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EXHIBIT 1.1
_____________ SHARES
CYBERGOLD, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
[DATE]
XX XXXXX SECURITIES CORPORATION
CIBC WORLD MARKETS
XXXXX XXXXX XXXXXX & COMPANY
E*OFFERING
As Representatives of the several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Cybergold, Inc., a Delaware corporation (the "Company"),
proposes to sell, pursuant to the terms of this Agreement, to the several
underwriters named in Schedule A hereto (the "Underwriters," or, each, an
"Underwriter"), an aggregate of ____ shares of Common Stock, $.0001 par value
(the "Common Stock") of the Company. The aggregate of ____ shares so proposed to
be sold is hereinafter referred to as the "Firm Stock." The Company also
proposes to sell to the Underwriters, upon the terms and conditions set forth in
Section 3 hereof, up to an additional ______ shares of Common Stock (the
"Optional Stock"). The Firm Stock and the Optional Stock are hereinafter
collectively referred to as the "Stock." XX Xxxxx Securities Corporation ("XX
Xxxxx"), CIBC World Markets, Xxxxx Xxxxx Xxxxxx & Company and E*Offering are
acting as representatives of the several Underwriters and in such capacity are
hereinafter referred to as the "Representatives."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, the several Underwriters that:
a. A registration statement on Form S-1 (File No. 333-79067) (the
"Initial Registration Statement") in respect of the Stock has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto, to you for
each of the other Underwriters, have been declared effective by the Commission
in such form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations (the "Rules and Regulations") of the Commission
thereunder, which became effective upon filing, no other document with respect
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to the Initial Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or, to the Company's knowledge, threatened by the
Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the Rules and
Regulations, is hereinafter called a "Preliminary Prospectus"); the various
parts of the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission pursuant to
Rule 424(b) under the Securities Act and deemed by virtue of Rule 430A under the
Securities Act to be part of the Initial Registration Statement at the time it
was declared effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statements"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the Securities
Act, is hereinafter called the "Prospectus." No document has been or will be
prepared or distributed in reliance on Rule 434 under the Securities Act. No
order preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission. All references in this Agreement to (i) the
Registration Statement, the Rule 462(b) Registration Statement, a preliminary
prospectus, the Prospectus or the Term Sheet, 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
Common Shares as contemplated by Section 4(o) of this Agreement.
b. The Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or supplements
to either of the Registration Statements or the Prospectus, when they become
effective or are filed with the Commission, as the case may be, will conform) in
all material respects to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable effective date (as
to the Registration Statements and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or supplement
thereto) contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing representations
and warranties shall not apply to information contained in or omitted from the
Registration Statements or the Prospectus or any such amendment or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
c. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property or the conduct of
its business requires such qualification, and has all power and authority
necessary to own or hold its properties and to conduct the business in which it
is engaged, except where the failure to so qualify or have such power or
authority would not have,
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singularly or in the aggregate, a material adverse effect on the condition
(financial or otherwise), results of operations, business or prospects of the
Company (a "Material Adverse Effect"). The Company does not own or control,
directly or indirectly, any corporation, association or other entity.
d. This Agreement has been duly authorized executed and delivered by
the Company.
e. The Stock to be issued and sold by the Company to the Underwriters
hereunder has been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued,
fully paid and nonassessable and free of any preemptive or similar rights and
will conform to the description thereof contained in the Prospectus.
f. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus.
g. The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property or assets
of the Company is subject, except for such conflicts, breaches, violations and
defaults that would not, individually or in the aggregate, result in a Material
Adverse Effect, nor will such actions result in any violation of the provisions
of the charter or by-laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its properties or assets.
h. Except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities laws and
from the National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby.
i. Arthur Xxxxxxxx LLP, who have expressed their opinions on the
audited financial statements included in the Registration Statements and the
Prospectus are independent public accountants as required by the Securities Act
and the Rules and Regulations.
j. The financial statements, together with the related notes [and
schedules], included in the Prospectus and in each Registration Statement fairly
present the financial position and the results of operations and changes in
financial position of the Company at the respective dates or for the respective
periods therein specified. Such statements and related notes [and schedules]
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have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis except as may be set forth in the Prospectus.
k. The Company has not sustained, since the date of the latest audited
financial statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there has not been any
change in the capital stock or long-term debt of the Company or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the business, general affairs, management, financial
position, stockholders' equity or results of operations of the Company,
otherwise than as set forth or contemplated in the Prospectus.
l. Except as set forth in the Prospectus, there is no legal or
governmental proceeding pending to which the Company is a party or of which any
property or assets of the Company is the subject which, singularly or in the
aggregate, if determined adversely to the Company, might have a Material Adverse
Effect or would prevent or materially and adversely affect the ability of the
Company to perform its obligations under this Agreement; and to the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
m. The Company is not (i) in violation of its charter or by-laws, (ii)
in default in any respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its property or
assets is subject or (iii) in violation in any respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject, except any violations or defaults which, singularly or in
the aggregate, would not have a Material Adverse Effect.
n. The Company possesses all licenses, certificates, authorizations and
permits issued by, and has made all declarations and filings with, the
appropriate state, federal or foreign regulatory agencies or bodies which are
necessary or desirable for the ownership of its properties or the conduct of its
business as described in the Prospectus except where any failures to possess or
make the same, singularly or in the aggregate, would not have a Material Adverse
Effect, and the Company has not received notification of any revocation or
modification of any such license, authorization or permit and has no reason to
believe that any such license, certificate, authorization or permit will not be
renewed.
o. The Company is not and, after giving effect to the offering of the
Stock and the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.
p. Neither the Company nor any of its officers, directors or affiliates
has taken or will take, directly or indirectly, any action designed or intended
to stabilize or manipulate the price of
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any security of the Company, or which caused or resulted in, or which might in
the future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
q. The Company owns or possesses the right to use all patents,
trademarks, trademark registrations, service marks, service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by it for the conduct of its business
and, except as described in the Prospectus, the Company is not aware of any
claim to the contrary or any challenge by any other person to the rights of the
Company with respect to the foregoing. The Company's business as now conducted
does not and will not infringe or conflict with any patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses or other intellectual
property or franchise right of any person. Except as described in the
Prospectus, no claim has been made against the Company alleging the infringement
by the Company of any patent, trademark, service xxxx, trade name, copyright,
trade secret, license in or other intellectual property right or franchise right
of any person.
r. The Company has good and marketable title in fee simple to, or has
valid rights to lease or otherwise use, all items of real or personal property
which are material to the business of the Company, in each case free and clear
of all liens, encumbrances, claims and defects that may result in a Material
Adverse Effect.
s. No labor disturbance by the employees of the Company exists or, to
the Company's knowledge, is imminent which might be expected to have a Material
Adverse Effect. The Company is not aware that any key employee or significant
group of employees of the Company or any subsidiary plans to terminate
employment with the Company.
t. No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the
"Code")), or "accumulated funding deficiency" (as defined in Section 302 of
ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than
events with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived) has occurred with respect to any employee benefit plan
which could have a Material Adverse Effect; each employee benefit plan is in
compliance in all respects with applicable law, including ERISA and the Code,
except to the extent that failure to so comply would not have a Material Adverse
Effect; the Company has not incurred and does not expect to incur liability
under Title IV of ERISA with respect to the termination of, or withdrawal from,
any "pension plan"; and each "pension plan" (as defined in ERISA) for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which could cause the loss of
such qualification.
u. There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of toxic
or other wastes or other hazardous substances by, due to, or caused by the
Company (or, to the Company's knowledge, any other
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entity for whose acts or omissions the Company is or may be liable) upon any of
the property now or previously owned or leased by the Company, or upon any other
property, in violation of any statute or any ordinance, rule, regulation, order,
judgment, decree or permit or which would, under any statute or any ordinance,
rule (including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or liability which
would not have, singularly or in the aggregate with all such violations and
liabilities, a Material Adverse Effect; there has been no disposal, discharge,
emission or other release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other hazardous
substances with respect to which the Company has knowledge, except for any such
disposal, discharge, emission, or other release of any kind which would not
have, singularly or in the aggregate with all such discharges and other
releases, a Material Adverse Effect.
v. The Company (i) has filed all necessary federal, state and foreign
income and franchise tax returns, (ii) has paid all federal state, local and
foreign taxes due and payable for which it is liable, and (iii) does not have
any tax deficiency or claims outstanding or assessed or, to the Company's
knowledge, proposed against it which could reasonably be expected to have a
Material Adverse Effect.
w. The Company carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of its business and the value
of its properties and as is customary for companies engaged in similar
businesses in similar industries.
x. The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
y. The minute books of the Company has been made available to the
Underwriters and counsel for the Underwriters, and such books (i) contain a
complete summary of all meetings and actions of the directors and shareholders
of the Company since the time of its incorporation through the date of the
latest meeting and action, and (ii) accurately in all material respects reflect
all transactions referred to in such minutes.
z. 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 Prospectus and which is not so described.
aa. No person or entity has the right to require registration of shares
of Common Stock or other securities of the Company because of the filing or
effectiveness of the Registration Statements or otherwise, except for persons
and entities who have expressly waived such right or who have been given proper
notice and have failed to exercise such right within the time or times required
under the terms and conditions of such right.
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bb. The Company does not own any "margin securities" as that term is
defined in Regulations G and U of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), and none of the proceeds of the sale of
the Stock will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause any of the Securities to be
considered a "purpose credit" within the meanings of Regulation G, T, U or X of
the Federal Reserve Board.
cc. The Company is not a party to any contract, agreement or
understanding with any person that would give rise to a valid claim against the
Company or the Underwriters for a brokerage commission, finder's fee or like
payment in connection with the offering and sale of the Stock.
dd. No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in the
Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
ee. The Company has reviewed its operations and that of any third
parties with which the Company has a material relationship to evaluate the
extent to which the business or operations of the Company will be affected by
the Year 2000 Problem. Based solely on the review to date of the Year 2000
Problem compliance of the Company's systems, except as otherwise described in
the Prospectus, the Company does not believe that the Year 2000 Problem will
have a Material Adverse Effect. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval, retransmission or
other utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000.
ff. The Stock has been approved for listing subject to notice of
issuance on the NASDAQ Stock Market's National Market.
3. PURCHASE SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company that number of shares of Firm Stock (rounded up or down, as
determined by XX Xxxxx in its discretion, in order to avoid fractions) obtained
by multiplying shares of Firm Stock by a fraction, the numerator of which is the
number of shares of Firm Stock set forth opposite the name of such Underwriter
in Schedule A hereto and the denominator of which is the total number of shares
of Firm Stock.
The purchase price per share to be paid by the Underwriters to the
Company for the Stock will be $_____ per share (the "Purchase Price").
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The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 12:00 Noon, New York time, on the second full business day preceding the
First Closing Date (as defined below)) against payment of the aggregate Purchase
Price therefor by wire transfer of immediately available funds to an account at
a bank acceptable to XX Xxxxx, payable to the order of the Company. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligations of each Underwriter
hereunder. The time and date of the delivery and closing shall be at 10:00 A.M.,
New York time, on_____________, 1999, in accordance with Rule 15c6-1 of the
Exchange Act. The time and date of such payment and delivery are herein referred
to as the "First Closing Date." The First Closing Date and the location of
delivery of, and the form of payment for, the Firm Stock may be varied by
agreement between the Company and XX Xxxxx.
The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters in New York, New
York at least twenty-four hours prior to the First Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or less than all of the Optional Stock. The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
Company agrees to sell to the Underwriters the number of shares of Optional
Stock specified in the written notice by XX Xxxxx described below and the
Underwriters agree, severally and not jointly, to purchase such shares of
Optional Stock. Such shares of Optional Stock shall be purchased for the account
of each Underwriter in the same proportion as the number of shares of Firm Stock
set forth opposite such Underwriter's name bears to the total number of shares
of Firm Stock (subject to adjustment by XX Xxxxx to eliminate fractions). The
option granted hereby may be exercised as to all or any part of the Optional
Stock at any time, and from time to time, not more than thirty (30) days
subsequent to the date of this Agreement. No Optional Stock shall be sold and
delivered unless the Firm Stock previously has been, or simultaneously is, sold
and delivered. The right to purchase the Optional Stock or any portion thereof
may be surrendered and terminated at any time upon notice by XX Xxxxx to the
Company.
The option granted hereby may be exercised by written notice given to
the Company by XX Xxxxx setting forth the number of shares of the Optional Stock
to be purchased by the Underwriters and the date and time for delivery of and
payment for the Optional Stock. Each date and time for delivery of and payment
for the Optional Stock (which may be the First Closing Date, but not earlier) is
herein called the "Option Closing Date" and shall in no event be earlier than
two (2) business days nor later than five (5) business days after written notice
is given. (The Option Closing Date and the First Closing Date are herein called
the "Closing Dates.")
The Company will deliver the Optional Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives
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may direct by notice in writing to the Company given at or prior to 12:00 Noon,
New York time, on the second full business day preceding the Option Closing
Date) against payment of the aggregate Purchase Price therefor in federal (same
day) funds by certified or official bank check or checks or wire transfer to an
account at a bank acceptable to XX Xxxxx payable to the order of the Company.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligations of each
Underwriter hereunder. The Company shall make the certificates for the Optional
Stock available to the Representatives for examination on behalf of the
Underwriters in New York, New York not later than 10:00 A.M., New York Time, on
the business day preceding the Option Closing Date. The Option Closing Date and
the location of delivery of, and the form of payment for, the Optional Stock may
be varied by agreement between the Company and XX Xxxxx.
The several Underwriters propose to offer the Stock for sale upon the
terms and conditions set forth in the Prospectus.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters that:
a. The Company will prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and file such Rule 462(b)
Registration Statement with the Commission on the date hereof; prepare the
Prospectus in a form approved by the Representatives and file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later than the second
business day following the execution and delivery of this Agreement; make no
further amendment or any supplement to the Registration Statements or to the
Prospectus to which the Representatives shall reasonably object by notice to the
Company after a reasonable period to review; advise the Representatives,
promptly after it receives notice thereof, of the time when any amendment to
either Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish the Representatives with copies thereof; advise the Representatives,
promptly after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the qualification
of the Stock for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statements or
the Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such qualification,
use promptly its best efforts to obtain its withdrawal.
b. If at any time prior to the expiration of nine months after the
effective date of the Initial Registration Statement when a prospectus relating
to the Stock is required to be delivered any event occurs as a result of which
the Prospectus as then amended or supplemented would include any 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 were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Securities Act, the Company will promptly notify the
Representatives thereof and upon their
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request will prepare an amended or supplemented Prospectus which will correct
such statement or omission or effect such compliance. The Company will furnish
without charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request of such
amended or supplemented Prospectus; and in case any Underwriter is required to
deliver a prospectus relating to the Stock nine months or more after the
effective date of the Initial Registration Statement, the Company upon the
request of the Representatives and at the expense of such Underwriter will
prepare promptly an amended or supplemented Prospectus as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the Securities
Act.
c. The Company will furnish promptly to each of the Representatives and
to counsel for the Underwriters a signed copy of each of the Registration
Statements as originally filed with the Commission, and each amendment thereto
filed with the Commission, including all consents and exhibits filed therewith.
d. The Company will deliver promptly to the Representatives in New York
City such number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration Statements as
originally filed with the Commission and each amendment thereto (in each case
excluding exhibits), (ii) each Preliminary Prospectus, (iii) the Prospectus (not
later than 10:00 A.M., New York time, of the business day following the
execution and delivery of this Agreement) and any amended or supplemented
Prospectus (not later than 10:00 A.M., New York City time, on the business day
following the date of such amendment or supplement).
e. The Company will make generally available to its stockholders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Securities Act), an earnings statement of the Company (which need not be
audited) complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule 158).
f. The Company will promptly take from time to time such actions as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may designate and to continue such qualifications in effect for
so long as required for the distribution of the Stock; provided that the Company
shall not be obligated to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified or to file a general consent to service of
process in any jurisdiction;
g. During the period of five years from the date hereof, the Company
will make available to the Representatives and, upon request, to each of the
other Underwriters, (i) as soon as they are available, copies of all reports or
other communications furnished to shareholders and (i) as soon as they are
available, copies of any reports and financial statements furnished or filed
with the Commission pursuant to the Exchange Act or any national securities
exchange or automatic quotation system on which the Stock is listed or quoted.
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h. The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for Common
Stock for a period of 180 days from the date of the Prospectus without the prior
written consent of XX Xxxxx other than the Company's sale of the Stock hereunder
and the issuance of shares pursuant to employee benefit plans, qualified stock
option plans or other employee compensation plans existing on the date hereof or
pursuant to currently outstanding options, warrants or rights. The Company will
cause each officer, director and shareholder listed in Schedule B to furnish to
the Representatives, prior to the First Closing Date, a letter, substantially in
the form of Exhibit I hereto, pursuant to which each such person shall agree not
to directly or indirectly offer, sell, assign, transfer, pledge, contract to
sell, or otherwise dispose of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock for a period of
180 days from the date of the Prospectus, without the prior written consent of
XX Xxxxx.
i. The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Stock under the Securities Act.
j. Prior to each of the Closing Dates, the Company will furnish to the
Representatives, as soon as they have been prepared, copies of any unaudited
interim financial statements of the Company for any periods subsequent to the
periods covered by the financial statements appearing in the Registration
Statement and the Prospectus.
k. Prior to each of the Closing Dates, the Company will not issue any
press release or other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or otherwise,
or earnings, business affairs or business prospects (except for routine oral
marketing communications in the ordinary course of business and consistent with
the past practices of the Company and of which the Representatives are
notified), without the prior written consent of the Representatives, unless in
the judgment of the Company and its counsel, and after notification to the
Representatives, such press release or communication is required by law.
l. In connection with the offering of the Stock, until XX Xxxxx shall
have notified the Company of the completion of the resale of the Stock, the
Company will not, [and will cause its affiliated purchasers (as defined in
Regulation M under the Exchange Act) not to,] either alone or with one or more
other persons, bid for or purchase, for any account in which it or any of its
affiliated purchasers has a beneficial interest, any Stock, or attempt to induce
any person to purchase any Stock; and not to, [and to cause its affiliated
purchasers not to,] make bids or purchase for the purpose of creating actual, or
apparent, active trading in or of raising the price of the Stock.
m. The Company will not take any action prior to the Option Closing
Date which would require the Prospectus to be amended or supplemented pursuant
to Section 4(b);
n. The Company expects to apply the net proceeds from the sale of the
Stock as set forth in the Prospectus under the heading "Use of Proceeds."
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o. The Company shall cause to be prepare and delivered, at its expense,
within one business day form the effective date of this Agreement, to E*Offering
an "electronic Prospectus" to be used by the Underwriters in connection with the
offering and sale of the Common 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 E*Offering, that may be transmitted
electronically by E*Offering and the other Underwriters to offerees and
purchasers of the Common Shares for at least the Prospectus Delivery Period;
(ii) it shall disclose the same information as the paper Prospectus and
Prospectus filed pursuant to XXXXX, except to the 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 E*Offering 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 satisfied 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.
5. PAYMENT OF EXPENSES. The Company agrees with the Underwriter to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Stock and any taxes payable in that connection; (b) the costs incident to
the Registration of the Stock under the Securities Act; (c) the costs incident
to the preparation, printing and distribution of the Registration Statement,
Preliminary Prospectus, Prospectus any amendments and exhibits thereto, the
costs of printing, reproducing and distributing the "Agreement Among
Underwriters" between the Representatives and the Underwriters, the Master
Selected Dealers' Agreement, the Underwriters' Questionnaire and this Agreement
by mail, telex or other means of communications; (d) the fees and expenses
(including related fees and expenses of counsel for the Underwriters) incurred
in connection with filings made with the National Association of Securities
Dealers; (e) any applicable listing or other fees; (f) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 4(f) and of preparing, printing and distributing Blue Sky
Memoranda and Legal Investment Surveys (including related fees and expenses of
counsel to the Underwriters); (g) all fees and expenses of the registrar and
transfer agent of the Stock; and (h) all other costs and expenses incident to
the performance of the obligations of the Company under this Agreement
(including, without limitation, the fees and expenses of the Company's counsel
and the Company's independent accountants); provided that, except as otherwise
provided in this Section 5 and in Section 9, the Underwriters shall pay their
own costs and expenses, including the fees and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters.
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6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of the
several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of their obligations hereunder, and to each of the following additional
terms and conditions:
a. No stop order suspending the effectiveness of either the
Registration Statements shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the Commission, and any
request for additional information on the part of the Commission (to be included
in the Registration Statements or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representatives. The Rule
462(b) Registration Statement, if any, and the Prospectus shall have been timely
filed with the Commission in accordance with Section 4(a).
b. None of the Underwriters shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of counsel for the Underwriters, is material or
omits to state any fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary to make the statements therein
not misleading.
c. All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Stock, the
Registration Statement and the Prospectus and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
x. Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, LLP shall
have furnished to the Representatives such counsel's written opinion, as counsel
to the Company, addressed to the Underwriters and dated the Closing Date, in
form and substance reasonably satisfactory to the Representatives, to the effect
that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, and has all
power and authority necessary to own or hold its properties and to conduct the
business in which its is engaged, except where the failure to so qualify or have
such power or authority would not have, singularly or in the aggregate, a
Material Adverse Effect.
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the Company,
including the Stock being delivered on the Closing Date, have been duly and
validly authorized and issued, are fully paid and non-assessable and conform to
the description thereof contained in the Prospectus.
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(iii) There are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any shares of the
Stock pursuant to the Company's charter or by-laws or any agreement or other
instrument known to such counsel.
(iv) This Agreement has been duly authorized, executed and delivered
by the Company.
(v) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the properties or assets of the
Company is subject, nor will such actions result in any violation of the charter
or by-laws of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body or court having jurisdiction over the
Company or any of its properties or assets.
(vi) Except for the registration of the Stock under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state
securities laws and from the NASD in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(vii) The description in the Registration Statement and Prospectus
of statutes, legal and governmental proceedings and contracts and other
documents, insofar as such statements constitute matters of law, summaries of
legal matters, the Company's charter or by-law provisions, documents or legal
proceedings, or legal conclusions, have been reviewed by such counsel and fairly
present and summarize, in all material respects, the matters referred to
therein; and such counsel's knowledge, there are no statutes, legal or
governmental proceedings, contracts or other documents of a character required
to be described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described or filed as
required.
(viii) To the best of such counsel's knowledge, the Company is not
(i) in violation of its charter or by-laws, (ii) in default, and no event has
occurred, which, with notice or lapse of time or both, would constitute a
default, in the due performance or observance of any term, covenant or condition
contained in any agreement or instrument to which it is a party or by which it
is bound or to which any of its properties or assets is subject or (iii) in
violation of any law, ordinance, governmental rule, regulation or court decree
to which it or its property or assets may be subject or has failed to obtain any
license, permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of its
business except, in the case of clauses (ii) and (iii), for those defaults,
violations or failures which, either individually or in the aggregate, would not
have a Material Adverse Effect.
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(ix) To such counsel's knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending or threatened
to which the Company is a party or of which any property or asset of the Company
is the subject which, singularly or in the aggregate, if determined adversely to
the Company, would prevent or adversely affect the ability of the Company to
perform its obligations under this Agreement.
(x) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the Rule
462(b) Registration Statement, if any, was filed with the Commission on the date
specified therein, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and Regulations specified in such
opinion on the date specified therein and no stop order suspending the
effectiveness of the Registration Statement has been issued and, to the
knowledge of such counsel, no proceeding for that purpose is pending or
threatened by the Commission.
(xi) The Registration Statements, as of the respective effective
dates and the Prospectus, as of its date, and any further amendments or
supplements thereto, as of their respective dates, made by the Company prior to
the Closing Date, complied as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) when they were filed with the Commission.
(xii) To such counsel's knowledge, no person or entity has the right
to require registration of shares of Common Stock or other securities of the
Company because of the filing or effectiveness of the Registration Statements or
otherwise, except for persons and entities who have expressly waived such right
or who have been given proper notice and have failed to exercise such right
within the time or times required under the terms and conditions of such right.
(xiii) The Company is not an "investment company" within the meaning
of the Investment Company Act and the rules and regulations of the Commission
thereunder.
Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and dated the
Closing Date, in form and substance satisfactory to the Representatives, to the
effect that (x) such counsel has acted as counsel to the Company in connection
with the preparation of the Registration Statements (y) based on such counsel's
examination of the Registration Statements and such counsel's investigations
made in connection with the preparation of the Registration Statements and
"conferences with certain officers and employees of and with auditors for and
counsel to the Company," such counsel has no reason to believe that the
Registration Statements, as of the respective effective dates, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus contains any untrue statement of
a material fact or omits 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 when they were filed
with the Commission; it being understood that such counsel need express no
opinion as to the financial statements or other financial data contained in the
Registration Statement or the Prospectus.
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The foregoing opinion and statement may be qualified by a statement to
the effect that such counsel has not independently verified the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and takes no responsibility therefor except to the
extent set forth in the opinion described in clause (viii) above.
e. Patent Counsel to the Company shall have furnished to the
Representatives such counsel's written opinion, as counsel to the Company,
addressed to the Underwriters and dated the Closing Date, in substantially the
form of Exhibit A hereto.
f. The Representatives shall have received from Xxxxxxx, Phleger &
Xxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to such matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for enabling them to pass upon such matters.
g. At the time of the execution of this Agreement, the Representatives
shall have received from Xxxxxx Xxxxxxxx LLP a letter, addressed to the
Underwriters and dated such date, in form and substance satisfactory to the
Representatives (i) confirming that they are independent certified public
accountants with respect to the Company within the meaning of the Securities Act
and the Rules and Regulations and (ii) stating the conclusions and findings of
such firm with respect to the financial statements and certain financial
information contained or incorporated by reference in the Prospectus.
h. On the Closing Date, the Representatives shall have received a
letter (the "bring-down letter") from Xxxxxx Xxxxxxxx LLP addressed to the
Underwriters and dated the Closing Date confirming, as of the date of the
bring-down letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in the Prospectus as of a date not more than three business days prior to the
date of the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by its letter
delivered to the Representatives concurrently with the execution of this
Agreement pursuant to Section 6(g).
i. The Company shall have furnished to the Representatives a
certificate, dated the Closing Date, of its Chairman of the Board, its President
or a Vice President and its chief financial officer stating that (i) such
officers have carefully examined the Registration Statements and the Prospectus
and, in their opinion, the Registration Statements as of their respective
effective dates and the Prospectus, as of each such effective date, did not
include any untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) since the effective date of the Initial
Registration Statement no event has occurred which should have been set forth in
a supplement or amendment to the Registration Statements or the Prospectus,
(iii) to the best of their knowledge after reasonable investigation, as of the
Closing Date, the representations and warranties of the Company in this
Agreement are true and correct and the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, and (iv) subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change in the financial
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position or results of operation of the Company, or any change, or any
development including a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business or prospects of the
Company, except as set forth in the Prospectus.
j. The Company shall not have sustained since the date of the latest
audited financial statements included in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
(ii) since such date there shall not have been any change in the capital stock
or long-term debt of the Company or any change, or any development involving a
prospective change, in or affecting the business, general affairs, management,
financial position, stockholders' equity or results of operations of the
Company, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of the Stock
on the terms and in the manner contemplated in the Prospectus.
k. No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency or
body which would, as of the Closing Date, prevent the issuance or sale of the
Stock; and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued as of
the Closing Date which would prevent the issuance or sale of the Stock.
l. Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of
the Representatives, impracticable or inadvisable to proceed with the sale or
delivery of the Stock on the terms and in the manner contemplated in the
Prospectus.
m. The Nasdaq National Market System shall have approved the Stock for
listing, subject only to official notice of issuance and evidence of
satisfactory distribution.
n. XX Xxxxx shall have received the written agreements, substantially
in the form of Exhibit B hereto, of the officers, directors and shareholders of
the Company listed in Schedule B to this Agreement.
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o. All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION.
a. The Company shall indemnify and hold harmless each Underwriter, its
officers, employees, representatives and agents and each person, if any, who
controls any Underwriter within the meaning of the Securities Act (collectively
the "Underwriter Indemnified Parties" and each an "Underwriter Indemnified
Party") against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which that Underwriter Indemnified Party may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus, either of the Registration Statements or the Prospectus
or in any amendment or supplement thereto; (ii) the omission or alleged omission
to state in any Preliminary Prospectus, either of the Registration Statements or
the Prospectus or in any amendment or supplement thereto a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or (iii) any act or failure to act, or any alleged act or failure to
act, by any Underwriter in connection with, or relating in any manner to, the
Stock or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above, (provided that the
Company shall not be liable in the case of any matter covered by this clause
(iii) to the extent that it is determined in a final judgement by a court of
competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such act or failure to act undertaken or omitted to
be taken by such Underwriter through its gross negligence or wilful misconduct)
and shall reimburse each Underwriter Indemnified Party promptly upon demand for
any legal or other expenses reasonably incurred by that Underwriter Indemnified
Party in connection with investigating or preparing to defend or defending
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is based
upon (i) an untrue statement or alleged untrue statement in or omission or
alleged omission from the Preliminary Prospectus, either of the Registration
Statements or the Prospectus or any such amendment or supplement in reliance
upon and in conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for use
therein, which information the parties hereto agree is limited to the
Underwriter's Information (as defined in Section 16). This indemnity agreement
is not exclusive and will be in addition to any liability which the Company
might otherwise have and shall not limit any rights or remedies which may
otherwise be available at law or in equity to each Underwriter Indemnified
Party.
b. Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers, employees, representatives and agents,
each of its directors and each person, if any, who controls the Company within
the meaning of the Securities Act (collectively the "Company Indemnified
Parties" and each a "Company Indemnified Party") against any loss,
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claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company Indemnified Parties may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Prospectus, either of
the Registration Statements or the Prospectus or in any amendment or supplement
thereto or (ii) 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, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for use
therein, and shall reimburse the Company Indemnified Parties for any legal or
other expenses reasonably incurred by such parties in connection with
investigating or preparing to defend or defending against or appearing as third
party witness in connection with any such loss, claim, damage, liability or
action as such expenses are incurred; provided that the parties hereto hereby
agree that such written information provided by the Underwriters consists solely
of the Underwriter's Information. This indemnity agreement is not exclusive and
will be in addition to any liability which the Underwriters might otherwise have
and shall not limit any rights or remedies which may otherwise be available at
law or in equity to the Company Indemnified Parties.
c. Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 7, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 7 except to the extent it has been materially
prejudiced by such failure; and, provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under this Section 7. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
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the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties, which firm shall be designated in writing by XX Xxxxx, if the
indemnified parties under this Section 7 consist of any Underwriter Indemnified
Party, or by the Company if the indemnified parties under this Section 7 consist
of any Company Indemnified Parties. Each indemnified party, as a condition of
the indemnity agreements contained in Sections 7(a) and 7(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. Subject to the provisions of Section 7(d) below, no
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
d. If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under Section 7(a) or
7(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Stock or if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters on
the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Stock purchased under this Agreement (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Stock purchased
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or 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 on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission; provided that the parties hereto agree that the written information
furnished to the Company through the Representatives by or on behalf of the
Underwriters for use in any Preliminary Prospectus, either of the Registration
Statements or the Prospectus consists solely of the Underwriter's Information.
The Company and the
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Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 7(d) shall be deemed to include, for
purposes of this Section 7(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Stock underwritten by it and distributed
to the public were offered to the public less the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
e. The Underwriters' obligations to contribute as provided in this
Section 7(e) are several in proportion to their respective underwriting
obligations and not joint.
8. TERMINATION. The obligations of the Underwriters hereunder may be terminated
by XX Xxxxx, in its absolute discretion by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 6(j) or 6(l) has occurred or if
the Underwriters shall decline to purchase the Stock for any reason permitted
under this Agreement.
9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) this Agreement shall have
been terminated pursuant to Section 8 or 10, (b) the Company shall fail to
tender the Stock for delivery to the Underwriters for any reason permitted under
this Agreement, or (c) the Underwriters shall decline to purchase the Stock for
any reason permitted under this Agreement, the Company shall reimburse the
Underwriters for the fees and expenses of their counsel and for such other
out-of-pocket expenses as shall have been reasonably incurred by them in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company shall pay the full amount thereof to the XX Xxxxx. If this
Agreement is terminated pursuant to Section 10 by reason of the default of one
or more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
10. SUBSTITUTION OF UNDERWRITERS.
a. If any Underwriter or Underwriters shall default in its or their
obligations to purchase shares of Stock hereunder and the aggregate number of
shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed ten percent (10%) of the total number of shares
underwritten, the other Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the shares which such
defaulting Underwriter or Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters shall so default and the aggregate number of shares
with respect to which such default or defaults
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occur is more than ten percent (10%) of the total number of shares underwritten
and arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
b. If the remaining Underwriters or substituted Underwriters are
required hereby or agree to take up all or part of the shares of Stock of a
defaulting Underwriter or Underwriters as provided in this Section 10, (i) the
Company shall have the right to postpone the Closing Dates for a period of not
more than five (5) full business days in order that the Company may effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees promptly to file any amendments to the Registration Statement or
supplements to the Prospectus which may thereby be made necessary, and (ii) the
respective numbers of shares to be purchased by the remaining Underwriters or
substituted Underwriters shall be taken as the basis of their underwriting
obligation for all purposes of this Agreement. Nothing herein contained shall
relieve any defaulting Underwriter of its liability to the Company or the other
Underwriters for damages occasioned by its default hereunder. Any termination of
this Agreement pursuant to this Section 10 shall be without liability on the
part of any non-defaulting Underwriter or the Company, except expenses to be
paid or reimbursed pursuant to Sections 5 and 9 and except the provisions of
Section 7 shall not terminate and shall remain in effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This
Agreement shall inure to the benefit of and be binding upon the several
Underwriters, the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company contained in
this Agreement shall also be for the benefit of the Underwriter Indemnified
Parties, and the indemnities of the several Underwriters shall also be for the
benefit of the Company Indemnified Parties.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company or any person controlling any of them and
shall survive delivery of and payment for the Stock.
13. NOTICES. All statements, requests, notices and agreements hereunder
shall be in writing, and:
a. if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to SG Securities Corporation,
Attention:__________ (Fax:(212)______________ ;
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b. if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Cybergold, Inc., Attention: _________ (Fax: (510)
000-0000);
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) "business
day" means any day on which the New York Stock Exchange, Inc. is open for
trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. UNDERWRITERS' INFORMATION. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the Underwriters' Information consists
solely of the following information in the Prospectus: the statements concerning
the Underwriters contained in the first three paragraphs, the table and the
seventh and eighth paragraphs under the heading "Underwriting."
17. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement, you
will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by the Representatives will be binding on all the
Underwriters.
18. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
19. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representatives.
20. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
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If the foregoing is in accordance with your understanding of the
agreement between the Company and the several Underwriters, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
CYBERGOLD, INC.
By:
-------------------------------
Name:
Title:
Accepted as of the
date first above written:
XX XXXXX SECURITIES CORPORATION
CIBC WORLD MARKETS
XXXXX XXXXX XXXXXX & COMPANY
Acting on their own behalf and as
Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: XX XXXXX SECURITIES CORPORATION
By:
-------------------------------
Name:
Title:
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SCHEDULE A
Number of Firm Number of
Shares to be Optional Shares
Name Purchased to be Purchased
---- -------------- ---------------
XX Xxxxx Securities Corporation ---------- ----------
CIBC World Markets ---------- ----------
Xxxxx Xxxxx Xxxxxx & Company ---------- ----------
E*Offering ---------- ----------
Total ---------- ----------
========== ==========
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SCHEDULE B
[LIST OF SHAREHOLDERS SUBJECT TO SECTION 4(h)]
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EXHIBIT A
{UNDERWRITER]
[address]
[address]
Re: Cybergold, Inc.
Ladies and Gentlemen:
This opinion is furnished to you as of the date given above pursuant to
Section __ of the Underwriting Agreement dated ______, 1999 by and among
Cybergold Inc. (the "Company") and you.
I.
Such November of 1998, we have acted as special patent counsel to the
Company with respect to the following matters (collectively referred to herein
as our "Representation"): (i) assisting in the ongoing prosecution of certain
United States patent applications of the Company listed in Schedule A hereto
(the "U.S. Applications") and supervising foreign counsel in prosecuting
certain foreign counterpart patent applications corresponding thereto listed in
Schedule B hereto (the "Foreign Applications") (the U.S. Applications and the
Foreign Applications will be referred to collectively herein as the
"Applications"); and (ii) assisting the Company in the enforcement and
licensing of its issued United States Patents listed on Schedule C hereto (the
"Issued Patents"). To date, all Applications with respect to which we have
assisted in the prosecution or supervision of prosecution were written
initially by another firm, and responsibility for ongoing prosecution or
supervision of prosecution of such Applications was recently transferred to our
firm.
As patent counsel, we are familiar with the technology used by the Company
in its business that is the subject of the Applications and of the Issued
Patents. We have acted as general outside corporate counsel to the Company, but
rather have provided only the limited Representation described above. We have
not been asked to assist and have not assisted in the preparation and filing of
the Company's Registration Statement in connection with the offer of ___________
shares of Cybergold Inc. (the "Registration Statement"), or any amendments
thereto, other than those specific portions of the Registration Statement
referring to patents, trade secrets, trademarks, service marks or other
proprietary information of the Company reproduced in Schedule D attached hereto.
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II.
We have performed an electronic database search through the LEXIS search
service of the records of the United States Patent and Trademark Office. Based
on such search, as of the date hereof, the Company is listed in the records of
the United States Patent and Trademark Office as the holder of record of the
Issued Patents. Based on such search and on the U.S. Applications in our
possession, as of the date hereof, the Company has received an assignment of
each of the U.S. Applications from each of the designated inventors of each such
U.S. Application, which assignments have been recorded in the United States
Patent and Trademark Office. To our knowledge in the course of our limited
Representation as of the date hereof, there are no claims of third parties to
any ownership interest or lien with respect to any of the Issued Patents or U.S.
Applications, and the Company owns as its sole property the Issued Patents and
pending U.S. Applications. As of the date hereof, we are not aware of any
material defect in form in the preparation or filing of the U.S. Applications on
behalf of the Company, although as noted above, we did not perform the initial
preparation and filing of the U.S. Applications. To our knowledge as of the date
hereof, the U.S. Applications are being pursued by the Company.
We have reviewed the Foreign Applications in our possession. As of the
date hereof, each Foreign Application lists the Company as the applicant for
the patent. To our knowledge in the course of our limited Representation as of
the date hereof, there are no claims of third parties to any ownership interest
or lien with respect to any of the Foreign Applications, and the Company owns
as its sole property the pending Foreign Applications. As of the date hereof,
we are not aware of any material defect in form in the preparation or filing of
the Foreign Applications on behalf of the Company, although, as noted above, we
did not perform the initial preparation and filing of the Foreign Applications.
To our knowledge as of the date hereof, the Foreign Applications are being
pursued by the Company.
III.
We have not become aware in the course of our limited Representation as of
the date hereof of any reason why the Issued Patents are not valid as issued or
why any patent that may issue as a result of any Application would not be valid.
IV.
We have read the statements of the Registration Statement under the
captions "Risk Factors - Dependence on Patents and Proprietary Rights" and
"Business - Patents and Proprietary Rights" in the final form in which such
statements were delivered to us before the date hereof (the "Statements"), which
Statements are reproduced in Schedule D hereto. Nothing has come to our
attention in the course of our limited Representation as of the date hereof
which caused us to believe that the Statements contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the Statements not misleading.
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V.
As of date hereof, we know of no material action, suit, claim or proceeding
(other than prosecution of the Applications) relating to patents, patent rights
or licenses, trademarks or trademark rights, copyrights, collaborative research,
licenses or royalty arrangements or agreements, trade secrets, know-how or
proprietary techniques, including processes and substances, owned by or
affecting the business or operations of the Company which are pending or overtly
threatened against the Company or any of its officers or directors.
VI.
The opinion expressed in this letter is based solely on the information in
our possession as of the date hereof. We have undertaken no investigation to
uncover additional information relevant to the matters discussed herein. There
may be facts of which we are not aware that would materially influence our
opinion.
This letter and the opinions set forth herein are intended solely for your
use in connection with the offer of shares of the Company pursuant to the
Registration Statement, and may not be relied upon by you for any other purpose
and are not to be made available to or relied upon by other persons or entities
without our prior written consent. This letter is delivered to you as of the
date hereof, and we do not undertake to, and will not, advise you of any changes
to the matters addressed herein that arise or come to our attention after the
delivery hereof.
Very truly yours,
Xxxxx X. Xxxxx
for FENWICK & WEST LLP
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SCHEDULE A
U.S. APPLICATIONS
SERIAL NUMBER FILING DATE TITLE
------------- ----------- -----
08,988,902 12/11/97 Method for Trading Customer
Attention for Advertisement
09/175,731 10/28/98 Attention Brokerage
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SCHEDULE B
FOREIGN APPLICATIONS
COUNTRY SERIAL NUMBER FILING DATE
------- ------------- -----------
Australia 14153/97 12/11/96
Canada 2,240,314 12/11/96
Europe 96944314.2 12/11/96
Israel 124832 12/11/96
Japan 9-522188 12/11/96
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SCHEDULE C
ISSUED PATENTS
U.S. Xxx. No. 5,794,210 titled "Attention Brokerage"
U.S. Xxx. No. 5,855,008 titled "Attention Brokerage"
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SCHEDULE D
REGISTRATION STATEMENT EXCERPTS
From p. 11 of the S-1:
"WE RELY ON OUR INTELLECTUAL PROPERTY RIGHTS AND IF WE ARE UNABLE TO PROTECT
THESE RIGHTS, WE MAY FACE INCREASED COMPETITION OR GREATER DIFFICULTY IN
SUCCESSFULLY ESTABLISHING THE CYBERGOLD BRAND
We rely on a combination of patent, copyright, trademark, trade secret laws
and restrictions on disclosure to protect our intellectual property rights.
Despite our efforts to protect our proprietary rights, unauthorized parties may
attempt to copy or otherwise obtain and use our technology or business model.
Monitoring unauthorized use of our technology and business model is difficult
and we cannot be certain that the steps we have taken will prevent unauthorized
use of our technology and business model. In addition, our business activities
may infringe upon the proprietary rights of other, and, from time to time, we
have received, and may continue to receive, claims of infringement against us.
Litigation may be necessary to enforce our intellectual property rights, to
protect our trade secrets or to determine the validity and scope of the
proprietary rights of others. Litigation could subject us to significant
liability for damages and invalidation of our proprietary rights. These
lawsuits, regardless of their success, would likely be time consuming and
expensive to resolve and would divert management's time and attention away from
our business. Any potential intellectual property litigation could also force us
to do one or more of the following:
- make significant changes to the structure and operation of our
business;
- attempt to design around a third party's patent; or
- license alternative technology from another party.
Implementation of any of these alternatives could be costly and time
consuming, and may not be possible. Accordingly, an adverse determination in any
litigation that we are a party to would have a material adverse effect on our
business, results of operations and financial condition.
Cybergold has two issued U.S. Patents covering its business model and
software architecture. We also have U.S. and foreign pending patent
applications. Cybergold is our only registered trademark, although we have
applied to register additional trademarks in the United States. We cannot assure
you that our patents or trademarks will not be successfully challenged by others
or invalidated, that our pending patents will be issued or that our trademark
registrations will be approved. If our trademark registrations are not approved
because third parties own these trademarks, our use of these trademarks would be
restricted unless we entered into arrangements with the third-party owners,
which might not be possible on reasonable terms.
We generally enter into confidentiality or license agreements with our
employees and consultants, and control access to and distribution of our
technologies, documentation and other proprietary information. Despite our
efforts to protect our proprietary rights from unauthorized
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use or disclosure, unauthorized parties may attempt to disclose, obtain or use
our solutions or technologies. We cannot assure you that the steps we have taken
will prevent misappropriation of our solutions or technologies, particularly in
foreign countries where laws or law enforcement practices may not protect our
proprietary rights as fully as in the United States. See 'Business --
Intellectual Property --' for more information on our intellectual property."
From pp. 47-48 of the S-1:
"INTELLECTUAL PROPERTY
We rely on a combination of patent, copyright, trademark and trade secret
laws and restrictions on disclosure to protect our intellectual property rights.
Despite our efforts to protect our proprietary rights, unauthorized parties may
attempt to copy or otherwise obtain and use our technology or business model.
Monitoring unauthorized use of our technology and business model is difficult
and we cannot be certain that the steps we have taken will prevent unauthorized
use of our technology and business model. In addition, our business activities
may infringe upon the proprietary rights of others, and, from time to time, we
have received, and may continue to receive, claims of infringement against us.
Litigation may be necessary to enforce our intellectual property rights, to
protect our trade secrets or to determine the validity and scope of the
proprietary rights of others. Litigation could subject us to significant
liability for damages and invalidation of our proprietary rights. These
lawsuits, regardless of their success, would likely be time consuming and
expensive to resolve and would divert management's time and attention away from
our business. Any potential intellectual property litigation could also force us
to do one or more of the following:
- make significant changes to the structure and operation of our business;
- attempt to design around a third party's patent; or
- license alternative technology from another party.
Implementation of any of these alternatives could be costly and time
consuming, and may not be possible. Accordingly, an adverse determination in any
litigation that we are a party to would have a material adverse effect on our
business, results of operations and financial condition.
Cybergold has two issued U.S. Patents covering its business model and
software architecture:
- Patent #5,794,210 covers Attention Brokerage, in which users are
compensated for paying attention online to advertisements, promotions,
and similar information, and Orthogonal Sponsorship, in which users can
apply their earned compensation to purchase digital content or other
intellectual property; and
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- Patent #5,855,008, for Consumer and Controlled Privacy Management, in which
users establish criteria by which their personal information is released to
others, those requesting access to personal data provide their identity,
intentions for using the personal data, and may offer compensation to the user
for access to the personal data, and the user or an automated process decides
whether to release the requested personal data based on the user's criteria and
the requester's information.
We also have U.S. and foreign pending applications. Cybergold is our only
registered trademark, although we have applied to register additional trademarks
in the United States. We cannot assure you that our patents or trademarks will
not be successfully challenged by others or invalidated. If our trademark
registrations are not approved because third parties own these trademarks, our
use of these trademarks would be restricted unless we entered into arrangements
with the third-party owners, which might not be possible on reasonable terms.
We generally enter into confidentiality or license agreements with our
employees and consultants, and control access to and distribution of our
technologies, documentation and other proprietary information. Despite our
efforts to protect our proprietary rights from unauthorized use or disclosure,
parties may attempt to disclose, obtain or use our solutions or technologies. We
cannot assure you that the steps we have taken will prevent misappropriation of
our solutions or technologies, particularly in foreign countries where laws or
law enforcement practices may not protect our proprietary rights as fully as in
the United States.
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EXHIBIT B
LOCK-UP AGREEMENT
5/6/99
XX Xxxxx Securities Corporation
Xxxxx Xxxxx Xxxxxx & Company
CIBC World Markets
As representatives of the
several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Cybergold, Inc. Initial Public Offering
Dear Sirs:
The undersigned is a shareholder of Cybergold, Inc., a California
corporation. Cybergold, Inc. plans to reincorporate in Delaware as Cybergold,
Inc. (the "Company") prior to its initial public offering (the "Offering"). In
order to induce XX Xxxxx Securities Corporation ("XX Xxxxx"), Xxxxx Xxxxx Xxxxxx
& Company and CIBC World Markets (together with XX Xxxxx, the
"Representatives"), to enter in to a certain underwriting agreement with
Company, with respect to the public offering of shares of the Company's Common
Stock, par value $0.001 per share ("Common Stock"), the undersigned hereby
agrees that for a period of 180 days following the date of the final prospectus
filed by the Company with the Securities and Exchange Commission in connection
with such public offering, the undersigned will not, without the prior written
consent of XX Xxxxx, directly or indirectly, offer, sell, assign, transfer,
pledge, contract to sell, or otherwise dispose of any shares of Common Stock
(including, without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (such shares, the "Beneficially Owned
Shares")) or securities convertible into or exercisable or exchangeable in
Common Stock.; provided, however, that such restriction shall not apply to any
securities purchased after the Offering.
In addition, the undersigned hereby waives, from the date hereof until
the expiration of the 180 day period following the date of the Company's final
Prospectus, any and all right, if any, to request or demand registration
pursuant to the Securities Act of any shares of Common Stock that are registered
in the name of the undersigned or that are Beneficially Owned Shares;
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provided, however, that this waiver shall not apply to any right the undersigned
may have to be included in any Company-initiated registration of its securities.
Anything contained herein to the contrary notwithstanding, any person
to whom shares of Common Stock or Beneficially Owned Shares are transferred from
the undersigned shall be bound by the terms of this Agreement.
The undersigned hereby consent to the placing of legends and/or stop
transfer orders with the transfer agent of the Common Stock with respect to any
shares of Common Stock or Beneficially owned Shares.
[SIGNATORY]
By:
-------------------------------
Name:
Title:
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