Exhibit 1.1
WORLDGATE COMMUNICATIONS, INC.
COMMON STOCK, $.01 PAR VALUE
UNDERWRITING AGREEMENT
....................., 1999
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
Xxxxxxxxx & Company, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
As representative of the several Underwriters
named in Schedule I hereto,
c/o Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
WorldGate Communications, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 4,500,000 shares and, at the election of the
Underwriters, up to 675,000 additional shares, of common stock, $.01 par value
per share ("Stock") of the Company. The 4,500,000 shares to be sold by the
Company are herein called the "Firm Shares" and the 675,000 additional shares to
be sold by the Company are herein called the "Optional Shares". The Firm Shares
and the Optional Shares that the Underwriters elect to purchase pursuant to
Section 2 hereof are herein collectively called the "Shares".
As part of the offering contemplated by this Agreement, the
Underwriters have agreed to reserve out of the Shares up to 300,000 Shares, for
sale to certain of the Company's employees, officers and directors and other
parties associated with the Company as designated by the Company (collectively,
the "Directed Participants") as set forth in the Prospectus under the heading
"Underwriting" (the "Directed Share Program"). The Shares to be sold pursuant to
the Directed Share Program (the "Directed Shares") will be sold pursuant to this
Agreement at the public offering price in the jurisdictions designated by the
Company. Any Directed Shares not confirmed for purchase by any Directed
Participants by the end of the business day on which this Agreement is executed
will be offered to the public as set forth in the Prospectus.
1. (a) The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-71997)
(the "Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement (as amended through the date hereof) and any
post-effective amendments 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 "Act"), which became effective upon filing, no other document with
respect 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 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 of the
Commission under the Act 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 Act in accordance with Section 5(a) hereof and
deemed by virtue of Rule 430A under the 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
Statement"; and such final prospectus, in the form first filed pursuant to Rule
424(b) under the Act, is hereinafter called the "Prospectus");
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. expressly for use
therein;
(iii) The Registration Statement, when it became effective,
conformed, and the Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all material respects
to the requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as to
the Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter through
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. expressly for use therein;
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(iv) Neither the Company nor any of its Subsidiaries has
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 the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or long-term debt
of the Company or any of its Subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity or results
of operations of the Company and its Subsidiaries, otherwise than as set forth
or contemplated in the Prospectus;
(v) The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good title to all personal property
owned by it, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its Subsidiaries; and,
to the Company's best knowledge, any real property and buildings held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries;
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing in the Commonwealth of Pennsylvania and under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any such
jurisdiction; and each subsidiary of the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(vii) 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 of the Stock contained in the
Prospectus; and all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(viii) The Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be duly
and validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
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(ix) The issue and sale of the Shares to be sold by the Company
and the compliance by the Company with all of the provisions of this Agreement
and the consummation of the transactions herein contemplated 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 or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject except to the extent such conflict, breach, violation or
default, individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company or on the issue and
sale of the Shares, nor will such action result in any violation of the
provisions of the Certificate of Incorporation 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 Subsidiaries or any of
their properties; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the Company
of the transactions contemplated by this Agreement, except the registration
under the Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(x) Neither the Company nor any of its Subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound;
(xi) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a summary
of the terms of the Stock and the laws and documents referred to therein, are
accurate, complete and fair;
(xii) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or any of its
Subsidiaries is the subject which, if determined adversely to the Company or any
of its Subsidiaries, could reasonably be expected to individually or in the
aggregate have a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of the Company
and its Subsidiaries; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(xiii) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company", or an
entity controlled by an "investment company," as defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
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(xiv) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes; and
(xv) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company, are independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder.
(xvi) The Company owns, is licensed to use or otherwise possesses
adequate rights to use all material patents, patent rights, inventions, trade
secrete, know-how, trademarks, service marks, trade names, copyrights and other
intellectual property rights described or referred to in the Prospectus as owned
or used by it or which are necessary for the conduct of its business as
described in the Prospectus; and the Company has not received any notice of
(except as described in the Prospectus), and the Company has no knowledge of,
any action on the part of the Company which constitutes an infringement of or
conflict with asserted rights of others with respect to any patents, patent
rights, inventions, trade secrets, know-how, trademarks, service marks, trade
names, copyrights or other intellectual property rights;
(xvii) Except as described in the Prospectus, neither the
Company, nor to the best of the Company's knowledge, the Company's directors,
officers or stockholders, is a party to any stockholders' agreement involving
the Company or its capital stock or any other agreement involving buy/sell
arrangements or voting arrangements with respect to the Company's capital stock;
(xviii) The Company has reviewed its operations and that of its
Subsidiaries and has made inquiries of any third parties with which the Company
or any of its Subsidiaries has a material relationship, to evaluate the extent
to which the business or operations of the Company or any of its Subsidiaries
will be affected by the Year 2000 Problem. As a result of such review and such
inquiries, the Company has no reason to believe, and does not believe, that the
Year 2000 Problem will have a material adverse effect on the general affairs,
management, the current or future consolidated financial position, business
prospects, stockholders' equity or results of operations of the Company and its
Subsidiaries, or result in any material loss or interference with the Company's
business or operations. As used herein with respect to the Company or such third
parties, the "Year 2000 Problem" means any material failure of computer hardware
or software to function as effectively with dates or time periods occurring
after December 31, 1999 as with dates or time periods occurring prior to January
1, 2000, whether 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.
(xix) (a) The Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or supplements thereto
will comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program,
and (b) no authorization, approval, consent, license, order, registration or
qualification of or with any
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government, governmental instrumentality or court, other than such as have been
obtained, is necessary under the securities laws and regulations of foreign
jurisdictions in which the Directed Shares are offered outside the United
States.
(xx) The Company has not offered, or caused the Underwriters to
offer, Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (a) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business with the
Company, or (b) a trade journalist or publication to write or publish favorable
information about the Company or its products.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a purchase
price per share of $.............., the Firm Shares and (b) in the event and to
the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the purchase price per share set forth in clause
(a) of this Section 2, that portion of the number of Optional Shares as to which
such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying such number of Optional
Shares by a fraction the numerator of which is the maximum number of Optional
Shares which such Underwriter is entitled to purchase as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Shares that all of the Underwriters are entitled
to purchase hereunder.
The Company hereby grants to the Underwriters the right to
purchase at their election up to 675,000 Optional Shares, at the purchase price
per share set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered in such
names as Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc., through the
facilities of the Depository Trust Company ("DTC"), for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
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specified by the Company to Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. at least
forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Shares, 9:30 a.m., New York time, on ............., 1999 or such
other time and date as Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. and the Company may
agree upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New
York time, on the date specified by Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. in the
written notice given by Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. of the Underwriters'
election to purchase such Optional Shares, or such other time and date as Xxxxxx
Xxxxxx Xxxxxxxx & Co., Inc. and the Company may agree upon in writing. Such time
and date for delivery of the Firm Shares is herein called the "First Time of
Delivery", such time and date for delivery of the Optional Shares, if not the
First Time of Delivery, is herein called the "Second Time of Delivery", and each
such time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or
on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(j) hereof will be delivered at the offices of
Drinker Xxxxxx & Xxxxx LLP, 0000 Xxxxxxxxx Xxxxx, Xxxxxx, XX 00000 (the "Closing
Location"), and the Shares will be delivered at the Designated Office, all at
such Time of Delivery. A meeting will be held at the Closing Location at 2:00
p.m., Philadelphia time, on the New York Business Day immediately preceding such
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in New York, respectively, are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you
and to file such Prospectus pursuant to Rule 424(b) under the Act
not later than the Commission's close of business on the second
business day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or
Prospectus prior to the last Time of Delivery which shall be
reasonably disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement
to the Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to advise you, 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 prospectus, of the suspension of
the qualification of the Shares 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
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Registration Statement or 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 prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Shares for offering and
sale under the securities laws of such jurisdictions as you may
request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New
York Business Day next succeeding the date of this Agreement and
from time to time, to furnish the Underwriters with copies of the
Prospectus in New York City in such quantities as you may
reasonably request, and, if the delivery of a prospectus is
required by law or regulation at any time prior to the expiration
of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Shares and if at such
time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such period to amend or
supplement the Prospectus in order to comply with the Act, to
notify you and upon your request to prepare and furnish without
charge to each Underwriter and to any dealer in securities as
many copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance, and
in case any Underwriter is required to deliver a prospectus in
connection with sales of any of the Shares at any time nine
months or more after the time of issue of the Prospectus, upon
your request but at the expense of such Underwriter, to prepare
and deliver to such Underwriter as many copies as you may request
of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its securityholders 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 Act), an earnings statement of
the Company and its Subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of
the Prospectus, not to offer to sell or solicit an offer to buy,
sell, contract to sell, issue, or otherwise dispose of, except as
provided hereunder,
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any securities of the Company that are substantially similar to
the Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right
to receive, Stock or any such substantially similar securities
(other than pursuant to employee stock option plans existing on,
or upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement),
without your prior written consent. In addition, the Company
agrees that, without the prior written consent of Xxxxxx, Xxxxxx
Xxxxxxxx & Co., Inc., it will not, during the period ending 180
days after the date of the Prospectus, file or cause to become
effective any registration statement relating to any securities
of the Company, other than the shelf registration statement
registering only the shares issuable upon exercise of warrants
held by holders of the Company's face-value $6.0 million
discounted notes issued in March 1999 and other registration
statements registering only shares under any of the Company's
stock plans or other employee benefit plans;
(f) To furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of
each fiscal year (beginning with the fiscal quarter ending after
the effective date of the Registration Statement), consolidated
summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail (provided that this
covenant shall terminate at such time as the Company ceases to be
subject to the reporting requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended);
(g) During a period of five years from the effective date
of the Registration Statement, to furnish to you copies of all
reports or other communications (financial or other) furnished to
stockholders, and to deliver to you (i) as soon as they are
publicly available, copies of any reports and financial
statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of
the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as
you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the
Commission);
(h) To use the net proceeds received by it from the sale
of the Shares pursuant to this Agreement in the manner specified
in the Prospectus under the caption "Use of Proceeds";
(i) To list for quotation the Shares on the National
Association of Securities Dealers Automated Quotations National
Market System ("NASDAQ");
(j) To file with the Commission such information on Form
10-Q or Form 10-K as may be required by Rule 463 under the Act;
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(k) If the Company elects to rely upon Rule 462(b), to
file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time,
on the date of this Agreement, and at the time of filing either
pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act;
(l) In connection with the Directed Share Program, to
ensure that the Directed Shares will be restricted to the extent
required by the National Association of Securities Dealers, Inc.
(the "NASD") or the NASD rules from sale, transfer, assignment,
pledge or hypothecation for a period of three months following
the date of the effectiveness of the Registration Statement.
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. will notify the Company as to
which Directed Participants will need to be so restricted. The
Company will direct the transfer agent to place stop transfer
restrictions upon such securities for such period of time.
(m) To comply with all applicable securities and other
applicable laws, rules and regulations in each foreign
jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
6. The Company covenants and agrees with the several Underwriters
that (a) the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or copying,
as appropriate, and distributing any Agreement among Underwriters, this
Agreement, the Blue Sky Memorandum, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection with
the qualification of the Shares for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey, and all fees and
disbursements of counsel incurred by the Underwriters in connection with the
Directed Share Program and stamp duties, similar taxes or duties or other taxes,
if any, incurred by the Underwriters in connection with the Directed Share
Program; (iv) all fees and expenses in connection with listing the Shares on
NASDAQ; (v) the filing fees incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares; (vi) the cost of preparing stock certificates;
(vii) the cost and charges of any transfer agent or registrar; and (viii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that the Company shall bear the cost of any other
matters not directly relating to the sale and purchase of the Shares pursuant to
this Agreement, and that, except as provided in this Section (other than clause
(viii) of the preceding sentence), and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and
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expenses, including the fees of their counsel, stock transfer taxes on resale of
any of the Shares by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters hereunder, as to the
Shares to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of such Time of Delivery, true
and correct, the condition that the Company shall have performed all of its and
their obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations
under the Act and in accordance with Section 5(a) hereof; if the
Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop
order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your
reasonable satisfaction;
(b) Xxxx and Xxxx LLP, counsel for the Underwriters, shall
have furnished to you such written opinion or opinions (a draft
of each such opinion is attached as Annex II(a) hereto), dated
such Time of Delivery, with respect to the matters covered in
paragraphs (i), (ii), (viii) and (x) of subsection (c) below as
well as such other related matters as you may reasonably request,
and such counsel shall have received such papers and information
as they may reasonably request to enable them to pass upon such
matters;
(c) Drinker Xxxxxx & Xxxxx, LLP, counsel for the Company,
shall have furnished to you their written opinion (a draft of
such opinion is attached as Annex II(b) hereto), dated such Time
of Delivery, in form and substance satisfactory to you, 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 the State of Delaware, with all necessary power
and authority to own its properties and conduct its
business as described in the Prospectus;
(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 Shares being delivered at such Time of
Delivery when appropriate certificates representing those
Shares are duly countersigned by the Company's transfer
agent, issued and delivered against payment therefor in
accordance with the terms of this Agreement) have been duly
and validly authorized and issued and are fully paid and
non-assessable; and the Shares conform as to legal matters
in all material respects to the description thereof
contained under the heading "Description of Capital Stock";
11
(iii) The Company has been duly qualified as a
foreign corporation for the transaction of business and is
in good standing under the laws of the Commonwealth of
Pennsylvania;
(iv) Each subsidiary of the Company has been
duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation; and all of the issued shares of capital
stock of each such subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable,
and are owned directly or indirectly by the Company, free
and clear of perfected security interests or to the best of
such counsel's knowledge other liens, encumbrances, charges
or claims (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local
counsel and in respect to matters of fact upon certificates
of officers of the Company or its Subsidiaries, provided
that such counsel shall state that they believe that both
you and they are justified in relying upon such opinions
and certificates);
(v) To the best of such counsel's knowledge
and other than as set forth in the Prospectus, there is no
legal governmental proceeding pending against the Company
or any of its subsidiaries or to which any of the
properties of the Company or any of its subsidiaries is
subject that has caused such counsel to conclude that such
proceeding is required by Item 103 of Regulation S-K to be
described in the Registration Statement; and, to the best
of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(vi) This Agreement has been duly authorized,
executed and delivered by the Company;
(vii) The issue and sale of the Shares being
delivered at such Time of Delivery to be sold by the
Company and the compliance by the Company with all of the
provisions of this Agreement and the consummation of the
transactions herein contemplated 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 filed as an exhibit to the
Registration Statement, nor will such action result in any
violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or
any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction
over the Company or any of its properties;
(viii) No consent, approval, authorization,
order, registration or qualification of or with any such
court or governmental agency or body is required for the
issue and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement,
except the registration under the Act of the Shares,
12
and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters as to which
such counsel need not express an opinion; and
(ix) Assuming the application of the net
proceeds from the sale of the Shares as described in the
Prospectus under the caption "Use of Proceeds", the Company
is not subject to regulation under the Investment Company
Act of 1940, as amended; and
Such counsel shall also provide its advice that the Registration Statement and
the Prospectus and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the Act and
the rules and regulations thereunder; and that (relying as to factual matters to
the extent deemed appropriate by such counsel upon representations and
statements of officers and other representatives of the Company) they have
participated in the preparation of the Registration Statement and the Prospectus
and in conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and the
Underwriters' representatives and counsel at which the contents of the
Registration Statement, the Prospectus and related matters were discussed and,
although such counsel has not passed upon or assumed any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, and although such counsel has not
undertaken to verify independently the accuracy or completeness of the
statements in the Registration Statement and the Prospectus, and, therefore,
would not necessarily have become aware of any material misstatement of fact or
omission to state a material fact, on the basis of and subject to the foregoing
such counsel does not believe that as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that, as of its date, the Prospectus or any further amendment or supplement
thereto made by the Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
that, as of such Time of Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and they do not know of any
13
amendment to the Registration Statement required to be filed or of any contracts
or other documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration Statement
or the Prospectus which are not filed or described as required;
(d) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on
the effective date of any post-effective amendment to the
Registration Statement filed subsequent to the date of this
Agreement and also at each Time of Delivery,
PricewaterhouseCoopers LLP shall have furnished to you a letter
or letters, dated the respective dates of delivery thereof, in
form and substance satisfactory to you, to the effect set forth
in Annex I hereto (the executed copy of the letter delivered
prior to the execution of this Agreement is attached as Annex
I(a) hereto and a draft of the form of letter to be delivered on
the effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(e)(i) Neither the Company nor any of its subsidiaries
shall 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,
and (ii) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in
the capital stock or total or long-term indebtedness of the
Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders'
equity or results of operations of the Company and its
subsidiaries, 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 public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(f) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York
Stock Exchange or on NASDAQ; (ii) a suspension or material
limitation in trading in the Company's securities on NASDAQ;
(iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv)
the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering
or the delivery of the Shares being delivered at such Time of
Delivery on the terms and in the manner contemplated in the
Prospectus;
(g) The Shares at such Time of Delivery shall have been
duly listed for quotation on NASDAQ;
14
(h) The Company has obtained and delivered to the
Underwriters executed copies of an agreement from each of the
stockholders of the Company identified in Schedule II hereto,
substantially to the effect set forth in Subsection 1(b)(iv)
hereof in form and substance satisfactory to you;
(i) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of
prospectuses on the New York Business Day next succeeding the
date of this Agreement; and
(j) The Company shall have furnished or caused to be
furnished to you at such Time of Delivery certificates of
officers of the Company satisfactory to you as to the accuracy of
the representations and warranties of the Company herein at and
as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior
to such Time of Delivery, and as to such other matters as you may
reasonably request, and the Company shall have furnished or
caused to be furnished certificates as to the matters set forth
in subsections (a) and (e) of this Section.
8. (a) (i) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim 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 or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. expressly
for use therein.
(ii) The Company agrees to indemnify and hold harmless Xxxxxx
Xxxxxx Xxxxxxxx & Co., Inc. and each person, if any, who controls Xxxxxx Xxxxxx
Xxxxxxxx & Co., Inc. within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) (a) caused by any untrue statement or alleged untrue
statement of a material fact contained in the prospectus wrapper material
prepared by or with the consent of the Company for distribution in foreign
jurisdictions in connection with the Directed Share Program attached to the
Prospectus or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein, when considered in
15
conjunction with the Prospectus or any applicable preliminary prospectus, not
misleading; (b) caused by the failure of any Directed Participant to pay for and
accept delivery of the shares which, immediately following the effectiveness of
the Registration Statement, were subject to a properly confirmed agreement to
purchase; or (c) related to, arising out of, or in connection with the Directed
Share Program.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Xxxxxx Xxxxxx
Xxxxxxxx & Co., Inc. expressly for use therein; and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection, except to the extent
it is materially prejudiced as a result thereof. In case any such action shall
be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
16
Notwithstanding anything contained herein to the contrary, if indemnity may be
sought pursuant to Section 8(a)(ii) hereof in respect of such action or
proceeding, then in addition to such separate firm for the indemnified parties,
the indemnifying party shall be liable for the reasonable fees and expenses of
not more than one separate firm (in addition to any local counsel) for Xxxxxx
Xxxxxx Xxxxxxxx & Co., Inc. for the defense of any losses, claims, damages and
liabilities arising out of the Directed Share Program, and all persons, if any,
who control Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is 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 Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions 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 shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or 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 and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
PRO RATA allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from
17
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Shares, or the Company notifies you
that it has so arranged for the purchase of such Shares, you or the Company
shall have the right to postpone a Time of Delivery for a period of not more
than seven days, in order to 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 to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the
18
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company shall not exercise the right described in subsection (b) above
to require non-defaulting Underwriters to purchase Shares of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the Second
Time of Delivery, the obligations of the Underwriters to purchase and of the
Company to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company
shall then be under no further liability to any Underwriter in respect of the
Shares not so delivered except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. on your behalf as
the representatives.
All statements, requests, notices and agreements hereunder shall
be in writing, and if to the Underwriters shall be delivered or sent by mail,
overnight delivery service, telex or facsimile transmission to you as the
representatives in care of Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. at 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000 and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8 hereof shall be delivered or sent
by mail, overnight delivery service, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
by you on request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof. In each case a party may change its address
for notice hereunder by a written communication to the other parties hereto.
19
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters and the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
[remainder of page intentionally left blank]
20
If the foregoing is in accordance with your understanding, please
sign and return to us one for the Company and each of the Representatives plus
one for each counsel counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination, upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
WORLDGATE COMMUNICATIONS, INC.
By:
------------------------------
Name:
Title:
Accepted as of the date hereof
XXXXXX XXXXXX XXXXXXXX & CO., INC.
JEFFERIES & COMPANY, INC.
XXXXXX XXXXXXXXXX XXXXX INC.
By:
-------------------------------------------------------
On behalf of each of the Underwriters
21
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares to be Maximum Option
Purchased Exercised
----------------- ------------------
UNDERWRITER
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc............................
Jefferies & Company, Inc.....................................
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
[NAMES OF OTHER UNDERWRITERS]................................
----------------- ------------------
Total........................................................ 4,500,000 675,000
----------------- ------------------
----------------- ------------------
22
SCHEDULE II
STOCKHOLDERS SUBJECT TO LOCK-UPS
23
