EXHIBIT 1.1
3,500,000 Shares
INVENTA TECHNOLOGIES, INC.
Common Stock, par value $.001 per share
UNDERWRITING AGREEMENT
----------------------
April __, 2000
Xxxxxx Brothers Inc.
First Union Securities, Inc.
Friedman, Billings, Ramsey& Co.
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Inventa Technologies, Inc., a Delaware corporation (the "Company"),
proposes to sell 3,500,000 shares (the "Firm Stock") of the Company's common
stock, par value $.001 per share (the "Common Stock"). In addition, the Company
proposes to grant to the Underwriters named in Schedule 1 hereto (the
"Underwriters") an option to purchase up to an additional 525,000 shares of the
Common Stock on the terms and for the purposes set forth in Section (the
"Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock." This is to confirm the agreement
concerning the purchase of the Stock from the Company by the Underwriters named
in Schedule 1 hereto (the "Underwriters").
1. Representations, Warranties and Agreements of the Company. The Company
represents, warrants and agrees that:
(a) A registration statement on Form S-1 and amendments thereto, with
respect to the Stock have (i) been prepared by the Company in conformity
with the requirements of the Securities Act of 1933 (the "Securities Act")
and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, (ii) been
filed with the Commission under the Securities Act and (iii) become
effective under the Securities Act; and a second registration statement on
Form S-1 with respect to the Stock (i) may also be prepared by the Company
in conformity with the requirements of the Securities Act and the Rules and
Regulations and (ii) if to be so prepared, will be filed with the
Commission under the Securities Act pursuant to Rule 462(b) of the Rules
and Regulations on the
date hereof. Copies of the first such registration statement and the
amendments to such registration statement, together with the form of any
such second registration statement, have been delivered by the Company to
you as the representatives (the "Representatives") of the Underwriters. As
used in this Agreement, "Effective Time" means (i) with respect to the
first such registration statement, the date and the time as of which such
registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission and (ii) with
respect to any second registration statement, the date and time as of which
such second registration statement is filed with the Commission, and
"Effective Times" is the collective reference to both Effective Times;
"Effective Date" means (i) with respect to the first such registration
statement, the date of the Effective Time of such registration statement
and (ii) with respect to any second registration statement, the date of the
Effective Time of such second registration statement, and "Effective Dates"
is the collective reference to both Effective Dates; "Preliminary
Prospectus" means each prospectus included in any such registration
statement, or amendments thereof, before it became effective under the
Securities Act and any prospectus filed with the Commission by the Company
with the consent of the Representatives pursuant to Rule 424(a) of the
Rules and Regulations; "Primary Registration Statement" means the first
registration statement referred to in this Section 1(a), as amended at its
Effective Time, "Rule 462(b) Registration Statement" means the second
registration statement, if any, referred to in this Section 1(a), as filed
with the Commission, and "Registration Statements" means both the Primary
Registration Statement and any Rule 462(b) Registration Statement,
including in each case all information contained in the final prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations in accordance with Section hereof and deemed to be a part of
the Registration Statements as of the Effective Time of the Primary
Registration Statement pursuant to paragraph (b) of Rule 430A of the Rules
and Regulations; and "Prospectus" means such final prospectus, as first
filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b)
of the Rules and Regulations. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(b) The Primary Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any further amendments
or supplements to 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 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 that no
representation or warranty is made as to information contained in or
omitted from the Registration Statements or the Prospectus 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 and each of its subsidiaries (as defined in Section )
have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good standing
as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification and the failure to so qualify would
have a material adverse effect on the Company or its subsidiaries or their
respective operations or assets, and have all power and authority necessary
to own or hold their respective properties and to conduct the businesses in
which they are engaged; and none of the subsidiaries of the Company (other
than XTENDtech, Inc. (the "Significant Subsidiary")) is a "significant
subsidiary", as such term is defined in Rule 405 of the Rules and
Regulations.
(d) 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; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable and (except for directors' qualifying
shares and except as set forth in the Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(e) The unissued shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have 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 non-assessable; and the
Stock will conform to the descriptions thereof contained in the Prospectus.
(f) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby and
the migratory merger of the Company to Delaware (such actions are herein
collectively called the "Reorganization") do not and 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
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 properties or assets of the
Company or any of its subsidiaries is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of the Company
or any of its subsidiaries 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 or assets;
and 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, applicable state securities laws
and the rules and regulations of the National Association of Securities
Dealers, Inc. 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
and pursuant to the Reorganization.
(g) Except as described in the Prospectus and the exhibits to either
of the Registration Statements, there are no contracts, agreements or
understandings between the Company and any person granting such person the
right (other than rights which have been waived or satisfied) to require
the Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statements or in any
securities being registered pursuant to any other registration statement
filed by the Company under the Securities Act.
(h) Except as described in the Prospectus, the Company has not sold
or issued any shares of Common Stock during the six-month period preceding
the date of the Prospectus, including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Securities Act.
(i) 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
such date, there has not been any change in the capital stock or long-term
debt of the Company or 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.
(j) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statements or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The pro forma financial statements
(including the related notes and supporting schedules) filed as part of the
Registration Statements or included in the Prospectus have been prepared on
a basis consistent with the historical financial statements of the Company
and its subsidiaries, and give effect to assumptions used in the
preparation thereof on a reasonable basis and in good faith and present
fairly the historical and proposed transactions contemplated by the
Prospectus; and such pro forma financial statements comply as to form in
all material respects with the requirements applicable to pro
forma financial statements included in registration statements on Form S-1
under the Securities Act.
(k) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who
have delivered the initial letter referred to in Section hereof, are
independent public accountants as required by the Securities Act and the
Rules and Regulations.
(l) The Company and each of its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to
all personal property owned by them, 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 materially interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries; and all 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.
(m) The Company and each of its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
businesses in similar industries.
(n) Except as described in the Prospectus, the Company and each of
its subsidiaries own or possess adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights and
licenses necessary for the conduct of their respective businesses and have
no reason to believe that the conduct of their respective businesses will
conflict with, and have not received any notice of any claim of conflict
with, any such rights of others.
(o) 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
or asset of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, might have
a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects 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.
(p) There are no contracts or other documents that are required to be
described in the Prospectus or filed as exhibits to either of the
Registration Statements by the Securities Act or by the Rules and
Regulations that have not been described in the Prospectus or filed as
exhibits to either of the Registration
Statements or incorporated therein by reference as permitted by the Rules
and Regulations.
(q) 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 that is required to
be described in the Prospectus which is not so described.
(r) No labor disturbance by the employees of the Company exists or,
to the knowledge of the Company, is imminent that might be expected to have
a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries.
(s) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" 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 would cause the loss of such
qualification.
(t) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon other than any taxes that the Company or any of
its subsidiaries is contesting in good faith, and no tax deficiency has
been determined adversely to the Company or any of its subsidiaries that
has had (nor does the Company have any knowledge of any tax deficiency
that, if determined adversely to the Company or any of its subsidiaries,
might have) a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries.
(u) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations that were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.
(v) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls that (A) provide reasonable
assurance that transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability for
its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its
assets is compared with existing assets at reasonable intervals.
(w) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material
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 material 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
properties or assets is subject or (iii) is in violation in any material
respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its properties or assets may be subject or has failed
to obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its
properties or assets or to the conduct of its business.
(x) Neither the Company nor any subsidiary is an "investment company"
within the meaning of such term under the Investment Company Act of 1940
and the rules and regulations of the Commission thereunder.
2. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 3,500,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to purchase
up to 525,000 shares of Option Stock. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option Stock shall be adjusted by the Representatives so that no Underwriter
shall be obligated to purchase Option Stock other than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be $[_____] per
share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
3. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm Stock,
the several Underwriters propose to offer the Firm Stock for sale upon the terms
and conditions set forth in the Prospectus; provided, however, that no Stock
registered pursuant to the Rule 462(b) Registration Statement, if any, shall be
offered prior to the Effective Time thereof.
4. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., New York City time, on the
[third][fourth] full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to
as the "First Delivery Date." On the First Delivery Date, the Company shall
deliver or cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire of immediately available
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Firm Stock shall be registered
in such names and in such denominations as the Representatives shall request in
writing not less than two full business days prior to the First Delivery Date.
For the purpose of expediting the checking and packaging of the certificates for
the Firm Stock, the Company shall make the certificates representing the Firm
Stock available for inspection by the Representatives in New York, New York, not
later than 2:00 P.M., New York City time, on the business day prior to the First
Delivery Date.
At any time on or before the thirtieth day after the date of this Agreement
the option granted in Section may be exercised by written notice being given to
the Company by the Representatives. Such notice shall set forth the aggregate
number of shares of Option Stock as to which the option is being exercised, the
names in which the shares of Option Stock are to be registered, the
denominations in which the shares of Option Stock are to be issued and the date
and time, as determined by the Representatives, when the shares of Option Stock
are to be delivered; provided, however, that this date and time shall not be
earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Stock are delivered are sometimes
referred to as the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date").
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York time, on the Second Delivery Date. On
the Second Delivery Date, the Company shall deliver or cause to be delivered the
certificates representing the Option Stock to the Representatives for the
account of each Underwriter against payment to or upon the order of the Company
of the purchase price by wire transfer of immediately available funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names
and in
such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company shall make the certificates
representing the Option Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Second Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Rule 462(b) Registration Statement, if necessary,
in a form approved by the Representatives and to file such Rule 462(b)
Registration Statement with the Commission on the date hereof; to prepare
the Prospectus in a form approved by the Representatives and to file such
Prospectus pursuant to Rule 424(b) under the Securities Act not later than
10:00 A.M., New York City time, on the day following the execution and
delivery of this Agreement; to make no further amendment or any supplement
to the Registration Statements or to the Prospectus except as permitted
herein; to 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; to 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, to use promptly its best efforts to
obtain its withdrawal;
(b) To 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;
(c) To deliver promptly to the Representatives in New York City such
number of the following documents as the Representatives shall reasonably
request: conformed copies of the Registration Statements as originally
filed with the Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement and the computation of per
share earnings) and each Preliminary Prospectus, the Prospectus (not later
than 10:00 A.M., New York City time, of the 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 day following the date of
such amendment or supplement); and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the
Effective Time of the Primary Registration Statement in connection with the
offering
or sale of the Stock (or any other securities relating thereto) and if at
such time any event shall have occurred 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 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 same period to amend or
supplement the Prospectus in order to comply with the Securities Act, to
notify the Representatives and, upon their request, to prepare and 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
an amended or supplemented 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 Stock at any
time nine months or more after the Effective Time of the Primary
Registration Statement, upon the request of the Representatives but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as
many copies as the Representatives may from time to time reasonably request
of an amended or supplemented Prospectus complying with Section 10(a)(3) of
the Securities Act;
(d) To file promptly with the Commission any amendment to the
Registration Statements or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Representatives,
be required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission (i) any amendment to either
of the Registration Statements or supplement to the Prospectus or (ii) any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish a
copy thereof to the Representatives and counsel for the Underwriters and
obtain the consent of the Representatives to the filing;
(f) As soon as practicable after the Effective Date of the Primary
Registration Statement (it being understood that the Company shall have
until at least 410 days after the end of the Company's current fiscal
quarter), to make generally available to the Company's security holders and
to deliver to the Representatives an earnings statement of the Company and
its subsidiaries (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);
(g) For a period of five years following the Effective Date of the
Primary Registration Statement, to furnish to the Representatives copies of
all materials furnished by the Company to its shareholders and all public
reports and all reports and financial statements furnished by the Company
to the principal national securities exchange or automatic quotation system
upon which the Common Stock may be listed or quoted pursuant to
requirements of or agreements with such exchange or system or to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder, other than documents filed by XXXXX;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the
Representatives 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 Stock;
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;
(i) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly (whether any transaction is to be settled by
delivery of Common Stock or other securities, in cash or otherwise) (i)
offer for sale, sell or otherwise dispose of (or enter into any transaction
or device which is designed to, or could be expected to, result in the
disposition or purchase by any person at any time in the future of) any
shares of Common Stock or securities convertible into or exchangeable for
Common Stock or substantially similar securities (other than the Stock and
shares of Common Stock issued pursuant to employee benefit plans, qualified
stock option plans or other employee compensation plans existing on the
date hereof or under currently outstanding options, warrants or rights, or
(ii) sell or grant options, rights or warrants with respect to any shares
of Common Stock or securities convertible into or exchangeable for Common
Stock or substantially similar securities, other than the grant of options
under option plans existing on the date hereof, without the prior written
consent of Xxxxxx Brothers Inc.; and to cause each officer and director of
the Company to furnish to the Representatives, prior to the First Delivery
Date, a letter or letters, in form and substance satisfactory to counsel
for the Underwriters pursuant to which each such person shall agree for a
period of 180 days from the date of the Prospectus not to, directly or
indirectly (whether any transaction is to be settled by delivery of Common
Stock or other securities, in cash or otherwise) (i) offer for sale, sell
or otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition or purchase
by any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or
substantially similar securities or (ii) sell or grant options, rights or
warrants with respect to any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or substantially similar
securities, without the prior written consent of Xxxxxx Brothers Inc.
(j) Prior to the Effective Date of the Primary Registration
Statement, to apply for the listing of the Stock on the NASDAQ National
Market System and to use its best efforts to complete that listing, subject
only to official notice of issuance, prior to the First Delivery Date;
(k) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of the Rules and Regulations, to furnish a copy
thereof to the counsel for the Underwriters and receive and consider its
comments thereon, and to deliver
promptly to the Representatives a signed copy of each report on Form SR
filed by it with the Commission;
(l) To apply the net proceeds from the sale of the Stock being sold
by the Company as set forth in the Prospectus; and
(m) To take such steps as shall be necessary to ensure that neither
the Company nor any subsidiary shall become an "investment company" within
the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statements and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statements as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of reproducing and distributing this Agreement
(exclusive of legal fees and expenses of the Underwriters); (e) the costs of
distributing the terms of agreement relating to the organization of the
underwriting syndicate and selling group to the members thereof by mail, telex
or other means of communication; (f) the filing fees incident to securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of sale of the Stock; (g) any applicable listing or other fees; (h) the
fees and expenses of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 5(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters not to exceed $7,500); (i) all costs and expenses of
the Underwriters, including the fees and disbursements of counsel for the
Underwriters, incident to the offer and sale of shares of the Stock by the
Underwriters to [directors of the Company, certain holders of Common Stock and
preferred stock convertible into Common Stock and other persons associated with
the Company, as described in Section 9; and (j) all other costs and expenses
incident to the performance of the obligations of the Company under this
Agreement; provided that, except as provided in this Section 6 and in Sections 8
and, the Underwriters shall pay their own costs and expenses, including the
costs 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.
7. Conditions of Underwriters' Obligations. The respective obligations of
the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Rule 462(b) Registration Statement, if any, and the
Prospectus shall have been timely filed with the Commission in accordance
with Section 5(a); no stop order suspending the effectiveness of either of
the Registration Statements or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by
the Commission; and any request of the Commission for
inclusion of additional information in either of the Registration
Statements or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to such Delivery Date that either of the Registration
Statements or the Prospectus or any amendment or supplement thereto
contains any untrue statement of a fact which, in the opinion of Xxxxxxx
Xxxxxxx & Xxxxxxxx, 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 made the statements
therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the
Registration Statements and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby and the
Reorganization 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.
(d) Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed
to the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification (other than those jurisdictions in which
the failure to so qualify would not have a material adverse effect on
the Company or the Company and its subsidiaries taken as a whole), and
have all corporate power and authority necessary to own or hold their
respective properties and conduct the businesses in which they are
engaged;
(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 of Stock being delivered on such
Delivery Date) have been duly and validly authorized and issued, are,
to the best of such counsel's knowledge, fully paid and non-assessable
and conform to the description thereof 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 and are,
to the best of such counsel's knowledge, fully paid, non-assessable
and (except for directors' qualifying shares and except
as set forth in the Prospectus) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims;
(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) To the best of such counsel's knowledge and 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 or asset of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, might reasonably be expected to
have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of
the Company and its subsidiaries; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(v) The Primary Registration Statement was declared effective
under the Securities Act, 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 either of the Registration Statements has been
issued and, to the knowledge of such counsel, no proceeding for that
purpose is pending or threatened by the Commission;
(vi) The Registration Statements, as of their 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 such Delivery Date (other than the financial
statements and other financial data contained therein, as to which
such counsel need express no opinion) complied as to form in all
material respects with the requirements of the Securities Act and the
Rules and Regulations;
(vii) The statements made in the Prospectus under the caption
"Certain Relationships and Related Transactions" insofar as they
purport to constitute summaries of the terms of federal statutes,
rules and regulations thereunder constitute accurate summaries of the
terms of such statutes, rules and regulations in all material
respects;
(viii) To the best of such counsel's knowledge, there are no
contracts or other documents that are required to be described in the
Prospectus or filed as exhibits to the Registration Statements by the
Securities Act or by the
Rules and Regulations that have not been described or filed as
exhibits to the Registration Statements or incorporated therein by
reference as permitted by the Rules and Regulations;
(ix) This Agreement has been duly authorized, executed and
delivered by the Company;
(x) The issue and sale of the shares of Stock being delivered on
such Delivery Date by the Company and the compliance by the Company
with all of the provisions of this Agreement and the consummation of
the transactions contemplated hereby and pursuant to the
Reorganization do not and 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 known to such counsel 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 properties
or assets of the Company or any of its subsidiaries is subject, nor
will such actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries 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 subsidiaries or any of their properties or
assets; and, 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, applicable state securities laws (as to which such counsel
expresses no opinion) and the rules and regulations of the National
Association of Securities Dealers, Inc. (as to which such counsel
expresses no opinion except with respect to the listing requirements
thereof) 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 and pursuant to the Reorganization; and
(xi) Except as described in the Prospectus and the Registration
Statements and the exhibits thereto, to the best of such counsel's
knowledge, there are no contracts, agreements or understandings
between the Company and any person granting such person the right
(other than rights which have been waived or satisfied) to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statements or in
any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United
States of America, the laws of the State of California and the General
Corporation Law of the State of Delaware and that such counsel is not
admitted in the State of Delaware; and (ii) rely (to the extent such
counsel deems proper and specifies in its opinion), as to matters
involving the application of the laws of other states upon the opinion
of other counsel of good standing, provided that such other counsel is
satisfactory to counsel for the Underwriters and furnishes a copy of
its opinion to the Representatives. Such counsel shall also have
furnished to the Representatives a written statement, addressed to the
Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Representatives, to the effect that (x) such
counsel has acted as counsel to the Company on a regular basis
[(although the Company is also represented by other outside counsel
with respect to [specify matters handled by other counsel])], has
acted as counsel to the Company in connection with previous financing
transactions and has acted as counsel to the Company in connection
with the preparation of the Registration Statements, and (y) based on
the foregoing, no facts have come to the attention of such counsel
which lead them to believe that the Registration Statements, as of
their 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. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statements or the Prospectus
except for the statements made in the Prospectus under the captions
"Description of Capital Stock" and "Certain Relationships and Related
Transactions], insofar as such statements relate to the Stock and
concern legal matters.
(e) With respect to the letter of PricewaterhouseCoopers LLP
delivered to the Representatives concurrently with the execution of
this Agreement (as used in this paragraph, the "initial letter"), the
Company shall have furnished to the Representatives a letter (as used
in this paragraph, the "bring-down letter") of such accountants,
addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, 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 five 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 the initial letter
and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letter.
(f) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date;
the Company has complied with all its agreements contained herein; and
the conditions set forth in Section 7(a) have been fulfilled;
(ii) (A) Neither the Company nor any of its subsidiaries has
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 or (B) since such date there has not been any change
in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change other than changes generally affecting the economy or the
Company's industry, 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; and
(iii) They have carefully examined the Registration Statements
and the Prospectus and, in their opinion (A) the Registration
Statements, as of their respective Effective Dates, and the
Prospectus, as of each of the Effective Dates, did not include any
untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) since the Effective Date of
the Primary Registration Statement, no event has occurred that should
have been set forth in a supplement or amendment to either of the
Registration Statements or the Prospectus.
(g) (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 or
(ii) since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change other than
changes generally affecting the economy or the Company's industry, 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 Stock being delivered on such Delivery Date
on the terms and in the manner contemplated in the Prospectus.
(h) 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 (iv) there shall have been a declaration of a national
emergency or war by the United States or 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 a majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the Stock
being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(i) The NASDAQ National Market System shall have approved the Stock
for inclusion, subject only to official notice of issuance and evidence of
satisfactory distribution.
(j) The directors and executive officers of the Company listed on
Schedule 2 shall have entered into a written agreement in the form of Annex
A hereto (each such agreement, a "Lock-up Agreement"), and executed
-----------------
originals each Lock-up Agreement shall have been delivered to the
Representatives.
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.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person 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 (A) in any Preliminary Prospectus, either of the
Registration Statements or the Prospectus, or in any amendment or supplement
thereto or (B) in any materials
or information provided to investors by, or with the approval of, the Company in
connection with the marketing of the offering of the Stock, including any
roadshow or investor presentation made to investors by the Company (whether in
person or electronically ) ("Roadshow Materials"), (ii0 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, or in
any Roadshow Materials any 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 and each such officer, employee and controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against 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, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statements or the Prospectus, or in
any such amendment or supplement, or in any Roadshow Materials in reliance upon
and in conformity with the written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein and described in Section 8(e); and provided further that as to
any Preliminary Prospectus this indemnity agreement shall not inure to the
benefit of any Underwriter, its officers or employees or any person controlling
that Underwriter on account of any loss, claim, damage, liability or action
arising from the sale of Stock to any person by that Underwriter if that
Underwriter failed to send or give a copy of the Prospectus, as the same may be
amended or supplemented, to that person within the time required by the
Securities Act, and the untrue statement or alleged untrue statement of any
material fact or omission or alleged omission to state a material fact in such
Preliminary Prospectus was corrected in the Prospectus, unless such failure
resulted from non-compliance by the Company with Section 5(c). The foregoing
indemnity agreement is in addition to any liability that the Company may
otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company, its officers and employees, each of its directors and each
person, if any, who controls the Company within the meaning of the Securities
Act, from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Company or any such director,
officer or controlling person 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 (A) in any Preliminary Prospectus, either of the
Registration Statements or the Prospectus, or in any amendment or supplement
thereto, or (B) in any Roadshow Materials or (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, or in any Roadshow Materials any 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 the written information furnished to the Company through the
Representatives by or on behalf of that Underwriter specifically for inclusion
therein and described in Section 8(e), and shall reimburse the Company and any
such director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability that
any Underwriter may otherwise have to the Company or any such director, officer
or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 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 8, 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 that it
may have under this Section 8 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 that it may have to
an indemnified party otherwise than under this Section 8. 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 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
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section if, in the reasonable judgment of the
Representatives, it is advisable for the Representatives and those Underwriters,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company, 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 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 the
Representatives, if the indemnified parties under this Section 8 consist of any
Underwriter or any of their respective officers, employees or controlling
persons, or by the Company, if the indemnified parties under this Section
consist of the Company or any of the Company's directors, officers, employees or
controlling persons. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) 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 of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss of liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, 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 (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the 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, on the one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the shares of the Stock purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the shares of the Stock 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 whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters, the
intent of the parties and their relative 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 Section 8(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 that 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 8(d) shall be deemed to include, for purposes of this
Section 8(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 8(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
was offered to the public exceeds the amount of any damages that 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. The Underwriters' obligations to
contribute as provided in this Section 8(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) The Underwriters severally confirm that the statements with
respect to the public offering of the Stock set forth on the cover page of, and
under the caption "Underwriting" in, the Prospectus are correct and constitute
the only information furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statements and the
Prospectus.
9. Directed Share Program.
It is understood and agreed that approximately [_________] shares of
the Firm Stock ("Directed Shares") will initially be reserved by the
Underwriters for offer and sale to directors of the Company, certain holders of
Common Stock and preferred stock convertible into Common Stock and other persons
associated with the Company ("Directed Share Participants") upon the terms and
conditions set forth in the Prospectus and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. (the
"Directed Share Program"). Under no circumstances will any Underwriter be liable
to the Company or to any Directed Share Participant for any action taken or
omitted to be taken in good faith in connection with such Directed Share
Program. To the extent that any Directed Shares are not affirmatively
reconfirmed for purchase by any Directed Share Participant on or immediately
after the date of this Agreement, such Directed Shares may be offered to the
public as part of the public offering contemplated hereby.
The Company agrees to pay all fees and disbursements incurred by the
Underwriters in connection with the Directed Share Program, including counsel
fees and any stamp duties or other taxes incurred by the Underwriters in
connection with the Directed Share Program.
In connection with the offer and sale of the Directed Shares, the Company
agrees, promptly upon a request in writing, to indemnify and hold harmless the
Underwriters from and against any loss, claim, damage, expense, liability or
action which (i) arises out of, or is based upon, any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the approval of the Company for distribution to Directed Share
Participants in connection with the Directed Share Program or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) arises out of
the failure of any Directed Share Program participant to pay for and accept
delivery of Directed Shares that the Directed Share Participant agreed to
purchase or (iii) is otherwise related
to the Directed Share Program, other than losses, claims, damages or liabilities
(or expenses relating thereto) that are finally judicially determined to have
resulted directly from the bad faith or gross negligence of such Underwriters.
10. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the performance of
its obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Stock that the defaulting Underwriter agreed
but failed to purchase on such Delivery Date in the respective proportions that
the number of shares of the Firm Stock set opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the total number of
shares of the Firm Stock set opposite the names of all the remaining non-
defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Stock on such Delivery Date if the total number of shares of the Stock which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased on
such Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock that
it agreed to purchase on such Delivery Date pursuant to the terms of Section 2.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares that the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Stock) shall terminate without liability on the part of any non-
defaulting Underwriter or the Company, except that the Company will continue to
be liable for the payment of expenses to the extent set forth in Sections 6 and
12. As used in this Agreement, the term "Underwriter" includes, for all purposes
of this Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 10, purchases Firm Stock that a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the First Delivery Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Underwriters may be necessary in the Registration Statement, the Prospectus
or in any other document or arrangement.
11. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives 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 7(g) or 7(h) shall have occurred or if the
Underwriters shall decline to purchase the Stock for any reason permitted under
this Agreement.
12. Reimbursement of Underwriters' Expenses. If the Company shall fail to
tender the Stock for delivery to the Underwriters for any reason permitted under
this Agreement, the Company shall reimburse the Underwriters for the reasonable
fees and expenses of their counsel and for such other out-of-pocket expenses as
shall have been 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 Representatives. If this Agreement is terminated pursuant
to Section 11 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.
13. Notices, etc. 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 Xxxxxx Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Syndicate Department (Fax:
000-000-0000);
(b) 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
Primary Registration Statement, Attention: [_________] (Fax: _________);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives.
14. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Company and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the officers and
employees of each Underwriter and the person or persons, if any, who control
each Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section of this
Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Company and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section , any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
15. Survival. The respective indemnities, representations, warranties and
agreements of the Company and the Underwriters contained in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Stock and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
16. Definition of the Terms "Business Day" and "Subsidiary". 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.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the Company and
the Underwriters, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
INVENTA TECHNOLOGIES, INC.
By _______________________________________
[Insert title of person executing
agreement]
Accepted:
Xxxxxx Brothers Inc.
First Union Securities, Inc.
Friedman, Billings, Ramsey& Co.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By Xxxxxx Brothers Inc.
By _________________________________________________________
Authorized Representative
SCHEDULE 1
Number of
Underwriters Shares
------------ ---------
Xxxxxx Brothers Inc. . . . . . . . . . . . . . . . . . .
First Union Securities, Inc. . . . . . . . . . . . . . .
Friedman, Billings, Xxxxxx & Co. . . . . . . . . . . . .
_________
Total................................................
=========
SCHEDULE 2
Name of Officers and Directors
------------------------------
ANNEX A
April __, 2000
Xxxxxx Brothers Inc.
First Union Securities, Inc.
Friedman, Billings, Xxxxxx & Co.
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned have been informed that Inventa Technologies, Inc.
(the "Company") proposes to issue 3,500,000 shares of its common stock (the
"Shares"). The undersigned have been informed that the Company has prepared a
preliminary prospectus regarding the shares and will enter into an underwriting
agreement with respect to the Shares (the "Underwriting Agreement") with Xxxxxx
Brothers Inc., First Union Securities, Inc. and Friedman, Billings, Xxxxxx &
Co., as representatives on behalf of the underwriters named in such Underwriting
Agreement (the "Underwriters").
1.1.1 To facilitate the sale of the Shares to be purchased thereunder and
in consideration of the Underwriters entering into the Underwriting Agreement,
the undersigned hereby irrevocably confirms, covenants and agrees for the
benefit of the Company and the Underwriters for a period of 180 days from the
date hereof, that the undersigned will not, directly or indirectly (whether any
transaction is to be settled by delivery of the Company's common stock or other
securities, in cash or otherwise) (i) offer for sale, sell or otherwise dispose
of (or enter into any transaction or device that is designed to, or could be
expected to, result in the disposition or purchase by any person at any time in
the future of) any shares of the Company's common stock or securities
convertible into or exchangeable for the Company's common stock or substantially
similar securities or (ii) sell or grant options, rights or warrants with
respect to any shares of the Company's common stock or securities convertible
into or exchangeable for the Company's common stock or substantially similar
securities, without the prior written consent of Xxxxxx Brothers Inc.
The undersigned acknowledges and agrees that this agreement shall be
binding upon and inure to the benefit of the successors and assigns of the
undersigned, the Company and the Underwriters.
Very truly yours,
