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EXHIBIT 1.1
WEBSENSE, INC.
[ ] SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
March , 2000
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CHASE SECURITIES INC.
XX Xxxxx Securities Corporation
SoundView Technology Group, Inc.
As Representatives of the Several Underwriters
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Websense, Inc., a Delaware corporation (herein called the Company),
proposes to issue and sell _______ shares of its authorized but unissued Common
Stock, $0.01 par value (herein called the Common Stock) (said _______ shares of
Common Stock being herein called the Underwritten Stock), and the stockholders
of the Company named in Schedule II hereto (herein collectively called the
Selling Securityholders) propose to grant to the Underwriters (as hereinafter
defined) an option to purchase up to _______ additional shares of Common Stock
(herein called the Option Stock and with the Underwritten Stock herein
collectively called the Stock). The Common Stock is more fully described in the
Registration Statement and the Prospectus hereinafter mentioned.
The Company and the Selling Securityholders severally hereby confirm the
agreements made with respect to the purchase of the Stock by the several
underwriters, for whom you are acting, named in Schedule I hereto (herein
collectively called the Underwriters, which term shall also include any
underwriter purchasing Stock pursuant to Section 3(b) hereof). You represent and
warrant that you have been authorized by each of the other Underwriters to enter
into this Agreement on its behalf and to act for it in the manner herein
provided.
1. REGISTRATION STATEMENT. The Company has filed with the Securities and
Exchange Commission (herein called the Commission) a registration statement on
Form S-1 (No. 33-95619), including the related preliminary prospectus, for the
registration under the Securities Act of 1933, as amended (herein called the
Securities Act) of the Stock. Copies of such registration statement and of each
amendment thereto, if any, including the related preliminary prospectus (meeting
the requirements of Rule 430A of the rules and regulations of the Commission)
heretofore filed by the Company with the Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean
such registration statement, all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a Rule
462(b) registration statement), and, in the event of any amendment thereto after
the effective date of such registration statement (herein called the Effective
Date), shall also mean (from and after the effectiveness of such amendment) such
registration statement as so amended (including any Rule 462(b) registration
statement). The term Prospectus as used in this Agreement shall mean the
prospectus relating to the Stock first filed with the Commission pursuant to
Rule 424(b) and Rule 430A (or if no such filing is required, as included in the
Registration Statement) and, in the event of any supplement or amendment to such
prospectus after the Effective Date, shall also mean (from and after the filing
with the Commission of such supplement or the effectiveness of
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(1) Plus an option to purchase from the Selling Shareholders up to (_____)
additional shares to cover over-allotments.
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such amendment) such prospectus as so supplemented or amended. The term
Preliminary Prospectus as used in this Agreement shall mean each preliminary
prospectus included in such registration statement prior to the time it becomes
effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SECURITYHOLDERS.
(a) Each of the Company and the Selling Securityholders hereby
represents and warrants as follows:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has full
corporate power and authority to own or lease its
properties and conduct its business as described in the
Registration Statement and the Prospectus and as being
conducted, and is duly qualified as a foreign corporation
and in good standing in all jurisdictions in which the
character of the property owned or leased or the nature of
the business transacted by it makes qualification
necessary (except where the failure to be so qualified
would not have a material adverse effect on the business,
properties, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole).
(ii) The Company has full legal right, power and authority
to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Company and is a
valid and binding agreement on the part of the Company,
enforceable in accordance with its terms, except as rights
to indemnification hereunder may be limited by applicable
law and except as the enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable
principles; the performance of this Agreement and the
consummation of the transactions herein contemplated will
not result in a material breach or violation of any of the
terms and provisions of, or constitute a default under,
(i) any bond, debenture, note or other evidence of
indebtedness, or under any lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument to which the Company is a
party or by which it or any of its properties may be
bound, (ii) the charter or bylaws of the Company, or (iii)
any law, order, rule, regulation, writ, injunction,
judgment or decree of any court, government or
governmental agency or body, domestic or foreign, having
jurisdiction over the Company or over its properties. No
consent, approval, authorization or order of or
qualification with any court, government of governmental
agency or body, domestic of foreign, having jurisdiction
over the Company or any of its properties is required to
be obtained by the Company for the execution and delivery
of this Agreement and the consummation by the Company of
the transactions of this Agreement and the consummation by
the Company of the transactions herein contemplated,
except such as may be required under the Securities Act,
the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or under state or other securities or Blue
Sky laws, all of which requirements have been satisfied in
all material respects.
(iii) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus,
there has not been any materially adverse change in the
business, properties, financial condition or results of
operations of the Company, whether or not arising from
transactions in the ordinary course of business, other
than
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as set forth in the Registration Statement and the
Prospectus, and since such dates, except in the ordinary
course of business, the Company has not entered into any
material transaction not referred to in the Registration
Statement and the Prospectus.
(iv) The Registration Statement and the Prospectus comply,
and on the Closing Date (as hereinafter defined) and any
later date on which Option Stock is to be purchased, the
Prospectus will comply, in all material respects, with the
provisions of the Securities Act and the rules and
regulations of the Commission thereunder; on the Effective
Date, the Registration Statement did not contain any
untrue statement of a material fact and did not omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein not
misleading; and, on the Effective Date the Prospectus did
not and, on the Closing Date and any later date on which
Option Stock is to be purchased, will not contain 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, not misleading; provided, however, that
none of the representations and warranties in this
subparagraph (iii) shall apply to statements in, or
omissions from, the Registration Statement or the
Prospectus made in reliance upon and in conformity with
information herein or otherwise furnished in writing to
the Company by or on behalf of the Underwriters for use in
the Registration Statement or the Prospectus.
(v) The Stock is duly and validly authorized, is (or, in
the case of shares of the Stock to be sold by the Company,
will be, when issued and sold to the Underwriters as
provided herein) duly and validly issued, fully paid and
nonassessable and conforms to the description thereof in
the Prospectus. No further approval or authority of the
stockholders or the Board of Directors of the Company will
be required for the transfer and sale of the Stock to be
sold by the Selling Securityholders or the issuance and
sale of the Stock as contemplated herein.
(vi) The Stock to be sold by the Selling Securityholders
is listed and duly admitted to trading on the Nasdaq
National Market, and prior to the Closing Date the Stock
to be issued and sold by the Company will be authorized
for listing by the Nasdaq National Market upon official
notice of issuance.
(vii) The Company is not infringing or otherwise violating
any copyrights, trade secrets, trademarks, service marks
or other proprietary information or materials, of others
that could affect materially the use thereof by the
Company, nor is the Company aware of any infringements by
others of any of the Company's copyrights, trade secrets,
trademarks, service marks or other proprietary information
or materials that could affect materially the use thereof
by the Company.
(viii) The Company owns, possesses sufficient licenses to
use, or otherwise has the right to use, all copyrights,
trade secrets, trademarks, service marks or other
proprietary information or materials necessary to conduct
the business now being or proposed to be conducted by the
Company as described in the Prospectus.
(ix) Each holder of options to purchase Common Stock of
the Company (or Common Stock issued upon the exercise of
such options) has entered into a stock restriction
agreement, whereby he or she has agreed that he or she
will not sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any
shares of Common Stock of the Company (or securities
exchangeable for or convertible into Common Stock) for a
period of up to 180 days from the effective date of the
Registration Statement without the prior approval of the
Company. The Company will enforce all such restrictions on
disposition as set forth in such agreements and shall
impose or cause to be imposed stop-transfer restrictions
on the certificates representing such shares of Common
Stock.
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(b) Each of the Selling Securityholders hereby represents and
warrants as follows:
(i) Such Selling Securityholder now has and on the Closing
Date and on any later date which Option Shares are to be
purchased, will have good and marketable title to all
the shares of Stock to be sold by such Selling
Securityholder hereunder, free and clear of all liens,
encumbrances, equities, security interests and claims
whatsoever, with full right and authority to deliver the
same hereunder, subject, in the case of each Selling
Securityholder, to the rights of ________, as Custodian
(herein called the Custodian), and that upon the delivery
of and payment for such shares of the Stock hereunder, the
several Underwriters will receive good and marketable
title thereto, free and clear of all liens, encumbrances,
equities, security interests and claims whatsoever.
(ii) Certificates in negotiable form for the shares of the
Stock to be sold by such Selling Securityholder have been
placed in custody under a Custody Agreement for delivery
under this Agreement with the Custodian; such Selling
Securityholder specifically agrees that the shares of the
Stock represented by the certificates so held in custody
for such Selling Securityholder are subject to the
interests of the several Underwriters and the Company,
that the arrangements made by such Selling Securityholder
for such custody, including the Power of Attorney provided
for in such Custody Agreement (appointing certain
individuals as such Selling Securityholder's
attorneys-in-fact (the "Attorneys") to the extent set
forth therein), are to that extent irrevocable, and that
the obligations of such Selling Securityholder shall not
be terminated by any act of such Selling Securityholder or
by operation of law, whether by the death or incapacity of
such Selling Securityholder (or, in the case of a Selling
Securityholder that is not an individual, the dissolution
or liquidation of such Selling Securityholder) or the
occurrence of any other event; if any such death,
incapacity, dissolution, liquidation or other such event
should occur before the delivery of such shares of the
Stock hereunder, certificates for such shares of the Stock
shall be delivered by the Custodian in accordance with the
terms and conditions of this Agreement as if such death,
incapacity, dissolution, liquidation or other event had
not occurred, regardless of whether the Custodian shall
have received notice of such death, incapacity,
dissolution, liquidation or other event.
(iii) Each of the Custody Agreement and the Power of
Attorney provided for in such Custody Agreement constitute
a valid and binding agreement on the part of such Selling
Securityholder, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable
principles; and each of such Selling Securityholder's
Attorneys, acting alone, is authorized to execute and
deliver this Agreement and the certificate referred to in
Section 9(k) hereof on behalf of such Selling
Securityholder, to determine the purchase price to be paid
by the several Underwriters to such Selling Securityholder
as provided in Section 3 hereof, to authorize the delivery
of the Selling Securityholder Shares under this Agreement
and to duly endorse (in blank or otherwise) the
certificate or certificates representing such Shares or a
stock power or powers with respect thereto, to accept
payment therefor, and otherwise to act on behalf of such
Selling Securityholder in connection with this Agreement.
(iv) All consents, approvals, authorizations and orders
required for the execution and delivery by such Selling
Securityholder of the Power of Attorney and the Custody
Agreement, the execution and delivery by or on behalf of
such Selling Securityholder of this Agreement and the sale
and delivery of the Selling Securityholder Shares under
this Agreement (other than, at the time of the execution
hereof (if the Registration Statement has not yet been
declared effective by the Commission), the issuance of the
order of the Commission declaring the Registration
Statement effective and such
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consents, approvals, authorizations or orders as may be
necessary under state or other securities or Blue Sky
laws) have been obtained and are in full force and effect;
such Selling Securityholder, if other than a natural
person, has been duly organized and is validly existing in
good standing under the laws of the jurisdiction of its
organization as the type of entity that it purports to be;
and such Selling Securityholder has full legal right,
power and authority to enter into and perform its
obligations under this Agreement and such Power of
Attorney and Custody Agreement, and to sell, assign,
transfer and deliver the Shares to be sold by such Selling
Securityholder under this Agreement.
(v) This Agreement has been duly authorized by each
Selling Securityholder that is not a natural person and
has been duly executed and delivered by or on behalf of
such Selling Securityholder and is a valid and binding
agreement of such Selling Securityholder, enforceable in
accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law
and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors'
rights generally or by general equitable principles; and
the performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a
breach or violation of any of the terms and provisions of
or constitute a default under any material bond,
debenture, note or other evidence of indebtedness, or
under any material lease, contract, indenture, mortgage,
deed of trust, loan agreement, joint venture or other
agreement or instrument to which such Selling
Securityholder is a party or by which such Selling
Securityholder, or any of such Selling Securityholders'
Selling Securityholder Shares hereunder, may be bound or,
to the best of such Selling Securityholders' knowledge,
result in any violation of any material law, order, rule,
regulation, writ, injunction, judgment or decree of any
court, government or governmental agency or body, domestic
or foreign, having jurisdiction over such Selling
Securityholder or over the properties of such Selling
Securityholder, or, if such Selling Securityholder is
other than a natural person, result in any violation of
any provisions of the charter, bylaws or other
organizational documents of such Selling Securityholder.
(vi) Such Selling Securityholder has not taken and will
not take, directly or indirectly, any action designed to
or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(vii) Such Selling Securityholder has not distributed and
will not distribute any prospectus or other offering
material other than the Preliminary Prospectus, the
Prospectus and other materials permitted by the Act in
connection with the offering and sale of the Shares.
(viii) All information furnished by or on behalf of such
Selling Securityholder relating to such Selling
Securityholder set forth in the Registration Statement or
Prospectus is, and at the time the Registration Statement
became or becomes, as the case may be, effective and at
all times subsequent thereto up to and on the Closing
Date, and on any later date on which Option Shares are to
be purchased, was or will be, true and correct and does
not, and, at the time the Registration Statement became or
becomes, as the case may be, effective and, at all times
subsequent thereto up to and on the Closing Date, and on
any later date on which Option Shares are to be purchased,
will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated
therein or necessary to make such information not
misleading.
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(ix) Such Selling Securityholder does not have, or has
waive prior to the date hereof, any preemptive right,
co-sale right or right of first refusal or other similar
right to purchase any of the Shares that are to be sold by
the Company or any of the other Selling Securityholders to
the Underwriters pursuant to this Agreement; such Selling
Securityholder does not have, or has waived prior to the
date hereof, any registration right or other similar right
to participate in the offering made by the Prospectus,
other than such rights of participation as have been
satisfied by the participation of such Selling
Securityholder in the transactions to which this Agreement
relates in accordance with the terms of this Agreement;
and such Selling Securityholder does not own any warrants,
options or similar rights to acquire, and does not have
any right or arrangement to acquire, any capital stock,
rights, warrants, options or other securities from the
Company, other than those described in the Registration
Statement and the Prospectus.
(x) Each Selling Securityholder, severally and not
jointly, represents and warrants to and agrees with each
Underwriter and the Company that such Selling
Securityholder is not aware, without performing any
independent investigation, that the Registration Statement
or the Prospectus contain any untrue statement of a
material fact or omit to state a material fact necessary
to make the statements therein in light of the
circumstances under which they were made, not misleading.
(xi) Such Selling Securityholder has reviewed the
Registration Statement and Prospectus and, although such
Selling Securityholder has not independently verified the
accuracy or completeness of all the information contained
therein, nothing has come to the attention of such Selling
Securityholder that would lead such Selling Securityholder
to believe that on the Effective Date, the Registration
Statement 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; and, on the Effective
Date the Prospectus contained and, on the Closing Date and
any later date on which Option Stock is to be purchased,
contains any untrue statement of a material fact or
omitted or omits to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell _______ shares of the Underwritten Stock to the several
Underwriters, and each of the Underwriters agrees to purchase from the Company
the respective aggregate number of shares of Underwritten Stock set forth
opposite its name in Schedule I. The price at which such shares of Underwritten
Stock shall be sold by the Company and purchased by the several Underwriters
shall be $___ per share. In making this Agreement, each Underwriter is
contracting severally and not jointly; except as provided in paragraphs (b) and
(c) of this Section 3, the agreement of each Underwriter is to purchase only the
respective number of shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail
or refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company or the Selling Securityholders shall
immediately give notice thereof to you, and the non-defaulting Underwriters
shall have the right within 24 hours after the receipt by you of such notice to
purchase, or procure one or more other Underwriters to purchase, in such
proportions as may be agreed upon between you and such purchasing Underwriter or
Underwriters and upon the terms herein set forth, all or any part of the shares
of the Stock which such defaulting Underwriter or Underwriters agreed to
purchase. If the non-defaulting Underwriters fail so to make such arrangements
with respect to all such shares and portion, the number of shares of the Stock
which each non-defaulting Underwriter is otherwise obligated to purchase under
this Agreement shall be automatically increased on a pro rata basis to absorb
the remaining shares and portion
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which the defaulting Underwriter or Underwriters agreed to purchase; provided,
however, that the non-defaulting Underwriters shall not be obligated to purchase
the shares and portion which the defaulting Underwriter or Underwriters agreed
to purchase if the aggregate number of such shares of the Stock exceeds 10% of
the total number of shares of the Stock which all Underwriters agreed to
purchase hereunder. If the total number of shares of the Stock which the
defaulting Underwriter or Underwriters agreed to purchase shall not be purchased
or absorbed in accordance with the two preceding sentences, the Company and the
Selling Securityholders shall have the right, within 24 hours next succeeding
the 24-hour period above referred to, to make arrangements with other
underwriters or purchasers satisfactory to you for purchase of such shares and
portion on the terms herein set forth. In any such case, either you or the
Company and the Selling Securityholders shall have the right to postpone the
Closing Date determined as provided in Section 5 hereof for not more than seven
business days after the date originally fixed as the Closing Date pursuant to
said Section 5 in order that any necessary changes in the Registration
Statement, the Prospectus or any other documents or arrangements may be made. If
neither the non-defaulting Underwriters nor the Company and the Selling
Securityholders shall make arrangements within the 24-hour periods stated above
for the purchase of all the shares of the Stock which the defaulting Underwriter
or Underwriters agreed to purchase hereunder, this Agreement shall be terminated
without further act or deed and without any liability on the part of the Company
or the Selling Securityholders to any non-defaulting Underwriter and without any
liability on the part of any non-defaulting Underwriter to the Company or the
Selling Securityholders. Nothing in this paragraph (b), and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Selling Securityholders grant an option to the several Underwriters to purchase,
severally and not jointly, up to shares in the aggregate of the Option
Stock from the Selling Securityholders at the same price per share as the
Underwriters shall pay for the Underwritten Stock. Said option may be exercised
only to cover over-allotments in the sale of the Underwritten Stock by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the thirtieth day after the date of this Agreement upon
written or telegraphic notice by you to the Company setting forth the aggregate
number of shares of the Option Stock as to which the several Underwriters are
exercising the option. Delivery of certificates for the shares of Option Stock,
and payment therefor, shall be made as provided in Section 5 hereof. The number
of shares of the Option Stock to be purchased by each Underwriter shall be the
same percentage of the total number of shares of the Option Stock to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Stock, as adjusted by you in such manner as you deem advisable to
avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters
of the Stock to be purchased by them shall be as set forth in the Prospectus.
The Underwriters may from time to time change the public offering price after
the closing of the initial public offering and increase or decrease the
concessions and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the front
cover page and under "Underwriting" in the Registration Statement, any
Preliminary Prospectus and the Prospectus relating to the Stock filed by the
Company (insofar as such information relates to the Underwriters) constitutes
the only information furnished by the Underwriters to the Company for inclusion
in the Registration Statement, any Preliminary Prospectus, and the Prospectus,
and you on behalf of the respective Underwriters represent and warrant to the
Company that the statements made therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten
Stock and the Option Stock (if the option granted by Section 3(c) hereof shall
have been exercised not later than 7:00 a.m., San Diego time, on the date two
business days preceding the Closing Date), and payment therefor, shall be made
at the office of Xxxx Xxxx Xxxx & Freidenrich LLP, 0000 Xxxxxxxxx Xxxxx, Xxxxx
0000, Xxx Xxxxx, XX 00000-0000 at 7:00 a.m., San Diego time, on the fourth
business day after the date of this Agreement, or at such time on such other
day, not later than seven full business days after such fourth business day, as
shall be agreed upon in writing by the
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Company, the Selling Securityholders and you. The date and hour of such delivery
and payment (which may be postponed as provided in Section 3(b) hereof) are
herein called the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be
exercised after 7:00 a.m., San Diego time, on the date two business days
preceding the Closing Date, delivery of certificates for the shares of Option
Stock, and payment therefor, shall be made at the office of Xxxx Xxxx Xxxx &
Freidenrich LLP, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx, XX 00000-0000 at
7:00 a.m., San Diego time, on the third business day after the exercise of such
option.
(c) Payment for the Stock purchased from the Company shall be
made to the Company or its order, and payment for the Stock purchased from the
Selling Securityholders shall be made to the Custodian, for the account of the
Selling Securityholders, in each case by one or more certified or official bank
check or checks in same day funds. Such payment shall be made upon delivery of
certificates for the Stock to you for the respective accounts of the several
Underwriters against receipt therefor signed by you. Certificates for the Stock
to be delivered to you shall be registered in such name or names and shall be in
such denominations as you may request at least one business day before the
Closing Date, in the case of Underwritten Stock, and at least one business day
prior to the purchase thereof, in the case of the Option Stock. Such
certificates will be made available to the Underwriters for inspection, checking
and packaging at the offices of Lewco Securities Corporation, 0 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 on the business day prior to the Closing Date or, in the
case of the Option Stock, by 3:00 p.m., New York time, on the business day
preceding the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
and the Selling Securityholders for shares to be purchased by any Underwriter
whose check shall not have been received by you on the Closing Date or any later
date on which Option Stock is purchased for the account of such Underwriter. Any
such payment by you shall not relieve such Underwriter from any of its
obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING SECURITYHOLDERS.
Each of the Company and the Selling Securityholders respectively covenants and
agrees as follows:
(a) The Company will (i) prepare and timely file with the
Commission under Rule 424(b) a Prospectus containing information previously
omitted at the time of effectiveness of the Registration Statement in reliance
on Rule 430A and (ii) not file any amendment to the Registration Statement or
supplement to the Prospectus of which you shall not previously have been advised
and furnished with a copy or to which you shall have reasonably objected in
writing or which is not in compliance with the Securities Act or the rules and
regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the
event of (i) the request by the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional information,
(ii) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, (iii) the institution or notice of
intended institution of any action or proceeding for that purpose, (iv) the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Stock for sale in any jurisdiction, or (v) the receipt by
it of notice of the initiation or threatening of any proceeding for such
purpose. The Company and the Selling Securityholders will make every reasonable
effort to prevent the issuance of such a stop order and, if such an order shall
at any time be issued, to obtain the withdrawal thereof at the earliest possible
moment.
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(c) The Company will (i) on or before the Closing Date, deliver
to you a signed copy of the Registration Statement as originally filed and of
each amendment thereto filed prior to the time the Registration Statement
becomes effective and, promptly upon the filing thereof, a signed copy of each
post-effective amendment, if any, to the Registration Statement (together with,
in each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters, at
such office or offices as you may designate, as many copies of the Prospectus as
you may reasonably request, and (iii) thereafter from time to time during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, likewise send to the Underwriters as many additional
copies of the Prospectus and as many copies of any supplement to the Prospectus
and of any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer any event relating
to or affecting the Company, or of which the Company shall be advised in writing
by you, shall occur as a result of which it is necessary, in the opinion of
counsel for the Company or of counsel for the Underwriters, to supplement or
amend the Prospectus in order to make the Prospectus not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser of the
Stock, the Company will forthwith prepare and file with the Commission a
supplement to the Prospectus or an amended prospectus so that the Prospectus as
so supplemented or amended will not contain 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 existing at the time such
Prospectus is delivered to such purchaser, not misleading. If, after the initial
public offering of the Stock by the Underwriters and during such period, the
Underwriters shall propose to vary the terms of offering thereof by reason of
changes in general market conditions or otherwise, you will advise the Company
in writing of the proposed variation, and, if in the opinion either of counsel
for the Company or of counsel for the Underwriters such proposed variation
requires that the Prospectus be supplemented or amended, the Company will
forthwith prepare and file with the Commission a supplement to the Prospectus or
an amended prospectus setting forth such variation. The Company authorizes the
Underwriters and all dealers to whom any of the Stock may be sold by the several
Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company
will submit to you, for your information, a copy of any post-effective amendment
to the Registration Statement and any supplement to the Prospectus or any
amended prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in
the qualification of the Stock for offer and sale under the securities or blue
sky laws of such jurisdictions as you may designate and, during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, in keeping such qualifications in good standing under said securities or
blue sky laws; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. The Company
will, from time to time, prepare and file such statements, reports, and other
documents as are or may be required to continue such qualifications in effect
for so long a period as you may reasonably request for distribution of the
Stock.
(g) During a period of five years commencing with the date
hereof, the Company will furnish to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to stockholders of
the Company and of all information, documents and reports filed with the
Commission.
(h) Not later than the 45th day following the end of the fiscal
quarter first occurring after the first anniversary of the Effective Date, the
Company will make generally available to its security holders an earnings
statement in accordance with Section 11(a) of the Securities Act and Rule 158
thereunder.
(i) The Company and the Selling Securityholders jointly and
severally agree to pay all costs and expenses incident to the performance of
their obligations under this Agreement, including all costs and expenses
incident to (i) the preparation, printing and filing with the Commission and the
National Association of
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Securities Dealers, Inc. ("NASD") of the Registration Statement, any Preliminary
Prospectus and the Prospectus, (ii) the furnishing to the Underwriters of copies
of any Preliminary Prospectus and of the several documents required by paragraph
(c) of this Section 6 to be so furnished, (iii) the printing of this Agreement
and related documents delivered to the Underwriters, (iv) the preparation,
printing and filing of all supplements and amendments to the Prospectus referred
to in paragraph (d) of this Section 6, (v) the furnishing to you and the
Underwriters of the reports and information referred to in paragraph (g) of this
Section 6 and (vi) the printing and issuance of stock certificates, including
the transfer agent's fees. The Selling Securityholders will pay any transfer
taxes incident to the transfer to the Underwriters of the shares the Stock being
sold by the Selling Securityholders.
(j) The Company and the Selling Securityholders jointly and
severally agree to reimburse you, for the account of the several Underwriters,
for blue sky fees and related disbursements (including counsel fees and
disbursements and cost of printing memoranda for the Underwriters) paid by or
for the account of the Underwriters or their counsel in qualifying the Stock
under state securities or blue sky laws and in the review of the offering by the
NASD.
(k) The provisions of paragraphs (i) and (j) of this Section are
intended to relieve the Underwriters from the payment of the expenses and costs
which the Company and the Selling Securityholders hereby agree to pay and shall
not affect any agreement which the Company and the Selling Securityholders may
make, or may have made, for the sharing of any such expenses and costs.
(l) The Company and each of the Selling Securityholders hereby
agrees that, without the prior written consent of Chase Securities Inc. on
behalf of the Underwriters, the Company or such Selling Securityholder, as the
case may be, will not, for a period of 180 days following the commencement of
the public offering of the Stock by the Underwriters, directly or indirectly,
(i) sell, offer, contract to sell, make any short sale, pledge, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of any
shares of Common Stock or any securities convertible into or exchangeable or
exercisable for or any rights to purchase or acquire Common Stock or (ii) enter
into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Stock to be sold to the Underwriters pursuant to this
Agreement, (B) shares of Common Stock issued by the Company upon the exercise of
options granted under the stock option plans of the Company (the "Option Plans")
all as described in the Preliminary Prospectus, and (C) options to purchase
Common Stock granted under the Option Plans.
(m) The Company agrees to enforce all restrictions on disposition
as set forth in stock restriction agreements entered into by each holder of (i)
options to purchase Common Stock of the Company or (ii) Common Stock issued upon
the exercise of such options, whereby such holder has agreed that he or she will
not sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any shares of Common Stock of the Company (or securities
exchangeable for or convertible into Common Stock) for a period of up to 180
days from the effective date of the Registration Statement without the prior
approval of the Company. The Company further agrees that it will and shall
impose or cause to be imposed stop-transfer restrictions on the certificates
representing such shares of Common Stock.
(n) If at any time during the 25-day period after the
Registration Statement becomes effective any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in your
opinion the market price for the Stock has been or is likely to be materially
affected (regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you, responding to
or commenting on such rumor, publication or event.
7. INDEMNIFICATION AND CONTRIBUTION.
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(a) The Company and the Selling Securityholders jointly and
severally agree to indemnify and hold harmless each Underwriter and each person
(including each partner or officer thereof) who controls any Underwriter within
the meaning of Section 15 of the Securities Act from and against any and all
losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
Exchange Act, or the common law or otherwise, and the Company and the Selling
Securityholders jointly and severally agree to reimburse each such Underwriter
and controlling person for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement), or 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, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus or the Prospectus (as amended or as supplemented if
the Company shall have filed with the Commission any amendment thereof or
supplement thereto) or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or (iii) any
untrue statement or alleged untrue statement of a material fact contained in any
materials or information provided to investors by, or with the approval of the
Company in connection with the marketing or the offering of the Stock (herein
called Marketing Materials), including any roadshow or investor presentations
made to investors by the Company (regardless of the medium by which such
information is transmitted, whether in person, telephonically, via facsimile or
by other electronic means) or the omission or alleged omission to state in the
Marketing Materials a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that (1) the indemnity agreements of the Company
and the Selling Securityholders contained in this paragraph (a) shall not apply
to any such losses, claims, damages, liabilities or expenses if such statement
or omission was made in reliance upon and in conformity with information
furnished as herein stated or otherwise furnished in writing to the Company by
or on behalf of any Underwriter for use in any Preliminary Prospectus or the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto, (2) the indemnity agreement contained in this paragraph (a)
with respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless the failure is the result of noncompliance by
the Company with paragraph (c) of Section 6 hereof, and (3) each Selling
Securityholder shall only be liable under this paragraph with respect to (A)
information pertaining to such Selling Securityholder furnished on behalf of
such Selling Securityholder expressly for use in any Preliminary Prospectus or
the Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto or (B) facts that would constitute a breach of any
representation or warranty of such Selling Securityholder set forth in Section
2(b) hereof. The indemnity agreements of the Company and the Selling
Securityholders contained in this paragraph (a) and the representations and
warranties of the Company and the Selling Securityholders contained in Section 2
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its officers who signs the Registration Statement
on his own behalf or pursuant to a power of attorney, each of its directors,
each other Underwriter and each person (including each partner or officer
thereof) who controls the Company or any such other Underwriter within the
meaning of Section 15 of the Securities Act, and the Selling Securityholders
from and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified parties or any of them may become subject
under the Securities Act, the Exchange Act, or the common law or otherwise and
to reimburse each of them for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in
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connection with any investigation or inquiry of, or other proceeding which may
be brought against, the respective indemnified parties, in each case arising out
of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including the Prospectus
as part thereof and any Rule 462(b) registration statement) or any
post-effective amendment thereto (including any Rule 462(b) registration
statement) or 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 or (ii) any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, if such statement or
omission was made in reliance upon and in conformity with information furnished
as herein stated or otherwise furnished in writing to the Company by or on
behalf of such indemnifying Underwriter for use in the Registration Statement or
the Prospectus or any such amendment thereof or supplement thereto. The
indemnity agreement of each Underwriter contained in this paragraph (b) shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified party and shall survive the delivery of
and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a)
and (b) of this Section 7 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the Notice) of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
such indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of such indemnity agreement. Any indemnifying party shall be entitled at its own
expense to participate in the defense of any action, suit or proceeding against,
or investigation or inquiry of, an indemnified party. Any indemnifying party
shall be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the Notice of Defense) to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or parties
shall be entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified party
or parties and (ii) in any event, the indemnified party or parties shall be
entitled to have counsel chosen by such indemnified party or parties participate
in, but not conduct, the defense. If, within a reasonable time after receipt of
the Notice, an indemnifying party gives a Notice of Defense and the counsel
chosen by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs (a) through (c) of this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding,
except that (A) the indemnifying party or parties shall bear the legal and other
expenses incurred in connection with the conduct of the defense as referred to
in clause (i) of the proviso to the preceding sentence and (B) the indemnifying
party or parties shall bear such other expenses as it or they have authorized to
be incurred by the indemnified party or parties. If, within a reasonable time
after receipt of the Notice, no Notice of Defense has been given, the
indemnifying party or parties shall be responsible for any legal or other
expenses incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party, in
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lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party 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 each indemnifying party in
connection with the statements or omissions that 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 and the Selling Securityholders on the one hand and the Underwriters on
the other shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Stock received by the Company and the
Selling Securityholders and the total underwriting discount received by the
Underwriters, as set forth in the table on the cover page of the Prospectus,
bear to the aggregate public offering price of the Stock. 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 each indemnifying party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by such
Underwriter. 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 in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) Neither the Company nor the Selling Securityholders will,
without the prior written consent of each Underwriter, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought hereunder
(whether or not such Underwriter or any person who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of such
Underwriter and each such controlling person from all liability arising out of
such claim, action, suit or proceeding.
8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company and the
Selling Securityholders if after the date of this Agreement trading in the
Common Stock shall have been suspended, or if there shall have occurred (i) the
engagement in hostilities or an escalation of major hostilities by the United
States or the declaration of war or a national emergency by the United States on
or after the date hereof, (ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic or political conditions
if the effect of such outbreak, calamity, crisis or change in economic or
political conditions in the financial markets of the United States would, in the
Underwriters' reasonable judgment, make the offering or delivery of the Stock
impracticable, (iii) suspension of trading in securities generally or a material
adverse decline in value of securities generally on the New York Stock Exchange,
the American Stock Exchange, or The Nasdaq Stock Market, or limitations on
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prices (other than limitations on hours or numbers of days of trading) for
securities on either such exchange or system, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of, or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
Underwriters' reasonable opinion has a material adverse effect on the securities
markets in the United States. If this Agreement shall be terminated pursuant to
this Section 8, there shall be no liability of the Company or the Selling
Securityholders to the Underwriters and no liability of the Underwriters to the
Company or the Selling Securityholders; provided, however, that in the event of
any such termination the Company and the Selling Securityholders agree to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company and the Selling
Securityholders under this Agreement, including all costs and expenses referred
to in paragraphs (i) and (j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company and by the Selling Securityholders of all their
respective obligations to be performed hereunder at or prior to the Closing Date
or any later date on which Option Stock is to be purchased, as the case may be,
and to the following further conditions:
(a) The Registration Statement shall have become effective; and
no stop order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock
hereunder and the validity and form of the certificates representing the Stock,
all corporate proceedings and other legal matters incident to the foregoing, and
the form of the Registration Statement and of the Prospectus (except as to the
financial statements contained therein), shall have been approved at or prior to
the Closing Date by Xxxx Xxxx Xxxx & Freidenrich LLP, counsel for the
Underwriters.
(c) You shall have received from Xxxxxxx Phleger & Xxxxxxxx LLP,
counsel for the Company and Xxxxxxxx Xxxxxx, LLP, counsel for the Selling
Securityholders, opinions, addressed to the Underwriters and dated the Closing
Date, covering the matters set forth in Annex A hereto, and if Option Stock is
purchased at any date after the Closing Date, additional opinions from each such
counsel, addressed to the Underwriters and dated such later date, confirming
that the statements expressed as of the Closing Date in such opinions remain
valid as of such later date.
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(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true and
correct and neither the Registration Statement nor the Prospectus omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, respectively, not misleading, (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in such a
supplement or amendment, (iii) since the respective dates as of which
information is given in the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the business, properties, financial
condition or results of operations of the Company, whether or not arising from
transactions in the ordinary course of business, and, since such dates, except
in the ordinary course of business, the Company has not entered into any
material transaction not referred to in the Registration Statement in the form
in which it originally became effective and the Prospectus contained therein,
(iv) the Company does not have any material contingent obligations which are not
disclosed in the Registration Statement and the Prospectus, (v) there are not
any pending or known threatened legal proceedings to which the Company is a
party or of which property of the Company or any of its subsidiaries is the
subject which are material and which are not disclosed in the Registration
Statement and the Prospectus, (vi) there are not any franchises, contracts,
leases or other documents which are required to be filed as exhibits to the
Registration Statement which have not been filed as required, (vii) the
representations and warranties of the Company herein are true and correct in all
material respects as of the Closing Date or any later date on which Option Stock
is to be purchased, as the case may be, and (viii) there has not been any
material adverse change in the market for securities in general or in political,
financial or economic conditions from those reasonably foreseeable as to render
it impracticable in your reasonable judgment to make a public offering of the
Stock, or a material adverse change in market levels for securities in general
(or those of companies in particular) or financial or economic conditions which
render it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later
date on which Option Stock is purchased a certificate, dated the Closing Date or
such later date, as the case may be, and signed by the President and the Chief
Financial Officer of the Company, stating that the respective signers of said
certificate have carefully examined the Registration Statement in the form in
which it originally became effective and the Prospectus contained therein and
any supplements or amendments thereto, and that the statements included in
clauses (i) through (vii) of paragraph (d) of this Section 9 are true and
correct.
(f) You shall have received from Ernst & Young LLP, a letter or
letters, addressed to the Underwriters and dated the Closing Date and any later
date on which Option Stock is purchased, confirming that they are independent
public accountants with respect to the Company within the meaning of the
Securities Act and the applicable published rules and regulations thereunder and
based upon the procedures described in their letter delivered to you
concurrently with the execution of this Agreement (herein called the Original
Letter), but carried out to a date not more than three business days prior to
the Closing Date or such later date on which Option Stock is purchased (i)
confirming, to the extent true, that the statements and conclusions set forth in
the Original Letter are accurate as of the Closing Date or such later date, as
the case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter which are necessary
to reflect any changes in the facts described in the Original Letter since the
date of the Original Letter or to reflect the availability of more recent
financial statements, data or information. The letters shall not disclose any
material change, or any development involving a prospective change, in or
affecting the business or properties of the Company which, in your reasonable
judgment, makes it impractical or inadvisable to proceed with the public
offering of the Stock or the purchase of the Option Stock as contemplated by the
Prospectus.
(g) You shall have received from Ernst & Young LLP a letter
stating that their review of the Company's system of internal accounting
controls, to the extent they deemed necessary in establishing the scope of their
examination of the Company's financial statements as at ________, 19 ________,
did not disclose any weakness in internal controls that they considered to be
material weaknesses.
(h) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several jurisdictions,
or other evidence satisfactory to you, of the qualification referred to in
paragraph (f) of Section 6 hereof.
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(i) Prior to the Closing Date, the Stock to be issued and sold by
the Company shall have been duly authorized for listing by the Nasdaq National
Market upon official notice of issuance.
(j) On or prior to the Closing Date, you shall have received from
all directors, officers, and beneficial holders of more than 5% of the
outstanding Common Stock stockholders agreements, in form reasonably
satisfactory to Chase Securities Inc., stating that without the prior written
consent of Chase Securities Inc. on behalf of the Underwriters, such person or
entity will not, for a period of 180 days following the commencement of the
public offering of the Stock by the Underwriters, directly or indirectly, (i)
sell, offer, contract to sell, make any short sale, pledge, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for or any rights to purchase or acquire Common Stock or (ii) enter into any
swap or other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise.
(k) You shall have received a certificate, dated the Closing
Date, and on any later date which Option Shares are to be purchase, from the
Attorneys for each Selling Securityholder to the effect that, as of Closing
Date, and on any later date which Option Shares are to be purchased, they have
not been informed that:
(i) The representations and warranties made by such
Selling Securityholder herein are not true or correct in
any material respect on the Closing Date, or any later
date in which Option Shares are to be purchased, as the
case may be; or
(ii) Such Selling Securityholder has not complied with any
obligation or satisfied any condition which is required to
be performed or satisfied on the part of such Selling
Securityholder at or prior to the Closing Date, or any
later date in which Option Shares are to be purchased, as
the case may be.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Xxxx Xxxx Xxxx & Freidenrich LLP, counsel for the
Underwriters, shall be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and to the Selling Securityholders. Any such termination shall be
without liability of the Company or the Selling Securityholders to the
Underwriters and without liability of the Underwriters to the Company or the
Selling Securityholders; provided, however, that (i) in the event of such
termination, the Company and the Selling Securityholders agree to indemnify and
hold harmless the Underwriters from all costs or expenses incident to the
performance of the obligations of the Company and the Selling Securityholders
under this Agreement, including all costs and expenses referred to in paragraphs
(i) and (j) of Section 6 hereof, and (ii) if this Agreement is terminated by you
because of any refusal, inability or failure on the part of the Company or the
Selling Securityholders to perform any agreement herein, to fulfill any of the
conditions herein, or to comply with any provision hereof other than by reason
of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the transactions contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY AND THE SELLING
SECURITYHOLDERS. The obligation of the Company and the Selling Securityholders
to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company and the Selling
Securityholders by giving notice to you. Any such termination shall be without
liability of the Company and the Selling Securityholders to the Underwriters and
without liability of the Underwriters to the Company or the Selling
Securityholders; provided, however, that in the event of any such
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termination the Company and the Selling Securityholders jointly and severally
agree to indemnify and hold harmless the Underwriters from all costs or expenses
incident to the performance of the obligations of the Company and the Selling
Securityholders under this Agreement, including all costs and expenses referred
to in paragraphs (i) and (j) of Section 6 hereof.
11.REIMBURSEMENT OF CERTAIN EXPENSES. In addition to their other
obligations under Section 7 of this Agreement, the Company and the Selling
Securityholders hereby jointly and severally agree to reimburse on a quarterly
basis the Underwriters for all reasonable legal and other expenses incurred in
connection with investigating or defending any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in paragraph (a) of
Section 7 of this Agreement, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this Section 11 and the possibility that such payments might later be held to be
improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of the Company, the Selling Securityholders and the several
Underwriters and, with respect to the provisions of Section 7 hereof, the
several parties (in addition to the Company, the Selling Securityholders and the
several Underwriters) indemnified under the provisions of said Section 7, and
their respective personal representatives, successors and assigns. Nothing in
this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser, of
any of the Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Chase Securities Inc., Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, with a copy to Xxxx Xxxx Xxxx & Freidenrich
LLP, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx, XX 00000-0000, Attention:
Xxxxx X. Xxxxxxx; and if to the Company, shall be mailed, telegraphed or
delivered to it at its office, 00000 Xxxxxxxx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx
00000, Attention: CEO; and if to the Selling Securityholders, shall be mailed,
telegraphed or delivered to the Selling Securityholders in care
of________at________ . All notices given by telegraph shall be promptly
confirmed by letter.
14. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or the Selling Securityholders or their respective directors or
officers, and (c) delivery and payment for the Stock under this Agreement;
provided, however, that if this Agreement is terminated prior to the Closing
Date, the provisions of paragraphs (l), (m) and (n) of Section 6 hereof shall be
of no further force or effect.
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This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
Please sign and return to the Company and to the Selling Securityholders
in care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement among the Company, the Selling
Securityholders and the several Underwriters in accordance with its terms.
Very truly yours,
WEBSENSE, INC.
By:
---------------------------------------
Xxxx Xxxxxxxxxx
Chief Executive Office and
President
SELLING SECURITYHOLDERS:
[List Names]
By:
---------------------------------------
[Attorney-in-Fact]
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
CHASE SECURITIES INC.
XX Xxxxx Securities Corporation
SoundView Technology Group, Inc.
By Chase Securities Inc.
By
----------------------------------
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
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SCHEDULE I
UNDERWRITERS
Shares to be
Underwriters Purchased
------------ ------------
Chase Securities Inc.
XX Xxxxx Securities Corporation
SoundView Technology Group, Inc.
Total:
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SCHEDULE II
SELLING SECURITYHOLDERS
Name and Address of Selling Securityholders Number of Shares to be Sold
------------------------------------------- ---------------------------
Xxxxx XxXxxxx
Xxxxxx Xxxxxx
Total:
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ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF XXXXXXX PHLEGER & XXXXXXXX LLP
COUNSEL FOR THE COMPANY
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified as a foreign
corporation and in good standing in each state of the United States of
America in which its ownership or leasing of property requires such
qualification, and has full corporate power and authority to own or
lease its properties and conduct its business as described in the
Registration Statement;
(ii) the authorized capital stock of the Company consists of
degrees shares of degrees Stock, of which there are outstanding degrees
shares, and degrees shares of Common Stock, $ degrees par value, of
which there are outstanding degrees shares (including the Underwritten
Stock plus the number of shares of Option Stock issued on the date
hereof); proper corporate proceedings have been taken validly to
authorize such authorized capital stock; all of the outstanding shares
of such capital stock (including the Underwritten Stock and the shares
of Option Stock issued, if any) have been duly and validly issued and
are fully paid and nonassessable; any Option Stock purchased after the
Closing Date, when issued and delivered to and paid for by the
Underwriters as provided in the Underwriting Agreement, will have been
duly and validly issued and be fully paid and nonassessable; and no
preemptive rights of, or rights of refusal in favor of, stockholders
exist with respect to the Stock, or the issue and sale thereof, pursuant
to the Certificate of Incorporation or Bylaws of the Company and, to the
knowledge of such counsel, there are no contractual preemptive rights
that have not been waived, rights of first refusal or rights of co-sale
which exist with respect to the Stock being sold by the Selling
Securityholders or the issue and sale of the Stock;
(iii) the Registration Statement has become effective under the
Securities Act and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the Prospectus is in effect and no
proceedings for that purpose have been instituted or are pending or
contemplated by the Commission;
(iv) the Registration Statement and the Prospectus (except as to
the financial statements and schedules and other financial data
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
Securities Act, the Exchange Act and with the rules and regulations of
the Commission thereunder;
(v) such counsel have no reason to believe that the Registration
Statement (except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference
therein, as to which such counsel need not express any opinion or
belief) at the Effective Date contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
that the Prospectus (except as to the financial statements and schedules
and other financial and statistical data contained or incorporated by
reference therein, as to which such counsel need not express any opinion
or belief) as of its date or at the Closing Date (or any later date on
which Option Stock is purchased), contained or contains any untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(vi) the information required to be set forth in the Registration
Statement in answer to Items 9, 10 (insofar as it relates to such
counsel) and 11(c) of Form S-1 is to the best of such counsel's
knowledge accurately and adequately set forth therein in all material
respects or no response is required with respect to such Items, the
description of the Company's stock option plans and the options granted
and which may be granted thereunder and the options granted otherwise
than under such plans set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to said
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plans and options to the extent required by the Securities Act and the
rules and regulations of the Commission thereunder;
(vii) such counsel do not know of any franchises, contracts,
leases, documents or legal proceedings, pending or threatened, which in
the opinion of such counsel are of a character required to be described
in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement, which are not described and
filed as required;
(viii) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(ix) the Underwriting Agreement has been duly executed and
delivered by or on behalf of the Selling Securityholders and the Custody
Agreement between the Selling Securityholders and degrees , as
Custodian, and the Power of Attorney referred to in such Custody
Agreement have been duly executed and delivered by the several Selling
Securityholders;
(x) the issue and sale by the Company of the shares of Stock sold
by the Company as contemplated by the Underwriting Agreement will not
conflict with, or result in a breach of, the Certificate of
Incorporation or Bylaws of the Company or any agreement or instrument
known to such counsel to which the Company is a party or any applicable
law or regulation, or so far as is known to such counsel, any order,
writ, injunction or decree, of any jurisdiction, court or governmental
instrumentality;
(xi) all holders of securities of the Company having rights to
the registration of shares of Common Stock, or other securities, because
of the filing of the Registration Statement by the Company have waived
such rights or such rights have expired by reason of lapse of time
following notification of the Company's intent to file the Registration
Statement; and
(xii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated in the Underwriting Agreement, except such as
have been obtained under the Securities Act and such as may be required
under state securities or blue sky laws in connection with the purchase
and distribution of the Stock by the Underwriters.
------------------------------------
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States or of the State of California, upon
opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to the
Representatives and to counsel for the Underwriters and the foregoing opinion
shall also state that counsel knows of no reason the Underwriters are not
entitled to rely upon the opinions of such local counsel.
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ANNEX B
MATTERS TO BE COVERED IN THE OPINION OF XXXXXXXX XXXXXX, LLP
COUNSEL FOR THE SELLING SECURITYHOLDERS
(i) The Registration Statement has become effective under the
Securities Act and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the Prospectus is in effect and no
proceedings for that purpose have been instituted or are pending or
contemplated by the Commission;
(ii) the Registration Statement and the Prospectus (except as to
the financial statements and schedules and other financial data
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
Securities Act, the Exchange Act and with the rules and regulations of
the Commission thereunder;
(iii) such counsel have no reason to believe that the
Registration Statement (except as to the financial statements and
schedules and other financial and statistical data contained or
incorporated by reference therein, as to which such counsel need not
express any opinion or belief) at the Effective Date contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus (except as to the
financial statements and schedules and other financial and statistical
data contained or incorporated by reference therein, as to which such
counsel need not express any opinion or belief) as of its date or at the
Closing Date (or any later date on which Option Stock is purchased),
contained or contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(iv) the Selling Securityholders have full legal right, power and
authority, and all authorization and approval required by law, to enter
into this Agreement and the Custody Agreement and the Power of Attorney
of such Selling Securityholder provided for in such Custody Agreement
and to sell, assign, transfer and deliver the Shares to be sold by such
Selling Securityholder in the manner provided herein and therein;
(v) the Power of Attorney of the Selling Securityholder has been
duly authorized, executed and delivered by such Selling Securityholder
and is a valid and binding instrument of such Selling Securityholder,
enforceable in accordance with its terms, and, pursuant to the Power of
Attorney provided for in the Custody Agreement, such Selling
Securityholder has, among other things, authorized the Attorneys, or any
one of them, to execute and deliver on such Selling Securityholder's
behalf this Agreement and any other document they, or any one of them,
may deem necessary or desirable in connection with the transactions
contemplated hereby and thereby and to deliver the Shares to be sold by
such Selling Securityholder pursuant to this Agreement;
(vi) the execution, delivery and performance of this Agreement
and the Custody Agreement and Power of Attorney provided for in such
Custody Agreement by such Selling Securityholder, the compliance by such
Selling Securityholder with all the provisions hereof and thereof and
the consummation of the transactions contemplated hereby and thereby
will not (A) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency
(except such as have been obtained under federal securities laws, or
such as may be required under the securities or Blue Sky laws of the
various states), (B) conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the organizational documents
of such Selling Securityholder, if such Selling Securityholder is not an
individual, or nay indenture, loan agreement, mortgage, lease or other
agreement or instrument to which such Selling Securityholder is a party
or by which any property of such Selling Securityholder is bound or (C)
violate or conflict with any applicable law or any rule, regulation or,
to such counsel's knowledge, judgment, order or decree of any court or
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any governmental body or agency having jurisdiction over such Selling
Securityholder or any property of such Selling Securityholder.
(vii) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(viii) the Underwriting Agreement has been duly executed and
delivered by or on behalf of the Selling Securityholders and the Custody
Agreement between the Selling Securityholders and degrees , as
Custodian, and the Power of Attorney referred to in such Custody
Agreement have been duly executed and delivered by the several Selling
Securityholders;
(ix) good and marketable title to the shares of Stock sold by the
Selling Securityholders under the Underwriting Agreement, free and clear
of all liens, encumbrances, equities, security interests and claims, has
been transferred to the Underwriters who have severally purchased such
shares of Stock under the Underwriting Agreement, assuming for the
purpose of this opinion that the Underwriters purchased the same in good
faith without notice of any adverse claims; and
(x) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated in the Underwriting Agreement, except such as
have been obtained under the Securities Act and such as may be required
under state securities or blue sky laws in connection with the purchase
and distribution of the Stock by the Underwriters.
------------------------------------
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States or of the State of California, upon
opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to the
Representatives and to counsel for the Underwriters and the foregoing opinion
shall also state that counsel knows of no reason the Underwriters are not
entitled to rely upon the opinions of such local counsel.
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