1
EXHIBIT 1.1
1,500,000 Shares
go2net, Inc.
(Common Stock $.01 Par Value)
UNDERWRITING AGREEMENT
_________, 1997
XXXXXXX CAPITAL, INC.
[CO-MANAGER]
As Representatives of the several Underwriters
named in Schedule A hereto
c/x Xxxxxxx Capital, Inc.
0000 Xxxxx Xxxxx Xxxxxx Xxxxxxx
Xxxxx 000X
Xxxxxxxxx, Xxxxxx 00000
Dear Ladies and Gentlemen:
1. INTRODUCTORY. go2net, Inc., a Delaware corporation (the "Company"),
proposes to sell, pursuant to the terms of this Agreement, to the several
underwriters named in Schedule A hereto (the "Underwriters," or, each, an
"Underwriter"), an aggregate of 1,500,000 shares of Common Stock, $.01 par value
per share (the "Common Stock"), of the Company. The aggregate of 1,500,000
shares so proposed to be sold is hereinafter referred to as the "Firm Stock".
The Company also grants to the Underwriters an option, upon the terms and
conditions set forth in Section 3 hereof, to purchase up to an additional
225,000 shares of Common Stock (the "Option Stock"). The Firm Stock and the
Option Stock are hereinafter collectively referred to as the "Stock." Xxxxxxx
Capital, Inc. ("Xxxxxxx") and [CO-MANAGER] ("_______") are acting as
representatives of the several Underwriters and in such capacity are hereinafter
referred to as the "Representatives".
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-________) in
the form in which it became or becomes effective and also in such form as
it may be when any post-effective amendment thereto shall become effective
with respect to the Stock, including any pre-effective prospectus included
as part of the registration statement as originally filed or as part of any
amendment or supplement thereto, or filed pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules
and regulations (the "Rules and Regulations") of the Securities and
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Exchange Commission (the "Commission") thereunder, copies of which have
heretofore been delivered to you, has been carefully prepared by the
Company in conformity with the requirements of the Securities Act and has
been filed with the Commission under the Securities Act; one or more
amendments to such registration statement, including in each case an
amended pre-effective prospectus, copies of which amendments have
heretofore been delivered to you, have been so prepared and filed. Such
registration statement is referred to hereinafter as the "Registration
Statement." If it is contemplated, at the time this Agreement is executed,
that a post-effective amendment to the Registration Statement will be filed
and must be declared effective before the offering of the Stock may
commence, the term "Registration Statement" as used in this Agreement means
the Registration Statement as amended by said post-effective amendment. The
term "Registration Statement" as used in this Agreement shall also include
any registration statement relating to the Stock that is filed and declared
effective pursuant to Rule 462(b) under the Securities Act. The term
"Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement, or, (A) if the prospectus included
in the Registration Statement omits information in reliance on Rule 430A
under the Securities Act and such information is included in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Securities Act,
the term "Prospectus" as used in this Agreement means the prospectus in the
form included in the Registration Statement as supplemented by the addition
of the Rule 430A information contained in the prospectus filed with the
Commission pursuant to Rule 424(b) and (B) if any prospectus that meet the
requirements of Section 10(a) of the Securities Act are delivered pursuant
to Rule 434 under the Securities Act, then (i) the term "Prospectus" as
used in this Agreement means the "prospectus subject to completion" (as
such term is defined in Rule 434(g) under the Securities Act) as
supplemented by (a) the addition of Rule 430A information or other
information contained in the form of prospectus delivered pursuant to Rule
434(b)(2) under the Securities Act or (b) the information contained in the
term sheets described in Rule 434(b)(3) under the Securities Act, and (ii)
the date of any such prospectus shall be deemed to be the date of the term
sheets. The term "Pre-Effective Prospectus" as used in this Agreement means
the prospectus subject to completion in the form included in the
Registration Statement at the time of the initial filing of the
Registration Statement with the Commission, and as such prospectus shall
have been amended from time to time prior to the date of the Prospectus.
(b) The Commission has not issued or threatened to issue any order
preventing or suspending the use of any Pre-Effective Prospectus, and, at
its date of issue, each Pre-Effective Prospectus conformed in all material
respects with the requirements of the Securities Act and did not include
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
and, when the Registration Statement becomes effective and at all times
subsequent thereto up to and including the Closing Date, the Registration
Statement and the Prospectus and any amendments or supplements thereto
contained
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and will contain all material statements and information required to be
included therein by the Securities Act and conformed and will conform in
all material respects to the requirements of the Securities Act and neither
the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representations, warranties and agreements
shall not apply to information contained in or omitted from any
Pre-Effective Prospectus or the Registration Statement or the Prospectus or
any such amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company by or on
behalf of any Underwriter specifically for use in the preparation thereof;
there is no franchise, lease, contract, agreement or document required to
be described in the Registration Statement or Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed
therein as required; and all descriptions of any such franchises, leases,
contracts, agreements or documents contained in the Registration Statement
are accurate and complete descriptions of such documents in all material
respects.
(c) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as set forth
or contemplated in the Prospectus, the Company has not incurred any
material liabilities or obligations, direct or contingent, except for
liabilities and obligations incurred in the ordinary course of business,
nor entered into any transactions not in the ordinary course of business,
and there has not been any material adverse change in the condition
(financial or otherwise), properties, business, management, net worth or
results of operations of the Company and its subsidiaries considered as a
whole, or any change in the capital stock, short-term or long-term debt of
the Company.
(d) The financial statements, together with the related notes and
schedules, set forth in the Prospectus and elsewhere in the Registration
Statement fairly present, in all material respects on the basis stated in
the Registration Statement, the financial position and the results of
operations and changes in financial position of the Company at the
respective dates or for the respective periods therein specified. Such
statements and related notes and schedules have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
except as may be set forth in the Prospectus. The selected financial and
statistical data set forth in the Prospectus under the caption "SUMMARY
FINANCIAL DATA," "CAPITALIZATION" and "SELECTED FINANCIAL DATA" fairly
present, on the basis stated in the Registration Statement, the information
set forth therein.
(e) Ernst & Young LLP, who have expressed their opinions on the
audited financial statements and related schedules included in the
Registration Statement and the Prospectus, are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
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(f) The Company has been duly organized and is validly existing and in
good standing as a corporation under the laws of the State of Delaware,
with power and authority (corporate and other) to own or lease, as
applicable, its properties and to conduct its businesses as described in
the Prospectus; the Company is in possession of and operating in compliance
with all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders required for the conduct of its business,
all of which are valid and in full force and effect; and the Company is
duly qualified to do business and in good standing as a foreign corporation
in all other jurisdictions where its ownership or leasing of properties or
the conduct of its businesses requires such qualification. The Company has
all requisite power and authority, and all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses and permits
of and from all public regulatory or governmental agencies and bodies to
own, lease and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and the
Prospectus, and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially
burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus. The Company does not own or control, directly
or indirectly, any other corporation, partnership, limited liability
company, association or other entity.
(g) The Company's authorized and outstanding capital stock is on the
date hereof, and will be on the Closing Date, as set forth under the
heading "Capitalization" in the Prospectus; the outstanding shares of
Common Stock conform to the description thereof in the Prospectus and have
been duly authorized and validly issued and are fully paid and
nonassessable and have been issued in compliance with all federal and state
securities laws and were not issued in violation of or subject to any
preemptive rights or similar rights to subscribe for or purchase securities
and conform to the description thereof contained in the Prospectus. Except
as disclosed in or contemplated by the Prospectus and the financial
statements of the Company and related notes thereto included in the
Prospectus, the Company does not have outstanding any options or warrants
to purchase, or any preemptive rights or other rights to subscribe for or
to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations. The
description of the Company's stock option and other stock plans or
arrangements, and the options or other rights granted or exercised
thereunder, as set forth in the Prospectus, accurately and fairly presents
the information required to be shown with respect to such plans,
arrangements, options and rights.
(h) The shares of Stock to be issued and sold by the Company to the
Underwriters hereunder (including the Option Stock) have been duly and
validly authorized and, when issued and delivered against payment therefor
as provided herein, will be duly and validly issued, fully paid and
nonassessable and free of any preemptive or similar rights and will conform
to the description thereof in the Prospectus.
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(i) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property of the Company is subject, which, if determined
adversely to the Company might individually or in the aggregate (i) prevent
or adversely affect the transactions contemplated by this Agreement, (ii)
suspend the effectiveness of the Registration Statement, (iii) prevent or
suspend the use of the Pre-Effective Prospectus in any jurisdiction or (iv)
result in a material adverse change in the condition (financial or
otherwise), properties, business, management, net worth or results of
operations of the Company considered as a whole; and to the best of the
Company's knowledge no such proceedings are threatened against the Company
by governmental authorities or others. The Company is not a party or
subject to the provisions of any material injunction, judgment, decree or
order of any court, regulatory body or other governmental agency or body.
The description of the Company's litigation under the heading
"Business--Legal Proceedings" in the Prospectus is true and correct and
complies with the Rules and Regulations.
(j) The execution, delivery and 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 or provisions of or constitute a
default under any indenture, mortgage, deed of trust, note agreement or
other agreement or instrument to which the Company is a party or by which
it or any of its properties is or may be bound, the Certificate of
Incorporation, By-laws or other organizational documents of the Company or
any of its subsidiaries, or any law, order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its properties or will result in the creation of a lien.
(k) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company
of the transactions contemplated by this Agreement, except such as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") or under the Securities Act or the securities or "Blue Sky" laws of
any jurisdiction in connection with the purchase and distribution of the
Stock by the Underwriters.
(l) The Company has the full corporate power and authority to enter
into this Agreement and to perform its obligations hereunder (including to
issue, sell and deliver the Stock), and this Agreement has been duly and
validly authorized, executed and delivered by the Company and is a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws or the public policy underlying such laws.
(m) The Company is in all material respects in compliance with, and
conducts its business in conformity with, all applicable federal, state,
local and foreign laws, rules and regulations or any court or governmental
agency or body; to the knowledge of the Company, otherwise than as set
forth in the Registration Statement and the Prospectus, no prospective
change in any of such federal or state laws, rules or
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regulations has been adopted which, when made effective, would have a
material adverse effect on the operations of the Company.
(n) The Company has filed all necessary federal, state, local and
foreign income, payroll, franchise and other tax returns and has paid all
taxes shown as due thereon or with respect to any of the properties of the
Company, and there is no tax deficiency that has been, or to the knowledge
of the Company is likely to be, asserted against the Company or any of its
properties or assets that would adversely affect the financial position,
business or operations of the Company.
(o) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of the
filing or effectiveness of the Registration Statement or otherwise.
(p) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any security
of the Company, or which caused or resulted in, or which might in the
future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(q) The Company has provided you with its audited financial statements
as of September 30, 1996.
(r) The Company owns or possesses all patents, trademarks, trademark
registrations, service marks, service xxxx registrations, tradenames,
copyrights, licenses, inventions, trade secrets and rights described in the
Prospectus as being owned by it or necessary for the conduct of its
business, and the Company is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company with respect to
the foregoing. The Company's business as now conducted does not infringe or
conflict with in any material respect patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses or other intellectual
property or franchise right of any person. No claim has been made against
the Company alleging the infringement by the Company of any patent,
trademark, service xxxx, tradename, copyright, trade secret, license in or
other intellectual property right or franchise right of any person.
(s) The Company has performed all material obligations required to be
performed by it under any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which it is a party or by
which it or any of its properties is or may be bound, and the Company is
not in default under or in breach of any such obligations. The Company has
not received any notice of such default or breach.
(t) The Company is not involved in any labor dispute nor is any such
dispute threatened. The Company is not aware that (A) any executive, key
employee or significant group of employees of the Company or any subsidiary
plans to
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terminate employment with the Company or (B) any such executive or key
employee is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be violated by the
present or proposed business activities of the Company. The Company does
not have nor expects to have any liability for any prohibited transaction
or funding deficiency or any complete or partial withdrawal liability with
respect to any pension, profit sharing or other plan which is subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
to which the Company makes or ever has made a contribution and in which any
employee of the Company is or has ever been a participant. With respect to
such plans, the Company is in compliance in all material respects with all
applicable provisions of ERISA.
(u) The Company has obtained the written agreement described in
Section 8(j) of this Agreement from each of its officers, directors and
holders of Common Stock.
(v) The Company has, and as of the Closing Date will have, good and
marketable title in fee simple to all real property referred to in the
Prospectus as being owned by the Company and good and marketable title to
all personal property owned by it which is material to the business of the
Company, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not materially
affect the value of such property and do not interfere with the use made
and proposed to be made of such property by the Company; and any real
property and buildings described in the Prospectus as being held under
lease by the Company are, and will be as of the Closing Date, held by it
under valid, subsisting and enforceable leases or subleases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company except as
described in the Prospectus.
(w) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts which the
Company believes to be adequate as described in the Prospectus; and the
Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings, business or operations
of the Company, except as described in or contemplated by the Prospectus.
(x) Other than as contemplated by this Agreement and the fee to Credit
Research & Trading LLC in connection with serving as a "qualified
independent underwriter" (as such term is defined in Sechedule E to the
NASD By-Laws), there is no broker, finder or other party that is entitled
to receive from the Company any brokerage or finder's fee or other fee or
commission as a result of any of the transactions contemplated by this
Agreement.
(y) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in
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accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(z) To the Company's knowledge, neither the Company nor any employee
or agent of the Company made any payment of funds of the Company or any of
its subsidiaries or received or retained any funds in violation of any law,
rule or regulation.
(aa) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(bb) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company as to the matters
covered thereby.
(cc) There are no contracts or documents which are required to be
described in the Registration Statement, the Prospectus or to be filed as
exhibits thereto which have not been so described and filed as required.
(dd) The Company has complied with, and is and will be in compliance
with, the provisions of that certain Florida act relating to disclosure of
doing business with Cuba, codified as Section 517.075 of the Florida
statutes, and the rules and regulations thereunder or is exempt therefrom.
(ee) Except as described in the Registration Statement, the Prospectus
and except such violations as would not, singly or in the aggregate, result
in a material adverse effect to the Company's operations or financial
condition, (A) the Company is not in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule
of common law and any judicial or administrative interpretation thereof
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
has all permits, authorizations and approvals required under any applicable
Environmental Laws and is in compliance with its requirements, (C) there
are no pending or, to the Company's knowledge,
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threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violations,
investigations or proceedings relating to any Environmental Law against the
Company and (D) there are no events or circumstances that might reasonably
be expected to form the basis of an order for clean-up or remediation, or
an action, suit or proceeding by any private party or governmental body or
agency, against or affecting the Company relating to any Hazardous
Materials or Environmental Laws.
(ff) The Company has not at any time since inception (A) made any
unlawful contribution to any candidate for foreign office, or failed to
disclose fully any contribution in violation of law, or (B) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States of America
or any jurisdiction thereof.
3. PURCHASE BY, AND SALE AND DELIVERY TO, UNDERWRITERS--CLOSING DATES. The
Company agrees to sell to the Underwriters the Firm Stock, and on the basis of
the representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase the Firm Stock from the Company, the
number of shares of Firm Stock to be purchased by each Underwriter being set
opposite its name in Schedule A, subject to adjustment in accordance with
Section 12 hereof.
The purchase price per share to be paid by the Underwriters to the Company
will be $_________ per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 12:00 noon, New York City time, on the third full business day preceding the
First Closing Date (as defined below) or, if no such direction is received, in
the names of the respective Underwriters or in such other names as Xxxxxxx may
designate (solely for the purpose of administrative convenience) and in such
denominations as Xxxxxxx may determine), against payment of the aggregate
Purchase Price therefor in immediately available funds, payable to the order of
the Company, all at the offices of Xxxxxxxx, Xxxxxxx & Xxxxxxx, 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. The time and date of the delivery and
closing shall be at 10:00 A.M., New York City time, on ________, 1997, in
accordance with Rule 15c6-1 of the Securities Exchange Act of 0000 (xxx
"Xxxxxxxx Xxx"). The time and date of such payment and delivery are herein
referred to as the "First Closing Date". The First Closing Date and the location
of delivery of, and the form of payment for, the Firm Stock may be varied by
agreement between the Company and Xxxxxxx. The First Closing Date may be
postponed pursuant to the provisions of Section 12.
The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters not later than
10:00 A.M., New York City time, on the business day preceding the First Closing
Date at the offices of Continental Stock Transfer & Trust Company, 0 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
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It is understood that Xxxxxxx or [CO-MANAGER], individually and not as
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment to the Company on behalf of any Underwriter or Underwriters, for
the Stock to be purchased by such Underwriter or Underwriters. Any such payment
by Xxxxxxx or [CO-MANAGER] shall not relieve such Underwriter or Underwriters
from any of its or their other obligations hereunder.
The several Underwriters agree to make an initial public offering of the
Firm Stock at the initial public offering price as soon after the effectiveness
of the Registration Statement as in their judgment is advisable. The
Representatives shall promptly advise the Company of the making of the initial
public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Company hereby grants to the Underwriters an option to purchase, severally and
not jointly, the Option Stock. The price per share to be paid for the Option
Stock shall be the Purchase Price. The option granted hereby may be exercised as
to all or any part of the Option Stock at any time, and from time to time, not
more than thirty (30) days subsequent to the effective date of this Agreement.
No Option Stock shall be sold and delivered unless the Firm Stock previously has
been, or simultaneously is, sold and delivered. The right to purchase the Option
Stock or any portion thereof may be surrendered and terminated at any time upon
notice by the Underwriters to the Company.
The option granted hereby may be exercised by the Underwriters by giving
written notice from Xxxxxxx to the Company setting forth the number of shares of
the Option Stock to be purchased by them and the date and time for delivery of
and payment for the Option Stock. Each date and time for delivery of and payment
for the Option Stock (which may be the First Closing Date, but not earlier) is
herein called the "Option Closing Date" and shall in no event be earlier than
two (2) business days nor later than ten (10) business days after written notice
is given. (The Option Closing Date and the First Closing Date are herein called
the "Closing Dates".) All purchases of Option Stock from the Company shall be
made on a pro rata basis. Option Stock shall be purchased for the account of
each Underwriter in the same proportion as the number of shares of Firm Stock
set forth opposite such Underwriter's name in Schedule A hereto bears to the
total number of shares of Firm Stock (subject to adjustment by the Underwriters
to eliminate odd lots). Upon exercise of the option by the Underwriters, the
Company agrees to sell to the Underwriters the number of shares of Option Stock
set forth in the written notice of exercise and the Underwriters agree,
severally and not jointly and subject to the terms and conditions herein set
forth, to purchase the number of such shares determined as aforesaid.
The Company will deliver the Option Stock to the Underwriters (in the form
of definitive certificates, issued in such names and in such denominations as
the Representatives may direct by notice in writing to the Company given at or
prior to 12:00 noon, New York City time, on the second full business day
preceding the Option Closing Date or, if no such direction is received, in the
names of the respective Underwriters or in such other names as Xxxxxxx may
designate (solely for the purpose of administrative convenience) and in such
denominations as Xxxxxxx may determine), against payment of the aggregate
Purchase Price therefor in immediately available funds, payable to the order of
the Company all at the offices of Xxxxxxxx, Xxxxxxx & Xxxxxxx, 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. The Company shall make the certificates for
the Option Stock available to the
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Underwriters for examination not later than 10:00 A.M., New York City time, on
the business day preceding the Option Closing Date at the offices of Continental
Stock Transfer & Stock Company, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Option
Closing Date and the location of delivery of, and the form of payment for, the
Option Stock may be varied by agreement between the Company and Xxxxxxx. The
Option Closing Date may be postponed pursuant to the provisions of Section 12.
4. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants and
agrees with the several Underwriters that:
(a) The Company will (i) if the Company and the Representatives have
determined not to proceed pursuant to Rule 430A, use its best efforts to
cause the Registration Statement to become effective, (ii) if the Company
and the Representatives have determined to proceed pursuant to Rule 430A,
use its best efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to Rule 430A and Rule 424 of
the Rules and Regulations and (iii) if the Company and the Representatives
have determined to deliver Prospectuses pursuant to Rule 434 of the Rules
and Regulations, to use its best efforts to comply with all the applicable
provisions thereof. The Company will advise the Representatives promptly as
to the time at which the Registration Statement becomes effective, will
advise the Representatives promptly of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of the institution of any proceedings for that purpose, and will use its
best efforts to prevent the issuance of any such stop order and to obtain
as soon as possible the lifting thereof, if issued. The Company will advise
the Representatives promptly of the receipt of any comments of the
Commission or any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for
additional information and will not at any time file any amendment to the
Registration Statement or supplement to the Prospectus which shall not
previously have been submitted to the Representatives a reasonable time
prior to the proposed filing thereof or to which the Representatives shall
reasonably object in writing or which is not in compliance with the
Securities Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon the request of the Representatives, any amendments or supplements to
the Registration Statement or the Prospectus which in the opinion of the
Representatives is necessary to enable the several Underwriters to continue
the distribution of the Stock and will use its best efforts to cause the
same to become effective as promptly as possible.
(c) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Stock is required to be
delivered under the Securities Act any event relating to or affecting the
Company or any of its subsidiaries occurs as a result of which the
Prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the
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Prospectus to comply with the Securities Act, the Company will promptly
notify the Representatives thereof and will prepare an amended or
supplemented prospectus which will correct such statement or omission; and
in case any Underwriter is required to deliver a prospectus relating to the
Stock nine (9) months or more after the effective date of the Registration
Statement, the Company upon the request of the Representatives and at the
expense of such Underwriter will prepare promptly such prospectus or
prospectuses as may be necessary to permit compliance with the requirements
of Section 10(a)(3) of the Securities Act.
(d) The Company will deliver to the Representatives, at or before the
Closing Dates, signed copies of the Registration Statement, as originally
filed with the Commission, and all amendments thereto including all
financial statements and exhibits thereto and will deliver to the
Representatives such number of copies of the Registration Statement,
including such financial statements but without exhibits, and all
amendments thereto, as the Representatives may reasonably request. The
Company will deliver or mail to or upon the order of the Representatives,
from time to time until the effective date of the Registration Statement,
as many copies of the Pre-Effective Prospectus as the Representatives may
reasonably request. The Company will deliver or mail to or upon the order
of the Representatives on the date of the initial public offering, and
thereafter from time to time during the period when delivery of a
prospectus relating to the Stock is required under the Securities Act, as
many copies of the Prospectus, in final form or as thereafter amended or
supplemented, as the Representatives may reasonably request; provided,
however, that the expense of the preparation and delivery of any prospectus
required for use nine (9) months or more after the effective date of the
Registration Statement shall be borne by the Underwriters required to
deliver such prospectus.
(e) The Company will make generally available to its stockholders as
soon as practicable, but not later than fifteen (15) months after the
effective date of the Registration Statement, an earnings statement which
will be in reasonable detail (but which need not be audited) and which will
comply with Section 11(a) of the Securities Act, covering a period of at
least twelve (12) months beginning after the "effective date" (as defined
in Rule 158 under the Securities Act) of the Registration Statement.
(f) The Company will cooperate with the Representatives to enable the
Stock to be registered or qualified for offering and sale by the
Underwriters and by dealers under the securities laws of such jurisdictions
as the Representatives may designate and at the request of the
Representatives will make such applications and furnish such consents to
service of process or other documents as may be required of it as the
issuer of the Stock for that purpose; provided, however, that the Company
shall not be required to qualify to do business or to file a general
consent (other than that arising out of the offering or sale of the Stock)
to service of process in any such jurisdiction where it is not now so
subject. The Company will, from time to time, prepare and file such
statements and reports as are or may be required of it as the issuer of the
Stock to continue such qualifications in effect for so long a period as the
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Representatives may reasonably request for the distribution of the Stock.
The Company will advise the Representatives promptly after the Company
becomes aware of the suspension of the qualifications or registration of
(or any such exception relating to) the Common Stock of the Company for
offering, sale or trading in any jurisdiction or of any initiation or
threat of any proceeding for any such purpose, and, in the event of the
issuance of any orders suspending such qualifications, registration or
exception, the Company will, with the cooperation of the Representatives,
use its best efforts to obtain the withdrawal thereof.
(g) The Company will furnish to its stockholders annual reports
containing financial statements certified by independent public
accountants. During the period of five (5) years from the date hereof, the
Company will deliver to the Representatives and, upon request, to each of
the other Underwriters, as soon as they are available, copies of each
annual report of the Company containing the balance sheet of the Company as
of the close of such fiscal year and statements of income, stockholders'
equity and cash flows for the year then ended and the opinion thereon of
the Company's independent public accountants, and each other report or
communication furnished by the Company to its stockholders and will deliver
to the Representatives, (i) as soon as they are available, copies of any
other reports or communication (financial or otherwise) which the Company
shall publish or otherwise make available to any of its stockholders as
such, (ii) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission, or the NASD
or any national securities exchange and (iii) from time to time such other
information concerning the Company as you may request. So long as the
Company has active subsidiaries, such financial statements will be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally. Separate financial statements shall be furnished for all
subsidiaries whose accounts are not consolidated but which at the time are
significant subsidiaries as defined in the Rules and Regulations.
(h) The Company will use its best efforts to list and maintain the
listing of the Stock on the Nasdaq Small Cap Market for so long as the
Stock is qualified for such listing, and, in the event that the Stock may
be eligible for listing on the Nasdaq National Market, the Company will use
its best efforts to cause the Stock to be so listed, and to maintain such
listing, on the Nasdaq National Market.
(i) The Company shall retain a transfer agent for the Stock,
reasonably acceptable to the Underwriter, for a period of five years
following the Effective Date. In addition, for a period of five years
following the Effective Date, the Company, at its expense, shall cause such
transfer agent to provide the Underwriter, if so requested in writing, with
copies of the Company's daily transfer sheets, and, when requested by the
Underwriter, a current list of the Company's stockholders, including a list
of the beneficial owners of securities held by a depository trust company
or other nominees.
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(j) The Company will not offer, sell, assign, transfer, encumber,
contract to sell, grant an option to purchase or otherwise dispose of any
shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock during the 180 days following the Effective
Date, other than the Company's sale of Common Stock hereunder, the issuance
of Common Stock upon the exercise of stock options which are presently
outstanding and described in the Prospectus, the grant of options to
purchase shares of Common Stock under the stock option plan described in
the Prospectus and the issuance and the issuance of Common Stock in
connection with the acquisition of any businesses, assets or technologies.
In addition, the Company will never file any registration statement to
register shares of its currently outstanding Common Stock on behalf of any
stockholder (except for the registration on Form S-8 of shares issuable on
exercise of options granted under the Company's 1996 Stock Option Plan)
without the written consent of Xxxxxxx.
(k) The Company will apply the net proceeds from the sale of the Stock
as set forth in the description under "Use of Proceeds" in the Prospectus,
which description complies in all respects with the requirements of Item
504 of Regulation S-K. The Company will file with the Commission all
required reports on Form S-R in accordance with the provisions of Rule 463
promulgated under the Act and will provide a copy of each such report to
you.
(l) The Company will supply you with copies of all correspondence to
and from, and all documents issued to and by, the Commission in connection
with the registration of the Stock under the Securities Act.
(m) Prior to the Closing Dates and for twenty-five (25) days
thereafter, the Company will issue no press release or other communications
directly or indirectly and hold no press conference with respect to the
Company, or its financial condition, results of operation, business,
prospects, assets or liabilities, or the offering of the Stock, without
your prior written consent.
(n) The Company shall, as of the date hereof, have applied for listing
in Standard & Poor's Corporation Records Service (including annual report
information) or Xxxxx'x Industrial Manual (Xxxxx'x OTC Industrial Manual
not being sufficient for these purposes) and shall use its best efforts to
have the Company listed in such manual and shall maintain such listing for
a period of five years following the Effective Date.
5. PAYMENT OF EXPENSES. The Company will pay (directly or by reimbursement)
all costs, fees and expenses incurred in connection with the performance of its
obligations under this Agreement and in connection with the transactions
contemplated hereby, including but not limited to (i) all expenses and taxes
incident to the issuance and delivery of the Stock to the Representatives; (ii)
all expenses incident to the registration of the Stock under the Securities Act;
(iii) the costs of preparing stock certificates (including printing and
engraving costs); (iv) all fees and expenses of the registrar and transfer agent
of the Common Stock; (v) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Stock to the Underwriters; (vi)
fees and expenses
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of the Company's counsel and the Company's independent public accountants; (vii)
all costs and expenses incurred in connection with the preparation, printing
filing, shipping and distribution of the Registration Statement, each
Pre-Effective Prospectus and the Prospectus (including all exhibits and
financial statements) and all amendments and supplements provided for herein,
the "Agreement Among Underwriters" between the Representatives and the other
Underwriters, the Underwriters' Questionnaire, the Blue Sky memoranda and this
Agreement; (viii) all filing fees, attorneys' fees and expenses incurred by the
Company or the Underwriters in connection with exemptions from the qualifying or
registering (or obtaining qualification or registration of) all or any part of
the Stock for offer and sale and determination of its eligibility for investment
under the Blue Sky or other securities laws of such jurisdictions as the
Representatives may designate; (ix) all fees and expenses paid or incurred in
connection with filings made with the NASD; and (x) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 5. In addition, at the First Closing
Date or the Option Closing Date, as the case may be, the Underwriter will deduct
from the payment for the Firm Stock or any Option Stock purchased, two percent
(2%) of the gross proceeds of the Offering as payment for the Underwriter's
non-accountable expense allowance relating to the transactions contemplated
hereby, which amount will include the fees and expenses for Credit Research &
Trading LLC's services in connection with the transactions contemplated hereby.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of the Securities Act and the respective
officers, directors, partners, employees, representatives and agents of each of
such Underwriter (collectively, the "Underwriter Indemnified Parties" and, each,
an "Underwriter Indemnified Party"), against any losses, claims, damages,
liabilities or expenses (including the reasonable cost of investigating and
defending against any claims therefor and counsel fees incurred in connection
therewith), joint or several, which may be based upon the Securities Act, or any
other statute or at common law, on the ground or alleged ground that any
Pre-Effective Prospectus, the Registration Statement or the Prospectus (or any
Pre-Effective Prospectus, the Registration Statement or the Prospectus as from
time to time amended or supplemented) includes or allegedly includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, unless such
statement or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter specifically for use in
the preparation thereof; provided, that with respect to any untrue statement or
omission or alleged untrue statement or omission made in any Pre-Effective
Prospectus, the indemnity agreement contained in this subsection (a) shall not
inure to the benefit of any Underwriter Indemnified Party from whom the person
asserting any such losses, claims, damages or liabilities purchased the shares
of Stock concerned to the extent that any such loss, claim, damage or liability
of such Underwriter Indemnified Party results from the fact that a copy of the
Prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such shares of Stock to such person as required by
the Securities Act and if the untrue statement or omission concerned has been
corrected in the Prospectus. The Company will be entitled to participate at its
own expense in the defense or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Company elects to assume
the defense, such defense shall be conducted by counsel chosen by it. In the
event the
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Company elects to assume the defense of any such suit and retain such counsel,
any Underwriter Indemnified Parties, defendant or defendants in the suit, may
retain additional counsel but shall bear the fees and expenses of such counsel
unless (i) the Company shall have specifically authorized the retaining of such
counsel or (ii) the parties to such suit include any such Underwriter
Indemnified Parties, and the Company and such Underwriter Indemnified Parties at
law or in equity have been advised in writing by counsel to the Underwriters
that one or more legal defenses may be available to it or them which may not be
available to the Company, in which case the Company shall bear the fees and
expenses of one counsel to the Underwriter Indemnified Parties. This indemnity
agreement is not exclusive and will be in addition to any liability which the
Company might otherwise have and shall not limit any rights or remedies which
may otherwise be available at law or in equity to each Underwriter Indemnified
Party.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold
harmless the Company, its directors, its officers who have signed the
Registration Statement and each person, if any, who controls the Company or any
subsidiary within the meaning of the Securities Act (collectively, the "Company
Indemnified Parties"), against any losses, claims, damages, liabilities or
expenses (including, unless the Underwriter or Underwriters elect to assume the
defense, the reasonable cost of investigating and defending against any claims
therefor and counsel fees incurred in connection therewith), joint or several,
which arise out of or are based in whole or in part upon the Securities Act, the
Exchange Act or any other federal, state, local or foreign statute or
regulation, or at common law, on the ground or alleged ground that any
Pre-Effective Prospectus, the Registration Statement or the Prospectus (or any
Pre-Effective Prospectus, the Registration Statement or the Prospectus, as from
time to time amended and supplemented) includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
in which they were made, not misleading, but only insofar as any such statement
or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by such Underwriter, directly or through
the Representatives, specifically for use in the preparation thereof; provided,
however, that in no case is such Underwriter to be liable with respect to any
claims made against any Company Indemnified Party against whom the action is
brought unless such Company Indemnified Party shall have notified such
Underwriter in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon the Company Indemnified Party, but failure to notify such
Underwriter of such claim shall not relieve it from any liability which it may
have to any Company Indemnified Party other than on account of its indemnity
agreement contained in this paragraph. Such Underwriter shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any such liability, but, if such
Underwriter elects to assume the defense, such defense shall be conducted by
counsel chosen by it. In the event that any Underwriter elects to assume the
defense of any such suit and retain such counsel, the Company Indemnified
Parties and any other Underwriter or Underwriters or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them, respectively. The Underwriter
against whom indemnity may be sought shall not be liable to indemnify any person
for any settlement of any such claim effected without such Underwriter's
consent. This indemnity agreement is not exclusive and will be in addition to
any liability which such Underwriter might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in equity to
any Company Indemnified Party.
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(c) If the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to herein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Stock. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bears to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, defending, settling or compromising any
such claim. Notwithstanding the provisions of this subsection (c), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares of the Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
Underwriters' obligations to contribute are several in proportion to their
respective underwriting obligations and not joint. 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.
7. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company or any of its officers or directors or
any controlling person, and shall survive delivery of and payment for the Stock.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of
the several Underwriters hereunder shall be subject to the accuracy, at and
(except as otherwise stated
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herein) as of the date hereof and at and as of the Closing Dates, of the
representations and warranties made herein by the Company as to compliance at
and as of the Closing Dates by the Company with its covenants and agreements
herein contained and other provisions hereof to be satisfied at or prior to the
Closing Dates, and to the following additional conditions:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge
of the Company or the Representatives, shall be threatened by the
Commission, and any request for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus
or otherwise) shall have been complied with to the reasonable satisfaction
of the Representatives. Any filings of the Prospectus, or any supplement
thereto, required pursuant to Rule 424(b) or Rule 434 of the Rules and
Regulations, shall have been made in the manner and within the time period
required by Rule 424(b) and Rule 434 of the Rules and Regulations, as the
case may be.
(b) The Representatives shall have been satisfied that there shall not
have occurred any change, on a consolidated basis, prior to the Closing
Dates in the condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of the Company,
or any change in the capital stock, short-term or long-term debt of the
Company, such that (i) the Registration Statement or the Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact
which, in the opinion of the Representatives, is material, or omits to
state a fact which, in the opinion of the Representatives, is required to
be stated therein or is necessary to make the statements therein not
misleading, or (ii) it is impracticable in the reasonable judgment of the
Representatives to proceed with the public offering or purchase the Stock
as contemplated hereby.
(c) The Representatives shall be satisfied that no legal or
governmental action, suit or proceeding affecting the Company which is
material and adverse to the Company or which affects or may affect the
Company's ability to perform its obligations under this Agreement shall
have been instituted or threatened and there shall have occurred no
material adverse development in any existing such action, suit or
proceeding.
(d) At the time of execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP, independent certified public
accountants, a letter, dated the date hereof, in form and substance
satisfactory to the Representatives.
(e) The Representatives shall have received from Ernst & Young LLP,
independent certified public accountants, a letter, dated the Closing
Dates, to the effect that such accountants reaffirm, as of the Closing
Dates, and as though made on the Closing Dates, the statements made in the
letter furnished by such accountants pursuant to paragraph (d) of this
Section 8.
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(f) The Representatives shall have received from Xxxxxxxx, Xxxxxxx &
Xxxxxxx, counsel for the Company, an opinion, dated the Closing Dates, to
the effect set forth in Exhibit I hereto. In rendering such opinion,
Xxxxxxxx, Xxxxxxx & Xxxxxxx may rely as to all matters governed other than
by the laws of the Commonwealth of Massachusetts and the State of Delaware
or federal laws on the opinion of local counsel of good standing in such
jurisdictions, provided that such local counsel is satisfactory to the
counsel to the Underwriters and that in each case Xxxxxxxx, Xxxxxxx &
Xxxxxxx shall state that they believe that they and the Underwriters are
justified in relying on such other counsel.
(g) The Representatives shall have received from Xxxxxx & Xxxxx LLP,
counsel for the Underwriters, their opinion or opinions dated the Closing
Dates with respect to the incorporation of the Company, the validity of the
Stock, the Registration Statement and the Prospectus and such other related
matters as it may reasonably request, and the Company shall have furnished
to such counsel such documents as they may request for the purpose of
enabling them to pass upon such matters. In rendering such opinion, Xxxxxx
& Xxxxx LLP may rely as to all matters governed other than by the laws of
the State of California and Delaware or federal laws on the opinions of
counsel referred to in paragraph (f) of this Section 8.
(h) The Representatives shall have received a certificate, dated the
Closing Dates, of the chief executive officer or the President and the
chief financial or accounting officer of the Company to the effect that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of the
knowledge of the signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities Act;
(ii) Neither any Pre-Effective Prospectus, as of its date, nor
the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, as of the time when the Registration Statement
became effective and at all times subsequent thereto up to the
delivery of such certificate, included any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(iii) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, and except
as set forth or contemplated in the Prospectus, the Company has not
incurred any material liabilities or obligations, direct or
contingent, nor entered into any material transactions not in the
ordinary course of business and there has not been any material
adverse change in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of operations of
the Company or any change in the capital stock, short-term or
long-term debt of the Company;
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(iv) The representations and warranties of the Company in this
Agreement are true and correct at and as of the Closing Dates, and the
Company has complied with all the agreements and performed or
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Dates; and
(v) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, and except as
disclosed in or contemplated by the Prospectus, (i) there has not been
any material adverse change or a development involving a material
adverse change in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of operations of
the Company; (ii) the business and operations conducted by the Company
has not sustained a loss by strike, fire, flood, accident or other
calamity (whether or not insured) of such a character as to interfere
materially with the conduct of the business and operations of the
Company; (iii) no legal or governmental action, suit or proceeding is
pending or threatened against the Company which is material to the
Company, whether or not arising from transactions in the ordinary
course of business, or which may materially and adversely affect the
transactions contemplated by this Agreement; (iv) since such dates and
except as so disclosed, the Company has not incurred any material
liability or obligation, direct, contingent or indirect, made any
change in its capital stock, made any material change in its
short-term or funded debt or repurchased or otherwise acquired any of
the Company's capital stock; and (v) the Company has not declared or
paid any dividend, or made any other distribution, upon its
outstanding capital stock payable to stockholders of record on a date
prior to the Closing Date.
(i) The Company shall have furnished to the Representatives such
additional certificates as the Representatives may have reasonably
requested as to the accuracy, at and as of the Closing Dates, of the
representations and warranties made herein by it and as to compliance at
and as of the Closing Dates by it with its covenants and agreements herein
contained and other provisions hereof to be satisfied at or prior to the
Closing Dates, and as to satisfaction of the other conditions to the
obligations of the Underwriters hereunder.
(j) Xxxxxxx shall have received the written agreements of all officers
and directors of the Company and all holders of securities of the Company
that each will not offer, sell, assign, transfer, encumber, contract to
sell, grant an option to purchase or otherwise dispose of, other than by
operation of law, gifts, pledges or dispositions by estate representatives,
any shares of Common Stock (including, without limitation, Common Stock
which may be deemed to be beneficially owned by such officer, director or
holder in accordance with the Rules and Regulations) or securities
convertible into or exercisable or exchangeable for Common Stock during the
270 days following the Effective Date.
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(k) The Nasdaq Small Cap Market or Nasdaq National Market shall have
approved the Stock for inclusion, subject only to official notice of
issuance.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters and
other documents as the Representatives shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Representatives by notifying the Company of such termination
in writing or by telegram at or prior to the Closing Dates.
9. EFFECTIVE DATE. This Agreement shall become effective immediately as to
Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16, 17, 18 and 19, as to all other
provisions, at 11:00 a.m. New York City time, on the first full business day
following the effectiveness of the Registration Statement or at such earlier
time after the Registration Statement becomes effective as the Representatives
may determine on and by notice to the Company or by release of any of the Stock
for sale to the public. For the purposes of this Section 9, the Stock shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Stock or upon the release by you of
telegrams (i) advising Underwriters that the shares of Stock are released for
public offering or (ii) offering the Stock for sale to securities dealers,
whichever may occur first.
10. TERMINATION. This Agreement (except for the provisions of Section 5)
may be terminated by the Company at any time before it becomes effective in
accordance with Section 9 by notice to the Representatives and may be terminated
by the Representatives at any time before it becomes effective in accordance
with Section 9 by notice to the Company. In the event of any termination of this
Agreement under this or any other provision of this Agreement, there shall be no
liability of any party to this Agreement to any other party, other than as
provided in Sections 5, 6 and 11 and other than as provided in Section 12 as to
the liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to the First Closing
Date trading in securities on any of the New York Stock Exchange, American Stock
Exchange, Nasdaq National Market or Nasdaq Small Cap Market shall have been
suspended or minimum or maximum prices shall have been established on any such
exchange or market, or a banking moratorium shall have been declared by New York
or United States authorities; (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter market;
(iii) if at or prior to the First Closing Date there shall have been (A) an
outbreak or escalation of hostilities between the United States and any foreign
power or of any other insurrection or armed conflict involving the United States
or (B) any change in financial markets or any calamity or crisis which, in the
judgment of the Representatives, makes it impracticable or inadvisable to offer
or sell the Firm Stock on the terms contemplated by the Prospectus; (iv) if
there shall have been any material development or prospective material
development involving particularly the business or properties or securities of
the Company or any of its subsidiaries or the transactions contemplated by this
Agreement, which, in the judgment of the Representatives, makes it impracticable
or inadvisable to offer or deliver the Firm Stock on the terms contemplated by
the Prospectus; or (v) if there shall be any litigation or proceeding, pending
or threatened not disclosed in the Prospectus,
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which, in the judgment of the Representatives, makes it impracticable or
inadvisable to offer or deliver the Firm Stock on the terms contemplated by the
Prospectus.
11. REIMBURSEMENT OF UNDERWRITERS. Notwithstanding any other provisions
hereof, if this Agreement shall not become effective by reason of any election
of the Company pursuant to the first paragraph of Section 10 or shall be
terminated by the Representatives under Section 8, the Company will bear and pay
the expenses specified in Section 5 hereof and, in addition to its obligations
pursuant to Section 6 hereof, the Company will reimburse the reasonable
out-of-pocket expenses of the several Underwriters (including reasonable fees
and disbursements of counsel for the Underwriters) incurred in connection with
this Agreement and the proposed purchase of the Stock, and promptly upon demand
the Company will pay such amounts to you as Representatives.
12. SUBSTITUTION OF UNDERWRITERS. If on the First Closing Date or the
Option Closing Date, as the case may be, any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder
(otherwise than by reason of default on the part of the Company), you, as
Representatives of the Underwriters, shall use your reasonable efforts to
procure within 48 hours thereafter one or more of the other Underwriters, or any
others, to purchase from the Company such amounts as may be agreed upon and upon
the terms set forth herein, the shares of Stock which the defaulting Underwriter
or Underwriters failed to purchase. If during such 48 hours you, as such
Representatives, shall not have procured such other Underwriters, or any others,
to purchase the shares of Stock agreed to be purchased by the defaulting
Underwriter or Underwriters, then (a) if the aggregate number of shares which
such defaulting Underwriter or Underwriters agreed but failed to purchase does
not exceed ten percent (10%) of the total number of shares underwritten, the
other Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the shares of Stock which such
defaulting Underwriter or Underwriters agreed but failed to purchase, or (b) if
the aggregate number of shares of Stock with respect to which such default or
defaults occur is more than ten percent (10%) of the total number of shares
underwritten, the Company or you, as the Representatives of the Underwriters,
will have the right, by written notice given within the next 48-hour period to
the parties to this Agreement, to terminate this Agreement without liability on
the part of the non-defaulting Underwriters or the Company.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 12, (i) the Company
shall have the right to postpone the Closing Dates for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 12 shall be without liability on the part of
any non-defaulting Underwriter or the Company, except for expenses to be paid or
reimbursed pursuant to Section 5 and except for the provisions of Section 6.
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13. NOTICES. All communications hereunder shall be in writing and, if sent
to the Underwriters, shall be mailed, delivered or telegraphed and confirmed to
you, as their Representatives c/x Xxxxxxx Capital, Inc. at 0000 Xxxxx Xxxxx
Xxxxxx Xxxxxxx, Xxxxx 000X, Xxxxxxxxx, Xxxxxx 00000, Attention: Investment
Banking Department, with a copy to Xxxxx X. Xxxxx, Esq., Xxxxxx & Xxxxx LLP, 000
Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxxxx 00000, except that notices
given to an Underwriter pursuant to Section 6 hereof shall be sent to such
Underwriter at the address furnished by the Representatives or, if sent to the
Company, shall be mailed, delivered or telegraphed and confirmed c/o go2net,
Inc. Incorporated, at 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000,
Attention: Chief Executive Officer, with a copy to Xxxxxxx X. Xxxxxx, Esq.,
Xxxxxxxx, Xxxxxxx & Xxxxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
14. SUCCESSORS. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters, the Company and their respective successors and
legal representatives. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person other than the persons
mentioned in the preceding sentence any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person; except that the representations, warranties, covenants,
agreements and indemnities of the Company contained in this Agreement shall also
be for the benefit of the person or persons, if any, who control any Underwriter
or Underwriters within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the indemnities of the several Underwriters
shall also be for the benefit of each director of the Company, each of its
officers who has signed the Registration Statement and the person or persons, if
any, who control the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act.
15. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
choice of law principles thereof.
16. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement,
you will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by Xxxxxxx, as Representative, will be binding on all the
Underwriters.
17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
18. GENERAL. This Agreement constitutes the entire agreement of the parties
to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement
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may be amended or modified, and the observance of any term of this Agreement may
be waived, only by a writing signed by the Company and the Representatives.
19. COUNTERPARTS. This Agreement may be signed in two (2) or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
go2net, Inc.
By:
--------------------------------
Name:
Title:
Accepted and delivered in
Henderson, Nevada as of the
date first above written.
XXXXXXX CAPITAL, INC.
[CO-MANAGER]
Acting on their own behalf
and as Representatives of the several
Underwriters referred to in the
foregoing Agreement.
By: Xxxxxxx Capital, Inc.
By:
-------------------------------------
Name:
Title:
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SCHEDULE A
Number of shares of Firm Stock to be Purchased
---------------
Name
----
Xxxxxxx Capital, Inc.
Total......................... _________
1,500,000
27
EXHIBIT I
Matters to be covered in opinion
--------------------------------
of ISSUER'S COUNSEL(1)
-----------------------
1. The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the ownership or lease of property or the conduct of
its business requires such qualification (except where the failure to be so
qualified would not have a material adverse effect on the business or financial
condition of the Company), and has all corporate power and authority necessary
to own or hold its properties and conduct the business in which it is engaged as
described in the Prospectus.
2. The Company has an authorized capital stock as set forth in the Prospectus
under the heading "Capitalization", and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and all of the shares of Stock to be issued and sold by
the Company to the Underwriters pursuant to the Underwriting Agreement have been
duly and validly authorized and, when issued and delivered against payment
therefor as provided for in the Underwriting Agreement, will be duly and validly
issued, fully paid and non-assessable and free of any preemptive or similar
rights arising pursuant to the Company's Certificate of Incorporation or
Restated By-Laws.
3. Except as disclosed in or contemplated by the Prospectus and the financial
statements of the Company and related notes thereto included in the Prospectus,
to the knowledge of such counsel, the Company does not have outstanding any
options or warrants to purchase, or any preemptive rights or other rights to
subscribe for or to purchase any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations, except for
options granted subsequent to the date of information provided in the Prospectus
pursuant to the Company's employee and stock option plans as disclosed in the
Prospectus. There are no restrictions upon the voting or transfer of any of the
Stock pursuant to the Company's Certificate of Incorporation or Restated By-Laws
or any agreement or other instrument to which the Company is a party.
4. To such counsel's knowledge, except as set forth in the Prospectus, there
are no material legal or governmental proceedings pending to which the Company
is a party or of which any property or assets of the Company is the subject
which, if determined adversely to the Company, could have a material adverse
effect on the Company or prevent or adversely affect the transactions
contemplated by the Underwriting Agreement; and, to such counsel's
------------------
(1) Capitalized terms used herein but not defined shall have the meanings given
such terms in the Underwriting Agreement.
28
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or other third parties. To such counsel's knowledge, the Company is
not a party or subject to the provisions of any material injunction, judgment,
decree or order of any court, regulatory body or other governmental agency or
body.
5. The Company has the full corporate power and authority to enter into the
Underwriting Agreement and to perform its obligations thereunder (including to
issue, sell and deliver the Stock), and the Underwriting Agreement has been duly
and validly authorized, executed and delivered by the Company.
6. The execution, delivery and performance of the Underwriting Agreement and
the consummation of the transactions therein contemplated will not result in a
breach or violation of any of the terms or provisions of or constitute a default
under the Certificate of Incorporation, Restate By-Laws or other organizational
documents of the Company, or any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument known to such counsel to which the
Company is a party or by which it or any of its properties is or may be bound,
or any law, order, rule or regulation (other tan state securities or "blue sky"
laws)of any court or governmental agency or body having jurisdiction over the
Company or any of its properties or result in the creation of a lien.
7. No consent, approval, authorization or order of any court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by the Underwriting Agreement (except such as may be
required by the National Association of Securities Dealers, Inc. or as required
by the securities or "blue sky" laws of any jurisdiction as to which such
counsel need express no opinion) in connection with the purchase and
distribution of the Stock by the Underwriters except such as have been obtained
or made.
8. The Registration Statement has been declared effective under the Securities
Act as of , 1997, the Prospectus was filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations on , 1996 and, to such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose is
pending or threatened by the Commission.
9. The Registration Statement and the Prospectus and any amendments or
supplements thereto (except for the financial statements and notes thereto and
related schedules and other financial and statistical date 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 and the Rules and
Regulations.
10. To such counsel's knowledge, there are no contracts, leases, agreements or
other documents which are required by the Securities Act or by the Rules and
Regulations to be described in the Prospectus or filed as exhibits to the
Registration Statement which have not been described in the Prospectus or filed
as exhibits to the Registration Statement.
11. To such counsel's knowledge, no person or entity has the right to require
registration of shares of Common Stock or other securities of the Company
because of the filing or
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effectiveness of the Registration Statement or otherwise, except for persons and
entities who have expressly waived such right or who have been given proper
notice and have failed to exercise such right within the time or times required
under the terms and conditions of such right.
12. The information required to be set forth in the Registration Statement in
answer to Item 9, Item 10 (insofar as it relates to our firm) and Item 11(c) of
Form S-1 is to such counsel's knowledge accurately set forth therein in all
material respects or no response is required with respect to such Items.
13. The Company is not an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company Act of
1940, as amended.
You are advised that we have participated in conferences with officers and
representatives of the Company and with its independent public accountants at
which the affairs of the Company and the contents of the Registration Statement
and Prospectus and exhibits thereto were discussed. There can be no assurance
that all possible material facts as to the Company we discussed at such
meetings. Further, the limitations inherent in the independent verification of
factual matters and the character of determinations involved in the registration
process are such that we cannot vouch for and do not assume any responsibility
for the accuracy or completeness of the statements contained in the Registration
Statement and the Prospectus, as amended or supplemented, but we hereby confirm
to you that, in the course of such meetings and our other work in connection
with the Registration Statement and the Prospectus, nothing has come to our
attention to lead us to believe that the Registration Statement and Prospectus
(except as to the financial statements and schedules and other financial (and
statistical) data contained therein as to which we make no statement) at the
time the Registration Statement became effective, the Prospectus, or any
amendment or supplement thereto, as of the date it was filed pursuant to Rule
424(b) of the rules and regulations under the Securities Act, and the
Registration Statement and the Prospectus, or any amendment or supplement
thereto, as of this date contain any untrue statement of material fact or omit
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.
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