Exhibit 99.1
9,700,000 Shares
XXXXXX INTERACTIVE INC.
Common Stock
UNDERWRITING AGREEMENT
August 6, 2003
XXXXXX BROTHERS INC.
U.S. BANCORP XXXXX XXXXXXX INC.
As Representatives of the several
Underwriters named in Schedule 1, hereto
c/x XXXXXX BROTHERS INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Certain stockholders of Xxxxxx Interactive Inc., a Delaware
corporation (the "Company"), named in Schedule 2 hereto (the "Selling
Stockholders") propose to sell an aggregate of 9,700,000 shares (the "Firm
Stock") of the Company's common stock, par value $0.001 per share (the "Common
Stock").
In addition, certain of the Selling Stockholders propose to
grant to the Underwriters named in Schedule 1 hereto (the "Underwriters") an
option to purchase up to an additional 930,278 shares of the Common Stock on the
terms and for the purposes set forth in Section 3 (the "Option Stock"). The Firm
Stock and the Option Stock, if purchased, are hereinafter collectively called
the "Stock." This is to confirm the agreement concerning the purchase of the
Stock from the Selling Stockholders by the Underwriters.
SECTION 1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3, relating, among other things, to
the Stock and the offer and sale thereof from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended
(the "Securities Act"), and amendments thereto, has (i) been prepared
by the Company in conformity with the requirements of the Securities
Act and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act. Copies of such registration
statement, and the each of the amendments thereto have been delivered
by the Company to the Underwriters. As used in this Agreement,
"Effective Time" means the date and the time as of which such
registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Base Prospectus" means
each prospectus included in such registration statement, or amendments
thereof, at the Effective Time; "Registration Statement" means such
registration statement, as amended at the Effective Time, including any
documents incorporated by reference therein at such time. As provided
in Section 6(a), a final prospectus supplement to the Prospectus
reflecting the terms of the offering of the Stock and the other matters
set forth therein will be prepared and filed pursuant to Rule 424 under
the Securities Act. "Prospectus Supplement" means the final prospectus
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supplement, in the form first filed after the date of this Agreement
pursuant to Rule 424 under the Securities Act (provided, that for
purposes for this Agreement only, the Prospectus Supplement shall
include the information contained in Item 12 on the Company's Form 8-K,
dated July 30, 2003); "Prospectus" means the Prospectus Supplement,
together with the accompanying Base Prospectus and any and all
information incorporated by reference therein at such time, in the form
first used to confirm sales of Stock. Reference made herein to any Base
Prospectus, Prospectus Supplement or to the Prospectus shall be deemed
to refer to and include all documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, as of the
date of such Base Prospectus, Prospectus Supplement or the Prospectus,
as the case may be, and any reference to any amendment or supplement to
any Base Prospectus, Prospectus Supplement or the Prospectus shall be
deemed to refer to and include any document filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), after the date
of such Base Prospectus, Prospectus Supplement or the Prospectus, as
the case may be, and incorporated by reference in such Base Prospectus,
Prospectus Supplement or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be
deemed to include any annual report of the Company filed with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after
the Effective Time that is incorporated by reference in the
Registration Statement.
(b) The Commission has not issued any order
preventing or suspending the use of the Registration Statement.
(c) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when it becomes
effective or are filed with the Commission, as the case may be, conform
in all material respects to the requirements of the Securities Act and
the Rules and Regulations and do not and will not, as of the applicable
effective date (as to the Registration Statement and any amendment
thereto) and as of the applicable filing date (as to the Prospectus and
any amendment or supplement thereto) contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary ( in the case of the Prospectus, in the light of
the circumstances under which made) to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or
on behalf of any Underwriter or Selling Stockholder specifically for
inclusion therein.
(d) The documents incorporated by reference in the
Prospectus, when they were filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the Rules
and Regulations, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein not misleading in light of the
circumstances in which they were made; and any further documents so
filed and incorporated by reference in the Prospectus, when such
documents are filed with Commission, will conform in all material
respects to the requirements of the Exchange Act and the Rules and
Regulations and will not contain an untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein not misleading in light of the circumstances in which they were
made.
(e) The Company and each of its subsidiaries (as
defined in Section 15) have been duly incorporated or organized and are
validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such
qualification, except when such failure to be qualified would not have
a material adverse effect on the general affairs, management,
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries
(a "Material Adverse Effect") and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged.
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(f) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued,
were issued in compliance with federal and state securities laws, are
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus in all material respects; all of the
Company's options, warrants and other rights to purchase or exchange
any securities for shares of the Company's capital stock have been duly
and validly authorized and issued, were issued in compliance with
federal and state securities laws, and conform to the description
thereof contained in the Prospectus in all material respects. All of
the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims.
(g) The shares of the Stock to be sold by the Selling
Stockholders to the Underwriters hereunder have been duly and validly
authorized and, are validly issued, fully paid and non-assessable; and
the Stock conforms to the description thereof contained in the
Prospectus.
(h) This Agreement has been duly authorized, executed
and delivered by the Company.
(i) The execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act of 1934, as amended (the "Exchange Act") and applicable state
securities laws in connection with the purchase and distribution of the
Stock by the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(j) Except as described in the Prospectus, there are
no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(k) Except as described in the Prospectus, the
Company has not sold or issued any shares of Common Stock during the
six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act, other than shares issued pursuant to employee benefit
plans, qualified stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
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(l) Neither the Company nor any of its subsidiaries
has sustained, since the date of the latest audited financial
statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such
date, there has not been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, consolidated
financial position, stockholders' equity or results of operations,
business or prospects of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus.
(m) The financial statements (including the related
notes and supporting schedules) filed as part of the Registration
Statement or included in the Prospectus present fairly the financial
condition and results of operations of the entities purported to be
shown thereby, at the dates and for the periods indicated, and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved. The pro forma financial information included in the
Registration Statement and Prospectus has been prepared in accordance
with the applicable requirements of the Securities Act and the Rules
and Regulations and includes all adjustments necessary to present
fairly the pro forma financial position of the respective dates
indicated and the results of their operations for the respective
periods specified.
(n) PricewaterhouseCoopers LLP, who have certified
certain financial statements of the Company, whose report appears in
the Prospectus and who have delivered the letters referred to in
Section 9(f) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(o) The Company and each of its subsidiaries have
good and marketable title in fee simple to all real property and good
and marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as do not materially affect
the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries as a whole; and all assets held under lease by the Company
and its subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries as a whole.
(p) The Company and each of its subsidiaries carry,
or are covered by, insurance in such amounts and covering such risks as
the Company determines are adequate for the conduct of their respective
businesses and the value of their respective properties and as is
customary for companies engaged in similar businesses in similar
industries.
(q) The Company and each of its subsidiaries own or
possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights and licenses
(collectively, "Intellectual Property") necessary for the conduct of
their respective businesses in the manner presently conducted and have
no reason to believe that the conduct of their respective businesses
will conflict with, and have not received any notice of any claim of
conflict with, any such rights of others.
(r) Except as otherwise set forth, or incorporated by
reference in, the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, might have a Material Adverse
Effect; and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others.
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(s) There are no contracts or other documents which
are required to be described in the Prospectus or filed as exhibits to
the Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(t) No relationship, direct or indirect, exists
between or among the Company or its subsidiaries on the one hand, and
the directors, officers, stockholders, customers or suppliers of the
Company or its subsidiaries on the other hand, which is required to be
described in the Prospectus which is not so described.
(u) No labor disturbance by the employees of the
Company or its subsidiaries exists or, to the knowledge of the Company,
is imminent, which might be expected to have a Material Adverse Effect.
(v) The Company and its subsidiaries are in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or any of its subsidiaries would have any liability;
the Company and its subsidiaries have not incurred and do not expect to
incur liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971
of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which the Company or any of its subsidiaries
would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(w) The Company and its subsidiaries have filed all
federal, state and local income and franchise tax returns required to
be filed through the date hereof and has paid all taxes due thereon,
and no tax deficiency has been determined adversely to the Company or
any of its subsidiaries which has had (nor does the Company have any
knowledge of any tax deficiency which, if determined adversely to the
Company or any of its subsidiaries, might have) a Material Adverse
Effect.
(x) Since the date as of which information is given
in the Prospectus through the date hereof, and except as may otherwise
be disclosed in the Prospectus, the Company and its subsidiaries have
not (i) issued or granted any securities, other than securities issued
or granted under the Company's Long-Term Incentive Plan and Employee
Stock Option Plan in the ordinary course of business, (ii) incurred any
liability or obligation, direct or contingent, other than non-material
liabilities and obligations which were incurred in the ordinary course
of business, (iii) entered into any transaction not in the ordinary
course of business or (iv) declared or paid any dividend on its capital
stock.
(y) The Company and its subsidiaries (i) have made
and kept accurate books and records and (ii) have maintained internal
accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of their respective financial statements and to maintain
accountability for their respective assets, (C) access to their
respective assets is permitted only in accordance with management's
authorization and (D) the reported accountability for their respective
assets is compared with existing assets at reasonable intervals.
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(z) Neither the Company nor any of its subsidiaries
(i) is in violation of its charter or by-laws, (ii) is in default in
any material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject or (iii)
is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any material
license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or
to the conduct of its business.
(aa) Neither the Company nor any of its subsidiaries,
nor any director, officer, agent, employee or other person associated
with or acting on behalf of the Company or any of its subsidiaries, has
used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(bb) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances by the
Company or any of its subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any of
the property now or previously owned or leased by the Company or its
subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial
actions, a Material Adverse Effect; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or any
of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not
have or would not be reasonably likely to have, singularly or in the
aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a Material Adverse Effect.
The terms "hazardous wastes", "toxic wastes", "hazardous substances"
and "medical wastes" shall have the meanings specified in any
applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.
(cc) Neither the Company nor any subsidiary is, nor
as of the Closing Date will be, an "investment company" as defined in
the Investment Company Act of 1940, as amended.
(dd) There are no contracts, agreements or
understandings between the Company and any person that would give rise
to a valid claim against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with this
offering.
(ee) The statistical and market-related data included
in the Prospectus and the Registration Statement are based on or
derived from sources which the Company believes to be reliable and
accurate.
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SECTION 2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder (other than Virginia Retirement System
with respect to Section 2(e) and (f) below) severally and not jointly
represents, warrants and agrees that:
(a) The Selling Stockholder has, and immediately
prior to the Delivery Date will have good and valid title to the shares
of Stock to be sold by the Selling Stockholder hereunder on such date,
free and clear of all liens, encumbrances, equities or claims; and upon
delivery of such shares and payment therefor pursuant hereto, good and
valid title to such shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters.
(b) The Selling Stockholder has placed in custody
under a custody agreement (the "Custody Agreement" and, together with
all other similar agreements executed by the other Selling
Stockholders, the "Custody Agreements") with American Stock Transfer &
Trust Company, as custodian (the "Custodian"), for delivery under this
Agreement, certificates in negotiable form representing the shares of
Stock to be sold by the Selling Stockholder hereunder.
(c) The Selling Stockholder has duly and irrevocably
executed and delivered a power of attorney (the "Power of Attorney"
and, together with all other similar agreements executed by the other
Selling Stockholders, the "Powers of Attorney") appointing the
Custodian and one or more other persons, as attorneys-in-fact, with
full power of substitution, and with full authority (exercisable by any
one or more of them) to execute and deliver this Agreement and to take
such other action as may be necessary or desirable to carry out the
provisions hereof on behalf of the Selling Stockholder.
(d) The Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement; the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by the
Selling Stockholder and the consummation by the Selling Stockholder of
the transactions contemplated hereby will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or
to which any of the property or assets of the Selling Stockholder is
subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Selling Stockholders if
other than a natural person or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Selling Stockholder or the property or assets of
the Selling Stockholder; and, except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications will have been obtained prior to the
date hereof as may be required under the Exchange Act and applicable
state or securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Power of Attorney or
the Custody Agreement by the Selling Stockholder and the consummation
by the Selling Stockholder of the transactions contemplated hereby.
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(e) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they it becomes
effective or is filed with the Commission, as the case may be, conform
in all respects to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable effective
date (as to the Registration Statement and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary (in the case of the Prospectus, in the light of
the circumstances under which made) to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
specifically for inclusion therein, and provided further that this
paragraph (e) should apply to the Selling Stockholders only to the
extent that the statements or omissions from the Registration Statement
or the Prospectus were based on written information provided by the
Selling Stockholders specifically for inclusion therein, which
information, with respect the Selling Stockholders, shall consist only
of the names of all of the Selling Stockholders and the beneficial
ownership information pertaining to all of the Selling Stockholders as
set forth under the caption "Selling Security Holders" in the
Prospectus.
(f) The Selling Stockholder has no reason to believe
that the representations and warranties of the Company contained in
Section 1 hereof are not materially true and correct, is familiar with
the Registration Statement and the Prospectus (as amended or
supplemented) and has no knowledge of any material fact, condition or
information not disclosed in the Registration Statement, as of the
effective date, or the Prospectus (or any amendment or supplement
thereto), as of the applicable filing date, which has adversely
affected or may adversely affect the business of the Company and is not
prompted to sell shares of Common Stock by any information concerning
the Company which is not set forth in the Registration Statement and
the Prospectus.
(g) The Selling Stockholder has not taken and will
not take, directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the shares
of the Stock.
SECTION 3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, each Selling Stockholder hereby agrees to sell
the number of shares of the Firm Stock set opposite its name in Schedule 2
hereto, severally and not jointly, to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Firm Stock set opposite that Underwriter's name in Schedule 1 hereto.
Each Underwriter shall be obligated to purchase from each Selling Stockholder,
that number of shares of the Firm Stock which represents the same proportion of
the number of shares of the Firm Stock to be sold by each Selling Stockholder,
as the number of shares of the Firm Stock set forth opposite the name of such
Underwriter in Schedule 1 represents of the total number of shares of the Firm
Stock to be purchased by all of the Underwriters pursuant to this Agreement. The
respective purchase obligations of the Underwriters with respect to the Stock
shall be rounded among the Underwriters to avoid fractional shares, as the
Underwriters may determine.
In addition, on the basis of the representations and warranties contained in,
and subject to the terms and conditions of, this Agreement, certain of the
Selling Stockholders grant to the Underwriters an option to purchase up to
930,278 shares of Option Stock. Such option is granted solely for the purpose of
covering over-allotments in the sale of Firm Stock and is exercisable as
provided in Section 5 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be $6.01 per share.
The Selling Stockholders shall not be obligated to deliver any of the Stock to
be delivered on the Delivery Date (as hereinafter defined), except upon payment
for all the Stock to be purchased on such Delivery Date as provided herein.
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SECTION 4. Offering of Stock by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
SECTION 5. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the New York office of Weil, Gotshal & Xxxxxx
LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New York City
time, on the fourth full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the "First Delivery Date." On the First Delivery Date, the Selling Stockholders
shall deliver or cause to be delivered certificates representing the Firm Stock
to the Representatives for the account of each Underwriter against payment to or
upon the order of the Selling Stockholders of the purchase price by wire
transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Stock shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Stock, the Selling Stockholders shall
make the certificates representing the Firm Stock available for inspection by
the Representatives in New York, New York, not later than 2:00 P.M., New York
City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of this
Agreement and may be exercised in whole or in part from time to time but in no
event more than twice, by written notice being given to the Company and the
Selling Stockholders by the Representatives. Such notice shall set forth the
aggregate number of shares of Option Stock as to which the option is being
exercised, the names in which the shares of Option Stock are to be registered,
the denominations in which the shares of Option Stock are to be issued and the
date and time, as determined by the Representatives, when the shares of Option
Stock are to be delivered; provided, however, that this date and time shall not
be earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Stock are delivered are sometimes
referred to as a "Second Delivery Date" and the First Delivery Date and any
Second Delivery Date are sometimes each referred to as a "Delivery Date."
Delivery of security entitlements with respect to and payment for the Option
Stock shall be made at the place specified in the first sentence of the first
paragraph of this Section 5 (or at such other place as shall be determined by
agreement between the Representatives and the Company) at 10:00 A.M., New York
City time, on such Second Delivery Date. On such Second Delivery Date, the
Selling Stockholders who are selling the Option Stock shall deliver or cause to
be delivered the security entitlements with respect to the certificates
representing the Option Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of such Selling Stockholders of
the purchase price by wire transfer in immediately available funds. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names and
in such denominations as the Representatives shall request in the aforesaid
written notice.
SECTION 6. Further Agreements of the Company. The Company agrees:
(a) To prepare a Prospectus Supplement in a form
approved by the Underwriters and to file such Prospectus Supplement
pursuant to Rule 424(b) under the Securities Act not later than
Commission's close of business on the second business day following the
execution and delivery of this Agreement; to make no further amendment
or any supplement to the Registration Statement or to the Prospectus
Supplement except as permitted herein or otherwise required by law or
that certain Registration Rights Agreement of the Company, dated as of
October 15, 1999; to advise the Underwriters, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus Supplement or any amended Prospectus
Supplement has been filed and to furnish the Underwriters with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Stock; to advise the Underwriters, promptly
after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of the
Registration Statement, of the suspension of the qualification of the
Stock for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
Page 13 of 32
(b) To furnish promptly to each of the
Representatives and to counsel for the Underwriters a signed copy of
the Registration Statement as originally filed with the Commission, and
each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such
number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration Statement
as originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement and (ii) the
Prospectus and any amended or supplemented Prospectus; and, if the
delivery of a prospectus is required at any time after the Effective
Time in connection with the offering or sale of the Stock or any other
securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary to amend or supplement the
Prospectus in order to comply with the Securities Act, to notify the
Representatives and, upon their request, to file such document and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or any
supplement to the Prospectus that may, in the judgment of the Company
or the Representatives, be required by the Securities Act or requested
by the Commission;
(e) Prior to filing with the Commission any amendment
to the Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the
Underwriters and, except in the case of an amendment or supplement
required to be filed pursuant to the Registration Rights Agreement,
dated as of October 15, 1999, obtain the consent of the Representatives
to the filing;
(f) As soon as practicable after the Effective Date,
to make generally available to the Company's security holders and to
deliver to the Representatives an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Securities Act and the Rules and Regulations (including,
at the option of the Company, Rule 158);
(g) For a period of five years following the
Effective Date, to furnish to the Representatives copies of all
materials furnished by the Company to its shareholders and all public
reports and all reports and financial statements furnished by the
Company to the principal national securities exchange upon which the
Common Stock may be listed pursuant to requirements of or agreements
with such exchange or to the Commission pursuant to the Exchange Act or
any rule or regulation of the Commission thereunder;
Page 14 of 32
(h) Promptly from time to time to take such action as
the Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(i) For a period of 90 days from the date of the
Prospectus, not to, directly or indirectly, (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device
that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock
or securities convertible into or exchangeable for Common Stock (other
than the Stock and shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation or purchase
plans existing on the date hereof or pursuant to currently outstanding
options, warrants or rights and shares), or sell or grant options,
rights or warrants with respect to any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other
than the grant of options pursuant to option plans existing on the date
hereof), or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether
any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise without the prior written consent of Xxxxxx Brothers Inc. on
behalf of the Underwriters; provided, that the Company may issue shares
of Common Stock representing up to 10% of the Company's total
outstanding Common Stock in connection with acquisitions without the
prior written consent of Xxxxxx Brothers Inc.
(j) To take such steps as shall be necessary to
ensure that neither the Company nor any subsidiary shall become an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
SECTION 7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder agrees to deliver to the Underwriters prior to the Delivery Date a
properly completed and executed United States Treasury Department Form W-8 (if
the Selling Stockholder is a non-United States person) or Form W-9 (if the
Selling Stockholder is a United States person).
SECTION 8. Expenses. (a) The Company agrees to pay (i) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (ii) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (iii) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), the Base Prospectus, the Prospectus
and any amendment or supplement to the Prospectus, all as provided in this
Agreement; (iv) the costs of producing and distributing this Agreement and any
other related documents in connection with the offering, purchase, sale and
delivery of the Stock; (v) any applicable listing or other fees; (vi) the fees
and expenses of qualifying the Stock under the securities laws of the several
jurisdictions as provided in Section 6(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); (vii) fees and disbursements of custodians
(including, without limitation, pursuant to the Irrevocable Power of Attorney
and Custody Agreement, dated August 6, 2003), and fees and disbursements of
counsel for the Company and all independent certified public accountants,
underwriters (excluding discounts and commissions) and other Persons retained by
the Company; (viii) the fees and disbursements of Xxxxxxxx & Xxxxx LLP for the
Selling Stockholders; and (ix) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement as provided
in that certain Registration Rights Agreement, dated July 7, 1998, as amended
(the "Registration Rights Agreement"); provided that, except as provided in this
Section 8 and in Section 11 the Underwriters shall pay their own costs and
expenses, including the costs and expenses of counsel to the Underwriters and
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters; provided further, that
notwithstanding the foregoing, the Company shall be obligated to make payments
as and only to the extent set forth in the Registration Rights Agreement.
Page 15 of 32
(b) Virginia Retirement System, severally and not jointly, in proportion to the
number of shares of stock to be sold by it hereunder, shall reimburse each
Underwriter, its officers, employees, agents and each person, if any, who
controls any Underwriter within the meaning of the Securities Act, for any legal
or other expenses reasonably incurred in connection with investigating or
defending or preparing to defend against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases and sales
of Stock), to which that Underwriter, officer, employee, agent or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
any representation or warranty of Virginia Retirement System pursuant to Section
2(a) hereof failing to be true and correct as of the date hereof and the
Delivery Date; provided, however, that the aggregate amount of any reimbursement
obligation under this paragraph 8 (b) shall not exceed the cash proceeds
received by Virginia Retirement System from its sale of Stock.
SECTION 9. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and Selling
Stockholders contained herein, to the performance by the Company and Selling
Stockholders of their respective obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Prospectus Supplement shall have been timely
filed with the Commission in accordance with Section 6; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and any request of
the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been
complied with.
(b) No Underwriter shall have discovered and
disclosed to the Company on or prior to such Delivery Date that the
Registration Statement or the Prospectus or any amendment or supplement
thereto contains an untrue statement of a fact which, in the opinion of
Weil, Gotshal & Xxxxxx LLP, counsel for the Underwriters, is material
or omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the
Stock, the Registration Statement and the Prospectus, and all other
legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material
respects to counsel for the Underwriters, and the Company shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) (i) Xxxxxx Beach LLP shall have furnished to the
Representatives their written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives substantially
in the form of Exhibit A hereto, and (ii) Xxxxxxxx & Xxxxx LLP shall
have furnished to the Representatives its written opinion, as counsel
to the Selling Stockholders (other than Virginia Retirement System),
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives substantially
in the form of Exhibit B hereto.
Page 16 of 32
(e) The Representatives shall have received from
Weil, Gotshal & Xxxxxx LLP, counsel for the Underwriters, such opinion
or opinions, dated such Delivery Date, with respect to the issuance and
sale of the Stock, the Registration Statement, the Prospectus and other
related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(f) At the time of execution of this Agreement, the
Representatives shall have received from PricewaterhouseCoopers LLP a
letter, in form and substance satisfactory to the Representatives,
addressed to the Underwriters and the Selling Stockholders and dated
the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as
of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(g) With respect to the letter of
PricewaterhouseCoopers LLP referred to in the preceding paragraph and
delivered to the Representatives concurrently with the execution of
this Agreement (the "Initial Letter"), the Company shall have furnished
to the Representatives a letter (the "Bring-Down Letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date
(i) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(h) The Company shall have furnished to the
Representatives a certificate, dated such Delivery Date, of its
Chairman of the Board, its Chief Executive Officer, its President or a
Vice President and its chief financial officer stating that:
(i) The representations, warranties and
agreements of the Company in Section 1 are true and correct as
of such Delivery Date; the Company has complied with all its
agreements contained herein; and the conditions set forth in
Sections 6 (a) through 7(i) have been fulfilled; and
(ii) They have carefully examined the
Registration Statement and the Prospectus and, in their
opinion (A) as of the Effective Date, the Registration
Statement and Prospectus Supplement did not include any untrue
statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, and (B) since the
Effective Date no event has occurred which should have been
set forth in a supplement or amendment to the Registration
Statement or the Prospectus Supplement.
Page 17 of 32
(i) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the latest audited
financial statements included in the Prospectus Supplement any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus Supplement or (ii)
since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus Supplement, the effect of which, in any such case described
in clause (i) or (ii), is, in the judgment of the Representatives, so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Stock being
delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange or the
Nasdaq National Market or in the over-the-counter market, or trading in
any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) as to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(k) All opinions, letters, evidence and certificates
mentioned above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in form and
substance reasonably satisfactory to counsel for the Underwriters.
SECTION 10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless
each Underwriter, its officers, employees and agents and each person,
if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases
and sales of Stock), to which that Underwriter, officer, employee,
agent or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or
Page 18 of 32
action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in the
Registration Statement or the Prospectus or in any amendment or
supplement thereto, or (B) in any materials or information provided to
investors by, or with the approval of, the Company in connection with
the marketing of the offering of the Stock ("Marketing Materials"),
including any investor presentations made to investors by the Company
(whether in person or electronically), (ii) the omission or alleged
omission to state in the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, or in any Marketing Materials
any material fact required to be stated therein or necessary to make
the statements therein not misleading or (iii) any act or failure to
act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the
offering contemplated hereby, and that is included as part of or
referred to in any loss, claim, damage, liability or action arising out
of or based upon matters covered by clause (i) or (ii) above (provided
that the Company shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter
and each such officer, employee, agent or controlling person promptly
upon demand for any legal or other expenses reasonably incurred by that
Underwriter, officer, employee, agent or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement or the Prospectus, or in any such
amendment or supplement, in reliance upon and in conformity with
written information concerning such Underwriter furnished to the
Company by or on behalf of any Underwriter specifically for inclusion
therein which information consists solely of the information specified
in Section 10(f). The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to any Underwriter
or to any officer, employee or controlling person of that Underwriter.
(b) The Selling Stockholders (other than Virginia
Retirement System), severally and not jointly, in proportion to the
number of shares of stock to be sold by them hereunder, shall indemnify
and hold harmless each Underwriter, its officers, employees, agents and
each person, if any, who controls any Underwriter within the meaning of
the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which that
Underwriter, officer, employee, agent or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged
omission to state in the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each Underwriter, its officers,
employees and agents and each such controlling person for any legal or
other expenses reasonably incurred by that Underwriter, its officers
and employees or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however,
that such Selling Stockholders shall be liable in any such case only to
the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement or the Prospectus or in any such amendment or supplement in
reliance upon and in conformity with written information concerning
such Selling Stockholder furnished to the Company specifically for
inclusion therein; provided, further, the aggregate amount of any
Selling Stockholder's indemnity and contribution obligations under this
paragraph 10(b) shall not exceed the cash proceeds received by such
Selling Stockholder from its sale of stock. The foregoing indemnity
agreement is in addition to any liability which such Selling
Stockholders may otherwise have to any Underwriter or any officer,
employee or controlling person of that Underwriter.
Page 19 of 32
(c) Each Underwriter, severally and not jointly,
shall indemnify and hold harmless the Company, its officers and
employees, each of its directors (including any person who, with his or
her consent, is named in the Registration Statement as about to become
a director of the Company), and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company or any such director, officer or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or the Prospectus or in any amendment or supplement thereto,
or (ii) the omission or alleged omission to state in the Registration
Statement or the Prospectus, or in any amendment or supplement thereto,
or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading, but
in each case only to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such
Underwriter furnished to the Company by or on behalf of that
Underwriter specifically for inclusion therein; and shall reimburse the
Company and any such director, officer or controlling person for any
legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are incurred.
The foregoing indemnity agreement is in addition to any liability which
any Underwriter may otherwise have to the Company or any such director,
officer, employee or controlling person.
(d) Promptly after receipt by an indemnified party
under this Section 10 of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under Section 10(a), 10(b) or
10(c) hereof, notify the indemnifying party in writing of the claim or
the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability
which it may have under Section 10(a), 10(b) or 10(c), except to the
extent it has been materially prejudiced by such failure and, provided
further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under Section 10(a), 10(b) or 10(c). If any such claim
or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim
or action, the indemnifying party shall not be liable to the
indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that the Underwriters shall have the right to employ counsel
to represent jointly the Underwriters and their respective officers,
employees, agents and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be
sought by the Underwriters against the Company or any Selling
Stockholders under this Section 10 if, in the reasonable judgment of
the Underwriters, it is advisable for the Underwriters, officers,
employees and controlling persons to be jointly represented by separate
counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the indemnifying party No indemnifying party
shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but
if settled with the consent of the indemnifying party or if there be a
final judgment of the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from
and against any loss or liability by reason of such settlement or
judgment.
Page 20 of 32
(e) If the indemnification provided for in this
Section 10 shall for any reason be unavailable to or insufficient to
hold harmless an indemnified party under Section 10(a), 10(b) or 10(c)
in respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of
such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the
Stock or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company, and the Selling
Stockholders on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative benefits
received by the Company, and the Selling Stockholders on the one hand
and the Underwriters on the other with respect to such offering shall
be deemed to be in the same proportion as the total net proceeds from
the offering of the Stock purchased under this Agreement (before
deducting expenses) received by the Company and the Selling
Stockholders, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of
the Stock purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the shares of the Stock
under this Agreement, in each case as set forth in the table on the
cover page of the Prospectus Supplement. The relative fault shall be
determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, the
Selling Stockholders or the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 10 were to be
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability,
or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10(e), any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10(e), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Stock underwritten by it and
distributed to the public was offered to the public exceeds the amount
of any damages which such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 10(e) are several
in proportion to their respective underwriting obligations and not
joint.
(f) The Underwriters severally confirm and the
Company acknowledges that the statements with respect to the public
offering of the Stock by the Underwriters set forth on the cover page
of, and the concession and reallowance figures and the fourth, eighth
and ninth paragraphs appearing under the caption "Underwriting" in, the
Prospectus Supplement are correct and constitute the only information
concerning such Underwriters furnished in writing to the Company by or
on behalf of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
Page 21 of 32
SECTION 11. Defaulting Underwriters
If, on either Delivery Date, any Underwriter defaults in the performance of its
obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Stock which the defaulting Underwriter agreed
but failed to purchase on such Delivery Date in the respective proportions which
the number of shares of the Firm Stock set opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the total number of
shares of the Firm Stock set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Stock on such Delivery Date if the total number of shares of the Stock which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased on
such Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 3.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Selling Stockholders to
sell, the Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 8 and 13. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 11, purchases Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any liability
it may have to the Company and the Selling Stockholders for damages caused by
its default. If other Underwriters are obligated or agree to purchase the Stock
of a defaulting or withdrawing Underwriter, either the Underwriters or the
Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
SECTION 12. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
and the Selling Stockholders prior to delivery of and payment for the Stock if,
prior to that time, any of the events described in Sections 9(i) or 9(k) shall
have occurred or if the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement.
SECTION 13. Reimbursement of Underwriters' Expenses. If (a) any Selling
Stockholder shall fail to tender the Stock for delivery to the Underwriters by
reason of any failure, refusal or inability on the part of the Company or the
Selling Stockholders to perform any agreement on its part to be performed, or
because any other condition of the Underwriters' obligations hereunder required
to be fulfilled by the Company or the Selling Stockholders is not fulfilled, the
Company will reimburse the Underwriters for all reasonable out-of-pocket
expenses (including fees and disbursements of counsel) incurred by the
Underwriters in connection with this Agreement and the proposed purchase of the
Stock, and upon demand the Company shall pay the full amount thereof to the
Representative(s). If this Agreement is terminated pursuant to Section 9 by
reason of the default of one or more Underwriters, neither the Company nor any
Selling Stockholder shall be obligated to reimburse any defaulting Underwriter
on account of those expenses.
SECTION 14. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission to Xxxxxx Brothers Inc.,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate
Department (Fax: 000-000-0000), with a copy, in the case of any notice
pursuant to Section 9(c), to the Director of Litigation, Office of the
General Counsel, Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX
00000;
Page 22 of 32
(b) if to the Company or any of its subsidiaries,
shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Registration Statement,
Attention: Xxxxx X. Xxxxxx, Chief Financial Officer (Fax:
000-000-0000), with a copy to Xxxxxx Beach LLP, 00 Xxxxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxxx (Fax: 000-000-0000);
and
(c) if to any Selling Stockholders, shall be
delivered or sent by mail, or facsimile transmission to such Selling
Stockholder at the address set forth on Schedule 2 hereto;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives.
SECTION 15. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Company, the Selling
Stockholders and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
and the Selling Stockholders contained in this Agreement shall also be deemed to
be for the benefit of the person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Securities Act and (B) the indemnity
agreement of the Underwriters contained in Section 10(c) of this Agreement shall
be deemed to be for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 15, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
SECTION 16. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Selling Stockholders and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Stock and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
SECTION 17. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
SECTION 18. Governing Law. This agreement shall be governed by and construed in
accordance with the laws of New York.
SECTION 19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Page 23 of 32
If the foregoing correctly sets forth the agreement among the Company, the
Selling Stockholders and the Underwriters, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
XXXXXX INTERACTIVE INC.
By /s/ Xxxxxx X. Black
-----------------------------------
Name: Xxxxxx X. Black
Title: Chairman and CEO
Page 24 of 32
BVCF III, L.P.
By: X.X. Xxxx Associates, LLC, its General Partner
By: Xxxxxxx Venture Management, LLC, its Attorney-in-fact
By: Xxxxx Street Partners, LLC, as its Administrative Member
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
Partner
UBS Global Asset Management Trust Company as Trustee of the
Xxxxxxx MAP Venture Capital Fund III
By: UBS Global Asset Management Trust Company
By: Xxxxx Street Partners, LLC under Power of Attorney
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Xxxxxx X. Xxxxxx
Partner
Page 25 of 32
Virginia Retirement System
By:
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: CIO
Page 26 of 32
Accepted:
XXXXXX BROTHERS INC.
U.S. BANCORP XXXXX XXXXXXX INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By: XXXXXX BROTHERS INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
Page 27 of 32
SCHEDULE 1
Number of Shares
of Firm Stock
Underwriters To Be Purchased
------------ ---------------
Xxxxxx Brothers Inc..................................................................... 6,790,000
U.S. Bancorp Xxxxx Xxxxxxx Inc.......................................................... 2,910,000
---------
Total................................................................................... 9,700,000
=========
Page 28 of 32
SCHEDULE 2
Selling Stockholders Number of Shares
-------------------- ----------------
Virginia Retirement System 8,380,260
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Xxxxxxx MAP Venture Capital Fund III 185,064
x/x Xxxxx Xxxxxx Partners, LLC
attn: Xxx Xxxxxx
Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
BVCF III, L.P. 1,134,676
x/x Xxxxx Xxxxxx Partners, LLC
attn: Xxx Xxxxxx
Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Page 29 of 32
Exhibit A
1) The Company has been duly incorporated and is validly existing and in
good standing as a corporation under the laws of the State of Delaware
and has full corporate power and authority to conduct its business as
described in the Registration Statements and Prospectus;
2) All outstanding shares of the Company's Common Stock, including the
Shares to be sold by the Selling Stockholders, have been duly
authorized by the Company and are validly issued, fully paid and
nonassessable;
3) The statements made in the Prospectus under the caption "Description of
Capital Stock", insofar as they purport to constitute summaries of the
terms of the Company's capital stock (including the Shares), constitute
accurate summaries of the terms of such capital stock in all material
respects;
4) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
5) The compliance by the Company with all of the provisions of the
Underwriting Agreement will not breach or result in a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument filed or incorporated by reference as an
exhibit to the Registration Statements, nor will such action violate
the Certificate of Incorporation or By-laws of the Company or any
federal or New York statute or the Delaware General Corporation Law or
any rule or regulation that has been issued pursuant to any federal or
New York statute or the Delaware General Corporation Law or any order
known to us issued pursuant to any federal or New York statute or the
Delaware General Corporation Law by any court or governmental agency or
body or court having jurisdiction over the Company or any of its
subsidiaries or any of their properties;
6) No consent, approval, authorization, order, registration or
qualification of or with any federal or New York governmental agency or
body or any Delaware governmental agency or body acting pursuant to the
Delaware General Corporation Law or, to our knowledge, any federal or
New York court or any Delaware court acting pursuant to the Delaware
General Corporation Law is required for the compliance by the Company
with all of the provisions of the Underwriting Agreement, except for
the registration of the Shares under the Act and the Securities
Exchange Act of 1934, as amended, and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters;
7) The Registration Statements have become effective under the Act and the
Prospectus was filed on July 2, 2003 pursuant to Rule 424(b)(1) of the
rules and regulations of the Commission under the Act and, to our
knowledge, no stop order suspending the effectiveness of the
Registration Statements has been issued or proceeding for that purpose
has been instituted or threatened by the Commission;
8) To our knowledge, there are no statutes or pending or threatened legal
or governmental proceedings required to be described in the Prospectus
which are not described as required, or any contracts or documents of a
character required to be described in the Registration Statements or
Prospectus or to be filed as exhibits to the Registration Statements or
incorporated by reference therein which are not described and filed or
incorporated by reference as required;
9) To our knowledge, there are no contracts or agreements between the
Company and any person granting such person the right (other than
rights which have been waived or satisfied) to require the Company to
include any securities of the Company owned or to be owned by such
person in the securities registered pursuant to the Registration
Statements other than disclosed; and
Page 30 of 32
10) The Company is not an "investment company" within the meaning of and
subject to regulation under the Investment Company Act of 1940, as
amended.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement or the
Prospectus and take no responsibility therefor, except as and to the extent set
forth in paragraph 6 above. In the course of the preparation by the Company of
the Registration Statement and the Prospectus, we participated in conferences
with certain officers and employees of the Company, PricewaterhouseCoopers LLP
and with counsel to the Company. Based upon our examination of the Registration
Statement and the Prospectus, our investigations made in connection with the
preparation of the Registration Statements and the Prospectus and our
participation in the conferences referred to above, (i) we are of the opinion
that each of the Registration Statement, as of its date, and the Prospectus, as
of the date of the Agreement, complied as to form in all material respects with
the requirements of the Act and the applicable rules and regulations of the
Commission thereunder, except that we express no opinion with respect to the
financial statements or other financial data contained or incorporated by
reference in the Registration Statement or, the Prospectus, and (ii) we have no
reason to believe that the Registration Statement, as of its effective date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that in each case we express no
belief with respect to the financial statements or other financial data
contained or incorporated by reference in the Registration Statement or the
Prospectus.
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the law of the State of
New York, the federal law of the United States and the Delaware General
Corporation Law.
This opinion letter is rendered to you in connection with the
above-described transactions. This opinion letter may not be relied upon by you
for any other purpose, or relied upon by, or furnished to, any other person,
firm or corporation without our prior written consent.
Page 31 of 32
Exhibit B
1) Selling Stockholder has full right, power and authority to enter into this
Agreement, the Power of Attorney and the Custody Agreement; the execution,
delivery and performance of this Agreement, the Power of Attorney and the
Custody Agreement by such Selling Stockholder and the consummation by such
Selling Stockholder of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any partnership agreement,
certificate of incorporation or deed of trust of such Selling Stockholder or any
statute or any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over such Selling Stockholder or
the property or assets of such Selling Stockholder; and, except for the
registration of the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Power of Attorney or the Custody Agreement by
such Selling Stockholder and the consummation by such Selling Stockholder of the
transactions contemplated hereby and thereby;
2) This Agreement has been duly executed and delivered by or on behalf of each
Selling Stockholder;
3) A Power-of-Attorney and a Custody Agreement have been duly executed and
delivered by each Selling Stockholder and constitute valid and binding
agreements of each Selling Stockholder, enforceable in accordance with their
respective terms;
4) Immediately prior to the Effective Date, each Selling Stockholder had a
security entitlement with respect to the shares of Stock to be sold by the
Selling Stockholder under this Agreement free and clear of all liens,
encumbrances, equities or claims and full right, power and authority to sell,
assign, transfer and deliver such shares to be sold by the Selling Stockholder
hereunder; and
5) A security entitlement with respect to the shares of Stock to be sold by each
Selling Stockholder under this Agreement, has been transferred to each of the
several Underwriters and no action based on an adverse claim may be asserted
against the Underwriters with respect to such offered securities.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the general corporate or
partnership law, as the case may be, of the state of the Selling Stockholder's
incorporation or organization, as the case may be, and that such counsel is not
admitted in the jurisdiction in which the Selling Stockholder is incorporated or
organized, as the case may be, and (ii) in rendering the opinion above, rely
upon a certificate of such Selling Stockholder in respect of matters of fact as
to ownership of and liens, encumbrances, equities or claims on the shares of
Stock sold by such Selling Stockholder, provided that such counsel shall furnish
copies thereof to the Representatives and state that such counsel believes that
both the Underwriters and such counsel are justified in relying upon such
certificate.
Page 32 of 32
