1
3,000,000 Shares
INTERWORLD CORPORATION
Common Stock
($.01 par value)
UNDERWRITING AGREEMENT
__________, 1999
INVEMED ASSOCIATES LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
1. Introductory. InterWorld Corporation, a Delaware corporation
("Company"), proposes to issue and sell 3,000,000 shares (the "Firm Securities")
of its authorized and unissued Common Stock, $.01 par value, ("Common Stock") to
Invemed Associates LLC (the "Underwriter"). The Company also proposes to issue
and sell to the Underwriter, at the option of the Underwriter, an aggregate of
not more than 450,000 additional shares (the "Optional Securities") of its
Common Stock, as set forth below. The Firm Securities and the Optional
Securities are herein collectively called the "Offered Securities". The Company
hereby agrees with the Underwriter as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriter that:
(a) A registration statement (No. 333-79879) relating to the Offered
Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (A) has
been declared effective under the Securities Act of 1933 ("Act") and
is not proposed to be amended or (B) is proposed to be amended by
amendment or post-effective amendment. If such registration
statement (the "initial registration statement") has been declared
effective, either (A) an additional registration statement (the
"additional registration statement") relating to the Offered
Securities may have been filed with the Commission pursuant to Rule
462(b)
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("Rule 462(b)") under the Act and, if so filed, has become effective
upon filing pursuant to such Rule and the Offered Securities all
have been duly registered under the Act pursuant to the initial
registration statement and, if applicable, the additional
registration statement or (B) such additional registration statement
is proposed to be filed with the Commission pursuant to Rule 462(b)
and will become effective upon filing pursuant to such Rule and upon
such filing the Offered Securities will all have been duly
registered under the Act pursuant to the initial registration
statement and such additional registration statement. If the Company
does not propose to amend the initial registration statement or if
an additional registration statement has been filed and the Company
does not propose to amend it, and if any post-effective amendment to
either such registration statement has been filed with the
Commission prior to the execution and delivery of this Agreement,
the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has
become effective upon filing pursuant to Rule 462(c) ("Rule 462(c)")
under the Act or, in the case of the additional registration
statement, Rule 462(b). For purposes of this Agreement, "Effective
Time" with respect to the initial registration statement or, if
filed prior to the execution and delivery of this Agreement, the
additional registration statement means (A) if the Company has
advised the Underwriter that it does not propose to amend such
registration statement, the date and time as of which such
registration statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this
Agreement, was declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c), or (B) if the Company
has advised the Underwriter that it proposes to file an amendment or
post-effective amendment to such registration statement, the date
and time as of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is
declared effective by the Commission. If an additional registration
statement has not been filed prior to the execution and delivery of
this Agreement but the Company has advised the Underwriter that it
proposes to file one, "Effective Time" with respect to such
additional registration statement means the date and time as of
which such registration statement is filed and becomes effective
pursuant to Rule 462(b). "Effective Date" with respect to the
initial registration statement or the additional registration
statement (if any) means the date of the Effective Time
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thereof. The initial registration statement, as amended at its
Effective Time including all information contained in the additional
registration statement (if any) and deemed to be a part of the
initial registration statement as of the Effective Time of the
additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("Rule
430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement, as
amended at its Effective Time, including the contents of the initial
registration statement incorporated by reference therein and
including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time pursuant
to Rule 430A(b), is hereinafter referred to as the "Additional
Registration Statement". The Initial Registration Statement and the
Additional Registration Statement are hereinafter referred to
collectively as the "Registration Statements" and individually as a
"Registration Statement". The form of prospectus relating to the
Offered Securities, as first filed with the Commission pursuant to
and in accordance with Rule 424(b) ("Rule 424(b)") under the Act or
(if no such filing is required) as included in a Registration
Statement is hereinafter referred to as the "Prospectus". No
document has been or will be prepared or distributed in reliance on
Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all respects to the requirements
of the Act and the rules and regulations of the Commission ("Rules
and Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, (B) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement conformed or will
conform, in all respects to the requirements of the Act and the
Rules and Regulations and did not include, or, as of its Effective
Time and as of the Closing Date (as herein defined) will not
include, any untrue statement of a material fact and did not omit,
or as of its Effective Time and as of the Closing Date will not
omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (C) on
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the date of this Agreement, the Initial Registration Statement and,
if the Effective Time of the Additional Registration Statement is
prior to the execution and delivery of this Agreement, the
Additional Registration Statement each conforms, and at the time of
filing of the Prospectus pursuant to Rule 424(b) or (if no such
filing is required) at the Effective Date of the Additional
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, as of such time
of filing of the Prospectus or as of the Effective Date of such
Additional Registration Statement and as of the Closing Date will
include, any untrue statement of a material fact or omits, as of
such time of filing of the Prospectus or as of the Effective Date of
such Additional Registration Statement and as of the Closing Date,
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. If the
Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement: on the Effective
Date of the Initial Registration Statement, the Initial Registration
Statement and the Prospectus will conform in all respects to the
requirements of the Act and the Rules and Regulations, neither of
such documents will include any untrue statement of a material fact
or will omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and no Additional Registration Statement has been or will be filed.
The two preceding sentences do not apply to statements in or
omissions from a Registration Statement or the Prospectus based upon
written information furnished to the Company by the Underwriter
specifically for use therein, it being understood and agreed that
the only such information is that described as such in Section 7(c)
hereof.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own or
lease its properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the
condition (financial or other), businesses, properties or results of
operations of the Company and its subsidiaries taken as a whole
("Material Adverse Effect").
(d) Each subsidiary of the Company has been duly incorporated and is
an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority
(corporate and other) to own or lease its properties and conduct its
business as described in the Prospectus; and each subsidiary of the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not
have a Material Adverse Effect; all of the issued and outstanding
capital stock of each subsidiary of the Company has been duly
authorized and
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validly issued and is fully paid and nonassessable and is owned by
the Company, directly or through subsidiaries; and the capital stock
of each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects.
(e) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued, and are fully paid and
nonassessable and conform to the description thereof contained in
the Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Common Stock.
(f) The Offered Securities have been duly authorized, and when
issued, delivered and paid for pursuant to this Agreement, will be
validly issued, fully paid and non-assessable, and will conform to
the description thereof contained in the Prospectus.
(g) Except as disclosed in the Prospectus, 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 the
Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(h) Except for the Amended and Restated Registration Rights
Agreement dated January 12, 1999, between the Company and the
holders of Series A Preferred Stock and Series B Preferred Stock
(the "Registration Rights Agreement"), 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 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 a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act. No person has any registration rights with
respect to the registration statement covering the Offered
Securities.
(i) The Common Stock has been approved for quotation subject to
notice of issuance on the Nasdaq National Market.
(j) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by the Company for the consummation of the
transactions contemplated
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by this Agreement in connection with the sale of the Offered
Securities, except such as have been obtained and made under the
Act, the Exchange Act and the rules and regulations of the National
Association of Securities Dealers, Inc. (the "NASD") and such as may
be required under state securities laws.
(k) The execution, delivery and performance of this Agreement, and
the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms and provisions
of, or constitute a default under, (i) the charter or by-laws of the
Company or any subsidiary of the Company, (ii) any agreement or
instrument to which the Company or any such subsidiary is a party or
by which the Company or any such subsidiary is bound or to which any
of the properties of the Company or any such subsidiary is subject,
except for any such breaches or defaults which, individually or in
the aggregate, would not have a Material Adverse Effect, or (iii)
any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any such subsidiary of the Company
or any of their properties except for any such breaches or defaults
which, individually or in the aggregate would not have a Material
Adverse Effect.
(l) This Agreement has been duly authorized, executed and delivered
by the Company.
(m) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties
and all other properties and assets owned by them, in each case free
from liens, encumbrances and defects that would materially affect
the value thereof or materially interfere with the use made or to be
made thereof by them; and except as disclosed in the Prospectus, the
Company and its subsidiaries hold any leased real or personal
property under valid and enforceable leases with no exceptions that
would materially interfere with the use made or to be made thereof
by them, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rising generally or by
general equitable principles.
(n) The Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now operated by them and
have not received any notice of proceedings relating to the
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revocation or modification of any such certificate, authority or
permit that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(o) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent
that could reasonably be expected to have a Material Adverse Effect.
(p) The Company and its subsidiaries own, license, possess or can
acquire on reasonable terms, adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct
the business now operated by them, or presently employed by them,
and have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property
rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(q) Except as disclosed in the Prospectus, neither the Company nor
any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or
any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"),
owns or operates any real property contaminated with any substance
that is subject to any environmental laws, is liable for any
off-site disposal or contamination pursuant to any environmental
laws, or is subject to any claim relating to environmental laws,
which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and
the Company is not aware of any pending investigation which might
lead to such a claim.
(r) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any
of its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a Material Adverse
Effect, or would materially and adversely affect the ability of the
Company to perform its obligations under this Agreement, or which
are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are threatened
or, to the Company's knowledge, contemplated.
(s) The financial statements included in each Registration Statement
and the Prospectus present
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fairly the financial position of the Company and its consolidated
subsidiaries as of the dates shown and their results of operations
and cash flows for the periods shown, and such financial statements
have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent
basis, and the schedules included in each Registration Statement
present fairly the information required to be stated therein.
(t) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there
has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations
of the Company and its subsidiaries taken as a whole, and there has
been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock.
(u) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940.
(v) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes, and
the Company agrees to comply with such Section if prior to the
completion of the distribution of the Offered Securities it
commences doing such business.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, at a
purchase price of $______________ per share, the Firm Securities.
The Company will deliver the Firm Securities to you, against payment of
the purchase price in Federal (same day) funds by official bank check or checks
or wire transfer to an account at a bank acceptable to the Underwriter drawn to
the order of the Company at the office of Xxxxxx, Xxxxx & Xxxxxxx LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New York time, on ______________,
1999, or at such other time not later than seven full business days thereafter
as the Underwriter and the Company determine, such time being herein referred to
as the "First Closing Date." The certificates for the Firm Securities so to be
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delivered will be in definitive form, in such denominations and registered in
such names as the Underwriter requests and will be made available for checking
and packaging at the office of Invemed Associates LLP, 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000, at least 24 hours prior to the First Closing Date. If the
Underwriter so elects, delivery of Firm Securities may be made by credit to the
accounts at The Depository Trust Company designated by the Underwriter.
In addition, upon written notice from the Underwriter given to the
Company from time to time not more than 30 days subsequent to the date of the
Prospectus, the Underwriter may purchase all or less than all of the Optional
Securities at the purchase price per share to be paid for the Firm Securities.
The Company agrees to sell to the Underwriter the number of shares of Optional
Securities specified in such notice and the Underwriter agrees to purchase such
Optional Securities. Such Optional Securities shall be purchased from the
Company by the Underwriter only for the purpose of covering over-allotments made
in connection with the sale of the Firm Securities. No Optional Securities shall
be sold or delivered unless the Firm Securities previously have been, or
simultaneously are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to time and to the
extent not previously exercised may be surrendered and terminated at any time
upon notice by the Underwriter to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by the
Underwriter but shall be not less than two full business days nor later than
five full business days after written notice of election to purchase Optional
Securities is given. The Company will deliver the Optional Securities being
purchased on each Optional Closing Date to the Underwriter, against payment of
the purchase price therefor in Federal (same day) funds by wire transfer to an
account at a bank acceptable to the Underwriter drawn to the order of the
Company, at the above office of Invemed Associates LLC, 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000. The certificates for the Optional Securities being purchased on
each Optional Closing Date will be in definitive form, in such denominations and
registered in such names as the Underwriter requests upon reasonable notice
prior to such Optional Closing Date and will be made available for checking and
packaging at the above office of Xxxxxx, Xxxxx & Bockius LLP at a reasonable
time in advance of such Optional Closing Date. If the Underwriter so elects,
delivery of Optional Securities may be made by credit to the account at The
Depository Trust Company designated by the Underwriter.
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4. Offering by Underwriter. It is understood that the Underwriter
proposes to offer the Offered Securities for sale to the public as set forth in
the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
Underwriter that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company
will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented
to by the Underwriter, subparagraph (4)) of Rule 424(b) not later
than the earlier of (A) the second business day following the
execution and delivery of this Agreement or (B) the fifteenth
business day after the Effective Date of the Initial Registration
Statement. The Company will advise the Underwriter promptly of any
such filing pursuant to Rule 424(b). If the Effective Time of the
Initial Registration Statement is prior to the execution and
delivery of this Agreement and an additional registration statement
is necessary to register a portion of the Offered Securities under
the Act but the Effective Time thereof has not occurred as of such
execution and delivery, the Company will file the additional
registration statement or, if filed, will file a post-effective
amendment thereto with the Commission pursuant to and in accordance
with Rule 462(b) on or prior to 10:00 P.M., New York time, on the
date of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to the Underwriter, or will
make such filing at such later date as shall have been consented to
by the Underwriter.
(b) The Company will advise the Underwriter promptly of any proposal
to amend or supplement the initial or any additional registration
statement as filed or the related prospectus or the Initial
Registration Statement, the Additional Registration Statement (if
any) or the Prospectus and will not effect such amendment or
supplementation without the Underwriter's consent; and the Company
will also advise the Underwriter promptly of the effectiveness of
each Registration Statement (if its Effective Time is subsequent to
the execution and delivery of this Agreement) and of any amendment
or supplementation of a Registration Statement or the Prospectus and
of the institution by the Commission of any stop order proceedings
in respect of a Registration Statement and will use its best efforts
to prevent the issuance of
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any such stop order and to obtain as soon as possible its lifting,
if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection
with sales by the Underwriter or dealer, any event occurs 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 to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or
if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify the Underwriter of
such event and will promptly prepare and file with the Commission,
at its own expense, if delivery of a prospectus is required at any
time prior to the expiration of nine months after the time of issue
of the Prospectus and at the expense of the Underwriter, if delivery
of a prospectus is required at any time after the expiration of nine
months after the time of issue of the Prospectus, an amendment or
supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither the
Underwriter's consent to, nor delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set
forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
security holders an earnings statement covering a period of at least
12 months beginning after the Effective Date of the Initial
Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions
of Section 11(a) of the Act. For the purpose of the preceding
sentence, "Availability Date" means the 45th day after the end of
the fourth fiscal quarter following the fiscal quarter that includes
such Effective Date, except that, if such fourth fiscal quarter is
the last quarter of the Company's fiscal year, "Availability Date"
means the 90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Underwriter copies of each
Registration Statement (two of which will be signed and will include
all exhibits), each related preliminary prospectus, and, so long as
a prospectus relating to the Offered Securities is required to be
delivered under the Act in connection with sales by the
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Underwriter or dealer, the Prospectus and all amendments and
supplements to such documents, in each case in such quantities as
the Underwriter requests. The Prospectus shall be so furnished on or
prior to 3:00 P.M., New York time, on the business day following the
later of the execution and delivery of this Agreement or the
Effective Time of the Initial Registration Statement. All other such
documents shall be so furnished as soon as available. Except as set
forth in Section 5(c), the Company will pay the expenses of printing
and distributing to the Underwriter all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions in the
United States as the Underwriter designates and to continue such
qualifications in effect so long as required for the distribution of
the Offered Securities.
(g) During the period 5 years hereafter, the Company will furnish to
the Underwriter (i) as soon as practicable after the end of each
fiscal year, a copy of its annual report to stockholders for such
year, (ii) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission
under the Securities Exchange Act of 1934 or mailed to stockholders,
and (iii) from time to time, such other information concerning the
Company as the Underwriter may reasonably request.
(h) For a period of 180 days after the date of the initial public
offering of the Offered Securities, the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement
under the Act relating to, any additional shares of its Common Stock
or securities or other rights convertible into or exchangeable or
exercisable for any shares of its Common Stock, or publicly disclose
the intention to make any such offer, sale, contract to sell,
pledge, disposition or filing, without the prior written consent of
the Underwriter, except issuances of Common Stock pursuant to the
conversion or exchange of convertible or exchangeable securities or
the exercise of warrants or options in each case outstanding on the
date hereof, grants of employee stock options pursuant to the terms
of the Company's Amended and Restated 1996 Stock Option Plan, and
issuances of Common Stock pursuant to the Company's Employee Stock
Purchase Plan. Without limiting the foregoing, the Company shall not
amend the Registration Rights Agreement so as to allow
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for the exercise of any registration rights within 180 days of the
Effective Date.
(i) The Company agrees with the Underwriter that the Company will
pay all expenses incident to the performance of the obligations of
the Company under this Agreement, for any filing fees and other
expenses (including reasonable fees and disbursements of counsel) in
connection with qualification of the Offered Securities for sale
under the laws of such jurisdictions as the Underwriter designates
pursuant to paragraph (f) above and the printing of memoranda
relating thereto, for the filing fee incident to, and the reasonable
fees and disbursements of counsel to the Underwriter in connection
with, the review by the National Association of Securities Dealers,
Inc. of the Offered Securities, for any travel expenses of the
Company's officers and employees and any other expenses of the
Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities and for expenses
incurred in distributing preliminary prospectuses and the Prospectus
(including any amendments and supplements thereto) to the
Underwriter.
(j) The Company shall, prior to or concurrently with the execution
of this Agreement, deliver an agreement executed by each of the
directors and officers of the Company and each other shareholder and
each holder of options of the Company to the effect that such person
will not without the prior written consent of Invemed Associates LLC
during the period commencing on the date such person signs such
agreement and ending 180 days after the date of the Prospectus (i)
offer, sell, contract to sell, pledge, or otherwise dispose of,
directly or indirectly, any shares of Common Stock or any securities
or other rights convertible into or exchangeable or exercisable for
any shares of Common Stock or publicly disclose the intention to
make any such offer, sale, contract to sell, pledge, or disposition,
(ii) enter into any swap or other arrangement that transfers, in
whole or in part, all or a portion of the economic consequences of
ownership of shares of any Common Stock (regardless of whether any
of the transactions described in clause (i) or (ii) is to be settled
by the delivery of Common Stock, or such other securities, in cash
or otherwise) or (iii) make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for
Common Stock provided; that any such person may exercise options to
purchase Common Stock under the Company's Amended and Restated Stock
Option Plan and may transfer Common Stock or securities or other
rights convertible into or exchangeable or exercised for shares of
Common Stock pursuant to a bona fide gift to, or for the benefit of,
directly or indirectly, such person's children, grandchildren or
spouse for estate planning purposes; provided further that any such
gift is made other than on a securities exchange or in the
over-the-counter market and that any such transferee executes and
delivers to you an agreement in substantially the same form and
containing substantially the same provisions as in the agreement
executed by such director, officer or shareholder.
6. Conditions of the Obligations of the Underwriter. The obligations of
the Underwriter to purchase and pay for the Firm Securities on the First Closing
Date and the Optional Securities
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to be purchased on each Optional Closing Date will be subject to the accuracy of
the representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) The Underwriter shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of
this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to
the registration statement to be filed shortly prior to such
Effective Time), of PricewaterhouseCoopers LLP confirming that they
are independent public accountants within the meaning of the Act and
the applicable published Rules and Regulations thereunder and
stating to the effect that:
(i) in their opinion the financial statements and schedules
examined by them and included in the Registration Statements
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review
of interim financial information as described in Statement of
Auditing Standards No. 71, Interim Financial Information, on the
unaudited financial statements included in the Registration
Statements;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the Company
who have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention that
caused them to believe that:
(1) the unaudited financial statements included in the
Registration Statements do not comply as to form in all
material respects with the applicable accounting
requirements of the Act and the related
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published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements for them to be in conformity with generally
accepted accounting principles;
(2) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not
more than three business days prior to the date of this
Agreement, there was any change in the capital stock or
any increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or, at
the date of the latest available balance sheet read by
such accountants, there was any decrease in consolidated
net current assets or net assets, as compared with amounts
shown on the latest balance sheet included in the
Prospectus; or
(3) for the period from the closing date of the latest
income statement included in the Prospectus to the closing
date of the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year and with the
period of corresponding length ended the date of the
latest income statement included in the Prospectus, in
consolidated net sales or net operating income or in the
total or per share amounts of consolidated net income;
(4) except in all cases set forth in clauses (B) and (C)
above for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which
are described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the
general accounting records of the Company and its subsidiaries
subject to the internal controls of the Company's accounting
system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading
of such general accounting
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records and other procedures specified in such letter and have
found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as
otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time
of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, "Registration
Statements" shall mean the initial registration statement as
proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (ii)
if the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement but the
Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "Registration
Statements" shall mean the Initial Registration Statement and
the additional registration statement as proposed to be filed or
as proposed to be amended by the post-effective amendment to be
filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the
Registration Statements.
(b) The Company shall have received from PricewaterhouseCoopers LLP
(and furnished to the Underwriter) a review report with respect to
Management's Discussion and Analysis of Financial Condition and
Results of Operations of the Company for the fiscal years ending
1996, 1997 and 1998 and for the three-month period ending March 31,
1999, and the corresponding period for the prior fiscal year, each
in accordance with Statement on Standards for Attestation
Engagements No. 8 issued by the Auditing Standards Board of the
American Institute of Certified Public Accountants.
(c) If the Effective Time of the Initial Registration Statement is
not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by the Underwriter. If the Effective Time of
the Additional Registration Statement (if any) is not prior to the
execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date
of this Agreement or, if earlier, the time the Prospectus is printed
and distributed to the Underwriter, or shall have occurred at such
later date as shall have been consented to by the Underwriter. If
the Effective Time of the Initial Registration Statement is prior to
the execution and delivery of this Agreement, the Prospectus shall
have been filed with the Commission in
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accordance with the Rules and Regulations and Section 5(a) of this
Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or the Underwriter, shall be
contemplated by the Commission.
(d) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or
event involving a prospective change, in the condition (financial or
other), business, properties or results of operations of the Company
and its subsidiaries taken as a whole which, in the judgment of the
Underwriter, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Offered Securities; (ii) any suspension
or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market; (iii) any
banking moratorium declared by U.S. Federal or New York authorities;
or (iv) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any
other substantial national or international calamity or emergency
if, in the judgment of the Underwriter, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
(e) The Underwriter shall have received an opinion, dated such
Closing Date, of X'Xxxxxxxx, Graev & Karabell, LLP, counsel for the
Company, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business as
a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except
where the failure to be so qualified would not have Material
Adverse Effects;
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(ii) The Offered Securities delivered on such Closing Date
(assuming issuance and delivery against payment therefor in
accordance with the terms hereof) and all other outstanding
shares of the Common Stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable
and conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no
statutory preemptive rights or, to such counsel's knowledge,
similar rights with respect to the Common Stock;
(iii) To the best of the knowledge of such counsel, the grant of
all outstanding options and the issuance of all outstanding
warrants have been duly authorized, and such options and
warrants have been validly issued;
(iv) Except for the Amended and Restated Registration Rights
Agreement there are no contracts, agreements or understandings
known to such counsel between the Company and any person
granting such person the right to require the Company to file a
registration statement under the 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 Act. To
such counsel's knowledge, no person has any registration rights
with respect to a Registration Statement covering the Offered
Securities;
(v) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required
to be obtained or made by the Company for the consummation of
the transactions contemplated by this Agreement in connection
with the sale of the Offered Securities, except such as have
been obtained and made under the Act of the Exchange Act and the
Rules of the NASD and such as may be required under state
securities laws;
(vi) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under the
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charter or by-laws of the Company or any subsidiary of the
Company, any statute, any rule, regulation or, to such counsel's
knowledge, order of any governmental agency or body or any court
having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, or, to such counsel's
knowledge, any material agreement or instrument to which the
Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject;
(vii) The Initial Registration Statement was declared effective
under the Act as of the date and time specified in such opinion,
the Additional Registration Statement (if any) was filed and
became effective under the Act as of the date and time (if
determinable) specified in such opinion, the Prospectus either
was filed with the Commission pursuant to the subparagraph of
Rule 424(b) specified in such opinion on the date specified
therein or was included in the Initial Registration Statement or
the Additional Registration Statement (as the case may be), and,
to the knowledge of such counsel, no stop order suspending the
effectiveness of a Registration Statement or any part thereof
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and
each Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective
effective or issue dates, complied as to form in all material
respects with the requirements of the Act and the Rules and
Regulations; the descriptions in the Registration Statements and
Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present
the information required to be shown; and such counsel does not
know of any legal or governmental proceedings required to be
described in a Registration Statement or the Prospectus which
are not described as required or of any contracts or documents
of a character required to be described in a Registration
Statement or the Prospectus or to be filed as exhibits to a
Registration Statement which are not described and filed as
required; it being understood that such counsel need express no
opinion as to the financial statements or other
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financial data contained in the Registration Statements or the
Prospectus; and
(viii) This Agreement has been duly authorized, executed and
delivered by the Company.
Such counsel shall also state that it has no reason to believe
that any part of a Registration Statement or any amendment thereto,
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 to make the statements therein not
misleading; or that the Prospectus or any amendment or supplement
thereto, as of its issue date or as of such Closing Date, contained
or contains any untrue statement of a material fact or omitted or
omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(f) The Underwriter shall have received an opinion, dated such
Closing Date, of Xxxxxxxx, Rackman & Xxxxxxx, P.C., patent counsel
for the Company, to the effect that:
(i) Such counsel has no knowledge of any reason that any patent
of the Company is not valid and has no knowledge of any reason
why any patents that may issue from applications for patents
filed by the Company with the United States Patent and Trademark
Office would not be valid;
(ii) To the knowledge of such counsel, the Company is not
infringing or otherwise violating any patents, trade secrets,
know-how or proprietary rights or techniques of others and there
is no pending, or, to the knowledge of such counsel, threatened
action, suit, proceeding or claim by others that the Company has
infringed or otherwise violated any patents, licensing rights,
licensing or royalty arrangements or agreements, trade secrets
or know-how and proprietary rights;
(iii) To the knowledge of such counsel, there is no infringement
on the part of any third party of any patent, application for
patent, trade secret, know-how or other proprietary right of the
Company, and there is no pending or, to the knowledge of such
counsel, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any patent or application
for patent by the Company;
(iv) To the knowledge of such counsel, the statements in the
Registration Statements and
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Prospectus and any amendments and supplements thereto under the
captions "Risk Factors--Our proprietary rights may not be fully
protected, and we may be subject to intellectual property
infringement claims by others" and "Business--Proprietary
Rights," insofar as such statements constitute a summary of the
Company's patents, applications for patents and proprietary
technology, are in all material respects accurate descriptions
of the legal matters, documents and proceedings relating
thereto; and
(v) Such counsel has reviewed the statements in the Registration
Statements and Prospectus and any amendments and supplements
thereto under the captions "Risk Factors--Our proprietary rights
may not be fully protected, and we may be subject to
intellectual property infringement claims by others" and
"Business--Proprietary Rights," and such counsel has no reason
to believe that as of their respective effective dates, such
portions of the Registration Statement or any amendment thereto
contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that as of its issue date or such Closing Date,
such portions of the Prospectus or any amendment or supplement
thereto contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading.
(g) The Underwriter shall have received an opinion, dated such
Closing Date of Xxx Xxxxxxx-Xxxxx, Vice President, Legal Affairs of
the Company, to the effect that she has no reason to believe that
any part of a Registration Statement or any amendment thereto, 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 to make the statements therein not misleading;
or that the Prospectus or any amendment or supplement thereto, as of
its issue date or as of such Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and she does not know of any legal or governmental
proceedings required to be described in a
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Registration Statement or the Prospectus which are not described as
required or of any contracts or documents of a character required to
be described in a Registration Statement or the Prospectus or to be
filed as exhibits to a Registration Statement which are not
described and filed as required; it being understood that she need
express no opinion as to the financial statements or other financial
data contained in the Registration Statements or the Prospectus.
(h) The Underwriter shall have received from Xxxxxx, Xxxxx & Xxxxxxx
LLP, counsel for the Underwriter, such opinion or opinions, dated
such Closing Date, with respect to the incorporation of the Company,
the validity of the Offered Securities delivered on such Closing
Date, the Registration Statements, the Prospectus and other related
matters as the Underwriter may reasonably request, and the Company
shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(i) The Underwriter shall have received a certificate, dated such
Closing Date, of the President and the Chief Financial Officer of
the Company in which such officers, shall state on behalf of the
Company that: the representations and warranties of the Company in
this Agreement are true and correct; the Company has complied with
all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date;
no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have
been instituted or, to their knowledge, are contemplated by the
Commission; the Additional Registration Statement (if any)
satisfying the requirements of subparagraphs (1) and (3) of Rule
462(b) was filed pursuant to Rule 462(b), including payment of the
applicable filing fee in accordance with Rule 111(a) or (b) under
the Act, prior to the time the Prospectus was printed and
distributed to the Underwriter; and, subsequent to the respective
dates of the most recent financial statements in the Prospectus,
there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Prospectus or as
described in such certificate.
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(j) The Company shall have delivered to you the agreements specified
in Section 5(j) hereof which agreements shall be in full force and
effect on the Closing Date.
(k) The Underwriter shall have received a letter, dated such Closing
Date, of PricewaterhouseCoopers LLP which meets the requirements of
subsection (a) of this Section, except that the specified date
referred to in such subsection will be a date not more than three
business days prior to such Closing Date for the purposes of this
subsection.
The Company will furnish the Underwriter with such conformed copies of such
opinions, certificates, letters and documents as the Underwriter reasonably
requests. The Underwriter may in its sole discretion waive compliance with any
conditions to the obligations of the Underwriter hereunder, whether in respect
of an Optional Closing Date or otherwise.
7. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless the Underwriter
against any losses, claims, damages or liabilities, joint or
several, to which the Underwriter may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and will reimburse the Underwriter for any legal or
other expenses reasonably incurred by the Underwriter in connection
with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in
or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished
to the Company by the Underwriter specifically for use therein, it
being understood and agreed that the only such information furnished
by the Underwriter consists of the information described as such in
subsection (c) below; and provided further, that with respect to any
untrue statement or alleged untrue statement in or omission or
alleged omission
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from any preliminary prospectus, the indemnity agreement contained
in this subsection (a) shall not inure to the benefit of the
Underwriter in connection with the assertion of any such losses,
claims, damages or liabilities by a person who purchased the Offered
Securities, to the extent that a prospectus relating to such Offered
Securities was required to be delivered by the Underwriter under the
Act in connection with such purchase, and any such loss, claim,
damage or liability of the Underwriter results from the fact that
there was not sent or given to such person, at or prior to the
written confirmation of the sale of such Offered Securities to such
person, a copy of the Prospectus if the Company had previously
furnished copies thereof to the Underwriter.
(b) Insofar as the foregoing indemnity agreement, or the
representations and warranties contained in Section 2, may permit
indemnification for liabilities under the Act of any person who is
an Underwriter or a partner or controlling person of an Underwriter
within the meaning of Section 15 of the Act and who, at the date of
this Agreement, is a director, officer or controlling person of the
Company, the Company has been advised that in the opinion of the
Commission such provisions may contravene Federal public policy as
expressed in the Act and may therefore be unenforceable. In the
event that a claim for indemnification under such agreement or such
representations and warranties for any such liabilities (except
insofar as such agreement provides for the payment by the Company of
expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding)
is asserted by such a person, the Company will submit to a court of
appropriate jurisdiction (unless in the opinion of counsel for the
Company the matter has already been settled by controlling
precedent) the question of whether or not indemnification by it for
such liabilities is against public policy as expressed in the Act
and therefore unenforceable, and the Company will be governed by the
final adjudication of such issue.
(c) The Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or
supplement thereto, or
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any related preliminary prospectus, or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company
by the Underwriter specifically for use therein, and will reimburse
any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by
the Underwriter consists of the fourth, seventh, twelfth and last
paragraphs under the caption "Underwriting".
(d) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under subsection (a) or (c) above,
notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (c) above. In case any such
action is brought against any indemnified party and it notifies an
indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes
an unconditional release of such indemnified party from
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all liability on any claims that are the subject matter of such
action.
(e) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (c) above, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (c) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter on the other from the
offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Underwriter on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriter on the other shall be
deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by
the Underwriter. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company
or the Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), the
Underwriter shall not be required to contribute any amount in excess
of the amount by which the total price at which the Offered
Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent
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misrepresentation (within the meaning of Section 11(d) of the Act)
shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(f) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person,
if any, who controls the Underwriter within the meaning of the Act;
and the obligations of the Underwriter under this Section shall be
in addition to any liability which the Underwriter may otherwise
have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has
signed a Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and the Underwriter set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If for any reason the purchase of the
Offered Securities by the Underwriter is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 5 and the respective obligations of the Company and the Underwriter
pursuant to Section 7 shall remain in effect, and if any Offered Securities have
been purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Underwriter is not consummated for any reason other
than solely because of the occurrence of any event specified in clause (ii),
(iii) or (iv) of Section 6(d), the Company will reimburse the Underwriter for
all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by it in connection with the offering of the Offered
Securities.
9. Notices. All communications hereunder will be in writing and, if
sent to the Underwriter, will be mailed, delivered or telegraphed and confirmed
to the Underwriter, Invemed Associates LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX
00000-0000, Attention: Xxxxxxxx X. Xxxxxx - Executive Vice President, or, if
sent to the Company, will be mailed, delivered or telegraphed and confirmed to
it at InterWorld Corporation, 000 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000,
Attention: Xxx Xxxxxxx-Xxxxx.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective personal representatives
and successors and the officers and
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directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement among the Company and the
Underwriter in accordance with its terms.
Very truly yours,
INTERWORLD CORPORATION
By............................................................
[Insert title]
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
INVEMED ASSOCIATES LLC
By.....................................................
[Insert title]
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