EXHIBIT 1.1
UNDERWRITING AGREEMENT
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February 6, 2001
Xxxx Xxxxxxxx Xxxxxxx,
a division of Xxxx Xxxxxxxx Incorporated
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Onyx Software Corporation, a Washington corporation (the "Company"),
proposes to issue and issue and sell to Xxxx Xxxxxxxx Xxxxxxx, a division of
Xxxx Xxxxxxxx Incorporated (the "Underwriter"), an aggregate of 2,500,000 shares
(the "Firm Shares") of Common Stock, no par value, of the Company (the "Common
Stock") and, at the election of the Underwriter, up to 375,000 shares of Common
Stock (the "Option Shares"). The Firm Shares and the Option Shares are herein
collectively called the "Shares."
It is understood that the Underwriter proposes to make a public
offering of the Shares as soon as the Underwriter deems it advisable to do so.
The Firm Shares will be initially offered to the public at the public offering
price and in the manner set forth in the Prospectus (as defined below). The
Underwriter may from time to time thereafter change the public offering price
and other selling terms. To the extent, if any, that any Option Shares are
purchased pursuant to Section 1(b), the Underwriter will offer such Option
Shares to the public on the foregoing terms.
1. Sale and Purchase of the Shares.
(a) On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement,
the Company agrees to sell to the Underwriter, and the Underwriter agrees
to purchase from the Company, at a price of $12.75 per share (the "Initial
Price"), the Firm Shares.
(b) In addition, on the basis of the representations, warranties and
agreements contained in, and subject to the terms and conditions of, this
Agreement, the Company hereby grants to the Underwriter an option to
purchase, at its election, the Option Shares at the same price per share as
set forth for the Firm Shares in Section 1(a), for the sole purpose of
covering overallotments in the sale of the Firm Shares. The option granted
hereby may be exercised in whole or in part, but only once, and at any time
upon written notice from the
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Underwriter to the Company given within 30 days after the date of the
public offering of the Firm Shares setting forth the number of Option
Shares as to which the Underwriter is exercising the option and the time
and date at which certificates are to be delivered. The time and date at
which certificates for Option Shares are to be delivered shall be
determined by the Underwriter but shall not be earlier than two or later
than ten business days after the exercise of the option, and shall not in
any event be prior to the Closing Date for the Firm Shares.
2. Delivery and Payment. Delivery by the Company of the Shares to
the Underwriter for its account, and payment of the purchase price by wire
transfer or by certified or official bank check or checks payable in New York
Clearing House (same day) funds drawn to the order of the Company for the shares
purchased from the Company, against delivery of the respective certificates
therefor to the Underwriter, shall take place at the offices of Xxxx Xxxxxxxx
Xxxxxxx, a division of Xxxx Xxxxxxxx Incorporated, 00 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, at 10:00 a.m., New York City time, (i) in the case
of the Firm Shares, on the third business day following the date of the public
offering of the Firm Shares by the Underwriter, or at such time on such other
date, not later than 10 business days after the date of this Agreement, as shall
be agreed upon by the Company and the Underwriter and (ii) in the case of the
Option Shares, at such date as shall be determined in accordance with Section
1(b) (each such time and date of delivery and payment, a "Closing Date," as
appropriate).
Certificates evidencing the Shares shall be registered in such names
and shall be in such denominations as the Underwriter shall request at least two
full business days before the relevant Closing Date and shall be made available
to the Underwriter for checking and packaging, at such place as is designated by
the Underwriter, on the full business day before the relevant Closing Date.
3. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Underwriter as follows:
(a) A Registration Statement on Form S-3 (File No. 333-50428) and a
Post-Effective Amendment No. 1 thereto, including a final form of
prospectus included in Post-Effective Amendment No. 1 (the "Base
Prospectus"), have been prepared by the Company with respect to shares of
the Common Stock in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the rules and regulations
(the "Rules") of the Securities and Exchange Commission (the "Commission")
thereunder, and have been filed with the Commission and declared effective.
No stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceeding for that purpose has been instituted or
threatened by the Commission. The Registration Statement, as amended by
Post-Effective Amendment No. 1, is referred to herein as the "Registration
Statement," and the final form of Base Prospectus included in the
Registration Statement, as supplemented by the Prospectus Supplement (as
defined in Section 5(a)(i)), is referred to herein as the "Prospectus." Any
reference herein to the Registration Statement, the Prospectus or any
amendment or supplement thereto shall be deemed to refer to and include the
documents incorporated
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by reference therein, and any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement or
Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be
incorporated by reference therein. For purposes of this Underwriting
Agreement, all references to the Registration Statement and Prospectus or
to any amendment or supplement thereto shall be deemed to include any copy
filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System (XXXXX), and such copy shall be identical in
content to any Prospectus delivered to the Underwriter for use in
connection with the offering of the Shares. Copies of the Registration
Statement and Prospectus, any such amendments or supplements and all
documents incorporated by reference therein that were filed with the
Commission on or prior to the date of this Underwriting Agreement
(including one fully executed copy of the Registration Statement and of
each amendment thereto for the Underwriter and its counsel) have been
delivered to the Underwriter and its counsel.
(b) Each part of the Registration Statement, when such part became or
becomes effective and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the
relevant Closing Date, conformed or will conform in all material respects
with the applicable requirements of the Securities Act and the Rules; each
part of the Registration Statement, when such part became or becomes
effective, or when such part was filed with the Commission, did not or will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus and any amendment or
supplement thereto, on the date thereof and at the relevant Closing Date,
did not or will not include an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements in, or omissions
from, any such document in reliance upon, and in conformity with, written
information concerning the Underwriter that was furnished to the Company by
the Underwriter specifically for use in the preparation thereof.
(c) The documents incorporated by reference in the Registration
Statement, the Prospectus or any amendment or supplement thereto, when they
became or become effective under the Securities Act or were or are filed
with the Commission under the Securities Act or the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as the case may be, conformed or
will conform in all material respects with the requirements of the
Securities Act, the Rules, the Exchange Act and/or the rules and
regulations of the Commission thereunder (the "Exchange Rules"), as
applicable; such documents did not or will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) The financial statements of the Company together with the related
schedules and notes thereto, set forth or included or incorporated by
reference in the
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Registration Statement and Prospectus fairly present the financial
condition of the Company as of the dates indicated and the results of
operations, changes in financial position, shareholders' equity and cash
flows for the periods therein specified, in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise stated therein). The summary and/or selected
financial and statistical data included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the information
shown therein and, to the extent based upon or derived from the financial
statements, have been compiled on a basis consistent with the financial
statements presented therein. In addition, any pro forma financial
statements of the Company, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro
forma financial statements and have been properly compiled on the basis
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein. Furthermore, all
financial statements required by Rule 3-05 or Rule 3-14 of Regulation S-X
("Rule 3-05" and "Rule 3-14", respectively), if any, have been included or
incorporated by reference in the Registration Statement and the Prospectus
and any such financial statements are in conformity with the requirements
of Rule 3-05 and Rule 3-14. No other financial statements are required to
be set forth or incorporated by reference in the Registration Statement or
the Prospectus under the Securities Act or the Rules.
(e) Ernst & Young LLP, whose reports are incorporated by reference in
the Registration Statement, are and, during the periods covered by their
reports, were independent public accountants as required by the Securities
Act and the Rules.
(f) The Company and each of its Subsidiaries (as hereinafter defined)
is a corporation duly organized, validly existing and in good standing
(with respect to jurisdictions that recognize such concept) under the laws
of the jurisdiction of its incorporation. The Company and each such
subsidiary or other entity controlled directly or indirectly by the Company
(collectively, "Subsidiaries") is duly qualified to do business and is in
good standing (with respect to jurisdictions that recognize such concept)
as a foreign corporation in each jurisdiction in which the nature of the
business conducted by it or location of the assets or properties owned,
leased or licensed by it requires such qualification, except for such
jurisdictions where the failure to so qualify would not have a material
adverse effect on the assets or properties, business, results of operations
or financial condition of the Company (a "Material Adverse Effect"). The
Company and each of its Subsidiaries has all requisite corporate power and
authority, and all necessary authorizations, approvals, consents, orders,
licenses, certificates and permits of and from all governmental or
regulatory bodies or any other person or entity (collectively, the
"Permits"), to own, lease and license its assets and properties and conduct
its business, all of which are valid and in full force and effect, as
described in or incorporated by reference in the Registration Statement and
the Prospectus, except where the lack of such Permits, individually or in
the aggregate, would not have a Material Adverse Effect. The
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Company and each of its Subsidiaries has fulfilled and performed in all
material respects all of its material obligations with respect to such
Permits and to the Company's knowledge, no event has occurred that allows,
or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the
Company thereunder. Except as may be required under the Securities Act and
state and foreign Blue Sky laws, no other Permits are required to enter
into, deliver and perform this Agreement and to issue and sell the Shares.
(g) The Company and each of its Subsidiaries owns or possesses the
right to use all patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how and other similar rights and proprietary
knowledge (collectively, "Intangibles") which are material for the conduct
of its business as currently carried on or intended to be carried on, in
each case as described in or incorporated by reference in the Registration
Statement and the Prospectus. The description of the Intangibles in the
Prospectus is correct in all material respects and fairly and correctly
describes the Company's rights with respect thereto. Neither the Company
nor any of its Subsidiaries has received any notice of, or has any
knowledge of, any material infringement of or material conflict with
asserted rights of others with respect to any Intangibles. No action, suit,
arbitration, or legal, administrative or other proceeding is pending or, to
the knowledge of the Company or any of its Subsidiaries, threatened which
involves any Intangibles. The Company is not subject to any judgment,
order, writ, injunction or decree, and is not party to any contract or
agreement, which restricts or impairs the use of any of the Intangibles in
a manner which would have a Material Adverse Effect. No claims have been
asserted by any person with respect to the validity of the Company's
ownership or right to use the Intangibles and, to the knowledge of the
Company and its Subsidiaries, there is no reasonable basis for any such
claim to be successful.
(h) The Company and each of its Subsidiaries has good and marketable
title in fee simple to all material items of real property and good and
marketable title to all material personal property described in the
Registration Statement or the Prospectus or any document incorporated by
reference therein as being owned by it, except such as are described in the
Registration Statement and the Prospectus or would not have a Material
Adverse Effect. Any real property and buildings described in the
Registration Statement or the Prospectus or any document incorporated by
reference therein as being held under lease by the Company and each of its
Subsidiaries is held by it under valid, existing and enforceable leases,
free and clear of all liens, encumbrances, claims, security interests and
defects, except such as are described in the Registration Statement and the
Prospectus or would not have a Material Adverse Effect.
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(i) There are no litigation or governmental proceedings to which the
Company or its Subsidiaries is subject or which is pending or, to the
knowledge of the Company, threatened, against the Company or any of its
Subsidiaries, which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or to affect the consummation of
this Agreement, or which is required to be disclosed in the Registration
Statement and the Prospectus or any document incorporated by reference
therein that is not so disclosed.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
therein, (a) there has not been any material adverse change with regard to
the assets or properties, business, results of operations or financial
condition of the Company; (b) neither the Company nor its Subsidiaries has
sustained any loss or interference with its assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or any court or legislative or other governmental action,
order or decree which would have a Material Adverse Effect; and (c) since
the date of the latest balance sheet included in the Registration Statement
and the Prospectus, except as reflected therein, neither the Company nor
its Subsidiaries has (i) issued any securities (other than issuances of
Common Stock and options to purchase Common Stock issued under the
Company's existing stock option and similar stock incentive plans and
issuances of Common Stock upon the exercise of such options) or incurred
any liability or obligation, direct or contingent, for borrowed money,
except such liabilities or obligations incurred in the ordinary course of
business, (ii) entered into any material transaction not in the ordinary
course of business or which is required to be disclosed or incorporated by
reference in the Registration Statement or the Prospectus and is not so
disclosed or incorporated or (iii) declared or paid any dividend or made
any distribution on any shares of its stock or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise acquire any
shares of its stock.
(k) There is no document, contract or other agreement of a character
required to be described in the Registration Statement or Prospectus or to
be filed as an exhibit to the Registration Statement which is not described
or filed as required by the Securities Act or Rules. Each description of a
contract, document or other agreement in the Registration Statement and the
Prospectus or incorporated by reference therein accurately reflects in all
material respects the terms of the underlying document, contract or
agreement. Except for agreements that have terminated or expired pursuant
to their terms and agreements that have been performed in full, each
agreement described in the Registration Statement and Prospectus or
incorporated by reference therein or listed in the Exhibits to the
Registration Statement or incorporated by reference is in full force and
effect and is valid and enforceable against the Company or the Subsidiary,
as the case may be, and is, to the Company's knowledge, valid and
enforceable by the Company or the Subsidiary, as the case may be, in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles. Neither the Company nor the Subsidiary, if
the Subsidiary is a party,
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nor to the Company's knowledge, any other party is in default in the
observance or performance of any term or obligation to be performed by it
under any such agreement, and no event has occurred which with notice or
lapse of time or both would constitute such a default, in any such case
which default or event, individually or in the aggregate, would have a
Material Adverse Effect. No default exists, and no event has occurred which
with notice or lapse of time or both would constitute a default, in the due
performance and observance of any term, covenant or condition, by the
Company or the Subsidiary, if the Subsidiary is a party thereto, of any
other material agreement or instrument to which the Company or the
Subsidiary is a party or by which it or its properties or business may be
bound or affected which default or event, individually or in the aggregate,
would have a Material Adverse Effect.
(l) Neither the Company nor any of its Subsidiaries is in violation
of any term or provision of its charter or by-laws or of any franchise,
license, permit, judgment, decree, order, statute, rule or regulation,
where the consequences of such violation, individually or in the aggregate,
would have a Material Adverse Effect.
(m) Neither the execution, delivery and performance of this Agreement
by the Company nor the consummation of any of the transactions contemplated
hereby (including, without limitation, the issuance and sale by the Company
of the Shares) will give rise to a right to terminate, or accelerate the
due date of any payment due under, or conflict with, or result in the
material breach of, any term or provision of, or constitute a material
default (or an event which with notice or lapse of time or both would
constitute a material default) under, or require any consent or waiver
under, or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or its
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or its
Subsidiaries is a party or by which either the Company or its Subsidiaries
or any of their properties or businesses is bound, or any material
franchise, license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or its Subsidiaries or violate any
provision of the charter or by-laws of the Company or its Subsidiaries,
except for such consents or waivers which have already been obtained and
are in full force and effect.
(n) The certificates evidencing the Shares are in due and proper
legal form and have been duly authorized for issuance by the Company. All
of the issued and outstanding shares of Common Stock have been duly and
validly issued and are fully paid and nonassessable. There are no statutory
preemptive or other similar rights to subscribe for or to purchase or
acquire from the Company any shares of Common Stock of the Company or its
Subsidiaries or any such rights pursuant to its Certificate of
Incorporation or by-laws or any agreement or instrument to or by which the
Company or any of its Subsidiaries is a party or bound. The Shares, when
issued and sold pursuant to this Agreement, will be duly and validly
issued, fully paid and nonassessable and none of them will be issued in
violation of any preemptive or other similar right. Except as disclosed in
the Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and there is no
commitment, plan or
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arrangement to issue, any share of stock of the Company or its Subsidiaries
or any security convertible into, or exercisable or exchangeable for, such
stock. The Common Stock and the Shares conform in all material respects to
all statements in relation thereto contained in the Registration Statement
and the Prospectus. All outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued, and are fully paid
and nonassessable and, except as otherwise disclosed in the Prospectus, are
owned directly by the Company or by another wholly-owned subsidiary of the
Company free and clear of any security interests, liens, encumbrances,
equities or claims, other than those described in the Prospectus.
(o) No holder of any security of the Company has the right to have
any security owned by such holder included in the Registration Statement.
Except as disclosed in the Prospectus, no holder of any security of the
Company has the right to demand registration of any security owned by such
holder during the period ending 90 days after the date of this Agreement.
(p) All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Shares by the Company. This
Agreement has been duly and validly authorized, executed and delivered by
the Company and constitutes and will constitute a legal, valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
(q) Neither the Company nor any of its Subsidiaries are involved in
any labor dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a Material Adverse Effect. The Company
is not aware of any existing or imminent labor disturbance by the employees
of any of its principal suppliers or contractors which would have a
Material Adverse Effect. The Company is not aware of any threatened or
pending litigation between the Company or its Subsidiaries and any of its
executive officers which, if adversely determined, could have a Material
Adverse Effect and reasonably believes that such officers will remain in
the employment of the Company.
(r) No transaction has occurred between or among the Company and any
of its officers or directors or any affiliate or affiliates of any such
officer or director that is required to be described in and is not
described in or incorporated by reference in the Registration Statement and
the Prospectus.
(s) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of any of the Shares.
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(t) The Company and its Subsidiaries have filed all material Federal,
state, local and foreign tax returns which are required to be filed through
the date hereof, or has received extensions thereof, and has paid all taxes
shown on such returns and all assessments received by it to the extent that
the same are material and have become due. There are no tax audits or
investigations pending, which if adversely determined would have a Material
Adverse Effect; nor are there any material proposed additional tax
assessments against the Company and any of its Subsidiaries.
(u) The Shares have been or will be duly authorized for quotation on
the National Association of Securities Dealers Automated Quotation National
Market System ("Nasdaq"), subject to official Notice of Issuance. The
Common Stock has been registered pursuant to Section 12(g) of the Exchange
Act. The Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from Nasdaq, nor has the Company
received any notification that the Commission or Nasdaq is contemplating
terminating such registration or listing.
(v) The books, records and accounts of the Company and its
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its Subsidiaries. The Company and each of
its Subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(w) The Company and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions described in
the Prospectus; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its Subsidiaries or the Company's or its
Subsidiaries' respective businesses, assets, employees, officers and
directors are in full force and effect; the Company and each of its
Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and to the Company's knowledge,
neither the Company nor any Subsidiary will be unable to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
at a cost that would have a Material Adverse Effect. Neither the Company
nor any Subsidiary has been denied any insurance coverage which it has
sought or for which it has applied.
(x) Each approval, consent, order, authorization, designation,
declaration or
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filing of, by or with any regulatory, administrative or other governmental
body necessary in connection with the execution and delivery by the Company
of this Agreement and the consummation of the transactions herein
contemplated required to be obtained or performed by the Company (except
such additional steps as may be required by the National Association of
Securities Dealers, Inc. (the "NASD") or may be necessary to qualify the
Shares for public offering by the Underwriters under the state securities
or Blue Sky laws) has been obtained or made and is in full force and
effect.
(y) There are no affiliations with the NASD among the Company's
officers, directors or, to the knowledge of the Company, any five percent
or greater stockholder of the Company, except as set forth in the
Registration Statement or otherwise disclosed in writing to the
Underwriter.
(z) The Company and its Subsidiaries have conducted and are
conducting their business in compliance with all federal, state, local and
foreign laws, rules and regulations applicable to them or their business,
including, but not limited to, those relating to the use, treatment,
storage and disposal of toxic substances and protection of health or the
environment, those relating to discrimination in the hiring, promotion or
pay of employees, wages and hours laws and the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations promulgated
thereunder, except where the failure to do so would not have a Material
Adverse Effect.
(aa) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of proceeds thereof as described in
the Prospectus, will not be an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(bb) The Company, its Subsidiaries, or, to the Company's knowledge,
any other person associated with or acting on behalf of the Company or its
Subsidiaries including, without limitation, any director, officer, agent or
employee of the Company or its Subsidiaries has not, directly or
indirectly, while acting on behalf of the Company or its Subsidiaries (i)
used any corporate funds for unlawful contributions, gifts, entertainment
or other unlawful expenses relating to political activity; (ii) made any
unlawful payment to foreign or domestic government officials or employees
or to foreign or domestic political parties or campaigns from corporate
funds; (iii) violated any material provision of the Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any other unlawful payment.
(cc) The conditions for use of Form S-3 with respect to the
Registration Statement, as set forth in the General Instructions to Form S-
3, have been satisfied.
4. Conditions of the Underwriter's Obligations. The obligation of
the Underwriter to purchase the Shares is subject to each of the following terms
and conditions:
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(a) The Prospectus Supplement shall have been timely filed with the
Commission in accordance with Section 5(a)(i) of this Agreement.
(b) No order preventing or suspending the use of the Prospectus shall
have been or shall be in effect and no order suspending the effectiveness
of the Registration Statement shall be in effect and no proceedings for
such purpose shall be pending before or threatened by the Commission, and
any requests for additional information on the part of the Commission (to
be included in the Registration Statement or the Prospectus or otherwise)
shall have been complied with to the satisfaction of the Commission and the
Underwriter.
(c) The representations and warranties of the Company contained in
this Agreement and in the certificates delivered pursuant to Section 5(d)
shall be true and correct when made and on and as of the relevant Closing
Date as if made on such date. The Company shall have materially performed
all covenants and agreements and satisfied all the conditions contained in
this Agreement required to be performed or satisfied by it at or before the
relevant Closing Date.
(d) The Underwriter shall have received on the relevant Closing Date
a certificate, addressed to the Underwriter and dated the relevant Closing
Date, of the chief executive or chief operating officer or president and
the chief financial officer or chief accounting officer of the Company (i)
stating that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus and this Agreement and that the
representations and warranties of the Company in this Agreement are true
and correct on and as of the relevant Closing Date with the same effect as
if made on the relevant Closing Date and the Company has materially
performed all covenants and agreements and satisfied all conditions
contained in this Agreement required to be performed or satisfied by it at
or prior to the relevant Closing Date, (ii) stating that no stop order
suspending the effectiveness of the Registration Statement has been issued
and to their knowledge, no proceedings for that purpose are pending before
or have been threatened by the Commission and (iii) setting forth such
other matters as the Underwriter shall reasonably request.
(e) The Underwriter shall have received letters on and as of the date
of this Agreement and the relevant Closing Date (in the latter case
constituting a reaffirmation of the statements set forth in the former), in
form and substance reasonably satisfactory to the Underwriter, from Ernst &
Young LLP with respect to the financial statements and certain financial
information contained and incorporated by reference in the Registration
Statement and the Prospectus (as such documents may be amended and
supplemented at the date of the relevant letter), which letters shall also
confirm that they are independent accountants within the meaning of the
Securities Act and the Rules and that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them.
(f) The Underwriter shall have received on the relevant Closing Date
from
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Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, counsel for the Company, an opinion,
addressed to the Underwriter and dated the relevant Closing Date, and
stating in effect that:
(i) The Company is a corporation duly incorporated and validly
existing under the laws of the state of Washington, has paid all
excise taxes required by the Washington Department of Revenue and is
duly authorized to transact business in the corporate form in the
state of Washington. The Restated Articles of Incorporation of the
Company have been duly adopted by all necessary corporate and
shareholder action and have been duly filed with the Secretary of
State of the state of Washington.
(ii) The Company has the requisite corporate power and corporate
authority to own its property and to conduct its business as described
in the Registration Statement and the Prospectus, to enter into,
deliver and perform its obligations under, this Agreement and to issue
the Shares.
(iii) The issuance of the Shares without certificates has been
duly authorized by all necessary corporate action. The issuance and
sale of the Shares have been duly authorized by the Company and, when
issued and delivered in accordance with the terms of this Agreement,
the Shares will be validly issued, fully paid and non-assessable, and
the issuance of the Shares will not be subject to any statutory or, to
such counsel's knowledge, contractual, preemptive or similar rights.
The shares of Company Common Stock outstanding prior to the issuance
of the Shares have been duly authorized and are validly issued, fully
paid and non-assessable and, to such counsel's knowledge, none of such
shares were issued in violation of any statutory preemptive or similar
rights or of any contractual preemptive or similar rights. There are
no preemptive or other rights to subscribe for or to purchase shares
of the Company's capital stock and no restrictions upon the voting or
transfer of any securities of the Company pursuant to the Company's
Restated Articles of Incorporation or its Amended and Restated Bylaws
or any agreement or other instrument filed by the Company as an
exhibit to the Registration Statement or to any document incorporated
by reference therein (collectively, the "Material Contracts"). Except
as disclosed in or contemplated by the Prospectus, to such counsel's
knowledge, there are no outstanding options, warrants or other rights
calling for the issuance of, and no commitments, plans or arrangements
to issue, any shares of capital stock of the Company or any security
convertible into or exchangeable for capital stock of the Company. The
authorized capital stock of the Company conforms in all material
respects as to legal matters to the description thereof in the
Prospectus.
(iv) (A) The execution, delivery and performance by the Company
of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized
by all necessary corporate action on the part of the Company. (B) This
Agreement has been duly executed and delivered by the Company and is a
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms.
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(v) No authorization, consent, approval of or qualification with
any governmental authority is required for the execution and delivery
of this Agreement by the Company and for the performance by the
Company of its obligations hereunder, except such as have been made or
obtained under the Securities Act or such as may be required under
state or other blue sky laws (as to which such counsel need express no
opinion) in connection with the purchase and distribution of the
Shares by the Underwriter.
(vi) The execution, delivery and performance of this Agreement
does not, and the issuance of the Shares as contemplated by this
Agreement will not, (a) conflict with or violate the Company's
Restated Articles of Incorporation or its Amended and Restated Bylaws,
(b) constitute a breach of or constitute a default under any Material
Contract, (c) conflict with or violate any judgment, order or decree
of any court or governmental authority of which such counsel have
knowledge applicable to the Company or any of its properties, or (d)
result in a violation of, or conflict with, any statute, rule or
regulation of federal or Washington law by which the Company is bound.
(vii) To such counsel's knowledge, there are no legal or
governmental proceedings that are pending or threatened against the
Company or any of its properties that are required to be described in
the Prospectus and are not so described, and, to such counsel's
knowledge, there is no contract or other document that is required to
be described in the Registration Statement or the Prospectus or is
required to be filed as an exhibit to the Registration Statement which
is not so described or filed as required.
(viii) The Registration Statement and Prospectus (except the
financial statements, schedules and other financial and statistical
information contained therein, as to which such counsel need express
no opinion) as of their respective dates complied as to form in all
material respects with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder, and the
documents incorporated by reference in the Prospectus, when filed with
the Commission under the Exchange Act, complied as to form in all
material respects with the requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder.
(ix) Based solely on verbal advice from the staff of the
Commission, the Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or
preventing the use of the Prospectus has been issued and no
proceedings for that purpose have been instituted or, to such
counsel's knowledge, are pending or contemplated under the Securities
Act. The Prospectus Supplement has been filed with the Commission
pursuant to Rule 424(b) of the Securities Act in the manner and within
the time period required by such rule.
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(x) The Company is not, and after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus will not be, required to register as an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(xi) To such counsel's knowledge, no holder of any security of
the Company has any right that has not expired or been exercised or
waived to require registration of any security in connection with the
offering contemplated by this Agreement.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the federal laws of
the United States and the laws of the States of Washington and New York. To
the extent deemed advisable by such counsel, they may rely as to matters of
fact on certificates of responsible officers of the Company and public
officials. Copies of certificates of any public officials shall be
furnished to the Underwriter and counsel for the Underwriter.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Underwriter and representatives of the
independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement and the Prospectus
and related matters were discussed and, although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus (except as specified in the foregoing
opinion), on the basis of the foregoing, no facts have come to the
attention of such counsel which lead such counsel to reasonably believe
that the Registration Statement at the time it became effective (except
with respect to the financial statements and notes and schedules thereto
and other financial and statistical data, as to which such counsel need
express no belief) contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the Prospectus as
amended or supplemented (except with respect to the financial statements,
notes and schedules thereto and other financial data, as to which such
counsel need make no statement) on the date thereof contained any untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(h) All proceedings taken in connection with the sale of the Shares
as herein contemplated shall be reasonably satisfactory in form and
substance to the Underwriter and its counsel and the Underwriter shall have
received from Xxxxxx & Whitney LLP a favorable opinion, addressed to the
Underwriter and dated the relevant Closing Date, with respect to the
Shares, the Registration Statement and the Prospectus, and such other
related matters, as the Underwriter may reasonably request, and the Company
shall have furnished to Xxxxxx & Xxxxxxx LLP such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
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(i) The Company shall have furnished or caused to be furnished to the
Underwriter such further certificates or documents as the Underwriter shall
have reasonably requested.
(j) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency which would, as of the relevant Closing Date, prevent the issuance
or public offering of the Shares; and no injunction, restraining order or
order of any nature by a federal or state court of competent jurisdiction
shall have been issued as of the relevant Closing Date which would prevent
the issuance or public offering of the Shares.
(k) The Company shall not have failed at or prior to the relevant
Closing Date to perform or comply in any material respect with any of the
agreements herein contained and required to be performed or complied with
by the company at or prior to the relevant Closing Date.
5. Covenants of the Company.
(a) The Company covenants and agrees as follows:
(i) The Company will prepare a prospectus supplement (the
"Prospectus Supplement") setting forth the terms of the offering, sale
and plan of distribution of the Shares and additional information
concerning the Company and its business in conformity with the
Securities Act and the Rules, will file it pursuant to Rule 424(b) of
the Rules on or before the second business day after the date of the
public offering of the Firm Shares (or such earlier time as may be
required by the Rules) (but only if the Underwriter or its counsel has
not reasonably objected thereto by notice to the Company after having
been furnished a copy a reasonable time prior to filing) and will
notify the Underwriter promptly of such filing. The Company will
prepare and file a Current Report on Form 8-K including this Agreement
as an exhibit thereto.
(ii) For a period of 90 days from the date of this Agreement,
the Company shall promptly advise the Underwriter in writing (A) when
any amendment to the Registration Statement shall have been filed or
become effective or any subsequent supplement to the Prospectus has
been filed, (B) of any request by the Commission for any amendment of
the Registration Statement or the Prospectus or for any additional
information, (C) of the issuance of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (D) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. During
such period, the Company shall not file any amendment to the
Registration Statement or supplement to the Prospectus unless
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the Company has furnished the Underwriter a copy for its review prior
to filing and shall not file any such proposed amendment or supplement
to which the Underwriter reasonably objects. The Company shall use its
best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Shares
is required to be delivered under the Securities Act and the Rules,
any event occurs as a result of which the Prospectus as then amended
or supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the Securities Act or the Rules, the Company
promptly shall prepare and file with the Commission, subject to the
second sentence of paragraph (ii) of this Section 5(a), an amendment
or supplement which shall correct such statement or omission or an
amendment which shall effect such compliance.
(iv) The Company shall make generally available to its security
holders as soon as practicable, but not later than 45 days after the
end of the 12-month period beginning at the end of the fiscal quarter
of the Company during which the Effective Date occurs (or 90 days if
such 12-month period coincides with the Company's fiscal year), an
earning statement (which need not be audited) of the Company, covering
such 12-month period, which shall satisfy the provisions of Section
11(a) of the Securities Act or Rule 158 of the Rules.
(v) The Company shall furnish to the Underwriter and counsel for
the Underwriter, without charge, signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof) and
to each other Underwriter a copy of the Registration Statement
(without exhibits thereto) and all amendments thereof and, so long as
delivery of a prospectus by an Underwriter or dealer may be required
by the Securities Act or the Rules, as many copies of the Prospectus
and any amendments thereof and supplements thereto as the Underwriter
may reasonably request.
(vi) The Company shall reasonably cooperate with the Underwriter
and their counsel in endeavoring to qualify the Shares for offer and
sale in connection with the offering under the laws of such
jurisdictions as the Underwriter may designate and shall maintain such
qualifications in effect so long as required for the distribution of
the Shares; provided, however, that the Company shall not be required
in connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation as doing
business in any jurisdiction.
(vii) Without the prior written consent of the Underwriter, for
a period
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of 90 days after the date of this Agreement, the Company shall not
issue, sell or register with the Commission (other than on Form S-8 or
on any successor form), or otherwise dispose of, directly or
indirectly, any equity securities of the Company (or any securities
convertible into, exercisable for or exchangeable for equity
securities of the Company), except for (A) the issuance of the Shares
pursuant to the Registration Statement, (B) the issuance of shares
pursuant to the Company's existing stock option plans and employee
stock purchase plan as described in the Registration Statement and the
Prospectus, (C) the registration of the resale of up to 337,925 shares
of Common Stock by the former shareholders of Market Solutions Limited
and RevenueLab LLC, (D) the issuance of shares of Common Stock to
Ramius Securities, LLC ("Ramius") pursuant to the purchase option
granted to Ramius in Section 2.6 of the Common Stock Underwriting
Agreement dated as of January 4, 2001 between the Company and Ramius
and (E) the issuance of shares of Common Stock of the Company in
connection with the acquisition of other businesses or entities, or
the assets thereof, which acquisitions are approved in advance by the
Board of Directors of the Company, provided, that in no event shall
the aggregate number of shares of Common Stock issued pursuant to this
Section 5(a)(vii)(E) exceed 15% of the shares of Common Stock of the
Company outstanding immediately following the closing of the issuance
and sale of the Firm Shares. Nothing in this Agreement shall be deemed
to require the Company to (x) deregister any shares of Common Stock
covered by the Registration Statement but not sold to the Underwriter
or (y) terminate its agreements with Ramius.
(viii) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws and
by the Nasdaq National Market (including any required registration
under the Exchange Act).
(ix) The Company will apply the net proceeds from the offering
of the Shares in the manner set forth under "Use of Proceeds" in the
Prospectus.
(x) During the period when the Prospectus is required to be
delivered under the Act or the Exchange Act, the Company will file all
documents required to be filed with the Commission pursuant to the
Exchange Act within the time periods required by the Exchange Act and
the Exchange Act Rules.
(xi) The Company will use its best efforts to do and perform all
things required or necessary to be done and performed under this
Agreement by the Company prior to the relevant Closing Date and to
satisfy all conditions precedent to the delivery of the Securities.
(b) The Company agrees to pay, or reimburse if paid by the
Underwriter, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the public offering of the Shares and the performance of the
obligations of the Company under this Agreement including those
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relating to: (i) the preparation, printing, filing and distribution of the
Registration Statement including all exhibits thereto, the Prospectus, all
amendments and supplements to the Registration Statement and the
Prospectus, and the printing, filing and distribution of this Agreement;
(ii) the preparation and delivery of certificates for the Shares to the
Underwriter; (iii) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of the various
jurisdictions referred to in Section 5(a)(vi), including the reasonable
fees and disbursements of counsel for the Underwriter in connection with
such registration and qualification and the preparation, printing,
distribution and shipment of preliminary and supplementary Blue Sky
memoranda; (iv) the furnishing (including costs of shipping and mailing) to
the Underwriter of copies of the Prospectus and all amendments or
supplements to the Prospectus, and of the several documents required by
this Section to be so furnished, as may be reasonably requested for use in
connection with the offering and sale of the Shares by the Underwriter or
by dealers to whom Shares may be sold; (v) the filing fees of the NASD in
connection with its review of the terms of the public offering and
reasonable fees and disbursements of counsel for the Underwriters in
connection with such review (provided, that the Company shall not be
required by Section 5(b)(iii) and this Section 5(b)(v) to reimburse the
Underwriter for more than an aggregate of $20,000 of counsel fees); (vi)
inclusion of the Shares for quotation on the Nasdaq National Market; and
(vii) all transfer taxes, if any, with respect to the sale and delivery of
the Shares by the Company to the Underwriter. Subject to the provisions of
Section 8, the Underwriter agrees to pay, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated, all
costs and expenses incident to the performance of the obligations of the
Underwriter under this Agreement not payable by the Company pursuant to the
preceding sentence, including, without limitation, the fees and
disbursements of counsel for the Underwriter.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act against
any and all losses, claims, damages and liabilities, joint or several
(including any reasonable investigation, legal and other expenses incurred
in connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claim asserted), to which they, or any of them, may
become subject under the Securities Act, the Exchange Act or other Federal
or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto, or in any Blue Sky application or other
information or other documents executed by the Company filed in any state
or other jurisdiction to qualify any or all of the Shares under the
securities laws thereof (any such application, document or information
being hereinafter referred to as a "Blue Sky Application") or arise out of
or are based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) in whole or in part upon any
material breach of the
-18-
representations and warranties set forth in Section 3 hereof, or (iii) in
whole or in part upon any failure of the Company to materially perform any
of its obligations hereunder or under law; provided, however, that such
indemnity shall not inure to the benefit of the Underwriter (or any person
controlling the Underwriter) on account of any losses, claims, damages or
liabilities arising from the sale of the Shares to any person by the
Underwriter if such untrue statement or omission or alleged untrue
statement or omission was made in the Registration Statement or the
Prospectus, or such amendment or supplement thereto, or in any Blue Sky
Application in reliance upon and in conformity with information furnished
in writing to the Company by the Underwriter specifically for use therein.
(b) The Underwriter agrees to indemnify and hold harmless the Company
and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, each
director of the Company, and each officer of the Company who signs the
Registration Statement, to the same extent as the foregoing indemnity from
the Company to the Underwriter, but only insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement
or omission or alleged untrue statement or omission which was made in the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriter specifically for use
therein; provided, however, that the obligation of the Underwriter to
indemnify the Company (including any controlling person, director or
officer thereof) shall be limited to the net proceeds received by the
Company from the Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 6(a) or 6(b) shall be available to
any party who shall fail to give notice as provided in this Section 6(c) if
the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to
give such notice but the omission so to notify such indemnifying party of
any such action, suit or proceeding shall not relieve it from any liability
that it may have to any indemnified party for contribution or otherwise
than under this Section. In case any such action, suit or proceeding shall
be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and the approval by
the indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses, except as
provided below and except for the reasonable costs of investigation
-19-
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party and the payment of such counsel's fees by
the indemnifying party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have been advised by counsel that
there may be one or more legal defenses available to it which are different
from or in addition to those available to the indemnifying party (in which
case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the defense
of such action within a reasonable time after notice of the commencement
thereof, in each of which cases the reasonable fees and expenses of counsel
shall be at the expense of the indemnifying parties. An indemnifying party
shall not be liable for any settlement of any action, suit, proceeding or
claim effected without its written consent, which consent shall not be
unreasonably withheld or delayed.
7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 6(a) or 6(b) is due in accordance with its terms but for any reason is
held to be unavailable to or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject 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 Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 6 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to 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,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriter shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts but before deducting expenses) received by the
Company as set forth in the table on the cover page of the Prospectus, bear to
(y) the underwriting discounts received by the Underwriter, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company or
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact related to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriter agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation
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(even if the Underwriter were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this Section
7, (i) in no case shall the Underwriter be liable or responsible for any amount
in excess of the underwriting discount applicable to the Shares purchased by the
Underwriter hereunder and (ii) the Company shall be liable and responsible for
any amount in excess of such underwriting discount; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 7, each person, if any, who controls the Underwriter within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act shall
have the same rights to contribution as the Underwriter, and each person, if
any, who controls the Company within the meaning of the Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to clauses (i) and (ii) in the immediately preceding sentence of this
Section 7. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties under this Section, notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent.
8. Termination. This Agreement may be terminated by the Underwriter
effective immediately upon written notice to the Company with respect to the
Shares:
(a) in the absolute discretion of the Underwriter at or before any
Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in
the opinion of the Underwriter will in the future materially disrupt, the
securities markets; (ii) if there has occurred any new outbreak or material
escalation of hostilities or other calamity or crisis the effect of which
on the financial markets of the United States is such as to make it, in the
judgment of the Underwriter, inadvisable to proceed with the offering;
(iii) if there shall be such a material adverse change in general
financial, political or economic conditions or the effect of international
conditions on the financial markets in the United States is such as to make
it, in the judgment of the Underwriter, inadvisable or impracticable to
market the Shares; (iv) if trading in the Shares has been suspended by the
Commission or trading generally on the New York Stock Exchange, Inc., on
the American Stock Exchange, Inc. or the Nasdaq National Market has been
suspended or limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for
securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or any
other governmental or regulatory authority;
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or (v) if a banking moratorium has been declared by any state or Federal
authority; or (vi) if there has occurred a Material Adverse Effect or any
development involving a prospective Material Adverse Effect which would, in
the reasonable judgment of the Underwriter, make it inadvisable or
impracticable to proceed with the offering; or
(b) at or before any Closing Date, if any of the conditions specified
in Section 4 shall not have been fulfilled when and as required by this
Agreement.
If this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to the Underwriter, and the Underwriter
shall not be under any liability to the Company, except that (y) if this
Agreement is terminated by the Underwriter pursuant to Section 8(a)(vi) or
because of any failure, refusal or inability on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, the
Company will reimburse the Underwriter for all reasonable out-of-pocket expenses
(including the reasonable fees and disbursements of its counsel) incurred by it
in connection with the proposed purchase and sale of the Shares or in
contemplation of performing its obligations hereunder and (z) if the Underwriter
failed or refused to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify cancellation or
termination of its obligations under this Agreement, it shall not be relieved of
liability to the Company for damages occasioned by its failure or refusal, it
being agreed that any termination pursuant to Section 8(a) or Section 8(b) shall
in all events constitute sufficient reason.
9. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriter set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 6 and 7 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 5(b), 6, 7
and 8 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriter, the Company and their respective successors and assigns, and, to
the extent expressed herein, for the benefit of persons controlling the
Underwriter, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from the Underwriter merely
because of such purchase.
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All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the Underwriter, c/o Xxxx Xxxxxxxx Xxxxxxx, a division of
Xxxxxxxx Incorporated, 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: Xxx Xxxxxx, with a copy to Xxxxxxxx X. Xxxxx, Xxxxxx & Xxxxxxx LLP,
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, and (b) if to the Company,
to Onyx Software Corporation, 0000 000xx Xxxxxx XX, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000 Attention: Xxxxx Xxxx, with a copy to Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxx and Xxxx X. Xxxxx.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflict of
laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
ONYX SOFTWARE CORPORATION
By /s/ Xxx Xxxxxxxx
-------------------------------------
Name Xxx Xxxxxxxx
-------------------------------------
Its Interim CFO and Asst. Secretary
-------------------------------------
Confirmed:
XXXX XXXXXXXX XXXXXXX
a division of Xxxx Xxxxxxxx Incorporated
By /s/ Xxxx Xxxxxx
------------------------------
Title: Xxxx Xxxxxx
Xx. Managing Director
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