Exhibit 1.2
$250,000,000
▇▇▇▇▇▇▇▇▇.▇▇▇ INCORPORATED
% CONVERTIBLE SUBORDINATED NOTES DUE 2006
UNDERWRITING AGREEMENT
August __, 1999
August __, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇ & Company Incorporated
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "UNDERWRITERS") $250,000,000 aggregate principal amount of its %
Convertible Subordinated Notes due 2006 (the "FIRM SECURITIES") to be issued
pursuant to the provisions of an Indenture dated as of August __, 1999 (the
"INDENTURE") between the Company and Wilmington Trust Company, as Trustee (the
"TRUSTEE"). The Company also proposes to issue and sell to the Underwriters not
more than an additional $37,500,000 aggregate principal amount of its %
Convertible Subordinated Notes Due 2006 (the "ADDITIONAL SECURITIES") if and to
the extent that you, as managers of the offering, shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such %
Convertible Subordinated Notes Due 2006 granted to the Underwriters in Section 2
hereof. The Firm Securities and the Additional Securities are hereinafter
collectively referred to as the "SECURITIES." The Securities will be convertible
into shares of common stock, par value $.008 per share, of the Company (the
"COMMON STOCK") (such shares of Common Stock, the "UNDERLYING SECURITIES").
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Securities. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Securities is hereinafter referred to as the
"PROSPECTUS." If the Company has filed an abbreviated registration statement to
register additional % Convertible
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Subordinated Notes due 2006 pursuant to Rule 462(b) under the Securities Act
(the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the term
"REGISTRATION STATEMENT" shall be deemed to include such Rule 462 Registration
Statement.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the knowledge of the Company, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any 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 representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company is a corporation, validly existing and in good
standing under the laws of the State of Delaware, has the corporate
power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company.
(d) The Company has no subsidiaries and does not otherwise own
or control, directly or indirectly, any corporation, association or
other entity.
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(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of issued and outstanding capital stock of the
Company have been duly authorized and, are validly issued, fully paid
and non-assessable.
(h) The Underlying Securities reserved for issuance upon
conversion of the Securities have been duly authorized and reserved for
issuance and, when issued and delivered upon conversion of the
Securities in accordance with the terms of the Securities, will be
validly issued, fully paid and non-assessable, and the issuance of the
Underlying Securities will not be subject to any preemptive or similar
rights.
(i) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable against the Company, except to the extent that enforcement
thereof may be limited by (a) bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law) and except that the waiver
contained in Section [5.08] of the Indenture may be unenforceable.
(j) The Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable against the Company, except to the extent that
enforcement thereof may be limited by (a) bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b)
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) and except that the
waiver contained in Section [5.08] of the Indenture may be
unenforceable.
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(k) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture and the Securities will not contravene (i) any provision
of applicable law; (ii) the certificate of incorporation or by-laws of
the Company; (iii) except as disclosed in the Prospectus, any agreement
or other instrument binding upon the Company that is material to the
Company or (iv) any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company, except where, in
the case of (i), (iii) and (iv), such contravention would not, singly
or in the aggregate, have a material adverse effect on the Company, or
on the validity or enforceability of the Indenture and the Securities,
and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance
by the Company of its obligations under this Agreement, the Indenture
and the Securities, except such as have been obtained or made or such
as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Securities or such
consents, approvals, authorizations, orders or qualifications the
failure of the Company to obtain would not have a material adverse
effect on the Company or the offering of Securities contemplated
hereunder.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
(m) There are no (i) legal or governmental proceedings pending
or to the Company's knowledge threatened to which the Company is a
party or to which any of the properties of the Company is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or (ii) statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as required.
(n) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
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(o) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(p) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (i) the
Company has not incurred any material liability or obligation, direct
or contingent, nor entered into any material transaction not in the
ordinary course of business; (ii) the Company has not purchased any of
its outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (iii) there has not been any
material change in the capital stock, short-term debt (other than in
the ordinary course of business) or long-term debt of the Company,
except in each case as described in the Prospectus.
(q) The Company owns no real property and has good and
marketable title to all personal property owned by it which is material
to the business of the Company, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such
property and do not materially interfere with the use made or proposed
to be made of such property by the Company; and any real property and
buildings held under lease by the Company are held by it under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made or proposed
to be made of such property and buildings by the Company, in each case
except as described in the Prospectus.
(r) Except to the extent described in the Prospectus, the
Company owns, possesses, or has an irrevocable right to use all
patents, patent applications, trademarks, trademark applications,
service marks, service ▇▇▇▇ applications, trade names, copyrights,
licenses, inventions, trade secrets, technology and know-how
(collectively, "INTELLECTUAL PROPERTY RIGHTS") currently employed by it
in connection with and material to its business as described in the
Prospectus; other than the claims described in the Prospectus, the
Company is not aware of any rights of third parties to any such
Intellectual Property Rights; in connection with the filing of its
patent applications, the Company conducted reasonable investigations of
the published literature and patent references relating to the
inventions claimed in such applications. There are no enforceable
United States or foreign patents known to the Company which the
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Company believes to be infringed by its present activities or which the
Company believes would preclude the pursuit of its business as
described in the Prospectus to any material extent; the Company is not
aware of any infringement by third parties of any such Intellectual
Property Rights which would have a material adverse effect on the
Company; except as described in the Prospectus, there is no pending or,
to the Company's knowledge, threatened action, suit, proceeding or
claim challenging the validity or scope of the Company's rights in or
to any such Intellectual Property Rights; and, except as described in
the Prospectus, there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others that the Company
is infringing or otherwise violating intellectual property rights of
others.
(s) The Company possesses all certificates, licenses,
authorizations and permits (collectively, "GOVERNMENTAL LICENSES")
issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct its business, except such Governmental
Licenses the failure of the Company to possess would not, singly or in
the aggregate, have a material adverse effect on the Company; the
Company has not received any notice of proceedings relating to the
revocation or modification of any Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a material adverse effect on the Company, except
as described in the Prospectus.
(t) No material labor dispute with the employees of the
Company exists, except as described in the Prospectus, or, to the
knowledge of the Company, is imminent.
(u) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as it
believes are reasonable for the business in which it is engaged and the
Company believes it will be able to renew or replace its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from financially responsible insurers as may be
necessary to continue its business at a cost that would not materially
and adversely affect the Company, except as described in the
Prospectus.
(v) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance 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 conformity with generally
accepted
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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 (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), (ii) has received all permits, licenses or
other approvals required of it under applicable Environmental Laws to
conduct its business and (iii) is in compliance with all terms and
conditions of any such permit, license or approval, except, in each
case, where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not have a material adverse effect on the Company.
(x) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Securities registered pursuant to the Registration
Statement.
(y) Except as described or referred to in the Registration
Statement (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) and except for the 10,000,000
shares of Common Stock sold on April 1, 1999 in the Company's initial
public offering, the Company has not sold, issued or distributed any
shares of Common Stock during the six-month period preceding the date
hereof, including any sales pursuant to Rule 144A under, or Regulations
D or S of, the Securities Act, other than shares issued pursuant to
employee benefit plans, qualified stock option plans or other employee
compensation plans or pursuant to outstanding options, rights or
warrants.
(z) Options issued or to be issued pursuant to any of the
Company's stock option plans to employees who participated in the
option exercise program described in the Prospectus are not exercisable
until 180 days after the date of this Agreement.
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(aa) The Company has reviewed its operations to the extent and
in the manner described in the Prospectus to evaluate the extent to
which the business or operations of the Company will be affected by the
Year 2000 Problem (that is, any significant risk that computer hardware
or software applications used by the Company will not, in the case of
dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000); as a result of such review, (i) the Company
does not believe, that (A) there are any issues related to the
Company's preparedness to address the Year 2000 Problem that are of a
character required to be described or referred to in the Registration
Statement or Prospectus which have not been accurately described in the
Registration Statement or Prospectus or (B) the Year 2000 Problem will
have a material adverse effect on the Company.
(bb) There are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any shares of Common Stock.
2. AGREEMENTS TO SELL AND PURCHASE. Upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, the Company hereby agrees to sell to the several
Underwriters, and each Underwriter, agrees, severally and not jointly, to
purchase from the Company the respective principal amounts of Firm Securities
set forth in Schedule I hereto opposite its name at % of their principal amount
plus accrued interest, if any, from August __, 1999 to the date of payment and
delivery.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Securities, and the Underwriters shall have a
one-time right to purchase up to $37,500,000 aggregate principal amount of
Additional Securities at the Purchase Price plus accrued interest, if any, from
August __, 1999 to the date of payment and delivery. If the Underwriters elect
to exercise such option, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated shall so notify the
Company in writing not later than 30 days after the date of this Agreement,
which notice shall specify the aggregate principal amount of Additional
Securities to be purchased by the Underwriters and the date on which such
Additional Securities are to be purchased. Such date may be the same as the
Closing Date but not earlier than the Closing Date nor later than ten business
days after the date of such notice. Additional Securities may be purchased as
provided in Section 4 solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Securities.
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The Company hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, it will not, during the period ending 180
days after the date of the Prospectus, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock;
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of shares of
Common Stock, whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise or (iii) in the case of the Company, file a registration
statement, other than a registration statement on Form S-8 covering shares
of common stock subject to outstanding options under the 1997 Omnibus Plan
or shares of common stock subject to outstanding options under the 1999
Omnibus Plan, for the registration of any shares of Common Stock or any security
convertible or exercisable or exchangeable for Common Stock. The foregoing
sentence shall not apply to (A) the sale of the Securities under this Agreement;
(B) the Common Stock issuable upon conversion of Securities; (C) the issuance by
the Company of restricted stock awards under the Company's existing employee
benefits plans or of shares of Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof;
(D) the grant of options to officers, directors, employees or consultants,
PROVIDED such options are not exercisable (except in the case of a change
of control or similar event) prior to the end of the lock-up period;
(E) the issuance by the Company of warrants (or shares of capital stock upon
the exercise of such warrants) to suppliers or other entities providing
products or services to the Company in connection with entering into certain
supply, adaptive marketing or other similar arrangements, provided that the
recipient of such warrants or shares agrees to be bound by the foregoing
provisions; (F) the concurrent offering by the Company of 2,000,000 shares
of its Common Stock or the sale of the those 2,000,000 shares in an underwritten
offering; (G) the filing of a Rule 462(b) Registration Statement; (H) subject
to the other provisions herein the filing by the Company of a registration
statement in response to the exercise of demand registration rights by holders
of such rights as of the date hereof under the Amended and Restated Registration
Rights Agreement dated as of December 8, 1998 (the "Registration Rights
Agreement") among the Company, General Atlantic Partners 48, L.P., GAP
Coinvestment Partners, L.P., General Atlantic Partners 50, L.P. and the
stockholders named therein, or the grant of exchange rights and the issuance
by the Company of common stock on exercise of such exchange rights, in
connection with the development by ▇▇▇▇▇▇▇▇▇.▇▇▇ of new lines of business
through other entities, PROVIDED THAT no such issuance is permitted prior
to 180 days after the date of the Prospectus.
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Securities as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Securities are to be offered to the public initially at
% of their principal amount (the "PUBLIC OFFERING PRICE") plus accrued interest,
if
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any, from August __, 1999 to the date of payment and delivery and to certain
dealers selected by you at a price that represents a concession not in excess of
% of their principal amount, and that any Underwriter may allow, and such
dealers may reallow, a concession, not in excess of % of their principal amount,
to any Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Securities shall be made to
the Company in Federal or other funds immediately available in New York City at
10:00 a.m., New York City time, on August __, 1999, or at such other time on the
same or such other date, not later than August __, 1999, as shall be designated
in writing by you. The time and date of such payment are hereinafter referred to
as the "CLOSING DATE."
Payment for any Additional Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Securities for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than September __, 1999, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to as
the "OPTION CLOSING DATE."
Certificates for the Securities shall be in global form and registered
in such names and in such denominations as you shall request in writing not
later than one full business day prior to the Closing Date or the Option Closing
Date, as the case may be. The certificates evidencing the Securities shall be
delivered to you on the Closing Date or the Option Closing Date, as the case may
be, for the account of the Underwriters, with any transfer taxes payable in
connection with the transfer of the Securities to the Underwriters duly paid,
against payment therefor.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Company to sell the Securities to the Underwriters and the several obligations
of the Underwriters to purchase and pay for the Securities are subject to the
condition that the Registration Statement shall have become effective not later
than 5:00 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
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(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Securities on the terms
and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the
Chief Financial Officer of the Company, to the effect set forth in
Section 5(a)(i) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and
correct as of the Closing Date and that the Company has in all material
respects complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or
before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special outside
counsel for the Company, dated the Closing Date, to the effect set
forth in Annex I hereto.
(d) The Underwriters shall have received on the Closing Date
the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇, general counsel for the Company, dated the
Closing Date, to the effect set forth in Annex II hereto.
(e) The Underwriters shall have received on the Closing Date
the opinion of outside patent counsel for the Company, dated the
Closing Date, to the effect set forth in Annex IV hereto.
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(f) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters,
dated the Closing Date, in form and substance satisfactory to you.
The opinions described in Sections 5(c), 5(d), and 5(e) above
shall be rendered to the Underwriters at the request of the Company.
(g) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Deloitte & Touche LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
PROVIDED that the letter delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.
The obligations of the Underwriters to purchase Additional Securities
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company, the due authorization, execution and authentication of the Additional
Securities, the due authorization and reservation of the Underlying Securities
relating to the Additional Securities, and other matters related to the
execution and authentication of the Additional Securities and the issuance of
the Underlying Securities upon conversion of the Additional Securities.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, seven signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to you in New York
City, without charge, prior to 3:00 p.m. New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 6(c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
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proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Securities may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments
or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request; PROVIDED that the Company shall not be
obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending [September 30], 1999 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid the following expenses incident to the performance of
its obligations under this Agreement, including: (i) the fees,
disbursements
13
and expenses of the Company's counsel and the Company's accountants in
connection with the registration and delivery of the Securities under
the Securities Act and all other fees or expenses in connection with
the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements
to any of the foregoing, including all printing costs associated
therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities herein specified, (ii) all
costs and expenses related to the transfer and delivery of the
Securities to the Underwriters, including any transfer or other taxes
payable thereon, (iii) the cost of producing any Blue Sky or legal
investment memorandum in connection with the offer and sale of the
Securities under state securities law and all expenses in connection
with the qualification of the Securities for offer and sale under state
securities law as provided in Section 6(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection
with the Blue Sky or legal investment memorandum, not to exceed,
together with fees for the concurrent stock offering, $10,000, (iv) all
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification
of the offering of the Securities by the NASD Regulation, Inc., not to
exceed, together with fees for the concurrent stock offering, $10,000,
(v) any fees charged by the rating agencies for the rating of the
Securities, (vi) all costs and expenses incident to quotation of the
Underlying Securities on the NASDAQ National Market, (vii) the cost of
printing certificates representing the Securities, (viii) the costs and
charges of any trustee, transfer agent, registrar or depositary, (ix)
the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the
marketing of the offering of the Securities, including, without
limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of
the Company, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of any
aircraft chartered in connection with the road show, (x) all expenses
in connection with any offer and sale of the Securities outside of the
United States, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with offers
and sales outside of the United States and (xi) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. It
is understood, however, that except as provided in this Section,
Section 7 entitled "Indemnity and Contribution", and the last paragraph
of Section 9 below, the Underwriters will pay all of
14
their costs and expenses, including fees and disbursements of their
counsel, transfer taxes payable on resale of any of the Securities by
them and any advertising expenses connected with any offers they may
make.
(g) Not to release any option holder from, or in any other
way, amend or modify the lock-up agreements entered into in connection
with the Company's option exercise program described in the Prospectus,
without the consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of
the Underwriters, which shall not be unreasonably withheld.
(h) To notify ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated promptly upon
receipt by the Company of any demand registration request under the
Registration Rights Agreement so that the Underwriters may exercise
their holdback rights under Section 6(a) of Registration Rights
Agreement.
(i) To qualify the Underlying Securities for quotation on
the NASDAQ National Market.
7. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have made any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein, PROVIDED, that the
foregoing indemnity agreement with respect to any preliminary prospectus or the
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Securities, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented, if the Company shall have made any
amendments or supplements) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Securities to such person,
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability.
15
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 7(a) or 7(b), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred upon receipt of reasonably
detailed invoices thereof. Such firm shall be designated in writing by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, in the case of parties indemnified pursuant to
Section 7(a), and by the Company, in the case of parties indemnified pursuant to
Section 7(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
16
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause 7(d)(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 7(d)(i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that 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 Underwriters on the other hand
in connection with the offering of the Securities shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Securities (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Securities. The relative fault of the
Company on the one hand and the Underwriters on the other hand 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 by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the respective principal amounts of Securities they
have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such
17
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such 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 misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 7 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in this Section
7 and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Securities.
8. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange or the National Association
of Securities Dealers, Inc., (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses
8(a)(i) through 8(a)(iv), such event, singly or together with any other such
event, makes it, in your judgment, impracticable to market the Securities on the
terms and in the manner contemplated in the Prospectus.
9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters shall fail
or refuse to purchase Securities that it has or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is
18
not more than one-tenth of the aggregate principal amount of the Securities to
be purchased on such date, the other Underwriters shall be obligated severally
in the proportions that the principal amount of Securities set forth opposite
their respective names in Schedule I bears to the principal amount of Securities
set forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as you may specify, to purchase the Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; PROVIDED that in no event shall the principal amount of Securities
that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 9 by an amount in excess of one-ninth of such
principal amount of Securities without the written consent of such Underwriter.
If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Securities and the aggregate principal amount of Securities with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date, and arrangements
satisfactory to you and the Company for the purchase of such Securities are not
made within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. If, on the Option Closing Date,
any Underwriter or Underwriters shall fail or refuse to purchase Additional
Securities and the aggregate number of Additional Securities with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Securities to be purchased, the non-defaulting Underwriters shall
have the option to (i) terminate their obligation hereunder to purchase
Additional Securities or (ii) purchase not less than the number of Additional
Securities that such non-defaulting Underwriters would have been obligated to
purchase in the absence of such default. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
19
10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
12. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
20
Very truly yours,
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
By:
---------------------------------
Name:
Title:
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇ & Company Incorporated
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
Acting severally on behalf of themselves and the several Underwriters named in
Schedule I hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
---------------------------------
Name:
Title:
21
SCHEDULE I
PRINCIPAL AMOUNT OF
SECURITIES TO BE
UNDERWRITER PURCHASED
----------------------------------------------- --------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇, Sachs & Co...........................
▇▇▇▇▇ & Company Incorporated..................
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.............
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation..........................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated .....................
------------
Total:............................... $250,000,000
============
I-1
Annex I
Opinion of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
August 16, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇ SACHS & CO.
▇▇▇▇▇ & COMPANY INCORPORATED
BANCBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
As Representatives of the several Underwriters
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
Public Offering of ___% Convertible Subordinated
Notes Due 2006
------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated, a Delaware corporation (the "Company") in connection with the
Underwriting Agreement, dated August 13, 1999 (the "Underwriting Agreement"),
between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇▇ Sachs & Co.,
▇▇▇▇▇ & Company Incorporated, BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated as representatives of the several Underwriters named therein
(the "Underwriters"), relating to the sale by the Company to the several
Underwriters of $250,000,000 aggregate principal amount of the Company's ____%
Convertible Subordinated Notes due 2006 (the "Notes").
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
August 16, 1999
Page 2
This opinion is being furnished pursuant to Section 5(c) of
the Underwriting Agreement.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Registration Statement on Form S-1 (File No. 333-83513) relating to the Notes,
filed with the Securities and Exchange Commission (the "Commission") on July 23,
1999 under the Securities Act of 1933, as amended, (the "Act"), Amendment No. 1
thereto filed with the Commission on August 2, 1999 and Amendment No. 2 thereto
filed with the Commission on August 10, 1999, including information deemed
to be a part of the registration statement at the time of effectiveness pursuant
to Rule 430A of the General Rules and Regulations under the Act (the "Rules and
Regulations") (such Registration Statement, as so amended, being hereinafter
referred to as the "Registration Statement"); (ii) the final prospectus dated
August 10, 1999 relating to the Notes and the shares of Common Stock, par value
$.008 per share, of the Company issuable upon conversion of the Notes (the
"Conversion Shares"), in the form filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations (the "Prospectus"); (iii) a form of global
certificate representing the Notes; (iv) a specimen certificate representing
Common Stock; (v) an executed copy of the Underwriting Agreement; (vi) an
executed copy of the indenture, dated as of August 13, 1999 (the "Indenture"),
between the Company and Wilmington Trust Company, as trustee (the "Trustee");
(vii) the Certificate of Incorporation of the Company, as currently in effect
(the "Certificate of Incorporation"); (viii) the By-laws of the Company, as
currently in effect (the "By-laws");(ix) certain resolutions of the Board of
Directors of the Company and a Pricing Committee of the Board of Directors of
the Company; (x) the Amended and Restated Registration Rights Agreement, dated
as of December 8, 1998, among the Company, General Atlantic Partners 48, L.P.,
GAP Coinvestment Partners, L.P.,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
August 16, 1999
Page 3
General Atlantic Partners 50, L.P., and the stockholders named therein (the
"Registration Rights Agreement") and those other agreements and instruments
listed on Schedule I hereto (together with the Registration Rights Agreement,
the "Applicable Contracts"); (xi) executed acknowledgements from each of the
parties to the Registration Rights Agreement (other than America West Airlines,
Inc., Continental Airlines, Inc., Northwest Airlines, Inc. and Trans World
Airlines, Inc. (the "Non-Consenting Stock holders") and the Company) consenting
to the assignment of registration rights by certain stockholders and waiving
rights to notice under the Registration Rights Agreement; (xii) an executed
copy of the Underwriting Agreement, dated August 10, 1999 (the "Stock
Underwriting Agreement"), between the Company, certain stockholders of the
Company named therein (the "Selling Stockholders"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, ▇▇▇▇▇▇▇ Sachs & Co., ▇▇▇▇▇ & Company Incorporated, BancBoston
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated as representatives of the
several U.S. Underwriters named therein (the "U.S. Underwriters"), and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. International Limited, ▇▇▇▇▇▇▇ Sachs International, ▇▇▇▇▇ &
Company Incorporated, BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ International Inc.,
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ International and ▇▇▇▇▇▇▇ ▇▇▇▇▇ International as
representatives of the several International Under writers named therein (the
"International Underwriters" and together with the U.S. Underwriters, the "Stock
Underwriters"), relating to the sale to the several Stock Underwriters by the
Company of 2,000,000 shares (the "Primary Shares") of Common Stock and by the
Selling Stockholders of 3,500,000 shares of Common Stock; and (xiii) an
officer's certificate, dated the date hereof, a copy of which is attached as
Exhibit A hereto. We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company and
such agreements, certificates of public officials, certificates
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
August 16, 1999
Page 4
of officers or other representatives of the Company and others, and such other
documents, certificates and records as we have deemed necessary or appropriate
as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photo static copies and the
authenticity of the originals of such latter documents. In making our
examination of executed documents, we have assumed that the parties thereto,
other than the Company, had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other and the due execution and delivery
by such parties of such documents and the validity and binding effect thereof on
such parties. As to any facts material to the opinions ex pressed herein which
we did not independently establish or verify, we have relied upon oral or
written statements and representations of officers and other representatives of
the Company and others.
In rendering the opinions set forth in paragraphs 4 and 5
below, we have also assumed, with your consent, that the execution and delivery
by the Company of the Indenture and the Notes and the performance by the Company
of its obligations thereunder, do not and will not conflict with, contravene,
violate or constitute a default under (i) any lease, indenture, instrument or
other agreement to which the Company, or any property of the Company, is subject
(except that we do not make the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
August 16, 1999
Page 5
assumption set forth in this clause (i) with respect to the Certificate of
Incorporation, the By-Laws or the Applicable Contracts), (ii) any rule, law or
regulation to which the Company is subject (except that we do not make the
assumption set forth in this clause (ii) with respect to Applicable Laws); (iii)
any judicial or administrative order or decree of any governmental authority
(except that we do not make the assumption set forth in this clause (iii) with
respect to Applicable Orders); or (iv) any consent, approval, license,
authorization or validation of, or filing, recording or registration with any
governmental authority (except that we do not make this assumption with respect
to Governmental Approvals).
We do not express any opinion as to the effect on the opinions
set forth herein of (i) the compliance or noncompliance by any party (other than
the Company) with any state, federal or other laws or regulations applicable to
it or (ii) the legal or regulatory status or the nature of the business of any
party (other than the Company).
Our opinion set forth in paragraph 1 below as to the existence
and good standing of the Company under the laws of the State of Delaware is
based solely on our review of a certificate to such effect from the Secretary of
State of the State of Delaware.
In rendering the opinions set forth in paragraphs 6 and 7
below, we have assumed, with your consent, that the certificates representing
the Conversion Shares and the Primary Shares, respectively, will be manually
signed by one of the authorized officers of the Transfer Agent and Registrar for
the Common Stock and registered by such Transfer Agent and Registrar and will
conform to the specimen certificate representing Common Stock examined by us.
As used herein, (i) the term "Applicable Laws" means those
laws of the State of New York, the State of Delaware and the United States of
America that, in each case, in our experience, are normally applicable to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
August 16, 1999
Page 6
transactions of the type contemplated by the Underwriting Agreement (except for
United States, state and foreign securities or Blue Sky laws, anti-fraud laws
and the rules and regulations of the National Association of Securities Dealers,
Inc.) but without our having made any special investigation regarding any other
laws; (ii) the term "Governmental Authorities" means any federal, New York or
Delaware executive, legislative, judicial, administrative or regulatory body;
(iii) the term "Applicable Orders" means those judgments, orders or decrees of
any Governmental Authorities specifically identified to us by the Company to be
applicable to the Company, as identified on Schedule II hereto and (iv) the
term "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, qualification or registration with,
any Governmental Authority required to be made or obtained by the Company
pursuant to Applicable Laws, other than any consent, approval, license,
authorization, validation, filing, qualification or registration which may have
become applicable as a result of your involvement in the transactions
contemplated by the Underwriting Agreement or because of your legal or
regulatory status or because of any other facts specifically pertaining to you.
Members of our firm are admitted to the bar in the State of
New York and the State of Delaware and we do not express any opinion as to the
laws of any other jurisdiction other than the laws of the United States of
America to the extent referred to specifically herein.
Based upon and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:
1. The Company is a corporation validly existing and in good
standing under the laws of the State of Delaware.
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August 16, 1999
Page 7
2. The Company has the corporate power and corporate authority
to own, lease and operate its proper ties and to conduct its business as
described in the Registration Statement.
3. The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
4. The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by (a) bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law) and except that the waiver contained in Section 5.08 of the Indenture may
be unenforceable.
5. The Notes have been duly authorized for issuance by the
Company and, when executed and authenticated in accordance with the terms of
the Indenture and delivered to and paid for by you in accordance with the terms
of the Underwriting Agreement, the Notes will constitute valid and binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by (a) bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (b) general principles of equity
(regardless of whether enforcement is considered in a
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
August 16, 1999
Page 8
proceeding in equity or at law) and, except that the waiver contained in Section
5.08 of the Indenture may be unenforceable.
6. The Conversion Shares initially issuable on conversion of
the Notes have been duly authorized and reserved for issuance by the Company
upon conversion of the Notes and (assuming payment for the Notes by you in
accordance with the Underwriting Agreement), if and when issued upon conversion
of the Notes in accordance with the terms of the Notes and the Indenture, such
Conversion Shares will be validly issued, fully paid and nonassessable; and the
issuance of the Conversion Shares will not be subject to any preemptive or
similar rights arising under the Certificate of Incorporation or the By-laws or
the General Corporation Law of the State of Delaware, in each case as currently
in effect.
7. The Primary Shares have been duly authorized by the
Company and, when delivered to and paid for by the Stock Underwriters in
accordance with the terms of the Stock Underwriting Agreement, will be validly
issued, fully paid and non-assessable shares of Common Stock.
8. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
9. The execution and delivery of the Underwriting Agreement,
the Indenture and the Notes by the Company and the consummation by the Company
of the transactions contemplated thereby will not contravene (i) the Certificate
of Incorporation or the By-laws; (ii) any Applicable Law; (iii) except to the
extent disclosed in the Prospectus, any Applicable Contract; (iv) any Applicable
Order; or (v) the Act, the Rules and Regulations, the Securities Exchange
Act of 1934, as amended (the "Exchange Act") or the rules and regulations
thereunder, PROVIDED,
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August 16, 1999
Page 9
HOWEVER, that we express no opinion in this paragraph 9 with regard to the
anti-fraud provisions of the Act, the Rules and Regulations, the Exchange Act or
the rules and regulations thereunder or the information contained in, the
accuracy, completeness or correctness of, or the adequacy of the disclosure
contained in, the Prospectus or the Registration Statement or the responsiveness
thereof to the requirements of the Act and the Rules and Regulations,
which matters are addressed in paragraph 13 below and the second paragraph
following paragraph 14 below.
10. No Governmental Approval, or consent, filing, registration
or approval of or with the Commission, is required to be made or obtained by
the Company for the execution and delivery by the Company of the Underwriting
Agreement and the Indenture, the execution, issuance and delivery by the Company
of the Notes and the performance by the Company of its obligations under the
Underwriting Agreement, the Indenture and the Notes, except such as have been
obtained or made.
11. The statements set forth in the Prospectus under the
captions "Description of the Notes and "Description of Capital Stock" and in
Item 14 of the Registration Statement, insofar as such statements constitute
summaries of legal matters or certain provisions of the documents referred to
therein, fairly summarize the matters referred to therein in all material
respects.
12. Although the discussion set forth in the Prospectus under
the caption "Certain United States Federal Income Tax Considerations" does not
purport to discuss all possible United States federal income tax consequences of
the purchase, ownership, conversion and disposition of Notes, such discussion
constitutes, in all material respects, a fair summary of the United States
federal income
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August 16, 1999
Page 10
tax consequences of the purchase, owner ship, conversion and disposition of
Notes under current law.
13. The Registration Statement, at the time it became
effective, and the Prospectus, as of its date, appeared on their face to be
appropriately responsive in all material respects to the requirements of the Act
and the Rules and Regulations, except that, in each case, we express no opinion
as to the financial statements, schedules and other financial and statistical
data included therein or excluded therefrom or the exhibits thereto, and, except
to the extent expressly stated in paragraphs 11 and 12 above, we do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus.
14. The Company is not and, upon the consummation of the
transactions contemplated by the Underwriting Agreement, will not be, an
investment company under the Investment Company Act of 1940, as amended.
We have been orally advised by the Commission that the
Registration Statement was declared effective under the Act at ____ p.m. on
August 10, 1999. We have been orally advised by the Commission that no stop
order suspending the effectiveness of the Registration Statement has been
issued and, to the best of our knowledge, no proceedings for that purpose have
been instituted or are pending or threatened by the Commission.
In addition, we have participated in conferences with officers
and other representatives of the Company, representatives of the independent
accountants of the Company, your counsel and you at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although we are not passing upon, and do not assume any responsibility for,
the
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August 16, 1999
Page 11
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and have made no independent check or
verification thereof (except to the extent expressly stated in paragraphs 11
and 12 above), on the basis of the foregoing, no facts have come to our
attention that have led us to believe that the Registration Statement, at the
time it became effective, contained an 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, as of its
date and as of the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except that we express no opinion or belief with respect
to the financial statements, schedules and other financial and statistical data
included therein or excluded therefrom or the exhibits to the Registration
Statement.
This opinion is furnished to you solely for your benefit in
connection with the closing under the Underwriting Agreement occurring today and
is not to be used, circulated, quoted or otherwise referred to for any other
purpose or relied upon by any other person without our express written
permission.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
August 16, 1999
Page 12
SCHEDULE I
APPLICABLE CONTRACTS
Stock Purchase Agreement, dated July 31, 1998, by and among ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated, General Atlantic Partners 48, L.P. and GAP Coinvestment Partners,
L.P., as amended on September 18, 1998
Stock Purchase Agreement, dated December 8, 1998, by and between ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated and the Investors listed on Schedule 2.1 thereto
Airline Participation Agreement, dated April 1998, by and among ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated, Priceline Travel, Inc.
and Trans World Airlines, Inc.
Airline Participation Agreement, dated October 2, 1998, by and among
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, Priceline Travel, Inc. and Northwest Airlines, Inc.
Airline Participation Agreement, dated August 31, 1998, by and among
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, Priceline Travel, Inc. and Delta Air Lines, Inc., as
amended on January 19, 1999
General Agreement, dated August 31, 1998, by and among ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated, Priceline Travel, Inc. and Delta Air Lines, Inc., as amended on
January 19, 1999
Participation Warrant Agreement, dated August 31, 1998, between ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated and Delta Air Lines, Inc., as amended on December 31, 1998
Participation Warrant Agreement, dated December 31, 1998, between ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated and America West Airlines, Inc.
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August 16, 1999
Page 13
Participation Warrant Agreement, dated December 31, 1998, between ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated and Trans World Air lines, Inc.
Participation Warrant Agreement, dated December 31, 1998, between ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated and Northwest Air lines, Inc., as amended on February 4, 1999 and
March 3, 1999
Letter Agreement, dated July 16, 1999, between the Registrant and Delta Air
Lines, Inc.
Interactive Marketing Agreement, dated March 31, 1999, by and between the
Registrant and First USA Bank, N.A.
First Amendment to Interactive Marketing Agreement, dated as of April 26, 1999,
modifying the Interactive Marketing Agreement, dated March 31, 1999, by and
between the Registrant and First USA Bank, N.A.
Airline Participation Agreement, dated July 16, 1999, between the Registrant and
Continental Airlines, Inc.
Participation Warrant Agreement, dated July 16, 1999, between the Registrant and
Continental Airlines, Inc.
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August 16, 1999
Page 14
SCHEDULE II
APPLICABLE ORDERS
None
Exhibit A
▇▇▇▇▇▇▇▇▇.▇▇▇ INCORPORATED
OFFICER'S CERTIFICATE
I, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, am Chief Financial Officer of
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, a Delaware corporation (the "Company"). I understand
that pursuant to Section 5(c) of the Underwriting Agreement dated August 10,
1999 (the "Underwriting Agreement") among the Company and the several
underwriters (the "Underwriters") named in Schedule I thereto, Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP is rendering an opinion, to be dated August 13, 1999
(the "Opinion") to the Underwriters. I further understand that Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP is relying on this officer's certificate and the
statements made herein in rendering such opinion.
With regard to the foregoing, on behalf of the Company, I
certify that:
(i) the Company's sole business is the ownership and operation of an electronic
commerce business primarily over the Internet;
(ii) the Company (a) is not engaged and does not propose to engage in the
business of issuing face-amount certificates of the installment type, and has
not been engaged in such business and does not have any such certificate
outstanding, and (b) is not engaged and does not propose to engage in the
business of investing, reinvesting, owning, holding or trading in securities,
and does not own or propose to acquire investment securities (as defined in
Section 3(a) of the Investment Company Act of 1940, as amended) having a value
exceeding 40 percent of the value of the Company's total assets (exclusive of
government securities and cash items) on an unconsolidated basis;
(iii) there are no judgments, orders or decrees of any Governmental Authorities
(as such term is defined in the Opinion) applicable or relating to, or
affecting, the Company;
(iv) the Company has complied with all its obligations under the
confidentiality, publicity and non-disclosure provisions of the Applicable
Contracts and, without limiting the generality of the foregoing, in those
circumstances where an Applicable Contract does not by its terms permit the
filing of the Applicable Contract as an exhibit to the Registration Statement or
a description of certain provisions of the Applicable Contract in the
Registration Statement, the Company has obtained the consent of the other party
or parties (as applicable) to such Applicable Contract to the filing of such
Applicable Contract as an exhibit to the Registration Statement or the
description of certain provisions of such Applicable Contract in the
Registration Statement; and
(v) except to the extent disclosed in the Prospectus, the Company has complied
with all its obligations under Section 7 of the Registration Rights Agreement in
connection with the filing of the Registration Statement with the Commission
and the offerings contemplated by the Registration Statement, including (without
limitation) the procedural, notice and time period requirements of such Section.
IN WITNESS WHEREOF I have executed this certificate in the
name and on behalf of ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated this 16th day of August, 1999.
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
By:____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
Annex II
Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Senior Vice President, General Counsel and Secretary
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
Five ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
August 16, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇ SACHS & CO.
▇▇▇▇▇ & COMPANY INCORPORATED
BANCBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
As Representatives of the several Underwriters
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
Public Offering of ___% Convertible Subordinated
Notes Due 2006
------------------------------------------------
Ladies and Gentlemen:
I am Senior Vice President, General Counsel and Secretary of
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, a Delaware corporation (the "Company"), and have
acted as general counsel to the Company in connection with the Underwriting
Agreement, dated August 10, 1999 (the "Underwriting Agreement"), between the
Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇▇ Sachs & Co., ▇▇▇▇▇ &
Company Incorporated, BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated as representatives of the several Underwriters named
therein (the "Underwriters"), relating to the sale by the Company to the several
Underwriters of $250,000,000 aggregate principal amount of the Company's ____%
Convertible Subordinated Notes due 2006 (the "Notes").
This opinion is being furnished pursuant to Section 5(d) of the
Underwriting Agreement.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of (i) the Registration
Statement on Form S-1 (File No. 333-83513) relating to the Notes, filed with the
Securities and Exchange Commission (the "Commission") on July 23, 1999 under the
Securities Act of 1933, as amended (the "Act"), Amendment No. 1 thereto filed
with the Commission on August 2, 1999 and Amendment No. 2 thereto filed with the
Commission on August [9][10], 1999, including information deemed to be a part of
the registration statement at the time of effectiveness pursuant to Rule 430A
of the General Rules and Regulations under the Act (the "Rules and Regulations")
(such Registration Statement, as so amended, being here inafter referred to as
the "Registration Statement"); (ii) the final prospectus dated August 10, 1999
relating to the Notes and the shares of common stock, par value $.008 per share
("Common Stock"), of the Company issuable upon conversion of the Notes, in the
form filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations (the "Prospectus"); (iii) a form of global certificate representing
the Notes; (iv) a specimen certificate representing Common Stock; (v) an
executed copy of the Underwriting Agreement; (vi) an executed copy of the
indenture, dated as of August 13, 1999 (the "In denture"), between the Company
and Wilmington Trust Company, as trustee (the "Trustee"); (vii) the Certificate
of Incorporation of the Company, as currently in effect (the "Certificate of
Incorporation"); (viii) the By-laws of the Company, as currently in effect (the
"Bylaws"); (ix) certain resolutions of the Board of Directors of the Company
and a Pricing Committee of the Board of Directors of the Company; (x) a
certificate of the Chief Executive Officer and Chief Financial Officer of the
Company as to the factual matters covered thereby, a copy of which is attached
hereto (the
2
"Officers' Certificate"); (ix) the agreements included as exhibits to the
Registration Statement (the "Material Contracts"); and (x) certain documents
purporting to assign the rights to United States patents No. 5,794,207 and No.
5,797,127 (collectively, the "Patents") to the Company. I have also examined
originals or copies, certified or otherwise identified to my satisfaction, of
such records of the Company and such agreements, certificates of public
officials, certificates of officers or other representatives of the Company and
others, and such other documents, certificates and records as I have deemed
necessary or appropriate as a basis for the opinions set forth herein.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making my examination
of executed documents, I have assumed that the parties thereto, other than the
Company, had the power, corporate or other, to enter into and perform all
obligations thereunder and I have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity and binding effect thereof on such
parties.
As used herein, (i) the term "Applicable Laws" means the General
Corporation Law of the State of Delaware and those laws of the State of
Connecticut and the United States of America that, in each instance, are
normally applicable to transactions of the type contemplated by the Underwriting
Agreement (except for United States, state and foreign securities or Blue Sky
laws, anti-fraud laws, laws affecting creditors rights generally and the rules
and regulations of the National Association of Securities Dealers, Inc.) but
without my having made any investigation regarding any other laws; (ii) the term
"Governmental Authorities" means any federal or Connecticut executive,
legislative, administrative or regulatory body and the Secretary of State of the
State of Delaware and (iii) the term "Governmental Approval"
3
means any consent, approval, license, authorization or validation of, or filing,
qualification or registration with, any Governmental Authority required to be
obtained or made by the Company pursuant to Applicable Laws, other than any
consent, approval, license, authorization, validation, filing, qualification or
registration which may have become applicable as a result of your involvement in
the transactions contemplated by the Underwriting Agreement or because of your
legal or regulatory status or because of any other facts specifically pertaining
to you.
In providing the opinions set forth in paragraphs 2, 5, 6, 8, 9 and 10
below, I have made no investigation or search of public docket records of any
court, governmental or administrative agency or body, or of any filings,
applications or registrations with the United States Patent and Trademark Office
or the United States Copy right Office.
For the purposes of the opinions set forth in paragraphs 2, 5, 6, 8, 9
and 10 below, the expressions "to my knowledge" and "I have no knowledge" are
each limited to those matters brought to my attention after reasonable inquiry
of officers of the Company.
For the purposes of the opinion set forth in paragraph 10 below, the
term "Liens" means all presently asserted liens or other encumbrances.
Insofar as the opinion in paragraph 1 below relates to the laws of the
States of California, Ohio, New Jersey or New York [ANY OTHERS?], I have relied
solely on certificates of due qualification and good standing from the
Secretary of State of each such state.
I am the Senior Vice President, General Counsel and Secretary of the
Company, and have held such position since September 1998. I am admitted to the
bar in the State of Connecticut and, except to the extent set forth in the
preceding paragraph, I do not express any opinion as to the laws of any other
jurisdiction other than the General Corporation Law of the State of Delaware and
the laws of the
4
United States of America to the extent referred to specifically herein. I am not
registered to practice before the US Patent and Trademark Office as a Patent
Attorney. Except to the extent expressly set forth in paragraphs 4, 8, 9 and 10
below, I express no opinion with respect to any intellectual property rights or
intellectual property matters of the Company, which are addressed in the opinion
of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, outside intellectual property counsel to the Company.
Based upon and subject to the limitations, qualifications, exceptions
and assumptions set forth herein, I am of the opinion that:
1. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing could not
reasonably be expected to have a material adverse effect on the Company.
2. The execution and delivery of the Underwriting Agreement, the
Indenture and the Notes by the Company and the consummation by the Company of
the transactions contemplated thereby will not contravene (a) any Applicable
Law or (b) to my knowledge, except to the extent disclosed in the Prospectus,
any Material Contract; or (c) to my knowledge, any judgment, order or decree of
any court or Governmental Authority, applicable to the Company.
3. No Governmental Approval is required by the Company for the
execution and delivery of the Underwriting Agreement, the Indenture or the
Notes, or for the consummation of the transactions contemplated therein, except
such as have been obtained or made.
4. The statements in the Prospectus under the captions "Risk Factors-We
Face Potential Conflicts of Interest Relating to ▇▇▇▇▇▇ Digital," "Risk
Factors-Our Success Depends on Our Ability to Protect Our Intellectual
Property"
5
(other than the statements under the subheading "-Pending Interference Action"),
"Risk Factors-Regulatory and Legal Uncertainties Could Harm Our Business,"
"Business-Intellectual Property," "Business-Governmental Regulation," and
"Certain Transactions" and the final four paragraphs under the caption
"Business-Legal Proceedings," in each case, insofar as such statements
constitute summaries of legal matters, legal proceedings or certain provisions
of the documents referred to therein, fairly summarize the legal matters, legal
proceedings or provisions referred to therein in all material respects.
5. To my knowledge, except as described in the Prospectus, there are no
legal or governmental proceedings pending or threatened to which the Company is
a party or to which any of the properties of the Company is subject, the
unfavorable outcome of which could reason ably be expected to have a material
adverse effect on the Company.
6. To my knowledge, there are no statutes or regulations applicable to
the Company or its properties or material contracts or documents to which the
Company is party, that, in either case, are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement, but are not described or filed as required.
7. The shares of Common Stock outstanding immediately prior to
issuance of the Notes (including the shares of Common Stock being sold by
certain selling stockholders in the concurrent underwritten offering of Common
Stock) have been duly authorized and are validly issued, fully paid and
non-assessable.
8. To my knowledge, there are currently no pending or threatened claims
of infringement of any material patent, trademark, service ▇▇▇▇ or copyright or
of misappropriation of trade secrets, necessary for the Company to conduct the
business currently conducted by it, the unfavorable outcome of which could
reasonably be expected to have a material adverse effect on the Company and that
are required to be
6
described in the Registration Statement or the Prospectus but are not described
as required.
9. Except as described in the Prospectus, I have no knowledge that the
Company will be unable to continue to operate under any current license of a
patent, trademark, service ▇▇▇▇, copyright or trade secret, which license is
necessary for the Company to conduct the business currently conducted by it.
10. To my knowledge, the Company owns the Patents, free and clear of
all Liens, other than those that may arise from matters disclosed in the
Prospectus.
This opinion is given as of the date hereof, and I assume no obligation
to update or supplement this opinion to reflect any facts or circumstances that
may come to my attention or any change in the law that may occur or become
effective after the time of delivery hereof. This opinion is provided to you as
a legal opinion only, and not as a guaranty or warranty of the matters discussed
herein or of any transaction or obligation.
This opinion is furnished to you solely for your benefit in connection
with the closing under the Under writing Agreement occurring today and is not to
be used, circulated, quoted or otherwise referred to for any other purpose or
relied upon by any other person without my express written permission.
Very truly yours,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
7
EXHIBIT A
Officers' Certificate
▇▇▇▇▇▇▇▇▇.▇▇▇ INCORPORATED
The undersigned, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, the Chief Executive Officer of
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, a Delaware corporation (the "Company"), and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, the Chief Financial Officer of the Company, each under stand that,
pursuant to Section 5(d) of the Underwriting Agreement dated August 10, 1999
(the "Underwriting Agreement") among the Company and the several underwriters
(the "Underwriters") named in Schedule I thereto, the General Counsel of the
Company is rendering an opinion, to be dated August 13, 1999 (the "Opinion") to
the Under writers. We further understand that the General Counsel of the Company
is relying on this officer's certificate and the statements made herein in
rendering such Opinion.
With regard to the foregoing, on behalf of the Company, we certify
that:
(i) All contracts, agreements or other arrangements material
to the business of the Company (the "Material Contracts") have been filed with
the Securities and Exchange Commission as exhibits to the Registration Statement
(as such term is defined in the Opinion);
(ii) The Company has complied with all its obligations under
the confidentiality, publicity and non-disclosure provisions of the Material
Contracts and, without limiting the generality of the foregoing, in those
circumstances where a Material Contract does not by its terms permit the filing
of the Material Contract as an exhibit to the Registration Statement or a
description of certain provisions of the Material Contract in the Registration
Statement, the Company has obtained the consent of the other party or parties
(as applicable) to such Material Contract to the filing of such Material
Contract as an exhibit to the Registration Statement or the description of
certain
8
provisions of such Material Contract in the Registration Statement;
(iii) There are no judgments, orders or decrees of any
Governmental Authority (as such term is defined in the Opinion) applicable or
relating to, or affecting, the Company;
(iv) Except as described in the Prospectus (as such term is
defined in the Opinion), there are no legal or governmental proceedings pending
or threatened to which the Company is a party or to which any properties of the
Company is subject; and
(v) The shares of Common Stock outstanding immediately prior
to issuance of the Notes (including the shares of Common Stock being sold by
certain selling stockholders in the concurrent underwritten offering of Common
Stock)(as such terms are defined in the Opinion) are fully paid and
non-assessable and the amount reflected in the corporate records of the Company
as required to fully pay up such shares, has been received in full by the
Company.
IN WITNESS WHEREOF we have executed this certificate in the name and on
behalf of ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated this 16th day of August, 1999.
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
By:____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
By:____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
9
Annex III
Opinion of outside patent counsel
The statements made in the Prospectus under the captions "Risk Factors
- Our Success Depends on Our Ability to Protect Our Intellectual Property" (only
the subsection entitled "Pending Interference Action") and "Business - Legal
Proceedings" (only the first three paragraphs related to the potential ▇▇▇▇▇▇▇▇
interference matter), appear to be fair and accurate summaries of the matters
described therein.