1
EXHIBIT 1.1
[FORM OF UNDERWRITING AGREEMENT]
ONLINE RESOURCES & COMMUNICATIONS CORPORATION
Shares of Common Stock
Underwriting Agreement
, 1999
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
As Representatives of several underwriters
listed in Schedule I hereto
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Online Resources & Communications Corporation, a Delaware
corporation (the "Company"), proposes to issue and sell to the several
Underwriters listed in Schedule I hereto (the "Underwriters"), for whom you are
acting as representatives (the "Representatives") an aggregate of shares (the
"Underwritten Shares") of common stock, par value $.0001 per share, of the
Company (the "Common Stock") and, for the sole purpose of covering
over-allotments in connection with the sale of the Underwritten Shares, at the
option of the Underwriters, up to an additional shares (the "Option Shares" and,
together with the Underwritten Shares, the "Shares") of Common Stock.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Shares. The registration
statement as amended at the time when it shall become effective including
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act, is referred to
in this Agreement as the "Registration Statement", and the prospectus in the
form first used to confirm sales of Shares is referred to in this Agreement as
the "Prospectus". If the Company has filed an abbreviated registration statement
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.
The Company hereby agrees with the Underwriters as follows:
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1. The Company agrees to issue and sell the Underwritten
Shares to the several Underwriters as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase,
severally and not jointly, from the Company the respective number of
Underwritten Shares set forth opposite such Underwriter's name in Schedule I
hereto at a purchase price per share of $ (the "Purchase Price").
In addition, the Company agrees to issue and sell the Option
Shares to the several Underwriters as hereinafter provided, and the Underwriters
on the basis of the representations and warranties herein contained, but subject
to the conditions hereinafter stated, shall have the option to purchase,
severally and not jointly, from the Company up to an aggregate of Option Shares
at the Purchase Price, for the sole purpose of covering over-allotments (if any)
in the sale of Underwritten Shares by the several Underwriters.
If any Option Shares are to be purchased, the number of Option
Shares to be purchased by each Underwriter shall be the number of Option Shares
which bears the same ratio to the aggregate number of Option Shares being
purchased as the number of Underwritten Shares set forth opposite the name of
such Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to the aggregate number of Underwritten Shares being
purchased from the Company by the several Underwriters, subject, however, to
such adjustments to eliminate any fractional Shares as the Representatives in
their sole discretion shall make.
The Underwriters may exercise the option to purchase the
Option Shares at any time (but not more than once) on or before the thirtieth
day following the date of this Agreement, by written notice from the
Representatives to the Company. Such notice shall set forth the aggregate number
of Option Shares as to which the option is being exercised and the date and time
when the Option Shares are to be delivered and paid for which may be the same
date and time as the Closing Date (as hereinafter defined) but shall not be
earlier than the Closing Date nor later than the tenth full Business Day (as
hereinafter defined) after the date of such notice (unless such time and date
are postponed in accordance with the provisions of Section 9 hereof). Any such
notice shall be given at least two Business Days prior to the date and time of
delivery specified therein.
2. The Company understands that the Underwriters intend (i) to
make a public offering of the Shares as soon after (A) the Registration
Statement has become effective and (B) the parties hereto have executed and
delivered this Agreement, as in the judgment of the Representatives is advisable
and (ii) initially to offer the Shares upon the terms set forth in the
Prospectus.
3. Payment for the Shares shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Representatives in the case of
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the Underwritten Shares, on , 1999, or at such other time on the
same or such other date, not later than the fifth Business Day thereafter, as
the Representatives and the Company may agree upon in writing or, in the case of
the Option Shares, on the date and time specified by the Representatives in the
written notice of the Underwriters' election to purchase such Option Shares. The
time and date of such payment for the Underwritten Shares is referred to herein
as the "Closing Date" and the time and date for such payment for the Option
Shares, if other than the Closing Date, are herein referred to as the
"Additional Closing Date". As used herein, the term "Business Day" means any day
other than a day on which banks are permitted or required to be closed in New
York City.
Payment for the Shares to be purchased on the Closing Date or
the Additional Closing Date, as the case may be, shall be made against delivery
to the Representatives for the respective accounts of the several Underwriters
of the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company. The certificates for
the Shares will be made available for inspection and packaging by the
Representatives at the office of ▇.▇. ▇▇▇▇▇▇ Securities Inc. set forth above not
later than 1:00 P.M., New York City time, on the Business Day prior to the
Closing Date or the Additional Closing Date, as the case may be.
4. The Company represents and warrants to each Underwriter
that:
(a) no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and 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 did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representatives
expressly for use therein;
(b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Company,
threatened by the Commission; and the Registration Statement and
Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the
Securities Act and do not and will not, as
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of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the date of the Prospectus and any
amendment or supplement thereto, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
the Prospectus, as amended or supplemented, if applicable, at the
Closing Date or Additional Closing Date, as the case may be, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; except that
the foregoing representations and warranties shall not apply to
statements or omissions in the Registration Statement or the Prospectus
made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use therein;
(c) the financial statements, and the related notes thereto,
included in the Registration Statement and the Prospectus present
fairly the financial position of the Company as of the dates indicated
and the results of its operations and changes in their consolidated
cash flows for the periods specified; and said financial statements
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, and the supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein;
(d) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any change in the capital stock or long-term debt of the Company,
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of the Company (a
"Material Adverse Change") otherwise than as set forth or contemplated
in the Prospectus; and except as set forth or contemplated in the
Prospectus, the Company has not entered into any transaction or
agreement (whether or not in the ordinary course of business) material
to the Company;
(e) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not have
a material adverse effect on the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of the Company (a "Material Adverse Effect");
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(f) the Company has no subsidiaries;
(g) this Agreement has been duly authorized, executed and
delivered by the Company;
(h) the Company has an authorized capitalization as set forth
in the Prospectus and such authorized capital stock conforms as to
legal matters to the description thereof set forth in the Prospectus,
and all of the outstanding shares of capital stock of the Company have
been duly authorized and validly issued, are fully-paid and
non-assessable and are not subject to any pre-emptive or similar
rights; and, except as described in or expressly contemplated by the
Prospectus, there are no outstanding rights (including, without
limitation, pre-emptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of capital
stock or other equity interest in the Company, or any contract,
commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any capital stock of the Company, any such
convertible or exchangeable securities or any such rights, warrants or
options;
(i) the Shares have been duly authorized, and, when issued and
delivered to and paid for by the Underwriters in accordance with the
terms of this Agreement, will be duly issued and will be fully paid and
non-assessable and will conform to the descriptions thereof in the
Prospectus; and the issuance of the Shares is not subject to any
preemptive or similar rights;
(j) the Company is not, or with the giving of notice or lapse
of time or both would not be, in violation of or in default under, its
certificate of incorporation (the "Certificate of Incorporation") or
by-laws (the "By-Laws") or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a
party or by which it or any of its properties is bound, except for
violations and defaults which individually and in the aggregate are not
material to the Company; the issue and sale of the Shares and the
performance by the Company of its obligations under this Agreement and
the consummation of the transactions contemplated herein will not
conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject, nor will any such
action result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company or any applicable law or
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order, license,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
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consummation by the Company of the transactions contemplated by this
Agreement, except such consents, approvals, authorizations, orders,
licenses, registrations or qualifications as have been obtained under
the Securities Act and as may be required under state securities or
Blue Sky Laws in connection with the purchase and distribution of the
Shares by the Underwriters;
(k) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its properties or to which
the Company is or may be a party or to which any property of the
Company is or may be the subject which, if determined adversely to the
Company, could individually or in the aggregate have, or reasonably be
expected to have, a Material Adverse Effect, and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others; and there are no
statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement that are not described
or filed as required;
(l) the Company has good and marketable title in fee simple to
all items of real property and good and marketable title to all
personal property owned by it, in each case free and clear of all
liens, encumbrances and defects except such as are described or
referred to in the Prospectus or such as do not materially affect the
value of such property and do not 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, existing and enforceable leases with such exceptions as
are not material and do not interfere with the use made or proposed to
be made of such property and buildings by the Company;
(m) no relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required by the Securities Act to be described in the
Registration Statement and the Prospectus which is not so described;
(n) no person has the right to require the Company to register
any securities for offering and sale under the Securities Act by reason
of the filing of the Registration Statement with the Commission or the
issue and sale of the Shares;
(o) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
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(▇) ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇ ("▇▇▇▇▇ & Young") who have certified
certain financial statements of the Company, are independent public
accountants as required by the Securities Act;
(q) the Company has filed all federal, state, local and
foreign tax returns which have been required to be filed and have paid
all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being
contested in good faith; and, except as disclosed in the Registration
Statement and the Prospectus, there is no tax deficiency which has been
or might reasonably be expected to be asserted or threatened against
the Company;
(r) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Common Stock;
(s) the Company owns, possesses or has obtained all licenses,
permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities (including
foreign regulatory agencies), all self-regulatory organizations and all
courts and other tribunals, domestic or foreign, necessary to own or
lease, as the case may be, and to operate its properties and to carry
on its business as conducted as of the date hereof, and Company has not
received any actual notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval or other authorization, except as described in the
Registration Statement and the Prospectus; and the Company is in
compliance with all laws and regulations relating to the conduct of its
business as conducted as of the date hereof;
(t) there are no existing or, to the best knowledge of the
Company, threatened labor disputes with or slowdowns, strikes or work
stoppages involving the employees of the Company which are likely to
have a Material Adverse Effect;
(u) 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 them 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 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,
singly or in the aggregate, have a Material Adverse Effect;
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(v) in the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company, in the course of
which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly
or in the aggregate, have a Material Adverse Effect;
(w) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended, ("ERISA") that is maintained, administered or contributed to
by the Company or any of its affiliates for employees or former
employees of the Company and its affiliates has been maintained in
compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended ("Code"). No
prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code has occurred with respect to any such plan
excluding transactions effected pursuant to a statutory or
administrative exemption. For each such plan which is subject to the
funding rules of Section 412 of the Code or Section 302 of ERISA no
"accumulated funding deficiency" as defined in Section 412 of the Code
has been incurred, whether or not waived, and the fair market value of
the assets of each such plan (excluding for these purposes accrued but
unpaid contributions) exceeded the present value of all benefits
accrued under such plan determined using reasonable actuarial
assumptions;
(x) the statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources which are believed by the Company to be reliable;
(y) except for compensation to be received by the Underwriters
under this Agreement, the Company does not know of any outstanding
claims for services, either in the nature of a finder's fee or
origination fee, with respect to any of the transactions contemplated
hereby;
(z) the Company owns, is licensed to use or otherwise
possesses adequate rights to use the patents, patent rights, licenses,
inventions, trademarks, service marks, trade names, copyrights and
know-how, including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures (collectively, the "Intellectual Property"), reasonably
necessary to carry on the business conducted by it, except to the
extent that the failure to own, license to use or otherwise possess
adequate rights to use such Intellectual Property would not have a
Ma-
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terial Adverse Effect, and, except as described in the Registration
Statement and the Prospectus, the Company has no knowledge of
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property, except for notices the content of which
if accurate would not have a Material Adverse Effect;
(aa) The Company has reviewed its operations and any third
parties with which the Company has a material relationship to evaluate
the extent to which the business or operations of the Company will be
affected by the Year 2000 Problem. As a result of such review, the
Company has no reason to believe, and does not believe, that the Year
2000 Problem will have a Material Adverse Effect or result in any
material loss or interference with the Company's business or
operations. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind 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; and
(bb) The Company carries insurance in such amounts and
covering such risks as is adequate for the conduct of the Company's
business and the value of its properties.
5. The Company covenants and agrees with each of the several
Underwriters as follows:
(a) to use its best efforts to cause the Registration
Statement to become effective at the earliest possible time and, if
required, to file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the
Securities Act and to furnish copies of the Prospectus to the
Underwriters in New York City prior to 10:00 a.m., New York City time,
on the Business Day next succeeding the date of this Agreement in such
quantities as the Representatives may reasonably request;
(b) to deliver, at the expense of the Company, to the
Representatives four (4) signed copies of the Registration Statement
(as originally filed) and each amendment thereto, in each case
including exhibits, and to each other Underwriter a conformed copy of
the Registration Statement (as originally filed) and each amendment
thereto, in each case without exhibits and, during the period mentioned
in paragraph (e) below, to each of the Underwriters as many copies of
the Prospectus (including all amendments and supplements thereto) as
the Representatives may reasonably request;
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(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the
time the Registration Statement becomes effective, to furnish to the
Representatives a copy of the proposed amendment or supplement for
review and not to file any such proposed amendment or supplement to
which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm
such advice in writing (i) when the Registration Statement has become
effective, (ii) when any amendment to the Registration Statement has
been filed or becomes effective, (iii) when any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof, (iv) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus or
the Prospectus or the initiation or threatening of any proceeding for
that purpose, (vi) of the occurrence of any event, within the period
referenced in paragraph (e) below, as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, and (vii) of
the receipt by the Company of any notification with respect to any
suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to prevent the issuance of
any such stop order, or of any order preventing or suspending the use
of any preliminary prospectus or the Prospectus, or of any order
suspending any such qualification of the shares, or notification of any
such order thereof and, if issued, to obtain as soon as possible the
withdrawal thereof;
(e) if, during such period of time after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriters a prospectus relating to the Shares is required by law to
be delivered in connection with sales by the Underwriters or any
dealer, any event shall occur 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 it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to
prepare and furnish, at the expense of the Company, to the Underwriters
and to the dealers (whose names and addresses the Representatives will
furnish to the Company) to which Shares may have been sold by the
Representatives on behalf of the Underwriters and to any other dealers
upon request, such amendments or supplements to the Prospectus as may
be necessary so that the statements in the Prospec-
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tus 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 will comply with law;
(f) to endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and to continue such
qualification in effect so long as reasonably required for distribution
of the Shares; provided that the Company shall not be required to file
a general consent to service of process in any jurisdiction;
(g) to make generally available to its security holders and to
the Representatives as soon as practicable an earnings statement
covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the effective date of the
Registration Statement, which shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder;
(h) so long as the Shares are outstanding, to furnish to the
Representatives copies of all reports or other communications
(financial or other) furnished to holders of the Shares, and copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange;
(i) for a period of 180 days after the date of the initial
public offering of the Shares not to (i) offer, pledge, announce the
intention to sell, 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, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock, or any securities
of the Company which are substantially similar to the Common Stock, or
any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap, option, future, forward or
other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Common Stock or any
securities of the Company which are substantially similar to the Common
Stock, including, but not limited to, any security convertible into or
exercisable or exchangeable for 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, without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities
Inc., other than the Shares to be sold hereunder and any shares of
Common Stock of the Company issued upon the exercise of options granted
under existing employee stock option plans;
(j) to use the net proceeds received by the Company from the
sale of the Shares pursuant to this Agreement in the manner specified
in the Prospectus under the caption "Use of Proceeds";
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(k) to use its best efforts to list for quotation the Shares
on the National Market System of The Nasdaq Stock Market, Inc. (the
"Nasdaq National Market");
(l) to file with the Commission such reports as may be
required by Rule 463 under the Securities Act; and
(m) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all costs and expenses incident to the performance of
its obligations hereunder, including without limiting the generality of
the foregoing, all costs and expenses (i) incident to the preparation,
issuance, execution and delivery of the Shares, (ii) incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or
qualification of the Shares under the laws of such jurisdictions as the
Representatives may designate (including fees of counsel for the
Underwriters and its disbursements), (iv) in connection with the
listing of the Shares on the Nasdaq National Market, (v) related to the
filing with, and clearance of the offering by, the National Association
of Securities Dealers, Inc., (vi) in connection with the printing
(including word processing and duplication costs) and delivery of this
Agreement, the Preliminary and Supplemental Blue Sky Memoranda and the
furnishing to the Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including mailing and
shipping, as herein provided, (vii) any expenses incurred by the
Company in connection with a "road show" presentation to potential
investors, (viii) the cost of preparing stock certificates and (ix) the
cost and charges of any transfer agent and any registrar.
6. The several obligations of the Underwriters hereunder to
purchase the Shares on the Closing Date or the Additional Closing Date, as the
case may be, are subject to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) the Registration Statement shall have become effective (or
if a post-effective amendment is required to be filed under the
Securities Act, such post-effective amendment shall have become
effective) not later than 5:00 P.M., New York City time, on the date
hereof; and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; the Prospectus shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under
the Securities Act and in accordance with Section 5(a) hereof; and all
re-
13
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quests for additional information shall have been complied with to the
satisfaction of the Representatives;
(b) the representations and warranties of the Company
contained herein are true and correct on and as of the Closing Date or
the Additional Closing Date, as the case may be, as if made on and as
of the Closing Date or the Additional Closing Date, as the case may be,
and the Company shall have complied with all agreements and all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date or the Additional Closing Date, as the case
may be;
(c) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date or the Additional Closing Date, as the
case may be, there shall not have occurred any downgrading, nor shall
any notice have been given of (i) any downgrading, (ii) any intended or
potential downgrading or (iii) any review or possible change that does
not indicate an improvement, in the rating accorded any securities of
or guaranteed by the Company by any "nationally recognized statistical
rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act;
(d) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the
capital stock or long-term debt of the Company or any Material Adverse
Change, or any development involving a prospective Material Adverse
Change, otherwise than as set forth or contemplated in the Prospectus,
the effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the Closing Date or the Additional Closing
Date, as the case may be, on the terms and in the manner contemplated
in the Prospectus; and the Company has not sustained since the date of
the latest audited financial statements included in the Prospectus any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus;
(e) the Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, a
certificate of an executive officer of the Company, with specific
knowledge about the Company's financial matters, satisfactory to the
Representatives to the effect set forth in subsections (a) through (d)
(with respect to the respective representations, warranties, agreements
and conditions of the Company) of this Section and to the further
effect that there has not occurred any Material Adverse Change, or any
development involving a prospective Material Adverse Change from that
set forth or contemplated in the Registration Statement;
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(f) ▇▇▇▇▇▇ ▇▇▇▇▇ LLP(1), counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the
Closing Date or the Additional Closing Date, as the case may be, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be
so qualified or in good standing would not have a Material
Adverse Effect;
(iii) the Company has no subsidiaries;
(iv) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the best of such
counsel's knowledge, threatened against or affecting the
Company or any of its properties or to which the Company or is
or may be a party or to which any property of the Company is
or may be the subject which, if determined adversely to the
Company, could individually or in the aggregate have, or
reasonably be expected to have, a Material Adverse Effect; to
the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others; and such counsel does not know of any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(v) this Agreement has been duly authorized, executed
and delivered by the Company;
----------
(1) To be divided between ▇▇▇▇▇▇ ▇▇▇▇▇ LLP and Michaels, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
P.C. as appropriate.
15
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(vi) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(vii) the shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be sold by
the Company have been duly authorized and are validly issued,
fully paid and non-assessable;
(viii) the Shares to be issued and sold by the
Company hereunder have been duly authorized, and when
delivered to and paid for the Underwriters in accordance with
the terms of this Agreement, will be validly issued, fully
paid and non-assessable and the issuance of the Shares is not
subject to any preemptive or similar rights;
(ix) all holders of securities of the Company having
rights to the registration of shares of Common Stock, or other
securities, because of the filing of the Registration
Statement by the Company have waived such rights or such
rights have expired by reason of lapse of time following
notification of the Company's intent to file the Registration
Statement;
(x) the statements in the Prospectus under
"Description of Capital Stock" and in the Registration
Statement in Items 14 and 15, insofar as such statements
constitute a summary of the terms of the Common Stock, legal
matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such terms,
legal matters, documents or proceedings;
(xi) such counsel is of the opinion that the
Registration Statement and the Prospectus and any amendments
and supplements thereto (other than the financial statements
and related schedules therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Securities Act and believes that
(other than the financial statements and related schedules
therein, as to which such counsel need express no belief) the
Registration Statement and the prospectus included therein at
the time the Registration Statement became effective did 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, and
that the Prospectus, as amended or supplemented, if
applicable, does not contain any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
16
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(xii) the Company is not, or with the giving of
notice or lapse of time or both would not be, in violation of
or in default under, its Certificate of Incorporation or
By-Laws or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Company is a party or by which it or any
of its properties is bound, except for violations and defaults
which individually and in the aggregate are not material to
the Company; the issue and sale of the Shares being delivered
on the Closing Date or the Additional Closing Date, as the
case may be, and the performance by the Company of its
obligations under this Agreement and the consummation of the
transactions contemplated herein will not conflict with or
result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known
to such counsel to which the Company is a party or by which
the Company is bound or to which any of the property or assets
of the Company is subject, nor will any such action result in
any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company or any applicable
law or statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the
Company or any of its properties;
(xiii) no consent, approval, authorization, order,
license, registration or qualification of or with any court or
governmental agency or body is required for the issue and sale
of the Shares or the consummation of the other transactions
contemplated by this Agreement, except such consents,
approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act
and as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Shares
by the Underwriters;
(xiv) the Company is not and, after giving effect to
the offering and sale of the Shares, will not be an
"investment company" or entity "controlled" by an "investment
company", as such terms are defined in the Investment Company
Act;
(xv) the Company owns, possesses or has obtained all
licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and has made all declarations
and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory
agencies), all self-regulatory organizations and all courts
and other tribunals, domestic or foreign, necessary to own or
lease, as the case may be, and to operate its properties and
to carry on its business as conducted as of the date hereof,
and the Company
17
-17-
has not received any actual notice of any proceeding relating
to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization,
except as described in the Registration Statement and the
Prospectus; and the Company is in compliance with all laws and
regulations relating to the conduct of its business as
conducted as of the date of the Prospectus;
(xvi) the Company has good and marketable title in
fee simple to all real property and good and marketable title
to all personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as
are described or referred to in the Prospectus or such as do
not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such
property by the Company; and any real property and buildings
held under lease by the Company are held by it under valid,
existing and enforceable leases with such exceptions as are
not material and do not interfere with the use made or
proposed to be made of such property and buildings by the
Company; and
(xvii) the Company is in compliance with all
Environmental Laws, except, in each case, where noncompliance,
individually or in the aggregate, would not have a Material
Adverse Effect; there are no legal or governmental proceedings
pending or, to the knowledge of such counsel, threatened
against or affecting the Company under any Environmental Law
which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the
United States and the State of New York and the General Corporation Law
of the State of Delaware, to the extent such counsel deems proper and
to the extent specified in such opinion, if at all, upon an opinion or
opinions (in form and substance reasonably satisfactory to
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws; (B) as to
matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and certificates or
other written statements of officials of jurisdictions having custody
of documents respecting the corporate existence or good standing of the
Company. The opinion of such counsel for the Company shall state that
the opinion of any such other counsel upon which they relied is in form
satisfactory to such counsel and, in such counsel's opinion, the
Underwriters and they are justified in relying thereon. With respect to
the matters to be covered in subparagraph (x) above counsel may state
their opinion and belief is based upon their participation in the
preparation of the Registration Statement and the
18
-18-
Prospectus and any amendment or supplement thereto and review and
discussion of the contents thereof but is without independent check or
verification except as specified.
The opinion of ▇▇▇▇▇▇ ▇▇▇▇▇, LLP described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein.
(g) [ ], special intellectual property counsel
for the Company, shall have furnished to the Representatives their
written opinion, dated the Closing Date or the Additional Closing Date,
as the case may be, to the effect that the Company owns the entire
right, title and interest in and to any and all Intellectual Property
used in the Company's business or licensed by the Company for use by
others; any such items licensed to the Company by other parties have
been licensed pursuant to a valid and enforceable license agreement and
such use is in conformity with the license agreement; and to the best
of such Counsel's knowledge, other than set forth or contemplated in
the Prospectus, there are no pending or threatened proceedings or
litigation affecting, challenging or with respect to the validity or
otherwise of such patents, trademarks, trade names or copyrights, or
any license for use of such items (whether by or to the Company);
(h) on the effective date of the Registration Statement and
the effective date of the most recently filed post-effective amendment
to the Registration Statement and also on the Closing Date or
Additional Closing Date, as the case may be, Ernst & Young shall have
furnished to you letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, containing
statements and information of the type customarily 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;
(i) the Representatives shall have received on and as of the
Closing Date or Additional Closing Date, as the case may be, an opinion
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Underwriters, with respect
to the due authorization and valid issuance of the Shares, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(j) the Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall have been approved
for listing on the Nasdaq National Market, subject to official notice
of issuance;
19
-19-
(k) on or prior to the Closing Date or Additional Closing
Date, as the case may be, the Company shall have furnished to the
Representatives such further certificates and documents as the
Representatives shall reasonably request; and
(l) the "lock-up" agreements, each substantially in the form
of Exhibit A hereto, of certain stockholders, officers and directors of
the Company identified by the Representatives relating to sales and
certain other dispositions of shares of Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in
full force and effect on the Closing Date or Additional Closing Date,
as the case may be.
7. 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 Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, the legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, 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 not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use therein.
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 who controls the Company within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to information relating to such Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to the preceding
paragraphs of this Section 7, such person (the "Indemnified Person") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person
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-20-
may designate in such proceeding and shall pay the fees and expenses of such
counsel related to such proceeding. In any such proceeding, any Indemnified
Person 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 Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary, (ii) the Indemnifying Person has failed within a reasonable time
to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person 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 Person shall not, in connection with any proceeding or related
proceeding 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 Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm for the Underwriters and such control persons
of Underwriters shall be designated in writing by ▇.▇. ▇▇▇▇▇▇ Securities Inc.
and any such separate firm for the Company, its directors, its officers who sign
the Registration Statement and such control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person 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 Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the Indemnifying Person agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
If the indemnification provided for in the first three
paragraphs of this Section 7 is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person 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
21
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Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the 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 shall be deemed to be in the same respective proportions as
the net proceeds from the offering (before deducting expenses) received by the
Company and the total underwriting discounts and the 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 Shares. 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 Company and the Underwriters agree that it would not be
just and 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 purposes) or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person 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 incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares 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 ll(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I hereto,
and not joint.
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.
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The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company set forth 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 other person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement
(or the obligations of the several Underwriters with respect to the Option
Shares) may be terminated in the absolute discretion of the Representatives, by
notice given to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (or, in the case of the Option Shares,
prior to the Additional 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 or the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by 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 the judgment of the Representatives, is material and
adverse and which, in the judgment of the Representatives, makes it
impracticable to market the Shares being delivered at the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Underwritten Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pur-
23
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suant to Section 1 be increased pursuant to this Section 9 by an amount in
excess of one-ninth of such number of Shares without the written consent of such
Underwriter. If on the Closing Date or the Additional Closing Date, as the case
may be, any Underwriter or Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Shares to be purchased on such date,
and arrangements satisfactory to the Representatives and the Company for the
purchase of such Shares are not made within 36 hours after such default, this
Agreement (or the obligations of the several Underwriters to purchase the Option
Shares, as the case may be) 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 (or, in the case of
the Option Shares, the Additional 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. 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.
10. 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 or any condition of the Underwriters' obligations cannot be
fulfilled, the Company agrees to 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 expenses of its counsel)
reasonably incurred by the Underwriter in connection with this Agreement or the
offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be
binding upon the Company, the Underwriters, any controlling persons referred to
herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Shares from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by
the Representatives jointly or by ▇.▇. ▇▇▇▇▇▇ Securities Inc. alone on behalf of
the Underwriters, and any such action taken by the Representatives jointly or by
▇.▇. ▇▇▇▇▇▇ Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇
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(telefax:______); Attention: Syndicate Department. Notices to the Company shall
be given to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (telefax: (703)
394-5107); Attention: Chief Financial Officer.
13. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
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If the foregoing is in accordance with your understanding,
please sign and return four counterparts hereof.
Very truly yours,
ONLINE RESOURCES & COMMUNICATIONS
CORPORATION
By:
-----------------------------------
Name:
Title:
26
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Accepted: , 1999
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Acting severally on behalf of themselves and
the several Underwriters named in Schedule I
hereto
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By:
--------------------------------------------
Title:
27
SCHEDULE I
Number of Shares
Underwriter To Be Purchased
----------- ---------------
▇.▇. ▇▇▇▇▇▇ Securities Inc.............................................
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.........................................
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇................................................
.......................................................................
-----
Total
=====
28
Exhibit A
LOCK-UP AGREEMENT
, 1999
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
As Representatives of the several
Underwriters named in Schedule I to
the Underwriting Agreement referred to below
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Online Resources & Communications Corporation - Initial Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of
the several Underwriters, propose to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Online Resources & Communications Corporation, a
Delaware corporation (the "Company"), providing for the initial public offering
(the "Public Offering") by the several Underwriters named in Schedule I to the
Underwriting Agreement (the "Underwriters"), of Common Stock, $.0001 par value
(the "Common Stock"), of the Company. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Underwriting
Agreement.
In consideration of the Underwriters' agreement to purchase
and make the Public Offering of the Common Stock, and for other good and
valuable consideration receipt of which is hereby acknowledged, the undersigned
hereby agrees that, without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities
Inc. on behalf of the Underwriters, the undersigned will not, during the period
ending 180 days after the date of the prospectus relating to the Public Offering
(the "Prospectus"), (1) offer, pledge, announce the intention to sell, 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, or
otherwise transfer or dispose of, directly or indirectly,
29
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any shares of Common Stock of the Company, or any securities of the Company
which are substantially similar to the Common Stock, or any securities
convertible into or exercisable or exchangeable for Common Stock (including, but
not limited to, Common Stock which may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the Securities and
Exchange Commission and securities which may be issued upon exercise of a stock
option or warrant) or (2) enter into any swap, option, future, forward or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Common Stock or any securities of the Company which are
substantially similar to the Common Stock, including, but not limited to, any
security convertible into or exercisable or exchangeable for Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. In addition, the undersigned agrees that, without the prior written
consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of the Underwriters, it will
not, during the period ending 180 days after the date of the Prospectus, make
any demand for or exercise any right with respect to, the registration of any
shares of Common Stock or any substantially similar securities of the Company,
including but not limited to, any security convertible into or exercisable or
exchangeable for Common Stock.
In furtherance of the foregoing, the Company and any duly
appointed transfer agent for the registration or transfer of the securities
described herein are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this
Lock-Up Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-up Agreement.
All authority herein conferred or agreed to be conferred and any obligations of
the undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting
Agreement does not become effective, or if the Underwriting Agreement (other
than the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Common Stock to be sold
thereunder, the undersigned shall be released from all obligations under this
Lock-Up Agreement.
The undersigned understands that the Underwriters are entering
into the Underwriting Agreement and proceeding with the Public Offering in
reliance upon this Lock-Up Agreement.
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THIS LOCK-UP AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
Very truly yours,
[ ]
By:
-----------------------------------
Name:
Title:
Accepted as of the date
first set forth above:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Acting severally on behalf of themselves and
the several Underwriters named in Schedule I
to the Underwriting Agreement
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By:
--------------------------------------------
Name:
Title: