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Exhibit 1.1
blaxxun interactive, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
(acting in his individual capacity as the Chief Executive Officer
and on behalf of his wife; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, as one of the
Lenders named in Schedule 2 to this Agreement)
▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
(in his individual capacity as the Chief Financial Officer of
blaxxun interactive, Inc., and on behalf of his wife, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ as one of the Lenders named in Schedule 2 to this
Agreement)
August [ ], 2000
Frankfurt am Main
INITIAL PUBLIC OFFERING OF COMMON STOCK OF BLAXXUN INTERACTIVE, INC. (THE
"COMPANY") 2000
Dear Madams and Sirs:
With reference to our previous discussions, we would like to express our
pleasure with your decision to conduct the initial public offering (the
"Offering") of common stock of the Company (the "Shares") under the lead
management of DG BANK Deutsche Genossenschaftsbank AG ("DG" or the "Lead
Manager").
The Company proposes to sell an aggregate of
5,750,000 SHARES (THE "OFFER SHARES")
of the Company's Common Stock, par value $ 0.005 per share (the "Common Stock")
having been newly issued for this purpose from the Company's authorized capital.
Pursuant to separate share option agreements in the form attached hereto as
Annex D (the "Share Option Agreements"), certain shareholders of the Company
named in Schedule 1 (the "Selling Shareholders") furthermore propose to grant to
the Lead Manager an option to purchase up to an additional 750,000 shares of the
Common Stock on the terms and for the purposes set forth in Section 5 hereof
(the "Greenshoe Shares"). In addition, those Selling Shareholders listed in
Schedule 2 (the "Lenders") shall grant, pursuant to Section 5 below, the Lead
Manager a Borrowing Option (as defined under Section 5 hereof) to borrow Shares
from such Lenders and
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to enter into a securities loan upon the exercise of the option.
The Company and the Selling Shareholders have caused the Offer Shares and the
Greenshoe Shares to be registered (the "Registration") with the United States
Securities and Exchange Commission (the "SEC") under the United States
Securities Act (the "United States Securities Act") pursuant to a registration
statement on Form S-1 (the "Registration Statement") to permit the Offering to
be made in compliance with U.S. securities laws. The Company and the Lead Manger
have furthermore jointly made application for the listing of all Shares of
Common Stock of the Company on the Neuer Markt trading segment of the Frankfurt
Stock Exchange ("FSE").
This underwriting agreement (the "Agreement") is, however, conditioned upon the
conditions precedent set out under Section 9 hereof as well as subject to the
exercise of termination rights by either DG or the Company under Section 13
hereof.
1. GENERAL STRUCTURE OF THE TRANSACTION AND TASKS OF THE LEAD MANAGER
Pursuant to the Offering, the Lead Manager shall (i) offer newly issued
Shares of the Company (the "Offer Shares") to private and institutional
investors in Germany as well as, by way of a private placement, to
institutional investors outside Germany (excluding the United States,
Canada and Japan) (the "Investors"), (ii) receive such Offer Shares from
the Company at least two business days prior to such Shares' allocation to
Investors as contemplated under Section 5 hereof, (iii) pay the Offer
Purchase Price (as defined in Section 3 hereof) to the Company and
Greenshoe Purchase Price (as defined in Section 3 hereof) to the Selling
Shareholders on the Settlement Date (as defined in Section 6 hereof) as
contemplated under Section 6 hereof, and (iv) effect, together with the
Company, listing (the "Listing") of the entirety of the Company's issued
and outstanding Common Stock on the FSE's Neuer Markt trading segment as
contemplated under Section 9 hereof.
2. CAPITAL STRUCTURE OF THE COMPANY PRIOR TO STOCK EXCHANGE LISTING
Immediately prior to the sale of the Offer Shares to the Lead Manager, the
Company shall have [ ] Shares outstanding of Common Stock and
[ ] Shares authorized.
As of the date hereof, the amount of the Company's share capital owned by
each current shareholder (each such current shareholder hereinafter
referred to as a "Shareholder" and the entirety of such current
shareholders collectively referred to as the "Shareholders") is as set
forth Schedule 3.
3. PURCHASE (ZEICHNUNG) OF THE OFFER SHARES BY THE LEAD MANAGER
On the basis of the representations and warranties contained in, and
subject to the terms and conditions of, this Agreement, the Company agrees
to sell up to 5,750,000 Offer Shares to the Managers (as defined below),
and each of the Managers, severally and not jointly, agrees to subscribe,
at the purchase price determined as set forth below (in no event, however,
shall the purchase price be less than the par value) to that number of
Offer Shares which represents the following
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quotas:
DG BANK Lead Manager 85%
Merck ▇▇▇▇▇ & Co. Co-Manager 10%
VEM Virtuelles Emissionshaus AG Co-Manager 5%
------------------------------- ---------- ---
Total 100%
===
The Lead Manager and the Co-Managers are collectively referred to as the
"Managers". The Managers shall have the right to agree among themselves to
modify the foregoing quotas.
The Lead Manager has presented the Company with a list of Investors to whom
it intends to allocate Shares in the Offering, and the Company has approved
this list.
The respective purchase obligations of the Managers with respect to the
Offer Shares shall be rounded among the Managers to avoid fractional
Shares, as the Lead Manager may determine.
In all publications and advertisements relating to the Offering, the
Managers' names shall be listed in the following order: (i) the Lead
Manager's name shall appear first under the heading "Lead Manager", (ii)
the names of the Co-Managers shall appear under the Lead Manager's name in
declining order of each Co-Manager's quota.
In addition, the Selling Shareholders, pursuant to the Share Option
Agreements, grant to the Lead Manager an option ("the Over-Allotment
Option") to purchase up to 750,000 further Shares (the "Greenshoe Shares")
at the same purchase price per Share as the Offer Shares from their
holdings upon exercise of this Over-Allotment Option by the Lead Manager.
Each Selling Shareholder has indicated its willingness to sell the number
of Greenshoe Shares set next to his name in Schedule 1 hereof. Such
Over-Allotment Option is granted for the purpose of covering
over-allotments in the sale of Offer Shares and is exercisable as provided
in Section 5 hereof. Greenshoe Shares shall be purchased severally for the
account of the Managers pro rata based on the number of Offer Shares
purchasable by such Managers hereunder.
The Managers shall neither be co-owners (Miteigentumer nach Bruchteilen)
nor joint-owners (Gesamthandseigentumer) of the Offer Shares or the
Greenshoe Shares purchasable by the Managers pursuant to this Agreement.
The purchase price payable by the Lead Manager (on behalf of the Managers)
to the Company and the Selling Shareholders for the Offer Shares or the
Greenshoe Shares (the "Offer Purchase Price" or the "Greenshoe Purchase
Price", as the case may be) shall be equal to the Placement Price per
share, multiplied by the number of Offer Shares or Greenshoe Shares, as the
case may be, to be purchased by the Managers, from which product the amount
of costs and commissions payable by each of the Company and each respective
Selling Shareholder pursuant to Section 8 hereof shall be deducted.
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4. PLACEMENT PRICE, PRICING DATE
The price at which the Offer Shares and the Greenshoe Shares, if any, are
sold (the "Placement Price") is hereby determined to be:
[ ] per Share (the "Placement Price").
The date hereof shall henceforth be referred to as the "Pricing Date".
5. ALLOTMENTS, PREFERENTIAL ALLOTMENT, OVER-ALLOTMENTS
The Designated Sponsors shall be entitled to retain 5% of the Offer Shares
for their own account against payment of the Placement Price less
commissions as contemplated by Section 7.
Up to 350,000 of the Offer Shares shall be reserved for preferential
allotment to employees of the Company and persons having business
relationships with the Company (the "Preferential Allotment"). The persons
eligible for Preferential Allotment (the "Beneficiaries") shall receive an
allotment of shares at the Placement Price and on the general terms and
conditions of the Offering according to a list of the Beneficiaries
produced by the Company (the "Beneficiary List"), which has been presented
to the Lead Manager.
The Lead Manager is neither obliged nor entitled to inquire as to whether
Preferential Allotments to the Beneficiaries included in the Beneficiary
List contravene any statutory or contractual rules. The Company shall be
liable for any damages incurred by the Lead Manager as a result of a
failure of Beneficiaries who do not request to have the Offer Shares
delivered to a securities account in Germany, to pay for Offer Shares for
which they have subscribed.
Under no circumstances shall the arrangement described in this Section 5
constitute a third-party beneficiary contract for the benefit of the
Beneficiaries within the meaning of Section 328 of the German Civil Code,
nor will any Manager be liable to the Company or to any Beneficiary for any
action taken or omitted to be taken by such Manager in good faith in
connection with the Preferential Allotment to the Beneficiaries.
The Over-Allotment Option will begin on the first day on which the
Company's Shares are traded on the FSE and will expire 45 calendar days
thereafter (the "Option Period"). The Over-Allotment Option may be
exercised during such period by the Lead Manager, in whole or in part from
time to time, by written notice given to the Company, which will, in turn,
inform the Selling Shareholders of such notice without undue delay. Such
notice shall set forth the aggregate number of Greenshoe Shares as to which
the Over-Allotment Option is being exercised.
Each Lender hereby agrees to grant the Lead Manager an option to borrow up
to the number of Shares set opposite that Shareholder's name in Schedule 2
hereof (the "Borrowing Option"). The Borrowing Option shall be exercisable
by DG no later
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than the Pricing Date by giving written notice to the relevant
Shareholders. The exercise of the Borrowing Option shall create a
securities loan (the "Securities Loan") between the respective Lender and
the Lead Manager for the account of the Managers for the number of shares
for which the Borrowing Option has been exercised (the "Borrowed Shares").
The Securities Loan shall be free of charge to the Lead Manager and have
the duration of the period commencing with the sale of the Offer Shares to
the Lead Manager and expiring upon the expiration of the Option Period.
Upon any exercise of the Over-Allotment Option by the Lead Manager, the
Lead Manager shall be obliged to pay the Selling Shareholders the Greenshoe
Purchase Price for all Shares for which the Over-Allotment Option has been
exercised upon the receipt of the Greenshoe Shares from such Selling
Shareholders and shall return the Borrowed Shares to the Lenders as soon as
DG Bank has received the Greenshoe Shares from the Selling Shareholders If
the Lead Manager shall not have exercised the Over-Allotment Option in full
at the end of the Option Period, the Lead Manager shall transfer the number
of Shares for which the Over-Allotment Option has not been exercised to the
Lenders upon the expiration of the Option Period.
The Company shall undertake to ensure that the Borrowed Shares and the
Greenshoe Shares will comply with the laws of each jurisdiction where such
compliance is required, including, without limitation, the United States.
6. DELIVERY OF SHARES AND PAYMENT FOR THE OFFER SHARES AND THE GREENSHOE
SHARES
On August 10, 2000, the Company and the Lenders gave the Company's
registrar and transfer agent (the "Registrar and Transfer Agent")
instructions to transfer the Offer Shares and the Borrowed Shares to a
custody account on behalf of the Company and the Lenders (the "Custody
Account") held with the DG (the "Custodian") in Frankfurt am Main, which
Offer Shares and Borrowed Shares were received in such Custody Account on
or before the Pricing Date. DG, in its capacity as the Custodian, agreed
that until such Offer Shares and Borrowed Shares are delivered to DG as
contemplated in the following sentence, (i) such Shares are held expressly
for the benefit of the Company and the Lenders, respectively, and (ii) the
Custodian shall take no action with respect to the Shares without written
authorization from the Company and the Lenders or as contemplated in this
Agreement. The Company and the Lenders hereby authorize the Custodian to
deliver the Offer Shares and any Borrowed Shares which the Lead Manager has
informed the Lenders that it wishes to borrow to an account in the name of
DG. The parties agree that title to the Offer Shares and the Borrowed
Shares shall pass to the Lead Manager and may be withdrawn for the Custody
Account on the Settlement Date in exchange for (Zug um Zug) release of the
Offer Purchase Price by DG as contemplated under Section 6 hereof.
For the period of time between the instruction to the Registrar and
Transfer Agent to transfer the Offer Shares and the Borrowed Shares, if
any, to the Custody Account, until the Settlement Date (as defined in this
Section 6), the Company and the Lenders hereby waive their right to
instruct the Custodian to transfer the Offer Shares and the Borrowed Shares
to any person other than the Lead Manager as contemplated hereby. In the
event that the Offer Purchase Price is not paid to the
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Company on the Settlement Date as contemplated under this Section 6, the
Custodian shall immediately return the Offer Shares and Borrowed Shares to
the Company and the Lenders, respectively.
The Managers undertake to deliver the Offer Shares that the Lead Manager
has received from the Company and that have been allocated to Investors to
such Investors, against payment to the Managers by such Investors of the
applicable Placement Price, on August 16, 2000 or such other time as the
Lead Manager and the Company may agree (the "Settlement Date"). However,
the Settlement Date shall in any event be the business day directly
following the business day on which the price for the Shares is first
quoted on the FSE.
On the Settlement Date, the Lead Manager shall credit a cash account of the
Company with DG in Frankfurt am Main (the "Sonderkonto Kapitalerhohung
blaxxun interactive, Inc.") with the Offer Purchase Price in euros
allocable to the Offer Shares as calculated pursuant to Section 4 hereof.
Subject to the terms of the Share Option Agreements, in the event that the
Lead Manager exercises all or a portion of the Over-Allotment Option, the
Greenshoe Shares shall be delivered to the Lead Manager in the same manner
as the Offer Shares have been delivered two business days after exercise of
the Over-Allotment Option against payment of the Greenshoe Purchase Price
to the Selling Shareholders' designated accounts. The Greenshoe Shares
shall be sold ratably by the Selling Stockholders
7. DESIGNATED SPONSOR
The Lead Manager and Merck ▇▇▇▇▇ & Co. have agreed to serve as "Designated
Sponsors" within the meaning of the Rules and Regulations of the Neuer
Markt. The services of the Designated Sponsors are subject to separate
agreements which have been executed between the Company and the Designated
Sponsors.
8. COSTS AND COMMISSION
The Company shall pay to the Lead Manager on behalf of the Co-Managers a
fee of up to 5.0% of the proceeds of the issue (the "Placement Fee"). This
Placement Fee is made up of a fixed component of 4.5% and the following two
variable components: 0.25% upon achievement of a placement price that is
within the upper third of the Price Range as well as an additional 0.25%
for the satisfactory handling of the IPO process by the Managers as
determined in good faith by the Company . Shares that are placed by a
Manager as part of the Preferential Allotment scheme are not subject to the
aforementioned fee regime. Pursuant to the Share Option Agreements, a fee
of 3.0% shall be charged to the Selling Shareholders for the placement of
the Greenshoe Shares, assuming the Over-Allotment Option is excercised.
Fees shall be deducted by the Lead Manager out of the proceeds payable to
the Company and the Selling Shareholders, as the case may be.
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Each individual Manager's share in the fees shall be calculated by DG and
settled with the respective Manager. DG shall determine the details of the
allocation of the Placement Fee among the Managers in accordance with the
following criteria .
- Management Fee: 20% of the Placement Fee to the Lead Manager;
- Underwriting Fee: 20% of the Placement Fee to be allocated between the
Managers pro rata based on the amount of Offer Shares purchased by
each Managers; and
- Selling Fee: 60% of the Placement Fee to be allocated between the
Managers pro rata based on their respective allotments as determined
by the allotment decisions at the end of the Book-building Period.
Notwithstanding the foregoing, DG shall receive a praecipuum of 50% of the
Management Fee.
The Company shall furthermore pay to the Lead Manager a listing fee (the
"Listing Fee") in the amount of [Euro]150,000 as consideration for the Lead
Manager's efforts in assisting the Company to effect the listing of the
Shares on the FSE and for the assumption of the liability arising pursuant
to the German Stock Exchange Act.
All costs associated with the Offering, the Listing and the Registration
Statement, including, but not limited to, the costs of (i) setting,
printing, distributing and translating the Offering Documents (including
financial statements and exhibits thereto); (ii) the Offer Invitation,
publication of the Price Range and the production of tombstones; (iii) the
preparation, printing, authentication, issuance and delivery of
certificates for the Shares, including any stamp or transfer taxes in
connection with the original issuance and sale of the Shares; (iv) the
printing (or reproduction) and delivery of all agreements and documents
printed (or reproduced) and delivered in connection with the Offering, the
Listing or the Registration; (v) fees relating to the Registration and the
Listing; and (vi) preparing and carrying out the roadshow, including travel
costs, and all other costs and expenses incident to the performance by the
Company and the Selling Shareholders of their obligations hereunder, will
be borne by the Company; provided, however, that the Lead Manager will pay
for its own out-of-pocket expenses (such as travel expenses and the hotel
costs of bank employees) incurred in respect of the roadshow.
The Company will also pay the costs and expenses of the Listing and the
Registration, including the costs and expenses of (i) Pollath & Partner for
its legal due diligence and (ii) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a
Professional Corporation. The Lead Manager will pay the costs and expenses
of (i) Freshfields Bruckhaus ▇▇▇▇▇▇▇▇ for legal services rendered in
connection with the drafting and negotiation of this Agreement and other
services relating to Offering (other than pursuant to the following
sentence), (ii) PriceWaterhouseCooper, and (iii) VDI/VDE-Technologiezentrum
Informationstechnik GmbH. The Company and the Lead Manager will share, on a
fifty-fifty basis, the costs and expenses of Freshfields Bruckhaus ▇▇▇▇▇▇▇▇
for the Listing and the Registration.
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In the event that the Offering is not consummated or completed on or prior
to September 30, 2000, as contemplated in this Agreement, the Company shall
reimburse the Lead Manager for all costs incurred in connection with the
preparation of the Offering, the Listing and the Registration Statement if
(i) the Lead Manager has terminated the Offering for one of the reasons set
forth in Section 13.1 hereof or (ii) the Company has terminated the
Offering pursuant to Section 13.2 hereof and the reason for the Company's
termination is not a reason for which DG is responsible within the meaning
of Section 13.2 hereof.
9. CONDITIONS PRECEDENT
The respective obligations of Managers hereunder are subject to the
accuracy, when made and on each of the Pricing Date, the Settlement Date
and the First and the Second Transfer Dates, of the representations and
warranties of the Company, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
and the Lenders contained herein, to the performance by the Company ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, and the Lenders of their respective
obligations hereunder, and to each of the following additional terms and
conditions:
9.1 The Company and the Shareholders shall have taken all necessary
action, corporate or otherwise, required to authorize the issuance of
the Offer Shares, the Borrowed Shares, and the Greenshoe Shares
necessary to complete the Offering.
9.2 The Lead Manager shall have received by 6.30 p.m. Central European
time on the Pricing Date satisfactory evidence of the issuance and the
transfer of the Offer Sharesand Borrowed Shares necessary in the form
of (i) a certificate of the Company's registrar and transfer agent
stating the issuance and (ii) a certificate of an officer of the
Company substantially as attached hereto as Annex A.
9.3 The Company and the Shareholders, as of the Pricing Date, shall have
authorized the automatic conversion of any preferred shares remaining
after the Pricing Date into shares of Common Stock prior to or on the
Settlement Date as contemplated by the Offering Documents. The Lead
Manager shall have received by 6.30 p.m. Central European time on the
Settlement Date satisfactory evidence of such conversion and
re-designation in the form of the accepted filing of a certificate of
amendment to the Company's Certificate of Incorporation by the
Secretary of State of the State of Delaware.
9.4 The Company and the Selling Shareholders shall have used all
commercially reasonable efforts to provide any other evidence
requested by the FSE to effect listing of the Shares.
9.5 The Company and the Shareholders shall have taken all actions
necessary to have all of the Offer Shares and any other Shares
deliverable to the Lead Manager pursuant to this Agreement
certificated in one or more share certificates (the "Certificates")
and such Certificates shall have been
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registered in the Company's share register in the name of The
Depository Trust Company of New York ("DTC") or a nominee of DTC.
9.6 The Offer Shares and the Borrowed Shares shall have been accepted for
deposit by DTC and shall be eligible for clearance and settlement
through the facilities of DTC. Upon depositing the Certificates with
DTC for the benefit of Clearstream Banking AG's ("Clearstream")
securities account with DTC, Clearstream shall have been instructed to
transfer the Offer Shares in book-entry form to DG's account with
Clearstream and DG shall have been instructed to transfer the Offer
Shares to the Custody Account on or prior to the Pricing Date and such
transfer to the Custody Account shall have occurred on or prior to the
Pricing Date.
9.7 The English language preliminary and final selling prospectus/company
report as well as all amendments thereto (collectively the "German
Prospectus") shall have been filed with the FSE by the Company and the
Lead Manager and the Registration Statement and all amendments thereto
shall have been filed with the SEC (such German Prospectus and
Registration Statement as well as their respective amendments and
translations into German, if any, collectively hereinafter referred to
as the "Offering Documents"). The Offering Documents shall comply with
all applicable German and US rules and regulations, respectively. The
Company shall have assumed responsibility for the correctness and
completeness of the Offering Documents under the German Stock Exchange
Act and the United States Securities Act. The Company shall
furthermore have undertaken to comply with all rules and regulations
of Neuer Markt pertaining to the admission of the Shares to trading on
Neuer Markt and have undertaken to comply with all rules and
regulations of the SEC pertaining to the registration of the Shares
with the SEC.
9.8 The Registration Statement shall have been declared effective by the
SEC and no stop order or other order issued by a governmental agency,
domestic or foreign, suspending the effectiveness of the Registration
Statement or preventing the completion of the Listing or the Offering
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened. The FSE shall have approved the
preliminary German Prospectus for publication.
9.9 The Company and the Shareholders shall have executed and provided to
the Lead Manager undertakings not to dispose of Shares for a period of
six months from the date of admission of the shares to Neuer Markt.
9.10 The Company shall have undertaken to FSE to observe the Rules and
Regulations Neuer Markt and to adhere to the provisions of the German
Take-Over Code.
9.11 The FSE shall have admitted all of the Company's Shares to the
regulated market (Geregelter Markt) with quotation in the Neuer Markt
trading segment of FSE and reasonably satisfactory evidence of such
actions shall
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have been provided to the Lead Manager.
9.12 The Company shall have authorized the Lead Manager to publish the
announcement of the proposed Offering of Offer Shares (the "Offer
Invitation" Verkaufsangebot) on behalf of the Company on the first day
of the book-building Period. The Offer Invitation shall comply with
Rule 134 of the United States Securities Act and shall have been
published in at least one FSE-approved daily newspaper with national
circulation in Germany. The publication of the Offering Documents in
Germany shall have been effectuated either (i) by making such Offering
Documents available at the offices of specified banks, accompanied by
a notice one day prior to the Invitation Offer in at least one
FSE-approved newspaper (Schalterpublizitat) with national circulation
in Germany or (ii) by publication of such Offering Documents in at
least one FSE-approved newspaper with national circulation in Germany.
9.13 On the Pricing Date, as well as on the Settlement Date, the Company's
auditors shall have confirmed to the Lead Manager in a comfort letter
substantially in the form attached hereto as Appendix B that there
have not been any material adverse changes in the financial position
of the Company or any of its subsidiaries between the date of issuance
of the audit certificate in respect of the latest financial statements
and the date of such comfort letter. The auditors of the Company shall
submit to the Lead Manager a further confirmation to the same effect
on the day prior to the Second Transfer Date.
9.14 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a Professional Corporation, US counsel to
the Company, shall have delivered a legal opinion addressed to the
Lead Manager dated the Pricing Date and shall deliver a second legal
opinion dated the Settlement Date, to the effect set forth in Annex C
attached hereto.
9.15 On the Settlement Date, there shall not have occurred, (i) since the
date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business, and the Lead Manager shall have received a certificate of
the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of the
Pricing Date and again as of the Settlement Date, to the effect that
(w) there has been no such material adverse change, (x) the
representations and warranties in Section 12 hereof are true and
correct with the same force and effect in all respects as though
expressly made on and as of the Pricing Date and the Settlement Date
respectively, (y) the Company has complied with all agreements and
satisfied all conditions of its part to be performed or satisfied on
or prior to the Pricing Date and (z) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to the Company's
knowledge, threatened, or (ii) since the date hereof, such a change in
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national or international financial, political or economic conditions
or currency exchange rates or exchange controls as to, in the
reasonable judgement of the Lead Manager, materially prejudice the
success of the Offering and distribution of the Shares or dealings in
the Shares in the secondary market; or (iii) a general suspension or
material limitation of trading on or by, as the case may be, the FSE.
9.16 Each Selling Shareholder shall have executed a Share Option Agreement
with the Lead Manger substantially in the form attached hereto as
Annex E and shall have delivered such Share Option Agreement to DG.
Each Selling Shareholder shall also have executed the Custody
Agreement with ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ attached to the Share
Option Agreement and shall have delivered such Custody Agreement to
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇..
9.17 On the Pricing Date and on the Settlement Date, the Lead Manager shall
have received a certificate of, or on behalf of, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, and each Lender, dated as of such date, to
the effect that each of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
and each Lender has complied, in all material respects, with all
agreements and all conditions on its part to be performed under this
Agreement at or prior to such date.
10. FURTHER AGREEMENTS OF THE COMPANY
10.1 For as long as the Lead Manager acts as designated sponsor for the
Company's Shares on Neuer Markt, the Company undertakes to keep the
Lead Manager informed of material issuances of capital stock, options
and warrants to receive capital stock and capital decreases (including
the repurchase of Shares). For as long as the Lead Manager acts as
designated sponsors for the Company's Shares on Neuer Markt, the
Company shall keep DG informed of all events of material economic
and/or legal significance in relation to the Shares on an ongoing
basis to the extent permitted by applicable laws, including the United
States securities laws.
10.2 The Company undertakes to (i) furnish to the Lead Manager for six
months following the expiry of the Option Period copies of the
Offering Documents in such quantities as the Lead Manager may from
time to time reasonably request, and, (ii) in case that at any time
prior to the completion of the initial distribution of the Offer
Shares and the Borrowed Shares, if any, or up to six months
thereafter, any event shall have occurred as a result of which any
Offering Document as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or, if for
any other reason it shall be required under applicable law during such
period to update the information contained in any Offering Document,
it will notify the Lead Manager promptly and confirm such notice in
writing, and will prepare and furnish to the Lead Manager, without
charge to the Lead Manager, as many copies as the Lead Manager may,
from time to time, reasonably request of
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such documents which update such Offering Documents in compliance with
the respective laws and regulations on prospectus liability such
statement or omission or effect such compliance;
10.3 For as long as the Lead Manager acts as designated sponsor for the
Company's Shares on Neuer Markt, the Company undertakes to observe the
requirements of all applicable securities laws, including, without
limitation, U.S. federal securities laws, in connection with the
Offering.
10.4 For as long as the Lead Manager acts as designated sponsor for the
Company's Shares on Neuer Markt, the Company undertakes to observe and
fulfill all regulations, legal provisions and requirements of the
Neuer Markt, as well as to make available in the future all necessary
documents. In addition, the Company undertakes to comply with all
rules and regulations of the United States Securities Act applicable
to it as a result of the Registration. In addition, the Company
undertakes:
- to comply with the German Take Over Code of the German Federal
Finance Ministry's Stock Exchange Expert Committee;
- to complete the timely production and publication of a Company
calendar giving details of the dates of the general shareholders'
meeting;
- to carry out at least one briefing of financial analysts per
year,
- to complete the timely production and publication of quarterly
reports with details of business trends and important financial
figures in German and English;
- to prepare the Company's financial statements according to
US-GAAP in German and English and to publish such statements no
later than four months after the end of the financial year; and
- to disclose annually the number of securities in the Company held
by members of the Board of Directors.
11. WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS OF THE LENDERS
11.1 Each of Lenders, severally and not jointly represents, warrants
and undertakes to the Lead Manager that:
11.1.1 Such Lender, if a corporation, is duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, and has the power and authority to own its
properties and assets.
11.1.2 Such Lender has the full right, power and authority to enter into
this
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Agreement and to transfer and deliver the Borrowed Shares to DG.
The execution and delivery of this Agreement and the sale and
delivery of the Borrowed Shares by such Lender and the
consummation of the transactions contemplated herein and
compliance by such Lender with its obligations hereunder have been
duly authorized by such Lender and do not and will not, whether
with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any tax, lien, charge or
encumbrance upon the Borrowed Shares to be loaned by such Lender
or any property or assets of such Lender pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement,
note, license, lease or other agreement or instrument to which
such Lender is a party or to which such Lender is subject, nor
will such action result in any violation of the provisions of the
charter or by-laws or other organizational instrument of such
Lender, if applicable, or any applicable treaty, law, statute,
rule, regulation, judgement, order, writ or decree of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over such Lender or any of its
properties.
11.1.3 Such Lender has complied, and will comply, in all respects, with
the provisions of U.S. law and the articles of incorporation of
the Company concerning the requirements for holding or disposing
of certain percentages of the share capital of the Company,
together with all applicable U.S. stock exchange and regulatory
authority rules and regulations.
11.1.4 Such Selling Shareholder has good, valid and marketable title to
the Borrowed Shares to be transferred by such Lender hereunder
(such Borrowed Shares being fully paid), free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity
or encumbrance of any kind, other than pursuant to this Agreement;
and upon delivery of such Borrowed Shares, assuming that the Lead
Manager has no notice of any adverse claim, the Lead Manager will
receive good, valid and marketable title to the Borrowed Shares
lent to it by such Lender, free and clear of any security
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interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind; and there is no other conflicting right,
contingent or otherwise, of any person to purchase or be offered
for purchase any of the Borrowed Shares to be delivered by such
Lender in connection with this Agreement.
11.1.5 This Agreement has been duly authorized, executed and delivered by
such Lender and constitutes the legal, valid and binding
obligation of such Lender enforceable in accordance with its
terms, subject to the application of applicable bankruptcy,
fraudulent conveyance and similar laws.
11.1.6 The Borrowed Shares will be transferred to Lead Manager, together
with all rights, dividends, distributions and other benefits
attaching to them on such date of transfer, with full title
guarantee and free from, and not in breach of, any charges, liens
or other encumbrances or any pre-emptive or other rights limiting
their transferability.
11.1.7 No filing with, or consent, approval, authorization, order,
registration, qualification or decree of, any court or
governmental authorization or agency, domestic or foreign, is
necessary or required for the performance by such Lender of its
obligations hereunder or in connection with the delivery of the
Borrowed Shares hereunder or the consummation of the transactions
contemplated by this Agreement, except such as may have previously
been made or obtained.
11.2 The commitments of the Managers hereunder are being made on the
basis of the representations, warranties and undertakings set out
above. Each Lender undertakes that each of them will fully
indemnify the Managers against any and all losses, liabilities,
costs, claims, charges, actions, proceedings, damages, expenses or
demands which may incur for it or which may be made against the
Managers as a result of, or in connection with, any breach or
alleged breach by such Lender of any of its representations,
warranties and undertakings set out above.
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11.3 The warranties, representations and undertakings set out in this
Section 11 shall be deemed to be repeated on the Pricing Date, the
Payment Date and each Transfer Date.
12. WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS OF THE COMPANY
12.1 The Company warrants, represents and undertakes to the Lead
Manager that:
12.1.1 The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of
Delaware and has corporate power and authority to own, lease and
operate its properties and to conduct its business and to enter
into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing
would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course
of business (a "Material Adverse Effect").
12.1.2 blaxxun interactive AG has been duly organized and is validly
existing as a corporation in good standing under the laws of
Germany, has corporate power and authority to own, lease and
operate its properties and to conduct its business and is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a
Material Adverse Effect; all of the issued and outstanding capital
stock of blaxxun interactive AG has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by
the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of blaxxun interactive AG was
issued in violation of the preemptive or similar rights of any
security-holder of the blaxxun interactive AG.
12.1.3 Cybertown, Inc. has been duly organized and is validly existing as
a corporation in good standing under the laws of Delaware, has
corporate power and authority to own, lease and operate its
properties and to conduct its business and is duly qualified as a
foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing
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of property or the conduct of business, except where the failure
so to qualify or to be in good standing would not result in a
Material Adverse Effect; all of the issued and outstanding capital
stock of Cybertown, Inc. has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the
Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares
of capital stock of Cybertown, Inc. was issued in violation of the
preemptive or similar rights of any security-holder of Cybertown,
Inc.
12.1.4 The shares of issued and outstanding capital stock of the Company,
including the Borrowed Shares and the Greenshoe Shares, have been
duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding Shares, including the
Borrowed Shares and Greenshoe Shares, was issued in violation of
the preemptive or other similar rights of any security-holder of
the Company.
12.1.5 Except as set forth in the Registration Statement or otherwise
disclosed to the Lead Manager, the Company has not sold or issued,
and will not sell or issue, any securities during the six-month
period preceding the date of the Prospectus, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the United
States Securities Act.
12.1.6 The Company has full power and authority to enter into, and
perform its obligations under, this Agreement and such entry into,
and performance of its obligations under, this Agreement has been
duly authorized by all necessary corporate or other action.
12.1.7 This Agreement has been duly executed and delivered by the Company
and constitutes a legal, valid and binding obligation of the
Company enforceable against it in accordance with its terms,
subject to the application of applicable bankruptcy, fraudulent
conveyance and similar laws.
12.1.8 Except as set forth in the Registration Statement, there are no
contracts, agreements, or understandings between the Company and
any person or entity granting such person or entity the right to
require the Company to file a registration statement under the
United States Securities Act with respect to any securities of the
Company owned or to be owned by such person or entity or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the United States Securities
Act.
12.1.9 The Company has consulted and will continue to consult the Lead
Manager in relation to the terms of, the timetable for, and the
manner of publication of, any announcement of, or other public
disclosure regarding, the Offering, the Listing and the
Registration except as required by law and any applicable rules of
any relevant stock exchange. The Company will not make any such
announcement or disclosure without the Lead Managers's
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prior written consent. Any public announcement of the sale of the
Offer Shares will refer to the Lead Manager.
12.1.10 The Offer Shares will, on or before the Transfer Date, have been
duly authorized for issuance and sale to the Lead Manager pursuant
to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration
set forth herein, will be validly issued and fully paid and
non-assessable.
12.1.11 Neither the Company nor blaxxun interactive AG and Cybertown,
Inc., the key direct subsidiaries of the Company (collectively the
"Subsidiaries"), is in violation of its charter or by-laws or in
default in the performance or observance of any obligation,
agreement or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or its
Subsidiaries are a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or
the Subsidiaries are subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a
Material Adverse Effect, and the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated herein (including the issuance and sale
of the Offer Shares and the use of the proceeds from the sale of
the Offer Shares) and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
or its Subsidiaries pursuant to, the Agreements and Instruments
(except for such conflicts, breaches or defaults or liens that
would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the articles
of incorporation or by-laws of the Company or its Subsidiaries or
any applicable law, statute, rule, regulation, judgement, order,
writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company
or its Subsidiaries or any of their assets, properties or
operations (except for such violations that would not result in a
Material Adverse Effect). As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person action
on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness
by the Company or its Subsidiaries.
12.1.12 There is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or its
Subsidiaries, which is required to be disclosed in the Prospectus,
or which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to
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materially and adversely affect the properties or assets t hereof
or the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations
hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or its Subsidiaries are a party
or of which any of their respective property or assets is the
subject, including ordinary routine litigation incidental to the
business, not reasonably be expected to result in a Material
Adverse Effect.
To the extent there are any exceptions to the foregoing existing
on the date of the Prospectus (or any supplement thereto), the
Company undertakes to disclose such proceedings in the Prospectus
or supplement, as the case may be.
12.1.13 To the best knowledge of the Company and its subsidiaries, the
Company and its Subsidiaries own, possess, can acquire on
reasonable terms or have the benefit or use of all material
patents, licenses, trade secrets, trademarks, trade names and
other rights to inventions, know-how, copyrights, confidential
information and other intellectual property (collectively,
"intellectual property rights") currently employed by them in
connection with the conduct of the businesses now operated by
them, and there are no unresolved assertions that the Company or
its Subsidiaries have infringed the intellectual property rights
of others that, if determined adversely to the Company or its
Subsidiaries, could, individually or in the aggregate, have a
Material Adverse Effect.
12.1.14 No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or
governmental authority or agency, either in the United States,
Germany or elsewhere, is necessary or required for the performance
by the Company of its obligations hereunder, in connection with
the Offering (including the Preferential Allotment), the Listing,
the Registration, issuance or sale of the Shares hereunder or the
consummation of the transactions contemplated by this Agreement,
except such as have been already obtained or will be obtained
prior to the Offering (including the Preferential Allotment),
Listing or Registration, as the case may be.
12.1.15 The Company and its Subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them, except where the
failure so to comply would not, singly or in the aggregate, have a
Material Adverse Effect; the Company and its Subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly
or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are in full force and effect except for
those Governmental Licenses the failure of which to be in full
force and effect would not have a Material Adverse Effect; and
neither the Company nor its Subsidiaries has received any notice
of proceedings relating to the
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revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
12.1.16 The Company and its Subsidiaries have good title to all
properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interest, claims, restrictions
or encumbrances of any kind (other than customary retention of
title) except such as do not, singly or in the aggregate,
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 or its Subsidiaries; and all of the leases and subleases
material to the business, the Company and its Subsidiaries,
considered as one enterprise, and under which the Company or its
Subsidiaries holds properties described in the Prospectus, are in
full force and effect, and neither the Company nor its
Subsidiaries has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company
or its Subsidiaries under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or
its Subsidiaries to the continued possession of the leased or
subleased premises under any such lease or sublease.
12.1.17 KPMG Deutsche Treuhandgesellschaft, who have audited or will
audit certain financial statements of the Company and its
consolidated subsidiaries, are independent accountants as required
by the United States Securities Act and the rules and regulations
thereunder.
12.1.18 The Company makes and keeps accurate books and records and
maintains internal accounting controls which provide reasonable
assurance that (i) transactions are executed in accordance with
management's authorization, (ii) transactions are recorded as
necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (iii) access to its assets
is permitted only in accordance with management's authorization
and (iv) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
12.1.19 Neither the Company nor its Subsidiaries, nor to the knowledge of
the Company or its Subsidiaries, any director, officer, agent,
employee or other person associated with or acting on behalf of
the Company or its Subsidiaries, have used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; or violated or is in
violation of any provision of the United States Foreign Corrupt
Practices Act of 1977.
12.1.20 The Company and its Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is, in the
opinion of the Company, adequate for the conduct of their
respective businesses and the value of their respective properties
and assets, and as is customary for companies engaged
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in similar businesses in similar industries or as required by law
or pursuant to agreements to which the Company or its Subsidiaries
are a party or by which the Company or its Subsidiary are bound.
12.1.21 The Company is not an "investment company" under, and as such
term is defined in, the U.S. Investment Company Act of 1940.
12.1.22 The Company is not a passive foreign investment company ("PFIC")
as defined in Section 1297(a) of the United States Internal
Revenue Code of 1986, as amended (the "Code"), for its current
taxable year and does not expect to be a PFIC for future taxable
years.
12.1.23 Neither the Company, nor any person acting on its behalf, has
taken or will take, directly or indirectly, any action designed to
cause or to result in, or that has constituted or which might
reasonably be expected to cause or result in, the stabilization in
violation of applicable laws or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares.
12.1.24 The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would
not have a Material Adverse Effect) and has paid all taxes
required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing
is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as
would not have a Material Adverse Effect.
12.1.25 The Company has not included any persons in the Beneficiary List
who, to its knowledge, are journalists, financial analysts or
public servants.
12.2 The Company has filed with the SEC a Registration Statement on
Form S-1, including a related preliminary prospectus, for the
registration under the United States Securities Act of the Shares
and to the Registration Statement has become effective. The
Company will file with the SEC after the Effective Date of the
Registration Statement, a final prospectus in accordance with
Rules 430A and 424(b). The Registration Statement, as amended, and
prior to the date hereof, includes all information (other than
Rule 430A information) required by the United States Securities
Act and the rules thereunder to be included in such Registration
Statement and the Prospectus. As filed, such amendment and form of
final prospectus, or such final prospectus, shall contain all Rule
430A information, together with all other such required
information, and, except to the extent the Lead Manager shall
agree in writing to a modification, shall be in all substantive
respects in the form furnished to the Lead Manager prior to the
Pricing Date or, to the extent not completed at the Pricing Date,
shall contain only such specific additional information and other
changes (beyond that contained in the latest preliminary
prospectus) as the Company has advised the Lead Manager, prior to
the Pricing Date, will be included or made therein. "Preliminary
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Prospectus" means each prospectus included in such Registration
Statement, or amendments thereof, before it becomes effective
under the United States Securities Act and any prospectus filed by
the Company with the consent of the Lead Manager pursuant to Rule
424(a) of the rules and regulations under the United States
Securities Act, and "Prospectus" means such final prospectus, with
any changes thereto made by the Company with the consent of the
Lead Manager, which consent shall not be unreasonably held.
On the Effective Date, the Registration Statement will conform in
all material respects to the applicable requirements of the United
States Securities Act and the rules and regulations thereunder and
will not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
At the time of filing of the Prospectus pursuant to Rule 424(b) or
(if no such filing is required) at the Effective Date of the
Registration Statement in which the final Prospectus is included,
the Registration Statement and the final Prospectus will conform
in all material respects to the requirements of the United States
Securities Act and the rules and regulations thereunder, and none
of such documents will include any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein not misleading; provided, however, that the
Company makes no undertaking as to the information contained in or
omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with information furnished herein
or in writing to the Company by or on behalf of the Lead Manager
specifically for inclusion in the Registration Statement or the
Prospectus.
12.3 The Company will comply with the requirements of Rule 430A or Rule
424, as applicable, and will notify the Lead Manager immediately,
and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or
any supplement to the Prospectus or any amended Prospectus shall
have been filed, (ii) of the receipt of any comments from the SEC,
(iii) of any request by the SEC for any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) of the issuance
by the SEC 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 of the suspension of the
qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly
effect the filings necessary pursuant to Rule 424(b) and will take
such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the SEC and, in the event that it was not,
it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
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12.4 The Company has prepared and filed, together with the Lead
Manager, with the FSE the preliminary and final German prospectus
to obtain listing of the Shares on the FSE as required by
applicable German law.
On the date on which such preliminary and final German Prospectus
and any amendment thereto is published, such published German
Prospectus and amendments thereto conformed in all material
respects to the applicable requirements of German law, provided,
however, that the Company makes no undertaking as to the
information contained in or omitted from the German Prospectus and
the amendments thereto in reliance upon and in conformity with
information furnished herein or in writing to the Company by or on
behalf of the Lead Manager specifically for inclusion in such
documents.
12.5 The Company undertakes that the consolidated historical financial
statements and schedules of the Company and its consolidated
subsidiaries included in the Prospectus and the Registration
Statement present fairly in all material respects the financial
condition, results of operations and cash flows of the Company and
its consolidated subsidiaries as of the dates and for the periods
indicated, comply as to form with the applicable accounting
requirements of the United States Securities Act and the Neuer
Markt and were prepared in conformity with U.S. generally accepted
accounting principles ("US-GAAP") applied on a consistent basis
throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth in the Prospectus
and Registration Statement fairly present, on the basis stated in
the Prospectus and the Registration Statement, the information
included therein.
12.6 As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to
its Shareholders an earnings statement covering a period of at
least 12 months beginning after the Effective Date of the
Registration Statement which will satisfy the provisions of
Section 11(a) of the United States Securities Act. For the purpose
of the preceding sentence, "Availability Date" means the 45th day
after the end of the fourth fiscal quarter following the fiscal
quarter that includes the Effective Date, except that, if such
fourth fiscal quarter is the last quarter of the Company's fiscal
year, "Availability Date" means the 90th day after the end of such
fourth fiscal quarter.
12.7 The Company will furnish to the Lead Manager and to counsel to the
Lead Manager copies of the Registration Statement (two of which
will be signed and will include all exhibits), the Preliminary
Prospectus, and, so long as delivery of a prospectus relating to
the Offer Shares is required to be delivered under the United
States Securities Act in connection with sales by the Lead Manager
or dealer, the Prospectus, and all amendments and supplements to
such documents, in each case in such quantities as the Lead
Manager may reasonably request. The Prospectus shall be so
furnished on or prior to 3:00 P.M., German time, on the business
day following the later of the Pricing Date or the Effective Date
of the Registration Statement, or at
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such other time as the Lead Manager shall consent. All other such
documents shall be so furnished as soon as available. The Company
and the Selling Shareholders will pay the expenses of printing and
distributing to the Lead Manager all such documents.
12.8 The Company shall use the proceeds from the Offering of Offer
Shares payable to it in the manner described under the heading
"Use of Proceeds" in the Prospectus.
12.9 The Company undertakes that it will notify the Lead Manager
immediately of any adverse change in, or affecting, the general
affairs, management, financial position, shareholders equity or
results of operation of the Company and its Subsidiaries taken as
a whole, which would be likely to prejudice materially the
proposed sale of the Shares in the Offering by the Managers.
The representations, undertakings and warranties set out in this
Section 12 shall be deemed to be repeated on the Pricing Date, the
Transfer Date, and the Settlement Date.
12.10 The commitment of the Lead Manager hereunder is being made on the
basis of the representations, warranties and undertakings set out
above. The Company undertakes that it will fully indemnify each of
the Managers against any and all losses, liabilities, costs,
claims, charges, actions, proceedings, damages, expenses or
demands which any of the Managers may incur or which may be made
against any Manager as a result of, or in connection with, any
breach or alleged breach by the Company or any of its
representations, warranties and undertakings set out above; the
Company will further indemnify and hold harmless the Managers
against any documentary, stamp or similar issuance or transfer
tax, including any interest and penalties, on the creation,
issuance and sale of the Shares and on the execution and delivery
of this Agreement.
12.11 The Company's obligations in respect of the above representations,
warranties, undertakings and indemnity will continue in full force
and effect after the Payment Date notwithstanding the performance
of this Agreement, the completion of the sale of the Offer Shares,
the completion of the Registration or any investigation of the
matters to which they relate by the Managers or on the Managers's
behalf.
13. TERMINATION RIGHTS
13.1 The Lead Manager reserves the right to terminate this Agreement if
(i) any of the Conditions Precedent set forth in Section 9 fail to
occur as contemplated herein or (ii), in the Lead Manager's
reasonable opinion, the circumstances set forth below threaten the
success of the Offering or the placement of the Shares:
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- a deterioration after the date hereof of the economic
situation of the Company or its Subsidiaries occurs or is
probable that the Lead Manager reasonably believes will
materially affect the market price of its shares, or
- any material adverse change in the German, U.S., or
international financial markets or stock markets occurs
that the Lead Manager believes will materially affect the
market price of the Company's shares.
Should the above mentioned circumstances occur after the Transfer
Date but prior to the Settlement Date, the Company and the Selling
Shareholders shall not be entitled to receive the applicable
Purchase Price from the Lead Manager and the Lead Manager shall
promptly transfer the Shares transferred to it by the Company and
the Selling Shareholders back to the Company and each such Selling
Shareholder.
13.2 The Company has the right to terminate this Agreement for
compelling reason (einen wichtigen ▇▇▇▇▇) at any time with effect
as of the receipt of a corresponding written notification by DG.
If the Agreement is terminated for a reason for which DG is not
responsible, the Company will reimburse DG of all incurred costs.
If the Agreement is terminated for a reason for which DG is
responsible, then all claims held by DG to compensation for its
services shall lapse.
14. LIABILITY
Except as provided in Section 18, the liability of the Lead Manager under
this Agreement shall be limited to ill intent and gross negligence.
15. MARKET PROTECTION MEASURES (LOCK-UP PERIOD)
The Selling Shareholders and the current shareholders listed in Schedule
3 (the "Current Shareholders") have undertaken, pursuant to Rule 7.2.9.
of the Rules and Regulations Neuer Markt, for a period of six months from
the date of admission of the Shares to the Neuer Markt (the "Admission
Date"), not to (i) directly or indirectly offer for sale, pledge,
transfer or otherwise dispose of or enter into any transaction or device
which is designed to, or could be expected to, result in the disposal by
any person at any time in the future of any Shares (other than the Shares
included in the Offering) or securities convertible into or exchangeable
for Shares, (ii) exercise any warrants or options convertible into
Shares, (iii) take other measures equivalent to a sale, or (iv) announce
any such measures, without the prior written consent of the FSE and the
Lead Manager to be obtained in each case prior to taking any such
measures.
The Selling Shareholders and all significant Current Shareholders have
undertaken for an additional period of six months from the Admission Date
(i.e., for a period of twelve months in total) not to take any of the
above-mentioned measures without the prior written consent of the Lead
Manager.
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The Selling Shareholders and the Current Shareholders furthermore have
undertaken to cause any third party to which they sell, pledge, transfer
or otherwise dispose of Shares prior to the Admission Date to assume
their obligations hereunder.
The Company undertakes pursuant to Rule 7.2.9 of the Rules and
Regulations Neuer Markt, for a period of six months from the Admission
Date, to refrain from offering or selling Shares directly or indirectly,
or announcing such action, or taking other measures economically
equivalent to a sale, without the prior written consent of the FSE and
the Lead Manager.
The Company undertakes for an additional period of six months from the
Admission Date (i.e., for a period of twelve months in total) not to take
any of the above-mentioned measures, without express written consent by
the Lead Manager to be obtained in each case prior to taking any such
measures.
The Company undertakes to instruct the registrar and transfer agent not
to effect any transfer of Shares by the Selling Shareholders and the
Current Shareholders in the Company's share register within the above
twelve months periods. The Company furthermore undertakes to cause the
registrar and transfer Agent to confirm to the Lead Manager and the FSE
that it has been instructed accordingly.
The issuance of the Greenshoe Shares to the Lead Manager are excluded
from the restrictions contained in this Section 15. In addition, the
Company's issuance of shares under the Company's ESOP are excluded form
the restrictions contained in this Section 15, provided, however, that
any shareholder receiving such shares shall not dispose of them for a
period of three months following their receipt.
16. POWER OF ATTORNEY
All declarations and communications of the Lead Manager relating to this
Agreement shall only be valid for and against all other parties to this
Agreement if made by DG as representative of the Managers to the Company.
DG is released from the restrictions of Section 181 of the German Civil
Code.
Further, in order for the parties to fulfil their obligations hereunder,
DG is authorized to deliver declarations or information in the name of
the Company, the Selling Shareholders and the Managers.
17. SERVICE OF PROCESS
In connection with the Offering, the Company and each of the Selling
Shareholders have appointed blaxxun interactive AG as agent for the
service of process (Zustellungsbevollmachtigter) in Germany for any
services of process regarding contractual or other obligations of the
Company and the Selling Shareholders in relation to the Managers.
18. INDEMNIFICATION AND CONTRIBUTION
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18.1 The Company shall indemnify and hold harmless each Manager, its
officers and employees and each person, if any, who controls any
Manager within the meaning of the United States Securities Act,
from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action relating
to purchases and sales of Shares), to which that Manager, officer,
employee or controlling person may become subject, under the
United States Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or (B) in any blue sky application or other
document prepared or executed by the Company (or based upon (i)
any written information furnished by the Company specifically for
the purpose of qualifying any or all of the Shares under the
securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a
"Blue Sky Application"); (ii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in
any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not
misleading; or (iii) any act or failure to act, or any alleged act
or failure to act, by any Manager in connection with, or relating
in any manner to, the Shares or the Offering contemplated hereby,
and which is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the
Company shall not be liable in the case of any matter covered by
this clause (iii) to the extent that it is determined in a final
judgement by a court of competent jurisdiction that such loss,
claim, damage, liability or action resulted directly from any such
act or failure to act undertaken or omitted to be taken by such
Manager through its gross negligence or willful misconduct), and
shall reimburse each Lead Manager and each such officer, employee
and controlling person promptly upon demand for any legal or other
expenses reasonably incurred by that Manager, officer, employee or
controlling person in connection with investigating or defending
or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, or in any Blue
Sky Application in reliance upon and in conformity with the
written information furnished to the Company by or on behalf of
any Manager specifically for inclusion therein and described in
Section 18.6. The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to any Manager
or to any officer, employee or controlling person of that Manager.
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18.2 Each Manager, severally and not jointly, shall indemnify and hold
harmless the Company and the Selling Shareholders, their officers
and employees, each of their directors and each person, if any,
who controls the Company or the Selling Shareholder within the
meaning of the United States Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action
in respect thereof, to which the Company or any such director,
officer or controlling person may become subject, under the United
States Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material
fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or in any
Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with the
written information furnished to the Company by or on behalf of
that Manager specifically for inclusion therein and described in
Section 18.6, and shall reimburse the Company and any such
director, officer or controlling person for any legal or other
expenses reasonably incurred by the Company and the Selling
Shareholder or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Manager may otherwise have to
the Company or any such director, officer or controlling person.
18.3 Promptly after receipt by an indemnified party under this Section
18 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section 18, notify
the indemnifying party in writing of the claim or the commencement
of that action; provided, however, that the failure to notify the
indemnifying party shall not relieve it from any liability which
it may have under this Section 18 except to the extent it has been
materially prejudiced by such failure and, provided further, that
the failure to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party
otherwise than under this Section 18. If any such claim or action
shall be brought against an indemnified party, and it shall notify
the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to
the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 18 for any legal or
other expenses subsequently incurred
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by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however,
that the Lead Manager shall have the right to employ counsel to
represent jointly the Managers and their respective officers,
employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be
sought by the Managers against the Company or any Selling
Shareholders under this Section 18 if, in the reasonable judgement
of the Managers, it is advisable for the Managers, officers,
employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such
separate counsel shall be paid by the Company and the Selling
Shareholders. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall
not be unreasonably withheld), settle or compromise or consent to
the entry of any judgement with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit
or proceeding, or (ii) be liable for any settlement of any such
action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with its written
consent or if there be a final judgement of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss of
liability by reason of such settlement or judgement.
18.4 If the indemnification provided for in this Section 18 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Sections 18.1 or 18.2 in respect of any
loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall,
in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of
such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Managers on the other from
the Offering of the 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 and the Selling Shareholders on the one hand
and the Managers on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the
Company, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ on the
one hand and the Managers on the other with respect to such
Offering shall be deemed to be in the same proportion as the total
net proceeds from the offering of the Shares purchased under this
Agreement (before deducting expenses) received by the Company,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, on the one hand,
and the total underwriting discounts and
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commissions received by the Managers with respect to the Shares
purchased under this Agreement, on the other hand, bear to the
total gross proceeds from the offering of the Shares under this
Agreement, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or the Managers, the intent
of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, and the
Managers agree that it would not be just and equitable if
contributions pursuant to this Section 18.4 were to be determined
by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in
respect thereof, referred to above in this Section 18.4 shall be
deemed to include, for purposes of this Section 18.4, any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 18.4, no
Manager shall 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 was offered to
the public exceeds the amount of any damages which such Manager
has otherwise paid or become liable to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the United States Securities Act) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Managers' obligations to
contribute as provided in this Section 18.4 are several in
proportion to their respective underwriting obligations and not
joint..
18.5 The Managers severally confirm that the statements with respect to
the Offering of the Shares set forth on the cover page of, and
under the caption "Underwriting" in, the Prospectus are correct
and constitute the only information furnished in writing to the
Company by or on behalf of the Managers specifically for inclusion
in the Registration Statement and the Prospectus.
19. MISCELLANEOUS
19.1 The parties hereto agree that DG is entitled to transfer all its
rights and obligations under this Agreement to an associated
company in the overall scheme of transferring its investment
banking activities to such associated company.
19.2 The parties hereto shall keep information relating to the proposed
Offering and the Registration strictly confidential except to the
extent publication of
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such information is required by applicable law or the rules and
regulations of the SEC, FSE or other governmental agency.
19.3 Modifications and amendments of this Agreement must be in writing
unless there is another statutory form requirement. The foregoing
applies also to the modification or deletion of this provision.
19.4 Should any of the terms of this Agreement be entirely or partially
invalid or become invalid, this shall not effect the validity of
any other terms of the Agreement. The parties will be deemed to
have agreed upon a term or condition that reflects as closely as
possible the economic objectives aimed at by the parties when
entering into the invalid term or condition.
19.5 This Agreement shall be governed by and construed in accordance
with the laws of the Federal Republic of Germany excluding the
UNCISG. Place of performance and, as far as permitted by
applicable statute, forum for all disputes arising in connection
with this agreement shall be Frankfurt am Main.
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We would request you to countersign the second copy of this underwriting
agreement as a sign of your agreement.
Yours sincerely,
--------------------------------- --------------------------
DG BANK MERCK ▇▇▇▇▇ & CO.
DEUTSCHE GENOSSENSCHAFTSBANK AG
---------------------------------- --------------------------
VEM VIRTUELLES EMISSIONSHAUS AG BLAXXUN INTERACTIVE, INC.
--------------------------------- --------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------------------------------------------
(acting in his individual capacity as (acting in his individual capacity as
the Chief Executive Officer of blaxxun the Chief Financial Officer of Blaxxun
interactive, Inc. and on behalf of his interactive, Inc., and on behalf of his
wife; ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, as one of wife, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, as one of the
the Lenders named in Schedule 2 to this Lenders named in Schedule 2 to this
Agreement) Agreement)
--------------------------------------------------------------------------------
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blaxxun interactive, Inc.
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OTHER EXHIBITS AND SCHEDULES TO THIS AGREEMENT WILL BE PROVIDED UPON REQUEST.
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Annex D
[DG BANK LETTERHEAD]
[Date], 2000
Investment Banking
[Name]
Tel. (+44 69) 7447-*
Fax (+44 69)-*
[ ]@▇▇▇▇▇▇.▇▇
[Name of Selling Shareholder]
[Address]
INITIAL PUBLIC OFFERING OF CLASS A COMMON SHARES OF BLAXXUN INTERACTIVE, INC.
2000 SHARE OPTION AGREEMENT
Dear [Name]:
blaxxun interactive, Inc. (the "Company"), has engaged DG BANK Deutsche
Genossenschaftsbank AG to act as the lead manager (the "Lead Manager" or "DG
BANK") for the initial public offering (the "Offering") of 5,750,000 newly
issued Class A common shares of the Company (the "Offer Shares") and, subject to
the Lead Manager's exercise of its over-allotment option (the "Over-Allotment
Option), up to an additional 750,000 outstanding Class A common shares of the
Company (the "Greenshoe Shares"). It has been agreed between DG BANK and the
Company that you and other current shareholders (the "Selling Shareholders"),
subject to the entering into this agreement, shall be given the opportunity to
provide the Lead Manger with Greenshoe Shares from your shareholdings and, in
turn, receive the proceeds from the sale of your shares less underwriting
commissions.
We are pleased to offer you, as a Selling Shareholder, the opportunity to place
up to [ * ] of your common shares of the Company in the Offering (after
giving effect to the stock split to be effected as part of the Offering)
pursuant to the Lead Manger's exercise of its Over-Allotment Option. Your
acceptance of this offer will create a Share Option Agreement among DG BANK and
yourself.
BOOK-BUILDING
The Offer Shares and the Greenshoe Shares, if any, will be offered for
sale by the Lead Manager, VEM Virtuelles Emissionshaus AG and Merck ▇▇▇▇▇
& Co. (the "Underwriting Consortium") nationally and internationally
(outside the United States, Canada and Japan) to investors utilizing a
book-building process customary for initial public offerings in Germany.
The book-building period is currently expected to occur from August 8, to
August 11, 2000 (the "Book-building Period"). The Book-building Period
may be abbreviated or lengthened at the Lead Manager's discretion.
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PLACEMENT PRICE AND PRICING DATE
The price at which the Offer Shares and the Greenshoe Shares, if any, are
sold to Investors having offered to purchase such Shares (the "Placement
Price") will be jointly determined by the Lead Manager (in the name of
the Underwriting Consortium) and the Company after completion of the
book-building on the basis of purchase offers received by the Lead
Manager. The date on which the price is determined, which is currently
expected to be August 14, 2000, is referred to as the "Pricing Date".
OVER-ALLOTMENT OPTION
You hereby grant to the Lead Manager an option to purchase up to [fill in
from Schedule 1] Shares (after giving effect to the stock split to be
effected as part of the Offering) at the Purchase Price from your
holdings to satisfy the Lead Manager's request for Greenshoe Shares upon
its exercise of the Over-Allotment Option. Such Over-Allotment Option is
granted for the purpose of covering over-allotments in the sale of Offer
Shares.
The Over-Allotment Option will begin on the first day on which the
Company's shares are traded on the Frankfurt Stock Exchange, which is
currently expected to be August 15, 2000 (the "Admission Date"), and will
expire 45 calendar days thereafter (the "Option Period"). The
Over-Allotment Option may be exercised during such period by the Lead
Manager, in whole or in part from time to time, by written notice given
to the Company, which you have authorized to receive such notice on your
behalf. Such notice shall be substantially in the form attached to the
custody agreement (attached hereto as Exhibit 1).
It will be left to the Lead Manager's sole discretion to decide whether
the Over-Allotment Option shall be exercised. If the Lead Manager does
not exercise the Over-Allotment Option, none of your shares will be sold
in the Offering.
TRANSFER OF GREENSHOE SHARES
In order to ensure timely delivery of the Greenshoe Shares upon the
exercise of the Greenshoe Option, you undertake to enter into a custody
agreement with, and executed a Power of Attorney in favour of ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Boston, (the "Custodian") in the form attached hereto
as EXHIBIT 1 (the "Custody Agreement"). If DG BANK has not received
confirmation by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ that you have entered into
the Custody Agreement prior to August 3, 2000, DG BANK shall not be
obliged to purchase any Greenshoe Shares from you.
The Custodian will deliver the Greenshoe Shares to DG BANK two business
days following DG BANK's exercise of the Over-Allotment Option (such day
of delivery defined as the "Transfer Date").
PURCHASE PRICE AND COMMISSIONS
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The purchase price payable by the Lead Manager (on behalf of the
Underwriting Consortium) to you for the Greenshoe Shares (the " Purchase
Price") shall be equal to the Placement Price per share, multiplied by
the number of Greenshoe Shares, as the case may be, to be purchased by
the Underwriting Consortium, from which product a commission for the
Underwriters in the amount of 3% will be deducted.
Upon any exercise of the Over-Allotment Option by the Lead Manager, the
Lead Manager will pay you the Purchase Price for the portion of your
Greenshoes Shares for which the Over-Allotment Option has been exercised
upon The Lead Manager's receipt of such Greenshoe Shares (the "Transfer
Date"). Pending the Lead Manager's receipt of such Greenshoe Shares, the
Lead Manager will not be obligated to release the Purchase Price to you.
You hereby irrevocably instruct DG BANK to release the Purchase Price to
the account identified in the Custody Agreement attached as EXHIBIT 1 OR
OTHERWISE INSTRUCTED BY YOUR ATTORNEYS-IN-FACT.
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS GIVEN BY YOU
You hereby represent, warrant and undertake to the Lead Manager and the
other members of the Underwriting Consortium that:
- You, if a corporation, are duly organized, validly existing and in
good standing under the laws of your jurisdiction of
incorporation, and have the power and authority to own your
properties and assets.
- You have the full right, power and authority to enter into this
Agreement and to sell, transfer and deliver the Greenshoe Shares
to be sold by you hereunder. The execution and delivery of this
Agreement and the sale and delivery of the Greenshoe Shares to be
sold by you and the consummation of the transactions contemplated
herein and compliance by you with your obligations hereunder have
been duly authorized by you and do not and will not, whether with
or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any tax, lien, charge or
encumbrance upon the Greenshoe Shares to be sold by you or any
property or assets of you pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license,
lease or other agreement or instrument to you Shareholder are a
party or to which you are subject, nor will such action result in
any violation of the provisions your charter or by-laws or other
organizational instrument, if applicable, or any applicable
treaty, law, statute, rule, regulation, judgement, order, writ or
decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over such Selling
Shareholder or any of your properties.
- You have complied, and will comply for the one-year period
following the Pricing Date, in all respects, with the provisions
of United States law and the articles of incorporation of the
Company concerning the requirements for holding or disposing of
certain percentages of the share capital of the Company, together
with all applicable United States stock exchange and regulatory
authority rules and
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regulations relating thereto.
- You have, and will at the Transfer Date have, good, valid and
marketable title to the Greenshoe Shares to be sold by you
hereunder (such Greenshoe Shares being fully paid), free and clear
of any security interest, mortgage, pledge, lien, charge, claim,
equity or encumbrance of any kind, other than pursuant to this
Agreement; and upon delivery of such Greenshoe Shares, assuming
the Lead Manger has no notice of any adverse claim, the Lead
Manager will receive good, valid and marketable title to the
Greenshoe Shares purchased by it from you, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity
or encumbrance of any kind; and there is no other conflicting
right, contingent or otherwise, of any person to purchase or be
offered for purchase any of the Greenshoe Shares to be delivered
by you in connection with this Agreement.
- This Agreement has been duly authorized, executed and delivered by
you and constitutes a legal, valid and binding obligation by your
enforceable in accordance with its terms, subject to the
application of applicable bankruptcy, fraudulent conveyance and
similar laws.
- Your Greenshoe Shares, if any, will be transferred to Lead Manager
(the date on which the Greenshoe Shares are transferred to the
Lead Managers referred to as the "Transfer Date"), together with
all rights, dividends, distributions and other benefits attaching
to them on the Transfer Date, with full title guarantee and free
from, and not in breach of, any charges, liens or other
encumbrances or any pre-emptive or other rights limiting their
transferability.
- You will consult the Lead Manager in relation to the terms of, the
timetable for, and the manner of publication of, any announcement
of, or other public disclosure regarding, the sale of the
Greenshoe Shares except as required by law and any applicable
rules of any relevant stock exchange. You will not make any such
announcement or disclosure without the lead manager's prior
written consent.
- You agree that the Greenshoe Shares owned by you are subject to
the interests of the Lead Manager hereunder; your obligations
hereunder shall not be terminated by operation of law, whether in
the case of a partnership or corporation, by the dissolution of
such partnership or corporation, or by the occurrence of any other
event; and if you should be dissolved, or if any other such event
should occur, before the delivery of the Greenshoe Shares
hereunder, the Greenshoe Shares shall be delivered by or on your
behalf in accordance with the terms and conditions of this
Agreement.
- Neither you, nor any of your affiliates (which shall not include
the Company), nor any person acting on your behalf, has taken or
will take, directly or indirectly, any action designed to cause or
to result in, or that has constituted or which might reasonably be
expected to cause or result in, the stabilization in violation of
applicable laws or manipulation of the price of any security of
the Company to facilitate the sale or the resale of the Offer
Shares and the Greenshoe Shares.
- No filing with, or consent, approval, authorization, order,
registration, qualification
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or decree of, any court or governmental authorization or agency,
domestic or foreign, is necessary or required for the performance
by you or your obligations hereunder or in connection with the
sale and delivery of the Greenshoe Shares hereunder or the
consummation of the transactions contemplated by this Agreement,
except such as may have previously been made or obtained.
The commitments of the Underwriting Consortium are being made on the
basis of the representations, warranties and undertakings set out above.
You undertake that you will fully indemnify the Managers against any and
all losses, liabilities, costs, claims, charges, actions, proceedings,
damages, expenses or demands which may incur for it or which may be made
against the Managers as a result of, or in connection with, any breach or
alleged breach by you of any of your representations, warranties and
undertakings set out above.
Your liability in respect of the above representations, warranties,
undertakings and indemnity will continue in full force and effect after
the Payment Date notwithstanding the performance of this Agreement.
You agree to deliver to the Lead Manager's attention: DG Bank Deutsche
Genossenschaftsbank AG, attention: ▇▇. ▇▇▇▇, Department F/IBSA, DG BANK,
Am ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ Frankfurt am Main, on or prior to the
Transfer Date, if required, a properly completed and executed United
States Treasury Department Form W-8 or W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
The warranties, representations and undertakings set above shall be
deemed to be repeated on the Pricing Date, the Payment Date and each
Transfer Date.
MARKET PROTECTION MEASURES
You acknowledge that you have entered into a lock-up agreement with the
Frankfurt Stock Exchage authorities, which is required in order to effect
any listing of the Company's shares on the Neuer Markt. You undertake,
pursuant to Rule 7.2.9. of the Rules and Regulations Neuer Markt, for a
period of six months from the date of admission of the Shares to the
Neuer Markt (the "Admission Date"), which is currently expected to occur
on August 16, 2000, not to (i) directly or indirectly offer for sale,
pledge, transfer or otherwise dispose of or enter into any transaction or
device which is designed to, or could be expected to, result in the
disposal by any person at any time in the future of any Shares (other
than the Shares included in the Offering) or securities convertible into
or exchangeable for Shares, (ii) exercise any warrants or options
convertible into Shares, (iii) take other measures equivalent to a sale,
or (iv) announce any such measures, without the prior written consent of
the FSE and the Lead Manager to be obtained in each case prior to taking
any such measures.
You also undertake for an additional period of six months from the
Admission Date (i.e., for a period of twelve months in total) not to take
any of the above-mentioned measures without the prior written consent of
the Lead Manager.
You furthermore undertake to cause any third party to which you sell,
pledge, transfer
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or otherwise dispose of Shares prior to the Admission Date to assume your
obligations hereunder.
The Company will instruct the registrar and transfer agent not to effect
any transfer of your Shares in the Company's share register within the
above twelve months periods.
Your sale and transfer of the Greenshoe Shares to the Lead Manager are
excluded from the restrictions contained in the previous four paragraphs.
If you receive any shares under the Company's employee stock option plan,
you will not dispose of them for (i) a period of three months following
their receipt and (ii) for a period of twelve months from the Admission
Date.
INDEMNIFICATION
You shall indemnify and hold harmless the Company and each Manager, its
officers and employees and each person, if any, who controls any Manager
within the meaning of the United States Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Shares), to which
that Manager, officer, employee or controlling person may become subject,
under the United States Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement of a fact contained in
any of the representations contained herein.
TERMINATION RIGHTS
The Lead Manager reserves the right to terminate this Agreement if:
- the representations and warranties given by you are not fulfilled
or will not be fulfilled;
- the Underwriting Consortium, Company, and the Lenders fail to
execute an underwriting agreement governing the Offering; or
- if the Underwriting Consortium, Company, and the Lenders fail to
execute an underwriting agreement governing the Offering, or if
this Offering is terminated under and in accord with the terms of
the underwriting agreement;
Should the above mentioned circumstances occur after the Transfer Date
but prior to the Settlement Date, you will not be entitled to receive the
applicable Purchase Price from the Lead Manager and the Lead Manager
shall promptly transfer the Shares transferred to it by you back to you.
SERVICE OF PROCESS
In connection with the Offering, you have appointed blaxxun interactive
AG as agent for the service of process (Zustellungsbevollmachtigter) in
Germany for any service of
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process regarding your contractual or other obligations in relation to
the Managers.
TRANSFER
You agree that DG BANK is entitled to transfer all its rights and
obligations under this Agreement to an associated company in the overall
scheme of transferring its investment banking activities to such
associated company.
CONFIDENTIALITY
You shall keep all confidential information relating to the proposed
Offering strictly confidential except to the extent publication of such
information is required by applicable law.
COMPANY AS BENEFICIARY
The Company shall be deemed to be a third person beneficiary of this
agreement and each party's representations, warranties, covenants and
agreements, contained herein are made for the benefit of the Company.
AMENDMENTS
Modifications and amendments of this Agreement must be in writing signed
by you, the Lead Manager and the Company. The foregoing applies also to
the modification or deletion of this provision.
Notwithstanding the foregoing paragraph, the Lead Manager, subject to the
consent of the Company, reserves the right to adjust the Book-Building
Period, the Pricing Date, and the Admission Date.
SAVING CLAUSE
Should any of the terms of this Agreement be entirely or partially
invalid or become invalid, this shall not effect the validity of any
other terms of the Agreement. The parties will be deemed to have agreed
upon a term or condition that reflects as closely as possible the
economic objectives aimed at by the parties when entering into the
invalid term or condition.
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JURISDICTION
This contract shall be governed by and construed in accordance with the
laws of the Federal Republic of Germany; the rules of EGBGB on conflict
of laws shall not apply. Place of performance and, as far as permitted by
applicable statute, forum for all disputes arising in connection with
this agreement shall be Frankfurt am Main.
We would request you to countersign the second copy of this offer as a sign of
your agreement with the terms of this offer.
Yours sincerely,
DG BANK
Deutsche Genossenschaftsbank AG
I hereby declare my acceptance of the terms of this agreement.
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Date:
Place:
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