Exhibit 1.1
WEBSIDESTORY, INC.
________ SHARES(1)
OF
COMMON STOCK
($0.001 PAR VALUE)
UNDERWRITING AGREEMENT
________________, 2004
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
RBC Capital Markets Corporation
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
▇▇▇▇ CAPITAL PARTNERS, LLC,
as Representatives of the several Underwriters
c/o Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. RBC Capital Markets
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
WebSideStory, Inc., a Delaware corporation (the "COMPANY"), and
certain stockholders of the Company listed on Schedule I hereto (the "SELLING
STOCKHOLDERS"), each confirms its agreement with each of the Underwriters listed
on Schedule II hereto (collectively, the "UNDERWRITERS"), for whom Friedman,
Billings, ▇▇▇▇▇▇ & Co., Inc., RBC Capital Markets Corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Company L.L.C. and ▇▇▇▇ Capital Partners, LLC are acting as representatives (in
such capacity, the "REPRESENTATIVES"), with respect to (i) the sale by the
Company of ___________ shares ("the COMPANY INITIAL SHARES") and by the Selling
Stockholders of ____________ shares (the "SELLING STOCKHOLDER INITIAL SHARES"
and collectively with the Company Initial Shares, the "INITIAL SHARES") of
Common Stock, par value $0.001 per share, of the Company ("COMMON STOCK") in the
respective numbers of shares set forth opposite the names of the Company and
each such Selling Stockholder in Schedule I hereto, and the purchase by the
Underwriters, acting severally and not jointly, of the respective number of
shares of Common Stock set forth opposite the names of the Underwriters in
Schedule II hereto, and (ii) the grant of the option described in Section 1(b)
hereof to purchase all or any part of __________ additional shares of Common
Stock to cover over-allotments (collectively, the "OPTION SHARES"), if any, from
the Company and each such Selling Stockholder, in the respective number of
shares of Common Stock set forth opposite the names of the Company (such shares,
the "COMPANY OPTION SHARES") and each Selling Stockholder (such shares, the
"SELLING STOCKHOLDER OPTION
------------------
(1) Plus an option to purchase up to _______ additional shares to cover
over-allotments.
SHARES") in Schedule I hereto, to the Underwriters, acting severally and not
jointly, in the respective numbers of shares of Common Stock set forth opposite
the names of the Underwriters in Schedule II hereto. The Initial Shares and the
Option Shares are hereinafter called, collectively, the "SHARES."
The Company understands that the Underwriters propose to make a
public offering of the Shares as soon as the Underwriters deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION"), a registration statement on Form S-1 (No. 333-115916) and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and the rules and
regulations thereunder (the "SECURITIES ACT REGULATIONS"). The Company has
prepared and filed such amendments thereto, if any, and such amended preliminary
prospectuses, if any, as may have been required to the date hereof, and will
file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The registration statement has been declared effective
under the Securities Act by the Commission. The registration statement as
amended at the time it became effective (including all information deemed
(whether by incorporation by reference or otherwise) to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
of the Securities Act Regulations) is hereinafter called the "REGISTRATION
STATEMENT," except that, if the Company files a post-effective amendment to such
registration statement which becomes effective prior to the Closing Time (as
defined below), "REGISTRATION STATEMENT" shall refer to such registration
statement as so amended. Any registration statement filed pursuant to Rule
462(b) of the Securities Act Regulations is hereinafter called the "RULE 462(B)
REGISTRATION STATEMENT," and after such filing the term "REGISTRATION STATEMENT"
shall include the 462(b) Registration Statement. Each prospectus included in the
Registration Statement, or amendments thereof or supplements thereto, before it
became effective under the Securities Act and any prospectus filed with the
Commission by the Company pursuant to Rule 424(a) of the Securities Act
Regulations is hereinafter called the "PRELIMINARY PROSPECTUS." The term
"PROSPECTUS" means the final prospectus, as first filed with the Commission
pursuant to paragraph (1) or (4) of Rule 424(b) of the Securities Act
Regulations, and any amendments thereof or supplements thereto. The Commission
has not issued any order preventing or suspending the use of any Preliminary
Prospectus.
Each Selling Stockholder has executed and delivered a Custody
Agreement and a Power of Attorney in the form attached hereto as Exhibit A
(collectively, the "CUSTODY AGREEMENTS") pursuant to which each Selling
Stockholder party thereto has placed the Initial Shares and Option Shares to be
sold by it pursuant to this Agreement in custody and appointed the persons
designated therein as a committee (the "COMMITTEE") with the authority to
execute and deliver this Agreement on behalf of such Selling Stockholder and to
take certain other actions with respect thereto and hereto.
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The Company and each of the Selling Stockholders and the
Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, at the purchase price per share
of $________, the Company agrees to sell to the Underwriters the number of
Initial Shares set forth in Schedule I opposite its name and each Selling
Stockholder agrees, severally and not jointly, to sell to the Underwriters the
number of Initial Shares set forth in Schedule I opposite such Selling
Stockholder's name, and each Underwriter agrees, severally and not jointly, to
purchase from the Company and the Selling Stockholders the number of Initial
Shares set forth in Schedule II opposite such Underwriter's name, plus any
additional number of Initial Shares which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 10 hereof, subject in each
case, to such adjustments among the Underwriters as the Representatives in their
sole discretion shall make to eliminate any sales or purchases of fractional
shares.
(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per share set forth in paragraph (a), the Company and each Selling
Stockholder hereby grants an option to the Underwriters, acting severally and
not jointly, to purchase from the Company and each Selling Stockholder in
Schedule I hereto, all or any part of the Option Shares, plus any additional
number of Option Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof. The option hereby granted will
expire 30 days after the date hereof and may be exercised in whole or in part
from time to time only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Initial Shares upon
written notice by the Representatives to the Company and the Committee setting
forth the number of Option Shares as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Shares. Any such time and date of delivery (a "DATE OF DELIVERY") shall
be determined by the Representatives, but shall not be later than three full
business days (or earlier, without the consent of the Company, than two full
business days) after the exercise of such option, nor in any event prior to the
Closing Time (as hereinafter defined), although the notice of such exercise of
the option may be given prior to the Closing Time.
If the option is exercised as to less than all of the Option Shares or the
value of the Company immediately prior to the date of the Prospectus is less
than $150 million, which is equivalent to having an Offering Price (as defined
below) which is less than approximately $12.35, then (i) the Company will sell
fifty percent (50%) of the total number of Option Shares then being purchased
and (ii) each Selling Stockholder will sell, severally and not jointly, that
proportion of the remaining Option Shares then being purchased which the number
of Initial Shares set forth in Schedule I opposite the name of such Selling
Stockholder bears to the total number of Initial Shares sold by all Selling
Stockholders, and each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Shares then being
purchased which the number of Initial Shares set forth in Schedule II opposite
the name of such Underwriter bears to the total number of Initial Shares,
subject in each case to such adjustments among the Underwriters as the
Representatives in their sole discretion shall make to eliminate any sales or
purchases of fractional shares.
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In the event that the option is exercised in full and the value of the
Company immediately prior to the date of the Prospectus is equal to or exceeds
$150 million, which is equivalent to having an Offering Price which is
approximately equal to or exceeds $12.35, then (x) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will sell
twenty percent (20%) of the total number of Option Shares being purchased by the
Underwriters, (y) the Company will sell forty percent (40%) of the total number
of Option Shares being purchased by the Underwriters, and (z) each Selling
Stockholder will sell, severally and not jointly, that proportion of the
remaining Option Shares then being purchased (or forty percent (40%) of the
total number of Option Shares being purchased) which the number of Initial
Shares set forth in Schedule I opposite the name of such Selling Stockholder
bears to the total number of Initial Shares sold by all Selling Stockholders,
and each of the Underwriters, acting severally and not jointly, will purchase
that proportion of the total number of Option Shares then being purchased which
the number of Initial Shares set forth in Schedule II opposite the name of such
Underwriter bears to the total number of Initial Shares, subject in each case to
such adjustments among the Underwriters as the Representatives in their sole
discretion shall make to eliminate any sales or purchases of fractional shares.
For purposes of this Agreement, "OFFERING PRICE" shall mean the per share
"public offering price" set forth on the cover page of the Prospectus.
2. Payment and Delivery:
(a) Initial Shares. The Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior written notice to the Company and the Committee shall
be delivered by or on behalf of the Company and the Selling Stockholders to the
Representatives, including, at the option of the Representatives, through the
facilities of The Depository Trust Company ("DTC") for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified to the Representatives by the Company and each of the Selling
Stockholders, upon at least forty-eight hours' prior notice. The Company will
cause the certificates representing the Initial Shares to be made available for
checking and packaging at least twenty-four hours prior to the Closing Time (as
defined below) with respect thereto at the office of the Representatives, c/o
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and c/o RBC Capital Markets Corporation, c/o RBC Capital Markets,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇,
Syndicate Director, Fax: (▇▇▇) ▇▇▇-▇▇▇▇, or at the office of DTC or its
designated custodian, as the case may be (the "DESIGNATED OFFICE"). The time and
date of such delivery and payment shall be 9:30 a.m., New York City time, on the
third (fourth, if pricing occurs after 4:30 p.m., New York City time) business
day after the date hereof (unless another time and date shall be agreed to by
the Representatives and the Company). The time at which such payment and
delivery are actually made is hereinafter sometimes called the "CLOSING TIME"
and each date of delivery of any Initial Shares and/or Option Shares is
hereinafter sometimes called a "Date of Delivery."
(b) Option Shares. Any Option Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior written notice to the Company and the Committee shall
be delivered by or on behalf of the Company and the
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Selling Stockholders to the Representatives, including, at the option of the
Representatives, through the facilities of DTC for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified to the Representatives by the Company and each of the Selling
Stockholders, upon at least forty-eight hours' prior notice. The Company will
cause the certificates representing the Option Shares to be made available for
checking and packaging at least twenty-four hours prior to the Date of Delivery
with respect thereto at the Designated Office. The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on the date
specified by the Representatives in the notice given by the Representatives to
the Company of the Underwriters' election to purchase such Option Shares or on
such other time and date as the Company and the Representatives may agree upon
in writing.
(c) Selling Stockholder Shares. If on the Closing Time or upon a Date of
Delivery, if any, any Selling Shareholder fails to sell the Initial Shares or
Option Shares which such Selling Stockholder has agreed to sell on such date as
set forth in Schedule I hereto (including the Option Shares relating thereto),
the Company agrees that it will sell or arrange for the sale of that number of
shares of Common Stock to the Underwriters which represents Initial Shares or
the Option Shares which such Selling Stockholder has failed to so sell, or such
lesser number as may be requested by the Representatives.
3. Representations and Warranties of the Company:
The Company represents and warrants to the Underwriters that:
(a) The authorized and outstanding capitalization of the Company is as
set forth in the Prospectus. The outstanding shares of capital stock of the
Company and each subsidiary of the Company (each, a "SUBSIDIARY") have been duly
and validly authorized and issued and are fully paid and non-assessable, and all
of the outstanding shares of capital stock of the Subsidiaries are directly or
indirectly owned of record and beneficially by the Company. Except as disclosed
in the Prospectus, there are no outstanding (i) securities or obligations of the
Company or any of the Subsidiaries convertible into or exchangeable for any
capital stock of the Company or any such Subsidiary, (ii) warrants, rights or
options to subscribe for or purchase from the Company or any such Subsidiary any
such capital stock or any such convertible or exchangeable securities or
obligations, or (iii) obligations of the Company or any such Subsidiary to issue
any shares of capital stock, any such convertible or exchangeable securities or
obligation, or any such warrants, rights or options;
(b) Each of the Company and the Subsidiaries (all of which are named in
Exhibit 21 to the Registration Statement) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation with full corporate power and authority
to own its respective properties and to conduct its respective businesses as
described in the Registration Statement and Prospectus and, in the case of the
Company, to execute and deliver this Agreement and to consummate the
transactions contemplated herein;
(c) The Company and all of the Subsidiaries are duly qualified or
licensed and are in good standing in each jurisdiction in which they conduct
their respective businesses or in which they own or lease real property or
otherwise maintain an office and in which the failure, individually or in the
aggregate, to be so qualified or licensed could have a material adverse
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effect on the assets, business, operations, earnings, properties or condition
(financial or otherwise) of the Company and the Subsidiaries taken as a whole,
(any such effect or change, where the context so requires, is hereinafter called
a "MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE"). Except as disclosed
in the Prospectus, no Subsidiary is prohibited or restricted, directly or
indirectly, from paying dividends to the Company, or from making any other
distribution with respect to such Subsidiary's capital stock or from repaying to
the Company or any other Subsidiary any amounts which may from time to time
become due under any loans or advances to such Subsidiary from the Company or
such other Subsidiary, or from transferring any such Subsidiary's cash or
Intellectual Property to the Company or to any other Subsidiary. Other than as
disclosed in the Prospectus, the Company does not own, directly or indirectly,
any capital stock or other equity securities of any other corporation or any
ownership interest in any partnership, joint venture or other association;
(d) The Company and the Subsidiaries are in compliance in all material
respects with all applicable laws, rules, regulations, orders, decrees and
judgments, including those relating to transactions with affiliates;
(e) Neither the Company nor any Subsidiary is in breach of or in default
under (nor has any event occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), its respective organizational
documents, or in the performance or observance of any obligation, agreement,
covenant or condition contained in any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them or their respective
properties is bound, except for such breaches or defaults which could not have a
Material Adverse Effect;
(f) The execution, delivery and performance of this Agreement, and
consummation of the transactions contemplated herein will not (i) conflict with,
or result in any breach of, or constitute a default under (nor constitute any
event which with notice, lapse of time, or both would constitute a breach of, or
default under) (A) any provision of the organizational documents of the Company
or any Subsidiary, or (B) any provision of any license, indenture, mortgage,
deed of trust, loan or credit agreement or other agreement or instrument to
which the Company or any Subsidiary is a party or by which any of them or their
respective properties may be bound or affected, or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any Subsidiary, except in the case of this clause
(B) for such breaches or defaults which could not have a Material Adverse
Effect; or (ii) result in the creation or imposition of any lien, charge, claim
or encumbrance upon any property or asset of the Company or any Subsidiary;
(g) This Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general equitable principles, and except to
the extent that the indemnification and contribution provisions of Section 11
hereof may be limited by federal or state securities laws and public policy
considerations in respect thereof;
(h) No approval, authorization, consent or order of or filing with any
federal, state or local governmental or regulatory commission, board, body,
authority or agency is required in
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connection with the Company's execution, delivery and performance of this
Agreement, its consummation of the transactions contemplated herein, and its
sale and delivery of the Shares, other than (i) such as have been obtained, or
will have been obtained at the Closing Time or the relevant Date of Delivery, as
the case may be, under the Securities Act and the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), (ii) such approvals as have been obtained
in connection with the approval of the quotation of the Shares on the Nasdaq
National Market and (iii) any necessary qualification under the securities or
blue sky laws of the various jurisdictions in which the Shares are being offered
by the Underwriters;
(i) Each of the Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state or local law, regulation or rule, and has
obtained all necessary authorizations, consents and approvals from other
persons, required in order to conduct their respective businesses as described
in the Prospectus, except to the extent that any failure to have any such
licenses, authorizations, consents or approvals, to make any such filings or to
obtain any such authorizations, consents or approvals could not, individually or
in the aggregate, have a Material Adverse Effect. Neither the Company nor any of
the Subsidiaries is required by any applicable law to obtain accreditation or
certification from any governmental agency or authority in order to provide the
products and services which it currently provides or which it proposes to
provide as set forth in the Prospectus. Neither the Company nor any of the
Subsidiaries is in violation of, in default under, or has received any notice
regarding a possible violation, default or revocation of any such license,
authorization, consent or approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the Company or
any of the Subsidiaries the effect of which could result in a Material Adverse
Change; and no such license, authorization, consent or approval contains a
materially burdensome restriction that is not adequately disclosed in the
Registration Statement and the Prospectus;
(j) Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are threatened by the Commission, and the Company has
complied to the Commission's satisfaction with any request on the part of the
Commission for additional information;
(k) The Preliminary Prospectus and the Registration Statement comply,
and the Prospectus and any further amendments or supplements thereto will, when
they have become effective or are filed with the Commission, as the case may be,
comply, in all material respects with the requirements of the Securities Act and
the Securities Act Regulations. The Registration Statement did not, and any
amendment thereto will not, in each case as of the applicable effective date,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
the Preliminary Prospectus does not, and the Prospectus or any amendment or
supplement thereto will not, as of the applicable filing date and at the Closing
Time and on each Date of Delivery (if any), contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were
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made, not misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in the Registration
Statement or the Prospectus in reliance upon and in conformity with the
information concerning the Underwriters and furnished in writing by or on behalf
of the Underwriters through the Representatives to the Company expressly for use
in the Registration Statement or the Prospectus (that information being limited
to that described in the penultimate sentence of the first paragraph of Section
11(c) hereof);
(l) The Preliminary Prospectus was and the Prospectus delivered to the
Underwriters for use in connection with this offering will be identical to the
versions of the Preliminary Prospectus and Prospectus created to be transmitted
to the Commission for filing via the Electronic Data Gathering Analysis and
Retrieval System ("▇▇▇▇▇"), except to the extent permitted by Regulation S-T;
(m) Except as set forth in the Prospectus, there are no actions, suits,
proceedings, inquiries or investigations pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary or any of their
respective officers and directors or to which the properties, assets or rights
of any such entity are subject, at law or in equity, before or by any federal,
state, local or foreign governmental or regulatory commission, board, body,
authority, arbitral panel or agency which could result in a Material Adverse
Effect;
(n) The financial statements, including the notes thereto, included in
(or incorporated by reference into) the Registration Statement and the
Prospectus present fairly the consolidated financial position of the entities to
which such financial statements relate (the "COVERED ENTITIES") as of the dates
indicated and the consolidated results of operations and changes in financial
position and cash flows of the Covered Entities for the periods specified. Such
financial statements have been prepared in conformity with generally accepted
accounting principles as applied in the United States and on a consistent basis
during the periods involved and in accordance with Regulation S-X promulgated by
the Commission; provided, however, that the statements that are unaudited are
subject to normal year-end adjustments and do not contain certain footnotes,
required by generally accepted accounting principles. The financial statement
schedules included in the Registration Statement and the amounts in the
Prospectus under the captions "Prospectus Summary - Summary Consolidated
Financial Data" and "Selected Consolidated Financial Data" fairly present the
information shown therein and have been compiled on a basis consistent with the
financial statements included in the Registration Statement and the Prospectus.
No other financial statements or supporting schedules are required to be
included in the Registration Statement; the unaudited pro forma financial
information (including the related notes) included in the Prospectus and any
Preliminary Prospectus complies as to form in all material respects with the
applicable accounting requirements of the Securities Act and the Securities Act
Regulations, and management of the Company believes that the assumptions
underlying the pro forma adjustments are reasonable. Such pro forma adjustments
have been properly applied to the historical amounts in the compilation of the
information and such information fairly presents with respect to the Company and
the Subsidiaries, the financial position, results of operations and other
information purported to be shown therein at the respective dates and for the
respective periods specified.
(o) To the knowledge of the Company, PricewaterhouseCoopers LLP, whose
reports on the consolidated financial statements of the Company and the
Subsidiaries are filed with the
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Commission as part of the Registration Statement and Prospectus or are
incorporated by reference therein, are, and were during the periods covered by
its reports, independent public accountants as required by the Securities Act
and the Securities Act Regulations;
(p) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or Prospectus, there has not been (i) any
Material Adverse Change or any development that could reasonably be expected to
result in a Material Adverse Change, whether or not arising in the ordinary
course of business, (ii) any transaction that is material to the Company and the
Subsidiaries taken as a whole, which has been approved by the Board of Directors
of the Company or any Subsidiary or their respective stockholders, or entered
into by the Company or any of the Subsidiaries, or for which the Company or any
Subsidiary has executed a term sheet, a memorandum of understanding or similar
document, (iii) any obligation, contingent or otherwise, directly or indirectly
incurred by the Company or any Subsidiary that is material to the Company and
Subsidiaries taken as a whole or (iv) any dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock;
(q) The Shares conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus;
(r) Except as disclosed in the Registration Statement or Prospectus,
there are no persons with registration or other similar rights to have any
equity or debt securities, including securities which are convertible into or
exchangeable for equity securities, registered pursuant to the Registration
Statement or otherwise registered by the Company under the Securities Act;
(s) The Company Initial Shares and the Company Option Shares
(collectively, the "COMPANY SHARES") have been duly authorized and, when the
Company Shares are issued and duly delivered against payment therefor as
contemplated by this Agreement, the Company Shares will be validly issued, fully
paid and non-assessable, free and clear of any pledge, lien, encumbrance,
security interest or other claim created by or known to the Company, and the
issuance and sale of the Company Shares by the Company is not subject to
preemptive or other similar rights arising by operation of law, under the
organizational documents of the Company or under any agreement to which the
Company or any Subsidiary is a party or otherwise;
(t) The Shares have been approved for listing on the Nasdaq National
Market, subject to official notice of issuance;
(u) The Company has not taken, and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares;
(v) Neither the Company nor any of its Subsidiaries (i) is required to
register as a "broker" or "dealer" in accordance with the provisions of the
Exchange Act, or the rules and regulations thereunder (the "EXCHANGE ACT
REGULATIONS"), or (ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within the meaning
of Article I of the By-laws of the National Association of Securities Dealers,
Inc. (the "NASD")) any member firm of the NASD;
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(w) The Company has not relied upon the Representatives or legal counsel
for the Representatives for any legal, tax or accounting advice in connection
with the offering and sale of the Shares;
(x) Any certificate signed by any officer of the Company or any
Subsidiary delivered to the Representatives or to counsel for the Underwriters
pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby;
(y) The form of certificate used to evidence the Common Stock complies
in all material respects with all applicable statutory requirements, with any
applicable requirements of the organizational documents of the Company and the
requirements of the Nasdaq National Market;
(z) Neither the Company nor the Subsidiaries own any real property. The
Company and the Subsidiaries have good title to all personal property owned by
them, in each case free and clear of all liens, security interests, pledges,
charges, encumbrances, mortgages and defects, except such as are disclosed in
the Prospectus or such as do not materially and adversely affect the value of
such property and do not materially interfere with the use made or proposed to
be made of such property by the Company and the Subsidiaries; and any real
property and buildings held under lease by the Company or any Subsidiary are
held under valid, existing and enforceable leases, with such exceptions as are
disclosed in the Prospectus or are not material and do not interfere with the
use made or proposed to be made of such property and buildings by the Company or
such Subsidiary;
(aa) The descriptions in the Registration Statement and the Prospectus of
the legal or governmental proceedings, contracts, leases and other legal
documents therein described present fairly the information required to be shown,
and there are no legal or governmental proceedings, contracts, leases, or other
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement which
are not described or filed as required. All agreements between the Company or
any of the Subsidiaries and third parties expressly referenced in the Prospectus
are legal, valid and binding obligations of the Company or one or more of the
Subsidiaries (and, to the knowledge of the Company and such Subsidiaries, with
respect to third parties) enforceable in accordance with their respective terms,
except to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general equitable principles;
(bb) Except as described in the Prospectus, the Company and each
Subsidiary owns, possesses, licenses or has other rights to use all patents,
patent applications, trade and service marks, trade and service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, know-how and other intellectual property (collectively, the
"INTELLECTUAL PROPERTY") reasonably necessary for the conduct of the Company's
and each Subsidiary's business as now conducted or as proposed to be conducted,
as described in the Prospectus, and (i) to the knowledge of the Company and the
Subsidiaries, there is no infringement by third parties of any such Intellectual
Property owned by or exclusively licensed to the Company or any Subsidiary,
which could have a Material Adverse Effect; (ii) there is no pending or, to the
knowledge of the Company and the Subsidiaries, threatened action, suit,
proceeding or claim by
-10-
others challenging the Company's or any Subsidiary's rights in or to any such
Intellectual Property, which could have a Material Adverse Effect; (iii) there
is no pending or, to the knowledge of the Company and the Subsidiaries,
threatened action, suit, proceeding or claim by others challenging the validity
or scope of Intellectual Property owned by or exclusively licensed to the
Company or any Subsidiary; (iv) there is no pending or, to the knowledge of the
Company and the Subsidiaries, threatened action, suit, proceeding or claim by
others that the Company or any Subsidiary infringes, or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary rights of
others, and neither the Company nor any Subsidiary is aware of any other fact
which could have a Material Adverse Effect; (v) the Company and the Subsidiaries
do not in the conduct of their business as now or proposed to be conducted as
described in the Prospectus infringe or conflict with any right or patent of any
third party, or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the Company
or any of the Subsidiaries, which such infringement or conflict is reasonably
likely to result in a Material Adverse Change; (vi) to the knowledge of the
Company and the Subsidiaries, there is no U.S. patent which contains claims that
interfere with the issued claims of any Intellectual Property owned by or
exclusively licensed to the Company or any Subsidiary; (vii) there is no art of
which the Company or any Subsidiary is aware that may render any U.S. patent
held by the Company or any Subsidiary invalid or any U.S. patent application
held by the Company or any Subsidiary unpatentable which has not been disclosed,
or will not be disclosed in the required time period, to the U.S. Patent and
Trademark Office; (viii) to the knowledge of the Company and the Subsidiaries,
other than interests and liens which will be terminated or removed prior to the
Closing Time, no security interests have been recorded in the U.S. Patent and
Trademark Office with respect to any Intellectual Property owned by or
exclusively licensed to the Company or any Subsidiary and no liens have been
recorded against the Company or any Subsidiary with respect to any such
Intellectual Property and (vii) unless the Company decides to abandon or not
pursue any Intellectual Property, the Company has paid or will pay all
maintenance and issue fees that are due or will be due, within the required time
period, and has claimed small entity status only as appropriate;
(cc) The Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences;
(dd) Each of the Company and the Subsidiaries has filed on a timely basis
all necessary federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes shown as
due thereon; and no tax deficiency has been asserted against any such entity,
nor does any such entity know of any tax deficiency which is likely to be
asserted against any such entity which, if determined adversely to any such
entity, could have a Material Adverse Effect. In the reasonable judgment of the
Company, all tax liabilities are adequately provided for on the respective books
of such entities.
-11-
(ee) Each of the Company and the Subsidiaries maintains insurance (issued
by insurers of recognized financial responsibility) of the types and in the
amounts generally deemed adequate for their respective businesses and consistent
with insurance coverage maintained by similar companies in similar businesses,
all of which insurance is in full force and effect;
(ff) Neither the Company nor any of the Subsidiaries is in violation, or
has received notice of any violation with respect to, any applicable
environmental, safety or similar law applicable to the business of the Company
or any of the Subsidiaries. The Company and the Subsidiaries have received all
permits, licenses or other approvals required of them under applicable federal
and state occupational safety and health and environmental laws and regulations
to conduct their respective businesses, and the Company and the Subsidiaries are
in compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which could not,
individually or in the aggregate, result in a Material Adverse Change;
(gg) Neither the Company nor any Subsidiary is in violation of or has
received notice of any violation with respect to any federal or state law
relating to discrimination in the hiring, promotion or pay of employees, nor any
applicable federal or state wages and hours law, the violation of any of which
could have a Material Adverse Effect;
(hh) The Company and each of the Subsidiaries are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder (collectively, "ERISA"). No "reportable
event" (as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company or any of the Subsidiaries would have
any liability. The Company and each of the Subsidiaries have not incurred and do
not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Section 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder ("CODE"); and each "pension plan" for
which the Company and each of its Subsidiaries would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification;
(ii) Neither the Company nor any of the Subsidiaries nor, to the
knowledge of the Company, any officer or director purporting to act on behalf of
the Company or any of the Subsidiaries has at any time (i) made any
contributions to any candidate for political office, or failed to disclose fully
any such contributions, in violation of law, (ii) made any payment to any state,
federal or foreign governmental officer or official, or other person charged
with similar public or quasi-public duties, other than payments required or
allowed by applicable law, or (iii) engaged in any transactions, maintained any
bank account or used any corporate funds except for transactions, bank accounts
and funds which have been and are reflected in the normally maintained books and
records of the Company and the Subsidiaries;
(jj) Except as otherwise disclosed in the Prospectus, there are no
material outstanding loans or advances or material guarantees of indebtedness by
the Company or any of the
-12-
Subsidiaries to or for the benefit of any of the officers or directors of the
Company or any of the Subsidiaries or any of the members of the families of any
of them;
(kk) Neither the Company nor any of the Subsidiaries nor, to the
knowledge of the Company, any employee or agent of the Company or any of the
Subsidiaries, has made any payment of funds of the Company or of any Subsidiary
or received or retained any funds in violation of any law, rule or regulation or
of a character required to be disclosed in the Prospectus;
(ll) All securities issued on or prior to the date hereof by the Company,
any of the Subsidiaries or any trusts established by the Company or any
Subsidiary have been issued and sold in compliance with (i) all applicable
federal and state securities laws, (ii) the laws of the applicable jurisdiction
of incorporation of the issuing entity and, (iii) to the extent applicable to
the issuing entity, the requirements of the Nasdaq National Market; except for
such non-compliance, in the case of (i) and (ii), which do not require
disclosure in the Prospectus;
(mm) (i) Neither the Company nor any Subsidiary knows of any violation of
any municipal, state or federal law, rule or regulation (including those
pertaining to environmental matters) concerning the real properties leased by
any such entity (collectively, the "PROPERTIES"), or any part thereof which
could reasonably be expected to have a Material Adverse Effect; (ii) all liens,
charges, encumbrances, claims, or restrictions on or affecting the properties
and assets (including the Properties) of Company or any of the Subsidiaries that
are required to be described in the Prospectus (or, the most recent Preliminary
Prospectus) are disclosed therein; and (iii) no lessee of any portion of any of
the Properties is in default under any of the leases governing such properties
and there is no event which, but for the passage of time or the giving of notice
or both would constitute a default under any of such leases, except such
defaults that could not have a Material Adverse Effect;
(nn) In connection with this offering, the Company has not offered and
will not offer its Common Stock or any other securities convertible into or
exchangeable or exercisable for Common Stock in a manner in violation of the
Securities Act. Other than as contemplated in this Agreement, the Company has
not distributed and will not distribute any Prospectus or other offering
material in connection with the offer and sale of the Shares;
(oo) Other than pursuant to this Agreement, the Company has not incurred
any liability for any finder's fees or similar payments in connection with the
transactions herein contemplated;
(pp) No relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of the Subsidiaries
on the other hand, which is required by the Securities Act and the Securities
Act Regulations to be described in the Registration Statement and the Prospectus
and which is not so described;
(qq) Neither the Company nor any of the Subsidiaries is and, after giving
effect to the offering and sale of the Shares, will be an "investment company"
or an entity "controlled" by an "investment company", as such terms are defined
in the Investment Company Act of 1940, as amended;
-13-
(rr) Neither the Company nor any of the Subsidiaries is currently engaged
in any negotiations with any third party, or is a party to any agreements,
commitments or current understanding, regarding (i) a strategic partnership or
joint venture with any such party except for such negotiations related to
transactions that are not required to be disclosed in the Prospectus, (ii) the
acquisition by the Company of such third party or any business or division
thereof, (iii) the consolidation or merger of the Company with or into, or
acquisition of the Company by, such third party or another entity, (iv) the
sale, conveyance or disposition of all or substantially all of the assets of the
Company or a transaction or series of related transactions in which more than
fifty percent (50%) of the voting power of the Company is disposed of, or (v)
any other form of acquisition, merger, or reorganization of the Company; and
(ss) There are no existing or, to the knowledge of the Company,
threatened labor disputes with the employees of the Company or any of the
Subsidiaries which are likely to have individually or in the aggregate a
Material Adverse Effect.
4. Representations and Warranties of the Selling Stockholders:
Each Selling Stockholder represents and warrants to the Underwriters that:
(a) Such Selling Stockholder has full power and authority to enter into
this Agreement and the Custody Agreements to which it is a party. All
authorizations and consents necessary for the execution and delivery by such
Selling Stockholder of the Custody Agreements, and for the execution of this
Agreement on behalf of such Selling Stockholder, have been given. Each of the
Custody Agreements and this Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder and constitutes a valid
and binding agreement of such Selling Stockholder and is enforceable against
such Selling Stockholder in accordance with the terms thereof and hereof, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, and by general equitable
principles, and except to the extent that the indemnification and contribution
provisions of Section 11 hereof may be limited by federal or state securities
laws and public policy considerations in respect thereof;
(b) Such Selling Stockholder now has, and at the Closing Time or the
applicable Date of Delivery will have, (i) good and marketable title to the
Selling Stockholder Initial Shares and the Selling Stockholder Option Shares
(collectively, the "SELLING STOCKHOLDER SHARES") to be sold by such Selling
Stockholder hereunder, free and clear of all liens, encumbrances and claims
whatsoever (other than pursuant to the Custody Agreements), and (ii) full legal
right and power, and all authorizations and approvals required by law (other
than securities laws authorizations, which will be obtained on or prior to the
Closing Time), to sell, transfer and deliver such Selling Stockholder Shares to
the Underwriters hereunder and to make the representations, warranties and
agreements made by such Selling Stockholder herein. Upon the delivery of and
payment for such Selling Stockholder Shares hereunder, such Selling Stockholder
will deliver good and marketable title thereto, free and clear of any pledge,
lien, encumbrance, security interest or other claim;
(c) At the Closing Time or the applicable Date of Delivery, all stock
transfer or other taxes (other than income taxes) which are required to be paid
in connection with the sale and transfer of the Shares to be sold by such
Selling Stockholder to the Underwriters hereunder will
-14-
have been fully paid or provided for by such Selling Stockholder and all laws
imposing such taxes will have been fully complied with;
(d) The performance of this Agreement and the consummation of the
transactions contemplated herein will not conflict with, or result in any breach
of, or constitute a default under (nor constitute any event which with notice,
lapse of time, or both would constitute a breach of, or default under), (i) any
provision of the certificate or articles of incorporation, other charter or
similar constitutive documents, or the bylaws of the Selling Stockholder, or
(ii) any provision of any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which it or its properties may be bound or
affected, or under any federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to the Selling Stockholder; or
result in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Selling Stockholder;
(e) No approval, authorization, consent or order of or filing with any
federal, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the Selling Stockholder's
execution, delivery and performance of this Agreement, its consummation of the
transactions contemplated herein, and its sale and delivery of the Selling
Stockholder Shares, other than (i) such as have been obtained, or will have been
obtained at the Closing Time or the relevant Date of Delivery, as the case may
be, under the Securities Act and the Exchange Act, (ii) such approvals as have
been obtained in connection with the approval of the quotation of the Shares on
the Nasdaq National Market and (iii) any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters;
(f) All material information with respect to such Selling Stockholder,
as provided by such Selling Stockholder to the Company specifically for
inclusion in the Registration Statement and Prospectus, contained in such
Registration Statement and the Prospectus (as amended or supplemented, if the
Company shall have filed with the Commission any amendment or supplement
thereto) complied and will comply in all material respects with all applicable
provisions of the Securities Act and the Securities Act Regulations, contains
and will contain all statements of material fact required to be stated therein
in accordance with the Securities Act and the Securities Act Regulations, and
does not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading;
(g) Other than as permitted by the Securities Act and the Securities Act
Regulations, such Selling Stockholder has not distributed and will not
distribute any preliminary prospectus, the Prospectus or any other offering
material in connection with the offering and sale of the Selling Stockholder
Shares. Such Selling Stockholder has not taken, directly or indirectly, any
action intended, or which might reasonably be expected, to cause or result in,
under the Securities Act, the Securities Act Regulations or otherwise, or which
has constituted, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares;
(h) Certificates in negotiable form for the Shares to be sold hereunder
by such Selling Stockholder have been placed in custody, for the purpose of
making delivery of such Shares
-15-
under this Agreement and under the Agreement and Power of Attorney which
appoints U.S. Stock Transfer Corporation, as custodian (the "CUSTODIAN"), for
such Selling Stockholder. Such Selling Stockholder agrees that the Shares
represented by the certificates held in custody for him or it under the
Agreement and Power of Attorney are for the benefit of and coupled with and
subject to the interest hereunder of the Custodian, the Committee, the
Underwriters, each other Selling Stockholder and the Company; that the
arrangements made by such Selling Stockholder for such custody and the
appointment of the Custodian and the Committee by such Selling Stockholder are
irrevocable; and that the obligations of such Selling Stockholder hereunder
shall not be terminated by operation of law, whether by the death, disability,
incapacity or liquidation of any Selling Stockholder or the occurrence of any
other event. If any Selling Stockholder should die, become disabled or
incapacitated or be liquidated or if any other such event should occur before
the delivery of the Shares hereunder, certificates for the Shares shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement and actions taken by the Committee and the Custodian pursuant to the
Agreement and Power of Attorney shall be as valid as if such death, liquidation,
incapacity or other event had not occurred, regardless of whether or not the
Custodian or the Committee, or either of them, shall have received notice
thereof;
(i) Such Selling Stockholder has not relied upon the Representatives or
legal counsel for the Representatives for any legal, tax or accounting advice in
connection with the offering and sale of the Selling Stockholder Shares;
(j) Such Selling Stockholder does not have any registration or other
similar rights to have any equity or debt securities registered for sale by the
Company under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as are described in the
Prospectus under "Shares Eligible for Future Sale";
(k) Such selling Stockholder does not have, or has waived prior to the
date hereof, any preemptive right, co-sale right or right of first refusal or
other similar right to purchase any of the Shares that are to be sold by the
Company or any of the other Selling Stockholders to the Underwriters pursuant to
this Agreement; and such Selling Stockholder does not own any warrants, options
or similar rights to acquire, and does not have any right or arrangement to
acquire, any capital stock, right, warrants, options or other securities from
the Company, other than those described in the Registration Statement and the
Prospectus; and
(l) Except as otherwise disclosed to the Underwriters in writing, such
Selling Stockholder is not a member of or an affiliate of or associated with any
member of the NASD.
5. Certain Company Covenants:
The Company hereby agrees with each Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such jurisdictions (both domestic and foreign) as the
Representatives may designate and to maintain such qualifications in effect as
long as requested by the Representatives for the distribution of the Shares,
provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state;
-16-
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the Company
will endeavor to cause such post-effective amendment to become effective as soon
as possible and will advise the Representatives promptly (and, if requested by
the Representatives, will confirm in writing) when such post-effective amendment
has become effective;
(c) to prepare the Prospectus in a form approved by the Underwriters and
file such Prospectus (or a term sheet as permitted by Rule 434) with the
Commission pursuant to Rule 424(b) under the Securities Act not later than 10:00
a.m. (New York City time), on the day following the execution and delivery of
this Agreement or on such other day as the parties may mutually agree and to
furnish promptly (and with respect to the initial delivery of such Prospectus,
not later than 10:00 a.m. (New York City time) on the day following the
execution and delivery of this Agreement or on such other day as the parties may
mutually agree to the Underwriters copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the Registration
Statement) in such quantities and at such locations as the Underwriters may
reasonably request for the purposes contemplated by the Securities Act
Regulations, which Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the version created to be
transmitted to the Commission for filing via ▇▇▇▇▇, except to the extent
permitted by Regulation S-T;
(d) to advise the Representatives promptly (and, if requested by the
Representatives, will confirm in writing) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes effective
under the Securities Act Regulations;
(e) to advise the Representatives immediately, confirming such advice in
writing, of (i) the receipt of any comments from, or any request by, the
Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or 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 and, if
the Commission or any other government agency or authority should issue any such
order, to make every reasonable effort to obtain the lifting or removal of such
order as soon as possible; to advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or Prospectus and
unless required by law, to file no such amendment or supplement to which the
Representatives shall reasonably object in writing;
(f) to furnish to the Representatives for a period of three years from
the date of this Agreement (i) copies of all annual, quarterly and current
reports or other communications supplied to holders of shares of Common Stock,
(ii) copies of all reports filed by the Company with the Commission, the NASD or
any securities exchange and (iii) such other information as the Representatives
may reasonably request regarding the Company and the Subsidiaries; provided,
however, the Company shall not be obligated to furnish any report or filing
available to the general public at no cost at the Commission's Internet web
site, ▇▇▇.▇▇▇.▇▇▇;
-17-
(g) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to the
Shares is required to be delivered under the Securities Act Regulations which,
in the judgment of the Company or in the reasonable opinion of the
Representatives or counsel for the Underwriters, would require the making of any
change in the Prospectus then being used so that the Prospectus would not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to amend or supplement the Prospectus to comply with
any law and, during such time, to promptly prepare and furnish to the
Underwriters copies of the proposed amendment or supplement before filing any
such amendment or supplement with the Commission and thereafter promptly furnish
at the Company's own expense to the Underwriters and to dealers, copies in such
quantities and at such locations as the Representatives may from time to time
reasonably request of an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with the
Securities Act;
(h) to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission, unless the Representatives
are advised by the counsel for the Underwriters that the Prospectus is no longer
required by law to be delivered in connection with sales by an Underwriter or
dealer;
(i) prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 under the Securities Act, to furnish a copy thereof to the
Representatives and counsel for the Underwriters and obtain the consent of the
Representatives to the filing, which consent will not be unreasonably withheld;
(j) to furnish promptly to each Representative a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith or
incorporated by reference therein) and such number of conformed copies of the
foregoing as the Representatives may reasonably request;
(k) to apply the net proceeds of the sale of the Shares in accordance
with its statements under the caption "Use of Proceeds" in the Prospectus;
(l) to make generally available to its security holders and to deliver
to the Representatives as soon as practicable, but in any event not later than
fifteen (15) months after the first anniversary of the effective date of the
Registration Statement an earnings statement complying with the provisions of
Section 11(a) of the Securities Act (in form, at the option of the Company,
complying with the provisions of Rule 158 of the Securities Act Regulations,)
covering a period of 12 months beginning after the effective date of the
Registration Statement;
(m) to use its reasonable best efforts, during the two (2) years
following the date of the Prospectus, to maintain the listing of the Shares on
the Nasdaq National Market or SmallCap Market or the New York Stock Exchange
(the "NYSE") or the American Stock Exchange ("AMEX") and to file with Nasdaq or
the NYSE or AMEX, as applicable, all documents and
-18-
notices required by such market or exchange; provided, however, that the Company
need not comply with this provision in the event that the Company consummates a
"going-private" or acquisition or merger transaction after which the Company is
not required to comply with the reporting requirements set forth in Section
13(a) or Section 15(d) of the Exchange Act;
(n) to engage and maintain, at its expense, a registrar and transfer
agent for the Shares;
(o) to refrain during a period of 180 days from the date of the
Prospectus, without the prior written consent of the Representatives, from,
directly or indirectly, (i) offering, pledging, selling, contracting to sell,
selling any option or contract to purchase, purchasing any option or contract to
sell, granting any option for the sale of, or otherwise disposing of or
transferring, (or entering into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any time in
the future of), any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or filing any registration
statement under the Securities Act (other than a registration statement on Form
S-8) with respect to any of the foregoing, or (ii) entering into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder, (B) any shares of Common Stock issued by the Company upon the
exercise of an option, warrant or right outstanding on the date hereof and
referred to in the Prospectus, (C) any shares of Common Stock (or securities
exchangeable, exercisable or convertible into Common Stock) issued pursuant to
any of the Company's stock option plans or arrangements described in the
Prospectus, and (D) after 90 days following the date of the Prospectus, any
shares of Common Stock issued, or entering into any agreement to issue, in
connection with a strategic partnership, joint venture, lending or similar
arrangement, or in connection with the acquisition or license by the Company of
any business, services or technologies, provided however that such shares in the
aggregate do not exceed ten percent (10%) of the Common Stock outstanding
immediately following the sale of the Shares (after giving effect to the
conversion of the outstanding preferred stock) and provided further that the
Company shall prohibit any sale or other transfer of, and the recipients of such
shares agree not to sell or otherwise transfer, such shares during the 180 days
following the date of the Prospectus;
(p) not to, and to use its reasonable best efforts to cause its
officers, directors and affiliates not to, (i) take, directly or indirectly
prior to termination of the underwriting syndicate contemplated by this
Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which may cause or result in, or which might in the
future reasonably be expected to cause or result in, the stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of any of the Shares or (ii) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of the Shares or (iii) pay or agree to pay
to any person any compensation for soliciting any order to purchase any other
securities of the Company;
(q) to cause each 1% or greater stockholder, officer and director of the
Company to furnish to the Representatives, prior to the first Date of Delivery,
a lockup letter or letters, substantially in the form of Exhibit B hereto; and
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(r) that the Company will comply with all of the provisions of any
undertakings in the Registration Statement.
6. Certain Selling Stockholder Covenants:
Each Selling Stockholder hereby agrees with each Underwriter:
(a) to deliver to the Representatives prior to the Closing Time a
properly completed and executed United States Treasury Department Form W-8 (if
the Selling Stockholder is a non-United States person, within the meaning of the
Code or Form W-9 (if the Selling Stockholder is a United States person, within
the meaning of the Code);
(b) to furnish to the Representatives, prior to the first Date of
Delivery, a lockup letter or letters, substantially in the form of Exhibit B
hereto;
(c) if, at any time prior to the date on which the distribution of the
Shares as contemplated herein and in the Prospectus has been completed, as
determined by the Representatives, such Selling Stockholder has knowledge of the
occurrence of any event as a result of which the information in the Prospectus
or the Registration Statement regarding such Selling Stockholder, in each case
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, such Selling Stockholder will promptly notify the Company and the
Representatives; and
(d) such Selling Stockholder agrees to deliver to the Company or the
Underwriters such documentation as the Company or the Underwriters or any of
their respective counsel may reasonably request in order to effectuate any of
the provisions of this Agreement.
7. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the preparation,
issuance and delivery of the certificates for the Shares to the Underwriters,
including any stock or other transfer taxes or duties payable upon the sale of
the Shares to the Underwriters, (iii) the printing of this Agreement and any
dealer agreements and furnishing of copies of each to the Underwriters and to
dealers (including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state laws that the Company and the
Representatives have mutually agreed are appropriate and the determination of
their eligibility for investment under state law as aforesaid (including the
legal fees and filing fees and other disbursements of counsel for the
Underwriters and the printing and furnishing of copies of any blue sky surveys
or legal investment surveys to the Underwriters and to dealers, (v) filing for
review of the public offering of the Shares by the NASD (including the legal
fees and filing fees and other disbursements of counsel for the Underwriters
relating thereto), (vi) the fees and expenses of any transfer agent or registrar
for the Shares and miscellaneous expenses
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referred to in the Registration Statement, (vii) the fees and expenses incurred
in connection with the inclusion of the Shares in the Nasdaq National Market,
(viii) costs of making road show presentations with respect to the offering of
the Shares, which costs are incurred by or on behalf of the Company or its
officers, directors and employees, (ix) the fees and expenses of counsel to the
Selling Stockholders, (x) fees and expenses of the custodian appointed in the
Custody Agreements (the "CUSTODIAN"), and (xi) the performance of the Company's
other obligations hereunder.
(b) Except as provided in subsection (a) above and subsection (c) below,
the Underwriters will pay all of their own expenses in connection with the
performance of their activities under this Agreement, including, but not limited
to, costs such as printing, facsimile, courier service, direct computer
expenses, accommodations and travel; costs of making road show presentations
with respect to the offering of the Shares, which costs are incurred by or on
behalf of the Underwriters or their employees; the fees and expenses of the
Underwriters' outside legal counsel and any other advisors, accountants,
appraisers, etc. (other than the fees and expenses of counsel with respect to
state securities or blue sky laws and obtaining the filing for review of the
public offering of the Shares by the NASD, all of which shall be reimbursed by
the Company pursuant to the provisions of subsection (a) above).
(c) If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company or the
Selling Stockholders to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company or the Selling
Stockholders shall be unable to perform their obligations under this Agreement,
the Company will reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (such as printing, facsimile, courier service, direct
computer expenses, accommodations, travel and the fees and disbursements of
Underwriters' counsel and any other advisors, accountants, appraisers, etc.)
reasonably incurred by such Underwriters in connection with this Agreement or
the transactions contemplated herein; provided, however, that in the event this
Agreement is terminated by the Underwriters because of any failure or refusal on
the part of any Selling Stockholder, such Selling Stockholder shall be liable
for its pro rata share of the Underwriters' expenses (based on the number of
shares to be sold by such Selling Stockholder as set forth in Schedule I).
8. Conditions of the Underwriters' Obligations:
(a) The obligations of the Underwriters hereunder to purchase Shares at
the Closing Time or on each Date of Delivery, as applicable, are subject to the
accuracy of the representations and warranties on the part of the Company and
the Selling Stockholders hereunder and under the Custody Agreements on the date
hereof and at the Closing Time and on each Date of Delivery, as applicable, the
performance by the Company and the Selling Stockholders of their respective
obligations hereunder and under the Custody Agreements to the satisfaction of
the following further conditions at the Closing Time or on each Date of
Delivery, as applicable;
(b) The Company shall furnish to the Underwriters at the Closing Time
and on each Date of Delivery an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the
Company, addressed to
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the Underwriters and dated such Date of Delivery and in form and substance
mutually acceptable to and agreed upon by the Company, the Representatives and
their respective counsel;
(c) The Company shall furnish to the Underwriters at the Closing Time
and on each Date of Delivery an opinion of De Maatschap Kab accountants &
belastingadviseurs, Netherlands counsel for the Company, addressed to the
Underwriters and dated such Date of Delivery and in form and substance mutually
acceptable to and agreed upon by the Company, the Representatives and their
respective counsel;
(d) Each Selling Stockholder shall furnish to the Underwriters on each
Date of Delivery an opinion of its legal counsel, addressed to the Underwriters
and dated the Closing Time and each Date of Delivery and in form and substance
mutually acceptable to and agreed upon by the Selling Stockholders, the
Representatives and their respective counsel;
(e) The Representatives shall have received from PricewaterhouseCoopers
LLP, letters dated, respectively, as of the date of this Agreement, the Closing
Time and each Date of Delivery, as the case may be, addressed to the
Representatives, in form and substance satisfactory to the Representatives,
relating to the financial statements, including any pro forma financial
statements, of the Company and the Subsidiaries, and such other matters
customarily covered by comfort letters issued in connection with registered
public offerings.
(f) The Representatives shall have received at the Closing Time and on
each Date of Delivery the opinion of ▇▇▇▇▇▇ & Whitney LLP, dated such Date of
Delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives.
(g) No amendment or supplement to the Registration Statement or
Prospectus shall have been filed to which the Underwriters shall have objected
in writing.
(h) Prior to the Closing Time and each Date of Delivery (i) no stop
order suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus has
been issued, and no proceedings for such purpose shall have been initiated or
threatened, by the Commission, and no suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or the initiation or
threatening of any proceedings for any of such purposes, has occurred; (ii) all
requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of the Representatives; and
(iii) the Registration Statement and the Prospectus shall not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(i) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the Closing Time shall have been made
within the applicable time period prescribed for such filing by such Rule.
(j) Between the time of execution of this Agreement and the Closing Time
or the relevant Date of Delivery there shall not have been any Material Adverse
Change, and (ii) no transaction which is material and unfavorable to the Company
shall have been entered into by the Company or any of the Subsidiaries, in each
case, which in the Representatives' sole
-22-
judgment, makes it impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Registration Statement.
(k) The Shares shall have been approved for inclusion in the Nasdaq
National Market.
(l) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(m) The Representatives shall have received lock-up agreements from each
officer, director, Selling Stockholder and 1% or greater stockholder of the
Company, in the form of Exhibit B attached hereto, and such letter agreements
shall be in full force and effect.
(n) The Company will, at the Closing Time and on each Date of Delivery,
deliver to the Underwriters a certificate of its Chief Executive Officer and
President and Chief Financial Officer, to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct, as if made on and as of the
date hereof, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the date hereof including all conditions
under this Section 8;
(ii) to the officer's best knowledge, no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto has been issued and no proceedings
for that purpose have been instituted or are pending or threatened
under the Securities Act;
(iii) when the Registration Statement became effective and at
all times subsequent thereto up to the date hereof, the Registration
Statement and the Prospectus, and any amendments or supplements
thereto contained all material information required to be included
therein by the Securities Act or the Exchange Act and the applicable
rules and regulations of the Commission thereunder, as the case may
be, and in all material respects conformed to the requirements of
the Securities Act or the Exchange Act and the applicable rules and
regulations of the Commission thereunder, as the case may be; the
Registration Statement and the Prospectus, and any amendments or
supplements thereto, did not and do not include any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and, since the effective date of the Registration
Statement, there has occurred no event required to be set forth in
an amendment or supplemented Prospectus which has not been so set
forth; and
(iv) subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus,
there has not been any Material Adverse Change or any development
which would have a Material Adverse Effect.
-23-
(o) Each Selling Stockholder will, at the Closing Time and on each Date
of Delivery, deliver to the Underwriters a certificate, to the effect that:
(i) the representations and warranties of such Selling
Stockholder set forth in this Agreement and in the Custody
Agreements are true and correct as of such date; and
(ii) such Selling Stockholder has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied hereunder and under the Custody Agreements at
or prior to the date hereof.
(p) The Company and the Selling Stockholders, as applicable, shall have
furnished to the Underwriters such other documents and certificates as may be
reasonably requested by Underwriters relating to the representations, warranties
and statements of the Company contained herein and in the Custody Agreements,
and the performance by the Company and the Selling Stockholders of their
respective covenants contained herein and therein, and the fulfillment of any
conditions contained herein or therein, as of the Closing Time or any Date of
Delivery.
9. Termination:
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of the Representatives, at any time prior
to the Closing Time or any Date of Delivery, (i) if any of the conditions
specified in Section 8 shall not have been fulfilled when and as required by
this Agreement to be fulfilled, or (ii) if there has been since the respective
dates as of which information is given in the Registration Statement, any
Material Adverse Change or any development involving a prospective Material
Adverse Change, or (iii) if there has occurred any outbreak or escalation of
hostilities or other national or international calamity or crisis or change in
economic, political or other conditions that are material, and the effect of
which on the financial markets of the United States is such as to make it, in
the judgment of the Representatives, impracticable to market the Shares or
enforce contracts for the sale of the Shares, or (iv) if trading in any
securities of the Company has been suspended by the Commission or by Nasdaq
National Market, or if trading generally on the New York Stock Exchange or in
the Nasdaq over-the-counter market has been suspended (including an automatic
halt in trading pursuant to market-decline triggers, other than those in which
solely program trading is temporarily halted), or limitations on prices for
trading (other than limitations on hours or numbers of days of trading) have
been fixed, or maximum ranges for prices for securities have been required, by
such exchange or the NASD or the over-the-counter market or by order of the
Commission or any other governmental authority, or (v) any action has been taken
by any federal, state or local government or agency in respect of its monetary
or fiscal affairs which, in the reasonable opinion of the Representatives, has a
material adverse effect on the securities markets in the United States.
If the Representatives elect to terminate this Agreement as provided in
this Section 9, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
-24-
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 7 and 11 hereof), the
Selling Stockholders shall be under no obligation or liability under this
Agreement (except to the extent provided in Sections 7 and 11 hereof) and the
Underwriters shall be under no obligation or liability under this Agreement
(except to the extent provided in Sections 7 and 11 hereof) or to one another
hereunder.
10. Increase in Underwriters' Commitments:
If any Underwriter shall default at the Closing Time or on a Date of
Delivery in its obligation to take up and pay for the Shares to be purchased by
it under this Agreement on such date, the Representatives shall have the right,
within 36 hours after such default, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Shares which such Underwriter shall have agreed but failed
to take up and pay for (the "DEFAULTED SHARES"). Absent the completion of such
arrangements within such 36-hour period, (i) if the total number of Defaulted
Shares does not exceed 10% of the total number of Shares to be purchased on such
date, each non-defaulting Underwriter shall take up and pay for (in addition to
the number of Shares which it is otherwise obligated to purchase on such date
pursuant to this Agreement) the portion of the total number of Shares agreed to
be purchased by the defaulting Underwriter on such date in the proportion that
its underwriting obligations hereunder bears to the underwriting obligations of
all non-defaulting Underwriters; and (ii) if the total number of Defaulted
Shares exceeds 10% of such total, the Representatives may terminate this
Agreement by notice to the Company, without liability of any party to any other
party except that the provisions of Sections 7 and 11 hereof shall at all times
be effective and shall survive such termination.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Shares hereunder on such date unless all of the Shares to be
purchased on such date are purchased on such date by the Underwriters (or by
substituted Underwriters selected by the Representatives with the approval of
the Company or selected by the Company with the approval of the
Representatives).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Date of Delivery for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term "UNDERWRITER" as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 10 with the same effect
as if such substituted Underwriter had originally been named in this Agreement.
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11. Indemnity and Contribution by the Company, the Selling Stockholders
and the Underwriters:
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability, damage or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Underwriter or
controlling person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability, damage or claim arises out
of or is based upon (i) any failure on the part of the Company to comply with
any applicable law, rule or regulation relating to the offering of securities
being made pursuant to the Prospectus, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
in the Registration Statement as amended by any post-effective amendment thereof
by the Company) or the Prospectus (the term Prospectus for the purpose of this
Section 11 being deemed to include any Preliminary Prospectus, the Prospectus
and the Prospectus as amended or supplemented by the Company), (iii) any
omission or alleged omission to state a material fact required to be stated in
any such Registration Statement or Prospectus or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, or (iv) any untrue statement or alleged untrue statement
of any material fact contained in any audio or visual materials prepared by or
with the Company and used in connection with the marketing of the Shares,
including, without limitation, slides, videos, films and tape recordings; except
insofar as any such loss, expense, liability, damage or claim arises out of or
is based upon any untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in and in conformity with
information furnished in writing by the Underwriters through the Representatives
to the Company expressly for use in such Registration Statement or Prospectus;
and provided further that the Company will not be liable to any Underwriter or
any person controlling such Underwriter with respect to any such untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact made in any Preliminary Prospectus that is corrected in the
Prospectus (or any amendment or supplement thereto) if (x) the Prospectus (or
such amendment or supplement) shall have been delivered to the Underwriters in
compliance with Section 5(c) and (y) the person asserting any such loss, claim,
damage or liability purchased Shares from such Underwriters but was not sent or
given a copy of the Prospectus (as so amended or supplemented) at or prior to
the written confirmation of the sale of such Shares to such person in any case
where such delivery of the Prospectus (as amended or supplemented) is required
by the Act. The indemnity agreement set forth in this Section 11(a) shall be in
addition to any liability which the Company may otherwise have.
(b) Each Selling Stockholder, severally not jointly, agrees to
indemnify, defend and hold harmless each Underwriter and any person who controls
any Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any loss, expense, liability,
damage or claim (including the reasonable cost of investigation) which, jointly
or severally, any such Underwriter or controlling person may incur under the
Securities Act, the Exchange Act or otherwise, insofar as such loss, expense,
liability, damage or claim arises out of or is based upon (i) any failure on the
part of such Selling Stockholder to comply with any applicable law, rule or
regulation relating to the offering of securities being made pursuant to the
Prospectus, (ii) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration Statement
as
-26-
amended by any post-effective amendment thereof by the Company) or Prospectus
(the term Prospectus for the purpose of this Section 11 being deemed to include
any Preliminary Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), or (iii) any omission or alleged omission to state
a material fact required to be stated in any such Registration Statement or
Prospectus, or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading; but in the case of
clauses (ii) and (iii) only insofar as any such loss, expense, liability, damage
or claim arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in and in
conformity with information furnished in writing by such Selling Stockholder to
the Company expressly for use in such Registration Statement or Prospectus; and
provided further that no Selling Stockholder will be liable to any Underwriter
or any person controlling such Underwriter with respect to any such untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact made in any Preliminary Prospectus that is corrected in the
Prospectus (or any amendment or supplement thereto) if (x) the Prospectus (or
such amendment or supplement) shall have been delivered to the Underwriters in
compliance with Section 5(c) and (y) the person asserting any such loss, claim,
damage or liability purchased Shares from such Underwriters but was not sent or
given a copy of the Prospectus (as so amended or supplemented) at or prior to
the written confirmation of the sale of such Shares to such person in any case
where such delivery of the Prospectus (as amended or supplemented) is required
by the Act. In no event shall the obligation of any Selling Stockholder to
indemnify, defend or hold harmless any person, or to contribute to losses,
expenses, liabilities, damages or claims of any person, exceed an amount that,
in the aggregate, equals the proceeds received by such Selling Stockholder
pursuant to this Agreement. The indemnity agreement set forth in this Section
11(b) shall be in addition to any liabilities that the Selling Stockholders may
otherwise have.
(c) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company and each Selling Stockholder, the Company's
directors, the Company's officers that signed the Registration Statement, and
any person who controls the Company or any Selling Stockholder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any loss, expense, liability, damage or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company, the
Selling Stockholder or any such person may incur under the Securities Act, the
Exchange Act or otherwise, insofar as such loss, expense, liability, damage or
claim arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
furnished in writing by such Underwriter through the Representatives to the
Company expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Company) or
the Prospectus (the term Prospectus for the purposes of this Section 11 being
deemed to include any Preliminary Prospectus, the Prospectus and the Prospectus
as amended or supplemented by the Company), or (ii) any omission or alleged
omission to state a material fact in connection with such information required
to be stated in any such Registration Statement or Prospectus, or necessary to
make such information, in the light of the circumstances under which made, not
misleading. The statements with respect to the date of delivery of the Shares by
the Underwriters set forth on the cover page of the Preliminary Prospectus and
the Prospectus and the following statements set forth under the caption
"Underwriting" in the Preliminary Prospectus and the Prospectus (except to the
extent such statements relate to the Company or the
-27-
Selling Stockholders) constitute the only information furnished by or on behalf
of any Underwriter through the Representatives to the Company for purposes of
Section 3(k) and this Section 11: (I) statements in the third paragraph which
relate to concessions and reallowances; (II) statements in the fourth paragraph
which relate to the underwriting discounts and commissions; (III) statements in
the twelfth paragraph regarding Regulation M; and (IV) the first sentence of the
fifteenth paragraph (the last paragraph) regarding electronic distribution. The
indemnity agreement set forth in this Section 11(c) shall be in addition to any
liabilities that such Underwriter may otherwise have.
(d) If any action is brought against an Underwriter or controlling
person in respect of which indemnity may be sought against the Company or any
Selling Stockholder pursuant to subsection (a) or (b) above, such Underwriter
shall promptly notify the Company or such Selling Stockholder, as applicable, in
writing of the institution of such action, and the Company or such Selling
Stockholder, as applicable, shall assume the defense of such action, including
the employment of counsel and payment of expenses; provided, however, that any
failure or delay to so notify the Company or such Selling Stockholder, as
applicable, will not relieve the Company or such Selling Stockholder, as
applicable, of any obligation hereunder, except to the extent that its ability
to defend is actually impaired by such failure or delay. Such Underwriter or
controlling person shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of such Underwriter or such controlling person unless the employment of such
counsel shall have been authorized in writing by the Company or such Selling
Stockholder, as applicable, in connection with the defense of such action, or
the Company or such Selling Stockholder, as applicable, shall not have employed
counsel to have charge of the defense of such action within a reasonable time or
such indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Company or such Selling
Stockholder, as applicable, (in which case neither the Company nor such Selling
Stockholder shall have the right to direct the defense of such action on behalf
of the indemnified party or parties), in any of which events such fees and
expenses shall be borne by the Company or the Selling Stockholder, as applicable
(it being understood, however, that neither the Company nor any Selling
Stockholder shall be liable for the expenses of more than one separate firm of
attorneys for the Underwriters or controlling persons in any one action or
series of related actions in the same jurisdiction (other than local counsel in
any such jurisdiction) representing the indemnified parties who are parties to
such action). Anything in this paragraph to the contrary notwithstanding,
neither the Company nor any Selling Stockholder shall be liable for any
settlement of, or consent to the entry of any judgment with respect to, any such
claim or action effected without its consent.
If any action is brought against the Company, any Selling Stockholder or
any such person in respect of which indemnity may be sought against any
Underwriter pursuant to subsection (c) above, the Company, the Selling
Stockholder or such person shall promptly notify the Representatives in writing
of the institution of such action and the Representatives, on behalf of the
Underwriters, shall assume the defense of such action, including the employment
of counsel and payment of expenses; provided, however, that any failure or delay
to so notify the Representatives will not relieve the Representatives, on behalf
of the Underwriters, of any obligation hereunder, except to the extent that its
ability to defend is actually impaired by such failure or delay. The Company,
the Selling Stockholder or such person shall have the right to
-28-
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company, the Selling Stockholder or such
person unless the employment of such counsel shall have been authorized in
writing by the Representatives in connection with the defense of such action or
the Representatives shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Underwriters (in which case the
Representatives shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that the Underwriters shall not be liable for the expenses
of more than one separate firm of attorneys in any one action or series of
related actions in the same jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, no
Underwriter shall be liable for any settlement of, or consent to the entry of
any judgment with respect to, any such claim or action effected without the
written consent of the Representatives.
(e) If the indemnification provided for in this Section 11 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a), (b) and (c) of this Section 11 in respect of any losses,
expenses, liabilities, damages or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, expenses, liabilities, damages or claims (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Selling Stockholders and the Underwriters from the offering of the
Shares or (ii) if (but only 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, of the Selling Stockholders and of the
Underwriters in connection with the statements or omissions which resulted in
such losses, expenses, liabilities, damages or claims, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the Selling Stockholders and the Underwriters shall be deemed to be in
the same proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
or the Selling Stockholders, as applicable, bear to the underwriting discounts
and commissions received by the Underwriters. The relative fault of the Company,
of the Selling Stockholders and of the Underwriters shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates to
information supplied by the Company, by the Selling Stockholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any claim or action.
(f) The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
11 were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in
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subsection (e)(i) and, if applicable (ii), above. Notwithstanding the provisions
of this Section 11, no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 11 are several in proportion to their respective underwriting
commitments and not joint. In no event shall the obligation of any Selling
Stockholder to indemnify, defend or hold harmless any person, or to contribute
to losses, expenses, liabilities, damages or claims of any person, exceed an
amount that, in the aggregate, equals the proceeds received by such Selling
Stockholder pursuant to this Agreement.
12. Survival:
The indemnity and contribution agreements contained in Section 11 and the
covenants, warranties and representations of the Company and the Selling
Stockholders and the Underwriters contained in Sections 3, 4, 5, 6, 7 and 10 of
this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, or any person who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors and officers, the Selling Stockholders or any person who controls the
Company or any Selling Stockholder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the sale and delivery of the Shares. The
Company, each Selling Stockholder and each Underwriter agree promptly to notify
the others of the commencement of any litigation or proceeding against it and,
in the case of the Company, against any of the Company's officers and directors,
in connection with the sale and delivery of the Shares, or in connection with
the Registration Statement or Prospectus.
13. Notices:
Except as otherwise herein provided, all statements, requests, notices and
agreements shall be in writing or by telegram and, if to the Underwriters, shall
be sufficient in all respects if delivered to c/o Friedman, Billings, ▇▇▇▇▇▇ &
Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Syndicate Department and c/o RBC Capital Markets Corporation, c/o RBC Capital
Markets, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
▇▇▇ ▇▇▇▇▇, Syndicate Director, Fax: (▇▇▇) ▇▇▇-▇▇▇▇; if to the Company, shall be
sufficient in all respects if delivered to the Company at the offices of the
Company at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Chief Executive Officer, with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇, Esq./▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.; or if to a Selling Stockholder, c/o INSERT
NAME AND ADDRESS OF ATTORNEY-IN-FACT.
14. Governing Law; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
The section headings in this
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Agreement have been inserted as a matter of convenience of reference and are not
a part of this Agreement.
15. Parties at Interest:
The Agreement herein set forth has been and is made solely for the benefit
of the Underwriters, the Company, the Selling Stockholders and the controlling
persons, directors and officers referred to in Section 11 hereof, and their
respective successors, assigns, executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
16. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts which together
shall constitute one and the same agreement among the parties. A facsimile
signature shall constitute an original signature for all purposes.
[SIGNATURE PAGE FOLLOWS]
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If the foregoing correctly sets forth the understanding among the Company,
the Selling Stockholders and the Underwriters, please so indicate in the space
provided below for the purpose, whereupon this Agreement shall constitute a
binding agreement among the Company, the Selling Stockholders and the
Underwriters.
Very truly yours,
WebSideStory, Inc.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
SELLING STOCKHOLDERS LISTED ON
SCHEDULE I ATTACHED HERETO
By: [Insert Name of Attorney-in-Fact]
_____________________________________
Attorney-in-Fact]
ACCEPTED AND AGREED TO AS
OF THE DATE FIRST ABOVE WRITTEN:
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
RBC CAPITAL MARKETS CORPORATION
(For themselves and as representatives of the
other Underwriters named on Schedule II hereto)
By: Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
By:___________________________________
Name:_________________________________
Title:________________________________
By: RBC Capital Markets Corporation
By:___________________________________
Name:_________________________________
Title:________________________________
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Schedule I
NUMBER OF OPTION
SHARES TO BE SOLD
------------------------------------
IF OPTION
NUMBER OF IF OPTION NOT EXERCISED IN FULL
INITIAL SHARES EXERCISED IN FULL AND =or>$150M
NAME OF PARTY SELLING SHARES TO BE SOLD OR <$150M VALUE VALUE
------------------------------------------------------------------------------------------------
WebSideStory, Inc. 4,400,000 375,000 300,000
TA/Advent VIII L.P. 218,914 136,821 109,457
Advent Atlantic and Pacific III L. P 41,192 25,745 20,596
TA Investors LLC 4,378 2,736 2,189
TA Executives Fund LLC 4,159 2,599 2,079
Summit Ventures V, L. P 199,242 124,526 99,621
Summit V. Companion Fund, L.P. 46,382 28,989 23,191
Summit V Advisors Fund (QP), L.P. 14,074 8,796 7,037
Summit V. Advisors Fund, L.P. 4,300 2,688 2,150
Summit Investors III, L.P. 4,645 2,902 2,322
Peninsula Fund, L.P. 20,905 13,066 10,453
Westcliff Partners, L.P. 11,388 7,118 5,694
Westcliff Master Fund, Ltd. 15,382 9,614 7,691
Westcliff Aggressive Growth 4,685 2,928 2,343
Westcliff Long/Short, L.P. 2,444 1,527 1,222
Palm Trust 4,889 3,056 2,445
Westcliff Small Cap 2,542 1,589 1,271
Westcliff Profit Sharing Plan 479 299 239
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ --- --- 150,000
TOTAL 5,000,000 750,000 750,000
--------- --------- ---------
S-I
Schedule II
Number of Initial
Shares to be
Underwriter Purchased
--------------------------------------------------------------------
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. [__________]
RBC Capital Markets Corporation [__________]
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. [__________]
▇▇▇▇ Capital Partners, LLC [__________]
[_____________________] [__________]
[_____________________] [__________]
Total X,XXX,XXX
===========
S-II
EXHIBIT A
FORM OF CUSTODY AGREEMENT AND POWER OF ATTORNEY
EXHIBIT B
FORM OF LOCK-UP LETTER AGREEMENT