DRAFT
2/1/00
FASTNET Corporation
4,000,000 Shares of Common Stock*
(no par value per share)
UNDERWRITING AGREEMENT
New York, New York
February __, 2000
ING Barings LLC
SoundView Technology Group, Inc.
FAC/Equities, a division of
First Albany Corporation
DLJDIRECT Inc.
As Representatives of the several Underwriters
c/o ING Barings LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
FASTNET Corporation, a Pennsylvania corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several underwriters named in Schedule I hereto (the
"Underwriters") for whom you are acting as representative (the "Representative")
an aggregate of 4,000,000 shares (the "Firm Shares") of its common stock, no par
value per share (the "Common Stock"), and for the sole purpose of covering
over-allotments in connection with the sale of the Firm Shares, at the option of
the Underwriters, up to an additional 600,000 shares (the "Option Shares"),
which number of Firm Shares and Option Shares shall not exceed an aggregate of
4,600,000 shares of Common Stock. The Firm Shares and the Option Shares are
collectively referred to as the "Shares."
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* Plus an option to purchase from the Company up to an additional 600,000 shares
of Common Stock to cover over-allotments.
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1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form
S-1 (No. 333-85465), for the registration of the Shares under the
Securities Act of 1933, as amended (the "Act"). Such registration
statement, including the prospectus, financial statements and
schedules, exhibits and all other documents filed as a part thereof, as
amended through the time of effectiveness of the registration
statement, including any information deemed to be a part thereof as of
the time of effectiveness pursuant to Rule 430A or Rule 434 of the
Rules and Regulations of the Commission under the Act (the
"Regulations"), is herein called the "Registration Statement". Any
registration statement filed by the Company pursuant to Rule 462(b)
under the Act is herein called the "Rule 462(b) Registration
Statement", and from and after the date and time of filing of the Rule
462(b) Registration Statement the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The prospectus, in the
form first filed with the Commission pursuant to Rule 424(b) of the
Regulations or filed as part of the Registration Statement at the time
of effectiveness if no Rule 424(b) or Rule 434 filing is required, is
herein called the "Prospectus". The term "preliminary prospectus" as
used herein means a preliminary prospectus as described in Rule 430A of
the Regulations; provided, however, if the Company has, with the
consent of ING Barings LLC, elected to rely upon Rule 434 under the
Act, the term "Prospectus" shall mean the Company's prospectus subject
to completion (each, a "preliminary prospectus") dated January __, 2000
(such preliminary prospectus is herein called the "Rule 434 preliminary
prospectus"). All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, a preliminary
prospectus, the Prospectus or the Term Sheet, or any amendments or
supplements to any of the foregoing, shall include any copy thereof
filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("▇▇▇▇▇").
(b) Each preliminary prospectus and the Prospectus, if filed
by electronic transmission pursuant to ▇▇▇▇▇ (except as may be
permitted by Regulation S-T under the Securities Act), was identical to
the copy thereof delivered to the Underwriters for use in connection
with the offer and sale of the Shares. At the time of the effectiveness
of the Registration Statement or the effectiveness of any Rule 462(b)
Registration Statement and any post-effective amendment thereto, when
the Prospectus is first filed with the Commission pursuant to Rule
424(b) or Rule 434 of the Regulations, when any supplement to or
amendment of
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the Prospectus is filed with the Commission and at the Closing Date and
the Additional Closing Date, if any (as defined in Section 2), the
Registration Statement and the Prospectus and any amendments thereof
and supplements thereto complied and will comply in all material
respects with the applicable provisions of the Act and the Regulations,
did not and will not contain an untrue statement of a material fact and
did not and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. When any related preliminary prospectus was first filed
with the Commission (whether filed as part of the Registration
Statement for the registration of the Shares or any amendment thereto
or pursuant to Rule 424(a) of the Regulations) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus and any amendments thereof and supplements
thereto complied in all material respects with the applicable
provisions of the Act and the Regulations and did not contain an untrue
statement of a material fact and did not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading. No representation and warranty is
made in this subsection (b), however, with respect to any information
contained in or omitted from the Registration Statement or the
Prospectus or any related preliminary prospectus or any amendment
thereof or supplement thereto in reliance upon and in conformity with
information relating to the Underwriters furnished in writing to the
Company by or on behalf of any Underwriter through you expressly for
use in connection with the preparation thereof. If Rule 434 is used,
the Company will comply with the requirements of Rule 434.
(c) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, with full power and authority to own,
lease and operate its properties and engage in the business in which it
is engaged or in which it proposes to engage as described in the
Registration Statement, the preliminary prospectus and the Prospectus.
The Company is duly registered and qualified to do business as a
foreign corporation in good standing in each jurisdiction where the
character, location, ownership or leasing of its properties (owned,
leased or licensed) or the nature or conduct of its business requires
such registration or qualification.
(d) The Company has no subsidiaries (as defined in the
Regulations), other than ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., formerly known as
Internet Unlimited, Inc. (the "Subsidiary"), which is a wholly-owned
subsidiary of the Company. The Company does not own or control,
directly or indirectly, any shares of stock or any other equity or
long-term debt
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securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association, or other entity other than the
Subsidiary. All the outstanding shares of capital stock of the
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, are owned solely by the Company and are
free and clear of any security interest, pledge, claim (legal or
equitable), lien, charge, equity, mortgage, encumbrance or other
restriction (each a "Lien"), shareholders' agreements, voting trusts or
defects of title. The Subsidiary has been duly organized and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of organization, with full power and authority to own,
lease and operate its properties and conduct the business in which it
is engaged or in which it proposes to engage. The Subsidiary is duly
registered and qualified as a foreign corporation in good standing in
each jurisdiction where the character, location, ownership or leasing
of its properties or the nature or conduct of its business requires
such registration or qualification. The Subsidiary is not currently
prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on its capital stock, from
repaying to the Company any loans or advances to it from the Company or
from transferring any of its property or assets to the Company or any
other subsidiary of the Company.
(e) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, the accountants who have expressed
their opinion with respect to the consolidated financial statements
(including the related notes and supporting schedules) of the Company
and the Subsidiary filed with Commission as a part of the Registration
Statement, the preliminary prospectus and the Prospectus, are, with
respect to the Company and the Subsidiary, independent public
accountants as required by the Act and the Regulations.
(f) The Company has an authorized capitalization as of
December 31, 1999 as set forth in the Registration Statement, the
preliminary prospectus and the Prospectus and there has been no
material change in its capitalization since that date. All outstanding
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable, have been issued
in compliance with all federal and state securities laws and were not
issued in violation of any preemptive right, resale right, right of
first refusal or similar right. The authorized and outstanding capital
stock of the Company conforms to the description thereof contained in
the Registration Statement, the preliminary prospectus and
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the Prospectus (and such description correctly states the substance of
the provisions of the instruments defining the capital stock of the
Company). Except as described in the Registration Statement, the
preliminary prospectus and the Prospectus, there are no authorized or
outstanding rights (including, without limitation, preemptive rights,
co-sale rights, resale rights, rights of first refusal or similar
rights), warrants or options to acquire, or instruments convertible
into or exercisable or exchangeable for, any share of capital stock or
other equity interest or ownership interest in the Company or the
Subsidiary or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock
or other equity interest or ownership interest in the Company or the
Subsidiary or any such convertible or exercisable or exchangeable
securities or instruments or any such rights, warrants or options. The
Shares to be issued pursuant to this Agreement will not be issued in
violation of any preemptive right, co-sale right, resale right, right
of first refusal or similar right. The description of the Company' s
stock option, stock bonus and other stock plans or arrangements, and
the options or other rights granted thereunder, set forth in the
Registration Statement, the preliminary prospectus and the Prospectus
accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and rights. The
Shares have been duly authorized for issuance and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued, fully paid and nonassessable, good
title to the Shares will be transferred to the Underwriters free and
clear of any Liens and the certificates representing the Shares will be
in valid and sufficient form.
(g) There is (i) no action, suit, proceeding or investigation
before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, pending, threatened or contemplated, as
to which the Company or the Subsidiary will be a party or as to which
the business, assets or property of the Company or the Subsidiary is or
will be subject, (ii) no statute, rule, regulation or order that has
been enacted, adopted or issued by any governmental agency, body or
official, and (iii) no injunction, restraining order or order of any
nature that has been issued by a federal or state court or foreign
court of competent jurisdiction to which the Company or the Subsidiary
is or will be subject or affecting the business, assets or property of
the Company or the Subsidiary, that could (in the case of clauses (i),
(ii) and (iii)), individually or in the aggregate, whether or not
arising from transactions in the ordinary course of business, result in
a material adverse effect on or affecting the business, operations,
assets, properties, condition (financial or other), stockholders'
equity, prospects or results of operations (a "Material Adverse
Effect") of the Company and its subsidiaries taken as a whole, be
required to be disclosed in the Registration Statement, the preliminary
prospectus or the Prospectus or adversely affect the ability of the
Company to perform its obligations under this Agreement or be otherwise
important in the context
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of the sale of the Shares. There are no legal or administrative
proceedings, statutes, Contracts or documents concerning the Company or
the Subsidiary of a character that would be required to be described in
or filed as an exhibit to a registration statement on Form S-1 under
the Act that are not described or filed, as required, in the
Registration Statement, the preliminary prospectus and the Prospectus.
(h) The consolidated financial statements of the Company and
the Subsidiary, together with the related notes thereto, which are a
part of the Registration Statement, the preliminary prospectus and the
Prospectus, present fairly the consolidated financial position and the
consolidated results of operations, changes in stockholders' equity and
changes in cash flows of the Company and the Subsidiary as of the
respective dates and for the respective periods specified therein. All
of such financial statements and related notes have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved and comply as to form
with the applicable accounting requirements included in Regulation S-X
under the Act. The supporting schedules, the "Summary Financial
Information", the "Selected Consolidated Financial Data" and the tables
included in the Registration Statement, the preliminary prospectus and
the Prospectus fairly present the information purported to be shown
thereby at the respective dates thereof and for the respective periods
covered thereby and have been presented on a basis consistent with that
of the audited financial statements therein. No other financial
statements or supporting schedules are required by the Act or
Regulation S-X to be included therein. The pro forma consolidated
financial statements of the Company and its subsidiaries and the
related notes thereto included under the caption, "Summary Consolidated
Selected Financial Information", "Selected Consolidated Financial Data"
and elsewhere in the Registration Statement, the preliminary prospectus
and the Prospectus present fairly the information contained therein,
have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been
properly presented on the bases described therein; and the assumptions
used in the preparation thereof are reasonable. The adjustments used
therein give appropriate effect to those assumptions and reflect the
proper application of those assumptions to the historical financial
statement amounts and the transactions and circumstances referred to
therein. No other pro forma financial information is required to be
included in the Registration Statement, the preliminary prospectus and
the Prospectus pursuant to Regulation S-X.
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(i) Subsequent to the respective dates as of which information
is given in the Registration Statement, the preliminary prospectus and
the Prospectus, there has not been (i) any loss or adverse change, or
any development which may result in a loss or adverse change, in or
affecting the business, properties, management, assets, prospects,
stockholders' equity, operations, condition (financial or other), or
results of operations of the Company and its subsidiaries taken as a
whole, (ii) any transaction entered into by the Company or the
Subsidiary, except transactions in the ordinary course of business;
(iii) any obligation, direct or contingent, incurred by the Company or
the Subsidiary which is material to the Company and the Subsidiary
taken as a whole, except for liabilities or obligations which are
reflected in the Registration Statement, the preliminary prospectus and
the Prospectus, (iv) any change in the capital stock or outstanding
indebtedness of the Company, or (v) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company, which
in any case described in clauses (i), (ii), (iii), (iv) or (v) above,
could, individually or in the aggregate, have a Material Adverse Effect
on the Company and its subsidiaries taken as a whole or adversely
affect the ability of the Company to perform its obligations under this
Agreement or be otherwise important in the context of the sale of the
Shares.
(j) The Company and the Subsidiary have good and marketable
title to all properties and assets described in the Registration
Statement, the preliminary prospectus and the Prospectus as being owned
by them, free and clear of Liens, except, individually and in the
aggregate, Liens for taxes not yet due and payable. The Company and the
Subsidiary have valid and enforceable leases for the properties leased
by them, the Company and the Subsidiary enjoy peaceful and undisturbed
possession under all such leases with such exceptions as do not
materially interfere with the use thereof made by the Company and the
Subsidiary, and such leases conform in all material respects to the
descriptions thereof, if any, set forth in the Registration Statement,
the preliminary prospectus and the Prospectus. The Company and the
Subsidiary, own, lease or otherwise have rights to use all properties
and assets as are important to their respective operations as now
conducted and as proposed to be conducted.
(k) The Company and the Subsidiary have all requisite power
and authority (corporate and other), and all licenses, certificates,
approvals, consents, concessions, qualifications, orders,
registrations, authorizations and permits from all federal, state,
foreign and other governmental and regulatory agencies, bodies and
authorities ("Permits") that are material to the conduct of the
business of the Company and the
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Subsidiary as such business is currently conducted. The Company
reasonably believes that it will be able to obtain Permits that are
material to the conduct of the business of the Company and the
Subsidiary as such business is proposed to be conducted as described in
the Registration Statement, the preliminary prospectus and the
Prospectus. All such Permits are valid and in full force and effect
(and there is no proceeding pending or, to the best knowledge of the
Company, threatened which may cause any such Permit to be withdrawn,
canceled, suspended or not renewed). The Company and the Subsidiary are
not in violation of, or in default under, and have fulfilled and
performed all their obligations with respect to such Permits. No event
has occurred which allows or would allow revocation or termination of
any such Permit or result in any material impairment of the rights of
the holder of any such Permit. The Contracts (as defined below) to
which the Company or the Subsidiary is a party are valid and binding
agreements, enforceable against the Company and the Subsidiary in
accordance with their terms and, to the best of the Company's
knowledge, the other contracting party or parties thereto are not in
material breach or default under any of such Contracts.
(l) The Company and the Subsidiary are not (i) in violation of
their respective certificates of incorporation, as amended, or bylaws,
as amended or (ii) in breach of or default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement,
franchise, joint venture, deed of trust, bond, note, lease, Permit or
other agreement or instrument to which the Company or the Subsidiary is
a party or by which the Company or the Subsidiary may be bound or to
which any of the property or assets of the Company or the Subsidiary is
subject (each a "Contract"), or in violation of any law, order, rule,
regulation, writ, injunction or decree of any court or governmental
agency, body or authority, except in the case of this clause (ii) for
such breaches, defaults or violations that could not, individually or
in the aggregate, have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole or adversely affect the ability of the
Company to perform its obligations under this Agreement or be otherwise
important in the context of the sale of the Shares.
(m) The Company and the Subsidiary own, possess or license or
have other rights to use all patents, patent applications, trademarks,
trademark applications, service marks, service ▇▇▇▇ applications,
tradenames, inventions, copyrights, manufacturing processes, formulae,
trade secrets, know-how, franchises, and other unpatented and/or
unpatentable proprietary or confidential information, collaborative
research agreements, systems or procedures and material intangible
8
property and assets (collectively, "Intellectual Property") necessary
to the conduct of their business as currently conducted and as proposed
to be conducted. The Company reasonably believes that the Company and
the Subsidiary will be able to own or possess adequate licenses or
other rights to use all Intellectual Property necessary to the conduct
of their business as proposed to be conducted as described in the
Registration Statement, the preliminary prospectus and the Prospectus.
The Company has no knowledge that it lacks or will be unable to obtain
any rights or licenses to use any of such Intellectual Property. The
Registration Statement, the preliminary prospectus and the Prospectus
fairly and accurately describe the Company's rights with respect to
Intellectual Property. Neither the Company nor the Subsidiary have
received any notice of, and otherwise has any knowledge of, any
infringement or of conflict with asserted rights or claims of others
with respect to any Intellectual Property and the Company is unaware of
any fact which could form a reasonable basis for any such claim.
(n) The Company has no knowledge of the existence of patents
or patent applications owned by third parties that may have a Material
Adverse Effect on the Company and its subsidiaries taken as a whole or
adversely affect the ability of the Company to perform its obligations
under this Agreement or be otherwise important in the context of the
sale of the Shares.
(o) The Company is the sole and exclusive owner of all right,
title and interest in the United States registered trademarks and
service marks set forth on Part I of Annex A (collectively, "Registered
Marks"). The Company has applied for the United States trademarks and
service marks set forth on Part II of Annex A (collectively, "Applied
Marks"). The Company has not allowed any Applied Marks or Registered
Marks to be abandoned, canceled, or to lapse. The Company has no
knowledge of claims, actions, or proceedings, pending or threatened,
challenging the validity of any of the Registered Marks or the
registration of any Applied Marks.
(p) The Company has no knowledge of the existence of
trademarks or service marks, or trademark or service ▇▇▇▇ applications,
owned by third parties that may have, individually or in the aggregate,
a Material Adverse Effect on the Company and its subsidiaries taken as
a whole or adversely affect the ability of the Company to perform its
obligations under this Agreement or otherwise be important in the
context of the sale of the Shares.
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(q) The Company has registered with Network Solutions, Inc.
the Internet domain names [▇▇▇▇.▇▇▇] and [ ], and has administrative
control over [ ]. The Company has no knowledge of a registered
trademark held by a third party that may be used to prevent the Company
from using this domain name.
(r) The Company has taken all economically reasonable steps to
secure, protect, and maintain Registered Marks, Applied Marks, and the
[ ] Internet domain names.
(s) The Company and the Subsidiary have filed on a timely
basis with the appropriate taxing authorities (or have received an
extension for filing with respect to) all necessary federal, state and
foreign income and franchise tax returns, reports and other information
required to be filed by them. Each such tax return, report or other
information was, when filed, accurate and complete. The Company and the
Subsidiary have duly paid, or have made adequate charges, accruals and
reserves in the financial statements for, all such taxes required to be
paid by them and any other assessment, fine or penalty levied against
them, for all periods as to which the tax liability of the Company or
the Subsidiary has not been finally determined, except for any such
assessment, fine or penalty that is currently being contested in good
faith or as could not have, individually or in the aggregate, a
Material Adverse Effect on the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business. No tax deficiency has been or, to the best of the
Company's knowledge, might be asserted or contemplated against the
Company or the Subsidiary.
(t) The Company and the Subsidiary are insured by recognized,
financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary for their business including,
but not limited to, policies covering real and personal property owned
or leased by the Company and the Subsidiary against theft, damage,
destruction, acts of vandalism and earthquakes, general liability and
directors and officers liability, all of which insurance is in full
force and effect. The Company has no reason to believe that it or the
Subsidiary will not be able to (i) renew its existing insurance
coverage as and when such policies expire or (ii) obtain comparable
coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not
result in a Material Adverse Effect on the Company and its subsidiaries
taken as a whole or adversely affect the ability of the Company to
perform its obligations under this Agreement or be otherwise important
in the context of the sale of the Shares. Neither of the
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Company nor the Subsidiary has been denied any insurance coverage which
it has sought or for which it has applied.
(u) Neither the Company nor the Subsidiary is involved in any
labor dispute, disturbance, lockout, slowdown or stoppage of employees,
and, to the best knowledge of the Company, no such dispute or
disturbance is threatened or imminent. The Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
principal suppliers, subassemblers, value added resellers,
subcontractors, original equipment manufacturers, authorized dealers or
international distributors that could result in a Material Adverse
Effect on the Company and its subsidiaries taken as a whole or
adversely affect the ability of the Company to perform its obligations
under this Agreement or be otherwise important in the context of the
sale of the Shares.
(v) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws (as defined
below) on the business, operations and properties of the Company and
the Subsidiary, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws, or any Permit, any
related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
has reasonably concluded that the Company and the Subsidiary (i) are in
compliance with all applicable foreign, United States federal, state
and local environmental laws, rules, regulations, treaties, statutes
and codes relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all Permits
required of them under applicable Environmental Laws to conduct their
business as currently conducted, (iii) are in compliance with all terms
and conditions of any such Permit and (iv) have not received notice of
any actual or potential liability for the investigation or remediation
of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants. No action, proceeding, revocation
proceeding, writ, injunction or claim is pending or threatened relating
to the Environmental Laws or to the Company's or the Subsidiary's
activities involving Hazardous Materials. "Hazardous Materials" means
any material or substance (i) that is prohibited or regulated by any
Environmental Law or (ii) that has been designated or regulated by any
governmental body or authority as radioactive, toxic, hazardous or
otherwise a danger to health, reproduction or the environment. Neither
the Company nor the Subsidiary has been named as a "potentially
responsible party" under the Comprehensive
11
Environmental Response, Compensation and Liability Act of 1980, as
amended.
(w) Neither the Company nor the Subsidiary has engaged in the
generation, use, manufacture, transportation or storage of any
Hazardous Materials on any of the Company's or the Subsidiary's
properties or former properties. No Hazardous Materials have been
treated or disposed of on any of the Company's or the Subsidiary's
properties or on properties formerly owned or leased by the Company or
the Subsidiary during the time of such ownership or lease, except in
compliance with Environmental Laws.
(x) No payments or inducements have been made or given,
directly or indirectly, to any federal or local official or candidate
for, any federal or state office in the United States or foreign
offices by the Company or the Subsidiary, by any of their officers,
directors, employees or agents or, to the best knowledge of the
Company, by any other person in connection with any opportunity,
Contract, Permit, certificate, consent, order, approval, waiver or
other authorization relating to the business of the Company or the
Subsidiary, except for such payments or inducements as were lawful
under applicable written laws, rules and regulations. Neither the
Company nor the Subsidiary, nor any director, officer, agent, employee
or other person associated with or acting on behalf of the Company or
the Subsidiary, (i) has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment
to any government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (iv) made any bribe, unlawful rebate, payoff,
influence payment, kickback or other unlawful payment in connection
with the business of the Company or the Subsidiary.
(y) Neither the Company nor the Subsidiary has any liability
for any prohibited transaction (within the meaning of Section 4975(c)
of the Internal Revenue Code of 1986, as amended (the "Code") or Part 4
of Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) (or an accumulated funding deficiency within the
meaning of Section 412 of the Code or Section 302 of ERISA) or any
complete or partial withdrawal liability (within the meaning of Section
4201 of ERISA), with respect to any pension, profit sharing or other
plan which is subject to ERISA, to which the Company and the Subsidiary
make or ever have made a contribution and in which any employee of the
Company and Subsidiary is or has ever been a participant. With respect
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to such plans, the Company and the Subsidiary are in compliance in all
material respects with all applicable provisions of ERISA.
(z) The Company and the Subsidiary maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization, (ii) transactions are
appropriately recorded to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted
only in accordance with management's general or specific authorization,
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences and (v) assets are properly accounted for
and safeguarded against loss from unauthorized use. The Company has not
received from its independent public accountants a letter describing or
been informed by them of, a substantial or material deficiency in the
Company's internal accounting controls in connection with their audit
of the Company's financial statements included in the Registration
Statement, the preliminary prospectus and the Prospectus.
(aa) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company or the Subsidiary to or for
the benefit of any of the officers or directors or shareholders of the
Company or the Subsidiary or any of the members of the families of any
of them, except as disclosed in the Registration Statement, the
preliminary prospectus and the Prospectus.
(bb) No consent, approval, registration, authorization,
filing, qualification, Permit or order of or with any court or
supervisory, regulatory, administrative or governmental agency, body or
authority, arbitrator or others (including securityholders) is required
in connection with the execution and delivery of this Agreement, the
issuance, sale or delivery of the Shares to be issued, sold and
delivered by the Company hereunder, or the consummation of any other of
the transactions contemplated herein or the fulfillment of the terms
hereof, except the registration under the Act of the Shares and such
consents, approvals, registrations, authorizations, filings,
qualifications, Permits or orders, as may be required under the state
securities or "blue sky" laws or the bylaws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") or as have been
obtained and which are in full force and effect in connection with the
offer, purchase and distribution by the Underwriters of the Shares.
13
(cc) The execution, delivery and performance by the Company of
this Agreement and the issuance and sale of the Shares and the
consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action. Neither the issuance,
offer, sale or delivery of the Shares, the execution, delivery and
performance by the Company of this Agreement nor the compliance by the
Company with all the provisions hereof nor the consummation of the
transactions contemplated hereby (i) conflicts with or will conflict
with, or constitutes or will constitute a breach or violation of or a
default under (or an event that, with notice or lapse of time or both,
would constitute such a breach, violation or default), or results in or
will result in the imposition of a Lien upon any property or assets of
the Company or the Subsidiary, under, any of the terms or provisions of
the certificate of incorporation or by-laws or other organizational or
constitutive documents of the Company or the Subsidiary, nor (ii)
conflicts with or will conflict with or constitutes or will constitute
a breach or violation of, or a default under (or an event that with
notice or the lapse of time or both would constitute a default) or the
loss of any material benefit under, or the termination of, or results
in or will result in the creation or imposition of any Lien upon any
property or assets of the Company or the Subsidiary pursuant to, any
Contract, nor (iii) violates or conflicts with or will violate or
conflict with any law, statute, rule or regulation applicable to the
Company or the Subsidiary or any judgment, decree or order applicable
to the Company or the Subsidiary of any court or supervisory,
regulatory, administrative or governmental agency, body or authority,
or arbitrator having jurisdiction over the Company or the Subsidiary or
any of their respective properties or assets.
(dd) The Company has full power and authority to enter into
this Agreement and to perform the transactions contemplated hereby.
This Agreement and the transactions contemplated herein have been duly
and validly authorized, executed and delivered by the Company and this
Agreement constitutes the legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other laws now or
hereafter in effect relating to or affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law) and
except to the extent that the provisions of Section 6 hereof may be
limited by applicable federal or state securities laws or unenforceable
as against public policy.
(ee) The Company has duly and validly authorized the issuance
and sale of the Shares. The description of the Shares in the
Registration
14
Statement, the preliminary prospectus and the Prospectus is accurate in
all material respects.
(ff) The Company, is not now, and as a result of Underwriting
the offer and sale of the Shares in the manner contemplated in this
Agreement, the Registration Statement, the preliminary prospectus and
the Prospectus and the application of the net proceeds of such sale as
described in the Registration Statement, the preliminary prospectus and
the Prospectus, will not be, an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "Investment Company Act"), without taking
account of any exemption arising out of the number or type of holders
of the Company's securities.
(gg) The Company has not incurred any liability for a fee,
commission, or other compensation on account of the employment of a
broker or finder in connection with the transactions contemplated by
this Agreement other than the discount contemplated hereby.
(hh) Neither the Company nor the Subsidiary nor, to the
Company's best knowledge, any of its or their officers, directors or
affiliates (as defined in Rule 501(b) of Regulation D ("Regulation D")
under the Act) has taken or will take, directly or indirectly, any
action designed to cause or to result in or that has constituted, or
might reasonably be expected to cause or result in or constitute, under
the Securities Exchange Act of 1934, as amended (the Exchange Act"), or
otherwise, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(ii) The Company has not distributed and will not distribute
prior to the later of (A) the Additional Closing Date and (B) the
completion of the distribution of the Shares by the Underwriters and
dealers, any offering material (including, without limitation, content
on its Website, if any, that may be deemed to be offering material) in
connection with the offering and sale of the Shares other than the
preliminary prospectus and the Prospectus.
(jj) There are no holders of securities of the Company which
by reason of the filing of the Registration Statement or otherwise in
connection with the sale of the Shares contemplated hereby, have the
right to request or demand that the Company register under the Act any
of their securities in connection with the Registration Statement .
15
(kk) There is no tax, duty, levy, impost, deduction, charge or
withholding imposed by any political subdivision or taxing authority by
virtue of the execution, delivery, performance or enforcement, or to
ensure the legality, validity or admissibility into evidence, of this
Agreement, and neither is it necessary that the Shares be submitted to,
or filed or recorded with, any court or other authority to ensure such
legality, validity, enforceability or admissibility into evidence.
There are no transfer taxes or other similar fees or charges under
federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance and sale by the Company of
the Shares.
(ll) All necessary actions, authorizations, conditions and
things required to be taken, given, fulfilled and done by the Company
and the Subsidiary on or prior to the date of this Agreement, have
been, or on the Closing Date or the Additional Closing Date, if any,
will have been taken, given, fulfilled and done in connection with (i)
the issue of the Prospectus, (ii) the execution and delivery of this
Agreement, (iii) the execution, delivery and issuance of the Shares,
(iv) the compliance with all provisions of this Agreement to be
performed or complied with by such date.
(mm) There are no issues related to the Company's or the
Subsidiary's preparedness for the Year 2000 that (i) are of a character
required to be described or referred to in the Registration Statement,
the preliminary prospectus or Prospectus which have not been accurately
described therein or (ii) could result in any Material Adverse Effect
on the Company and its subsidiaries taken as a whole or that might
materially affect their properties, assets or rights. All internal
computer systems and each Constituent Component of those systems and
all computer-related products and each Constituent Component (as
defined below) of those products of the Company and the Subsidiary
fully comply with Year 2000 Qualification Requirements. "Year 2000
Qualification Requirements" means that the internal computer systems
and each Constituent Component of those products of the Company and the
Subsidiary (i) have been reviewed to confirm that they store, process
(including sorting and performing mathematical operations, calculations
and computations), input and output data containing date and
information correctly regardless of whether the date contains dates and
times before, on or after January 1, 2000, (ii) have been designed to
ensure date and time entry recognition and calculations, and date data
interface values that reflect the century, (iii) accurately manage and
manipulate data involving dates and times, including single century
formulas and multi-century formulas, and will not cause an abnormal
ending scenario within the application or generate incorrect values or
invalid results involving such dates, (iv)
16
accurately process any date rollover, and (v) accept and respond to
two-digit year date input in a manner that resolves any ambiguities as
to the century. "Constituent Component" means all software (including
operating systems, programs, packages and utilities), firmware,
hardware, networking components, and peripherals provided as part of
the configuration. The Company and the Subsidiary have inquired of all
their material vendors as to their preparedness for the Year 2000 and
the Company has disclosed in the Registration Statement, the
preliminary prospectus or Prospectus any issues that could result in a
Material Adverse Effect on the Company and its subsidiaries taken as a
whole or adversely affect the ability of the Company to perform its
obligations under this Agreement or be otherwise important in the
context of the sale of the Shares.
(nn) No statement, representation, warranty or covenant made
by the Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to you was or will be, when
made, inaccurate, untrue or incorrect.
(oo) The Shares have been approved for inclusion on the Nasdaq
National Market System, subject only to official notice of issuance.
(pp) Except as described in the Registration Statement, the
preliminary prospectus and the Prospectus, the Company has not sold or
issued any shares of capital stock within the six month period
preceding the date of the Prospectus, all of which sales and issuances
were made in compliance with the Act and the Regulations.
(qq) Each officer, director and securityholder of the Company
has agreed to sign an agreement substantially in the form attached
hereto as EXHIBIT A (the "Lock-up Agreements"). The Company has
provided to counsel for the Underwriters a complete and accurate list
of all securityholders of the Company and the number and type of
securities held by each securityholder. The Company also has provided
to counsel for the Underwriters true, accurate and complete copies of
all of the Lock-up Agreements presently in effect or effected hereby.
The Company has given "no transfer" instructions to its transfer agent
and registrar with respect to such securities.
Any certificate signed by an officer of the Company and
delivered to the Representative or to counsel for the Underwriters
shall be deemed to be a representation and warranty by the Company to
each Underwriter as to the matters set forth therein.
17
2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) The Company agrees to issue and sell to the several
Underwriters the Firm Shares upon the terms herein set forth. On the
basis of the representations, warranties, covenants and agreements
herein contained, but subject to the terms and conditions herein set
forth, the Underwriters, severally and not jointly, agree to purchase
from the Company, at a purchase price per share of $[ ], the number of
Firm Shares set forth opposite the respective names of the Underwriters
in Schedule I hereto plus an additional number of Firm Shares which
such Underwriter may become obligated to purchase pursuant to the
provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of, the
Firm Shares and the Option Shares (if the option provided for in
Section 2(c) below shall have been exercised on or before the third
full business day prior to the Closing Date) shall be made at the
offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, 1290 Avenue of the Americas, New
York, New York, or at such other place as shall be agreed upon by ING
Barings LLC and the Company, at 10:00 A.M. on the third full business
day (as permitted under Rule 15c6-1 under the Exchange Act) (unless
postponed in accordance with the provisions of Section 9 hereof)
following the date of the effectiveness of the Registration Statement
(or, if the Company has elected to rely upon Rule 430A of the
Regulations, the third or fourth full business day (as permitted under
Rule 15c6-1 under the Exchange Act) after the determination of the
initial public offering price of the Firm Shares), or such other time
not later than five business days after such date as shall be agreed
upon by you and the Company (such time and date of payment and delivery
being herein called the "Closing Date"); provided, however, that if the
Company has not made available to the Underwriters copies of the
Prospectus in such quantities and at such places requested by the
Underwriters, no later than noon on the business day following the
execution of this Agreement, ING Barings LLC may, in its sole
discretion, postpone the Closing Date until no later than two full
business days following the delivery of such copies of the Prospectus.
Payment shall be made to the Company by wire transfer in immediately
available funds to the order of the Company, against delivery to you
for the respective accounts of the Underwriters of the Firm Shares to
be purchased by them. The Company shall deliver, or cause to be
delivered, a credit representing the Firm Shares to an account or
accounts at The Depository Trust Company, as designated by ING Barings
LLC for the accounts of ING Barings LLC and the several Underwriters on
the Closing Date, against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price
therefor. Certificates
18
for the Firm Shares shall be registered in such name or names and in
such authorized denominations as you may request on or before noon on
the business day prior to the Closing Date. The Company will permit you
to examine and package such certificates at or before noon on the
business day prior to the Closing Date. ("Business day" shall mean any
day other than a Saturday, Sunday or a legal holiday or a day on which
banking institutions or trust companies are authorized or obligated by
law to close in New York City.")
(c) In addition, the Company hereby grants to the Underwriters
the option to purchase, severally and not jointly, up to 600,000 Option
Shares at the same purchase price per share to be paid by the
Underwriters to the Company for the Firm Shares as set forth in this
Section 2, for the sole purpose of covering over-allotments in the sale
of Firm Shares by the Underwriters. This option may be exercised from
time to time and at any time, in whole or in part, on or before the
thirtieth day following the date of the Prospectus, by notice from ING
Barings LLC to the Company. Such notice shall set forth the aggregate
number of Option Shares as to which the option is being exercised and
the date and time, as reasonably determined by ING Barings LLC, when
the Option Shares are to be delivered (such date and time being herein
sometimes referred to as the "Additional Closing Date"); provided,
however, that the Additional Closing Date shall not be earlier than the
Closing Date or earlier than the second full business day after the
date on which the option shall have been exercised nor later than the
fifth full business day after the date on which the option shall have
been exercised (unless such time and date are postponed in accordance
with the provisions of Section 9 hereof). The Company shall deliver, or
cause to be delivered, a credit representing the Option Shares to an
account or accounts at The Depository Trust Company, as designated by
ING Barings LLC for the accounts of ING Barings LLC and the several
Underwriters on the Additional Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. Certificates for the Option
Shares shall be registered in such name or names and in such authorized
denominations as ING Barings LLC may request at or before noon on the
business day prior to the Additional Closing Date. The Company will
permit you to examine and package such certificates for delivery at or
before noon on the business day prior to the Additional Closing Date.
The number of Option Shares to be sold to each Underwriter
shall be the number which bears the same ratio to the aggregate number
of Option Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto (or such
19
number increased as set forth in Section 9 hereof) bears to the total
number of Firm Shares being purchased from the Company, subject,
however, to such adjustments to eliminate any fractional shares as ING
Barings LLC in its sole discretion shall make.
Payment for the Option Shares shall be made by wire transfer
in immediately available funds to the order of the Company as noted
above, at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP or such other location
as may be mutually acceptable, upon delivery of the Option Shares to
you for the respective accounts of the Underwriters
The Company shall deliver, or cause to be delivered a credit
representing the Option Shares the Underwriters have agreed to purchase
on the Additional Closing Date to an account or accounts at The
Depository Trust Company as designated by ING Barings LLC for the
accounts of ING Barings LLC and the several Underwriters against the
irrevocable release of a wire transfer of immediately available funds
for the amount of the purchase price therefor.
(d) Time shall be of the essence and delivery at the time and
place specified in this Agreement is a further condition to the
obligations of the Underwriters.
3. OFFERING. It is understood that the several Underwriters
propose to offer the Shares for sale to the public upon the terms set forth in
the Prospectus.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees
with each Underwriter that:
(a) If the Registration Statement has not been declared
effective at the time of the execution of this Agreement, the Company
will use its best efforts to cause the Registration Statement and any
amendments thereto to become effective as promptly as possible. The
Company will use its best efforts to cause a registration statement on
Form 8-A (the "Form 8-A Registration Statement") as required by the
Exchange Act to become effective simultaneously with the Registration
Statement. If Rule 430A is used or the filing of the Prospectus is
otherwise required under Rule 424(b) or Rule 434, the Company will file
the Prospectus (properly completed if Rule 430A has been used) pursuant
to Rule 424(b) or Rule 434 within the prescribed time period and will
provide evidence satisfactory to you of such timely filing. If the
Company elects to rely on Rule 434, the Company will prepare and file a
term sheet that complies with the requirements of Rule 434. If the
Company elects to rely on Rule 462(b) under the Act, the Company shall
file a Rule 462(b) Registration
20
Statement with the Commission in compliance with Rule 462(b) under the
Act prior to the time confirmations are sent or given, as specified by
Rule 462(b)(2) under the Act, and shall pay the applicable fees in
accordance with Rule 111 under the Act.
The Company will notify you immediately (and, if
requested by you, will confirm such notice in writing) (i) when the
Registration Statement and any amendments thereto become effective,
(ii) of any request by the Commission for any amendment of or
supplement to the Registration Statement, any preliminary prospectus or
the Prospectus or for additional information, (iii) of the mailing or
the delivery to the Commission for filing of any amendment of or
supplement to the Registration Statement or the Prospectus, (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto or of the initiation, or the threatening, of any
proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for
sale in any jurisdiction or the initiation or threatening of any
proceeding for that purpose. If a stop order or suspension of
qualification is proposed at any time, the Company will use its best
efforts to prevent the issuance of any such stop order and, if issued,
to obtain the lifting thereof as soon as possible. The Company will not
file any amendment to the Registration Statement or any amendment of or
supplement to, any preliminary prospectus or the Prospectus (including
the prospectus required to be filed pursuant to Rule 424(b) or Rule
434) that differs from the prospectus on file at the time of the
effectiveness of the Registration Statement before or after the
effective date of the Registration Statement to which you shall
reasonably object in writing after being timely furnished in advance a
copy thereof.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act by an Underwriter or dealer any
event shall have occurred as a result of which the Prospectus as then
amended or supplemented would, in the judgment of ING Barings LLC,
counsel to the Underwriters or the Company, include an untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, not
misleading or if it shall be necessary at any time to amend or
supplement the Registration Statement, the preliminary prospectus or
the Prospectus to comply with any law, the Company promptly will notify
ING Barings LLC and prepare and file with the Commission and furnish at
its own expense to the Underwriters and dealers, an appropriate
amendment or supplement (in form and substance satisfactory to ING
Barings LLC) which will correct
21
such untrue statement or omission or so that the Registration
Statement, any preliminary prospectus and the Prospectus will comply
with the law and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible. If at
any time during the ninety (90) day period after the Registration
Statement becomes effective, any rumor, publication or event relating
to or affecting the Company shall occur as a result of which in the
opinion of ING Barings LLC the market price of the Shares has been or
is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after notice from ING Barings LLC
advising the Company to the effect set forth above, forthwith prepare,
consult with ING Barings LLC concerning the substance of and
disseminate a press release or other public statement, reasonably
satisfactory to ING Barings LLC, responding to or commenting on such
rumor, publication or event.
(c) As soon as practicable, but not later than 45 days after
the end of its fiscal quarter in which the first anniversary date of
the effective date of the Registration Statement occurs, the Company
will make generally available (within the meaning of Section 11(a) of
the Act) to its securityholders and to you an earnings statement or
statements of the Company which will satisfy the provisions of Section
11(a) of the Act and Rule 158 of the Regulations, covering a period of
at least twelve consecutive months beginning after the effective date
of the Registration Statement; and will, during the period of five
years from the date of the Prospectus, make generally available (within
the meaning of Section 11(a) of the Act) to its securityholders as soon
as practicable after the end of each fiscal year, an annual report
(including a balance sheet and statements of financial condition,
operations, cash flows and changes in stockholders' equity of the
Company, certified by the Company's independent public accountants)
and, as soon as practicable after the end of each of the first three
quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), consolidated
summary financial information of the Company for such quarter in
reasonable detail.
(d) The Company will furnish without charge to you and counsel
to the Underwriters five (5) complete signed copies of the Registration
Statement (including exhibits thereto), and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as, in the opinion of counsel to the Underwriters, delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as
many copies of each preliminary prospectus and the Prospectus and any
amendment or supplement thereto as you may request.
22
(e) The Company will arrange for the qualification of the
Shares for sale under the laws of such jurisdictions (both national and
foreign) as ING Barings LLC may designate and will make such
applications, file such documents and furnish such information as may
be required for that purpose and will maintain such qualifications in
effect for so long as required for the distribution of the Shares;
provided, however, that in no event shall the Company be required to
qualify to do business in any such jurisdiction in which it is not
already qualified or to file a general consent to service of process in
any jurisdiction in which it is not now so required, other than in
respect of suits arising out of the offering or sale of the Shares. The
Company will, from time to time, prepare and file such statements,
reports and other documents, as are or may be required to continue such
qualifications in effect for so long a period as ING Barings LLC may
request for the distribution of the Shares. The Company will cooperate
with ING Barings LLC and counsel to the Underwriters in connection with
the filings required to be made by ING Barings LLC with the NASD and
will pay the fee of the NASD in connection with its review of the
offering of the Shares and will use its best efforts to cause the
Shares to be quoted on the Nasdaq National Market System.
(f) During the period of five years from the effective date of
the Registration Statement, the Company will furnish to you and, upon
request, to each of the several Underwriters, without charge, copies
of, in such quantities as you or the Underwriters may request from time
to time, (i) as soon as available, all reports or other communications
(financial or other) furnished generally by the Company to its
securityholders, (ii) as soon as practicable after the end of each
fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and
statements of income, stockholders' equity and cash flows for the year
then ended and the opinion thereon of the Company's independent public
or certified public accountants; and (iii) as soon as practicable after
the filing thereof, copies of each proxy statement, Annual Report on
Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or
other report filed by the Company with the Commission, the NASD, any
other supervisory, regulatory, administrative or governmental agency,
body or authority whether pursuant to the Exchange Act or otherwise or
any national securities exchange or system on which any class of
securities of the Company is listed or quoted.
(g) For a period of 180 days from the date of the Prospectus
(the "Lock-Up Period"), without the prior written consent of ING
Barings LLC, each of the Company, its executive officers, directors and
securityholders shall not, directly or indirectly: (1) issue, offer for
sale, contract to sell, sell, pledge or otherwise dispose of (or enter
into any
23
transaction or device which is designed to, or could be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by any person
at any time in the future of) any shares of Common Stock or securities
convertible into, exercisable or exchangeable for, or represent the
right to receive, Common Stock or sell or grant options, rights or
warrants with respect to any shares of Common Stock or any of the
foregoing or announce the offering of or register for sale any of the
foregoing or any outstanding shares of Common Stock; provided however,
that the Company may grant options and issue and sell Common Stock
pursuant to any directors' and employees' stock plan, stock ownership
plan or dividend reinvestment plan of the Company in effect at the
effective date of the Registration Statement and which are described in
the Prospectus so long as none of those shares may be transferred
during the Lock-Up Period and the Company shall enter stop transfer
instructions with its transfer agent and registrar against any such
transfer; or (2) enter into any swap, repurchase agreement, pledge,
transfer or other transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such shares
of Common Stock or other securities, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise. In addition,
during such period, the Company and the Subsidiary also agree not to
file any registration statement (other than a Form S-8 registration
statement filed in connection with shares of Common Stock received
under a Company directors' and employees' stock plan, stock ownership
plan, employment agreement or dividend reinvestment plan) with respect
to, and each of the executive officers, directors and securityholders
of the Company has agreed not to make any demand for, or exercise any
right with respect to, the registration of any shares of Common Stock
or any securities convertible into or exercisable or exchangeable for
Common Stock without the prior written consent of ING Barings LLC.
(h) During the period when, in the opinion of counsel to the
Underwriters, the delivery of a Prospectus by an Underwriter or dealer
may be required by the Act, the Company will comply, at its own
expense, with all requirements imposed upon it by the Commission, the
Act and the Exchange Act, and the rules and regulations of the
Commission promulgated thereunder, so far as necessary to permit the
continuance of sales of or dealing in the Shares during such period in
accordance with the provisions hereof and the Prospectus. In addition,
during such period the Company shall file, on a timely basis, with the
Commission and the Nasdaq National Market all reports and documents
required to be filed under the Exchange Act.
24
(i) Each of the Company and the Subsidiary will conduct its
business in compliance with all applicable laws, rules, regulations,
decisions, directives and orders. The Company will do and perform all
things required or necessary to be done and performed under this
Agreement by the Company on or prior to the Closing Date and to comply
or cause to be satisfied, to the extent such are within its control,
the conditions precedent to the several obligations of the Underwriters
specified in Section 8 hereof.
(j) Neither the Company nor any of its affiliates (as defined
in Regulation D under the Act), will take, directly or indirectly, any
action designed to cause or result in, or which constitutes or which
might reasonably be expected to cause, result in, or constitute, under
the Exchange Act, or otherwise, stabilization or manipulation of the
price of the shares of Common Stock of the Company to facilitate the
offering and distribution of the Shares or any other action prohibited
by Regulation M under the Exchange Act.
(k) The Company will apply the net proceeds from the offering
and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds."
(l) The Company shall take all economically reasonable steps
to enforce all Intellectual Property rights against potential
infringers.
(m) The Company shall engage and maintain, at its expense, a
registrar and transfer agent for the Shares.
(n) The Company shall cause to be prepared and delivered, at
its expense, within one business day from the date hereof, to the
Underwriters an "electronic Prospectus" to be used by the Underwriters
in connection with the offering and sale of the Shares . As used
herein, the term "electronic Prospectus" means a form of Prospectus,
and any amendment or supplement thereto, that meets each of the
following conditions: (i) it shall be encoded in an electronic format,
satisfactory to you, that may be transmitted electronically by the
Underwriters to offerees and purchasers of the Shares for at least
during the period when, in the opinion of counsel to the Underwriters,
the Prospectus is required to be delivered under the Act or the
Exchange Act; (ii) it shall disclose the same information as the paper
Prospectus and Prospectus filed pursuant to ▇▇▇▇▇, except to the extent
that graphic and image material cannot be disseminated electronically,
in which case such graphic and image material shall be replaced in the
electronic Prospectus with a fair and accurate narrative description or
tabular representation of such material, as appropriate; and (iii) it
shall be in or convertible into a paper format or
25
an electronic format, satisfactory to you, that will allow investors to
store and have continuously ready access to the Prospectus at any
future time, without charge to investors (other than any fee charged
for subscription to the system as a whole and for on-line time). The
Company hereby confirms that it has included or will include in the
Prospectus filed pursuant to ▇▇▇▇▇ or otherwise with the Commission and
in the Registration Statement at the effective date of the Registration
Statement an undertaking that, upon receipt of a request by an investor
or his or her representative during the period when, in the opinion of
counsel to the Underwriters, delivery of a Prospectus by an Underwriter
or dealer may be required by the Act, the Company shall transmit or
cause to be transmitted promptly, without charge, a paper copy of the
Prospectus.
5. PAYMENT OF EXPENSES. (a) Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company will pay, or reimburse ING Barings LLC if paid by the Underwriters,
all costs, fees and expenses incident to the performance of the obligations of
the Company under this Agreement, including but not limited to costs, fees and
expenses of or relating to (i) the preparation by the Company, printing and
filing of the Registration Statement and exhibits to it, each preliminary
prospectus, the Prospectus and any amendment or supplement to the Registration
Statement or the Prospectus (including, without limitation, the fees and
expenses of the Company's counsel, accountants and other advisors), (ii) the
preparation and delivery of certificates representing the Shares, (iii) the
printing of this Agreement and Underwriter's Questionnaires, Underwriter's
Powers of Attorney, Blue Sky Memoranda, Master Agreements Among Underwriters and
Master Selling Agreements, and all other documents relating to the public
offering of the Shares (including those documents supplied to the Underwriters
in quantities as hereinabove stated) and furnishing (including costs of shipping
and mailing) such copies of the Registration Statement, the Prospectus and any
preliminary prospectus, and all exhibits, schedules, consents, certificates of
experts, amendments and supplements thereto, as may be requested for use in
connection with the offering and sale of the Shares by the Underwriters or by
dealers to whom Shares may be sold, (iv) the quotation of the Shares on the
Nasdaq National Market, (v) any filings required to be made with, and the review
by, the NASD and the fees, disbursements and other charges of the Underwriters'
counsel in connection therewith, (vi) the registration or qualification (or
obtaining exemptions from such registration or qualification) of the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions
designated pursuant to Section 4(e), including the fees, disbursements and other
charges of the Underwriters' counsel in connection therewith, and the
preparation and printing of preliminary, supplemental and final Blue Sky
memoranda, (vii) the issuance, transfer and delivery of the Shares to the
Underwriters, including any issue, transfer, stamp or other taxes payable
26
thereon, (viii) the transfer agent or registrar for the Shares, (ix) all costs
and expenses incident to the preparation and undertaking of "road show"
preparations to be made to prospective investors, and (x) all other fees, costs
and expenses referred to in Part II of the Registration Statement.
(b) If this Agreement shall be terminated by the Company or if
for any reason the Company shall fail to perform its obligations hereunder, if
any condition to the obligations of the Underwriters set forth in Section 8
hereof is not satisfied, or if this Agreement shall be terminated by ING Barings
LLC pursuant to Section 6, Section 8, Section 9 or Section 11, or if the sale to
the Underwriters of the Shares on the Closing Date is not consummated because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or to comply with any provision hereof, the Company agrees to
reimburse ING Barings LLC and the other Underwriters (or such Underwriters as
have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been incurred by ING
Barings LLC and the Underwriters in connection with the proposed purchase and
the offering and sale of the Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges.
6. INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each Underwriter, its directors, officers, employees, and agents
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any and all
losses, liabilities, claims, damages, actions and expenses whatsoever, as
incurred (including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing, compromising or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other federal or state statutory law or regulation, or at common
law or otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Shares, as originally filed
or any amendment thereof, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (ii) upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or alleged
omission to state therein a material fact necessary in order to make statements
therein, not misleading; or (iii) in whole or in part upon any inaccuracy in the
representations and warranties of the Company contained
27
herein; or (iv) in whole or in part upon any failure of the Company to perform
its obligations hereunder or under law; or (v) any act or failure to act or any
alleged act or failure to act by an Underwriter in connection with, or relating
in any manner to, the Shares or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon any matter covered by clause (i), (ii),
(iii) or (iv) above, provided that the Company will not be liable under this
clause (v) to the extent that a court of competent jurisdiction shall have
determined by a final judgment that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its bad faith or willful
misconduct; and provided, however, that the Company will not be liable in any
such case covered by clauses (i), (ii), (iii), (iv) or (v) above to the extent
but only to the extent that any such loss, liability, claim, damage, action or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information relating to an Underwriter furnished
to the Company by or on behalf of any Underwriter through you expressly for use
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have, including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, and each other person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against
any losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement for the registration of the Shares, as originally filed or any
amendment thereof, or any related preliminary prospectus or the Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
relating to an Underwriter furnished to
28
the Company by or on behalf of any Underwriter through you expressly for use
therein; provided, however, that in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter hereunder.
This indemnity will be in addition to any liability which any Underwriter may
otherwise have, including under this Agreement. The Company acknowledges that
the statements set forth in the first and third paragraphs under the caption
"Underwriting" in the Prospectus constitute the only information furnished in
writing relating to an Underwriter by or on behalf of any Underwriter expressly
for use in the Registration Statement relating to the Shares as originally filed
or in any amendment thereof, any related preliminary prospectus or the
Prospectus or in any amendment thereof or supplement thereto, as the case may
be.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability or obligation which it may have under this Section 6 or otherwise (i)
unless the failure to notify shall result in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not in any event relieve
the indemnifying party from any obligations other than the indemnification
obligation provided in paragraph (a) or (b) above). In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified parties promptly after receiving the aforesaid notice from an
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified parties. Notwithstanding the foregoing, the indemnified party
or parties shall have the right to employ its or their own separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that a conflict may arise between the positions of the
indemnifying party or parties in conducting the defense of any such action or
that there may be one or more legal defenses available to it or them which are
different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying party or parties shall not
have the right to direct the defense of such action on behalf of
29
the indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying parties, it being understood, however, that
the indemnifying party or parties shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(plus separate local counsel, if retained by the indemnified party or parties)
at any time for all such indemnified parties. An indemnifying party shall not be
liable for any settlement of any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.
Notwithstanding the foregoing, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated in this Section 6, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement,
compromise or consent is for money damages only and includes (i) an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
Any losses, claims, damages, liabilities, expenses or actions
for which an indemnified party is entitled to indemnification or contribution
under this Section 6 or under Section 7 below shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages, liabilities or
expenses are incurred, but in all cases, no later than thirty (30) days of
invoice to the indemnifying party.
The indemnity and contribution agreements contained in this
Section 6 and in Section 7 below and the representation and warranties of the
Company set forth in this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on behalf of any
Underwriter or any director, officer or employee of or person controlling any
Underwriter, the Company, its directors or officers or any persons controlling
the Company, (ii) acceptance of any Shares and payment therefor hereunder, and
(iii) any termination of this Agreement. A successor to any Underwriter, or to
the
30
Company, shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 6 and Section 7 below.
The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 6 and Section 7 below and are fully informed
regarding said provisions. They further acknowledge that the provisions of this
Section 6 and Section 7 below fairly allocate the risks in light of the ability
of the parties to investigate the Company and its business in order to assure
that adequate disclosure is made in the Registration Statement, the preliminary
prospectus and Prospectus as required by the Act and the Exchange Act.
7. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriters shall severally contribute to the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, claims, damages, liabilities and expenses suffered by the Company any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to which the Company and one or more of
the Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company and the Underwriters from
the offering of the Shares or, if such allocation is not permitted by applicable
law or indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 6 hereof, in such proportion
as is appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company on the one hand and the Underwriters,
severally, on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters, severally, on the other 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 bears to the underwriting discounts and commissions
received by the Underwriters, respectively. The relative fault of the Company on
the one hand and of the Underwriters, severally, on the other shall be
31
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this Section
7, (i) in no case shall any Underwriter be liable or responsible for any amount
in excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter hereunder, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Further notwithstanding the provisions of this Section 7 and
the preceding sentence, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. For purposes of this Section 7, each director, officer,
employee and agent of an Underwriter and each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this Section 7. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 7 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent, provided that such consent was not unreasonably withheld.
The Underwriters' obligations in this Section 7 to contribute
are several in proportion to their respective underwriting obligations and not
joint. The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
32
8. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
several obligations of the Underwriters to purchase and pay for the Firm Shares
and the Option Shares, as provided herein, shall be subject to the accuracy of
the representations and warranties on the part of the Company contained herein
as of the date hereof, the Closing Date and any Additional Closing Date, to the
absence from any certificates, opinions, written statements or letters furnished
to you or to Underwriters' counsel pursuant to this Section 8 of any
misstatement or omission, to the timely performance by the Company of its
covenants and other obligations hereunder and to each of the following
additional conditions:
(a) The Registration Statement shall have become effective not
later than, if pricing pursuant to Rule 430A, 5:30 P.M., New York time
on the date of this Agreement, and if pricing pursuant to a pricing
amendment, 12:00 P.M., New York time on the date an amendment to the
Registration Statement containing the public offering price has been
filed with the Commission, or at such later time and date as shall have
been consented to in writing by ING Barings LLC; if the Company shall
have elected to rely upon Rule 430A or Rule 434 of the Regulations, the
Prospectus shall have been filed with the Commission in a timely
fashion in accordance with Section 4(a) hereof; and, at or prior to the
Closing Date no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof shall
have been issued and no proceedings for such purpose shall have been
initiated or threatened by the Commission; no order suspending the
qualification or registration of the Shares under the securities or
Blue Sky laws of any jurisdiction shall be in effect and no proceeding
for such purpose shall be pending before or threatened or contemplated
by the authorities of any such jurisdiction; any request for additional
information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the
staff of the Commission or such authorities and to the satisfaction of
counsel to the Underwriters; after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have
been filed unless a copy thereof was first submitted to you and you did
not reasonably object thereto; and the NASD, upon review of the terms
of the public offering of the Shares, shall not have raised any
objection to the fairness or reasonableness of the underwriting terms
and arrangements.
(b) The Company shall have furnished to you the opinion of
▇▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇▇▇ LLP, counsel for the Company, dated the
Closing Date and the Additional Closing Date, if applicable, addressed
to the Underwriters and in form and substance satisfactory to ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP, counsel to the Underwriters.
33
(c) The Company shall have furnished to the Underwriters the
opinion of ▇▇▇▇▇▇▇▇, Washburn, Kurtz, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Intellectual
Property counsel for the Company, dated the Closing Date and the
Additional Closing Date, if applicable, in form and substance
satisfactory to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the Underwriters.
(d) All corporate proceedings and other legal matters in
connection with this Agreement, the form of Registration Statement,
preliminary prospectus or Prospectus, and the registration,
authorization, issue, sale and delivery of the Shares as herein
contemplated shall be satisfactory in form and substance to you and to
Underwriters' counsel. The Underwriters shall have received from
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, Underwriters' counsel, a favorable opinion,
dated the Closing Date (and the Additional Closing Date, if
applicable), with respect to the issuance and sale of the Shares, the
Registration Statement, the Prospectus and other related matters as you
may reasonably require, and the Company and the Subsidiary shall have
furnished to Underwriters' counsel such documents as they request for
the purpose of enabling them to pass upon the matters referred to in
this Section.
(e) At the Closing Date (and the Additional Closing Date, if
applicable) you shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of the Company, dated the
Closing Date (and the Additional Closing Date, if applicable), to the
effect that (i) the condition set forth in subsection (a) of this
Section 8 has been satisfied, (ii) as of the date hereof and as of the
Closing Date (and the Additional Closing Date, if applicable) all the
representations and warranties of the Company set forth in this
Agreement are accurate with the same force and effect as if made on
each of such dates, (iii) as of the Closing Date (and the Additional
Closing Date, if applicable) the agreements and obligations of the
Company to be performed hereunder on or prior thereto have been duly
performed, (iv) when the Registration Statement became effective and at
all times subsequent thereto up to the delivery of such certificate,
the Registration Statement and the Prospectus, and any amendments or
supplements thereto, contained the information required to be included
therein by the Act and the applicable rules and regulations of the
Commission thereunder, and conformed to the requirements of the Act and
the applicable rules and regulations of the Commission thereunder; the
Registration Statement and the Prospectus, and any amendments or
supplements thereto, did not and does 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 not
misleading; and since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an
34
amended or supplemented Prospectus which has not been so set forth; and
(v) subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, the Company and the
Subsidiary have not sustained any material loss or interference with
their respective business or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, and
there has not been any material adverse change, or any development
involving a prospective material adverse change, in the business,
management, properties, operations, prospects, condition (financial or
otherwise), or results of operations of the Company and the Subsidiary
taken as a whole, or any transaction that is material to the Company
and its subsidiaries taken as a whole, except transactions entered into
in the ordinary course of business, or any obligation, direct or
contingent, that is material to the Company and its subsidiaries, taken
as a whole, incurred by the Company or its subsidiaries, except
obligations incurred in the ordinary course of business, or any change
in the capital stock or outstanding indebtedness of the Company or any
of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company or any
of its subsidiaries.
(f) At the time this Agreement is executed and at the Closing
Date (and the Additional Closing Date, if applicable), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP shall have furnished to you a letter or letters, dated respectively
as of the time this Agreement is executed and as of the Closing Date
(and the Additional Closing Date, if applicable), addressed to you and
based upon the procedures described in such letter, but carried out to
a date not more than five (5) days prior to the Closing Date or the
Additional Closing Date, as the case may be, and otherwise in form and
substance satisfactory to you, confirming that they are independent
public accountants with respect to the Company within the meaning of
the Act and Regulation S-X, stating that the answer to item 10 of the
Registration Statement is correct as it relates to them and that:
(i) in their opinion the audited consolidated
financial statements, the audited consolidated financial
statement schedules and the audited financial statements of
the Company included in the Registration Statement and the
Prospectus and reported on by them comply in form in all
material respects with the applicable accounting requirements
of the Act and the related published rules and regulations;
35
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and the
Subsidiary; carrying out certain specified procedures (but not
an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders and the board of directors of the Company and the
Subsidiary; and inquiries of certain officials of the Company
and the Subsidiary who have responsibility for financial and
accounting matters of the Company and the Subsidiary as to
transactions and events subsequent to December 31, 1998,
nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements
included in the Registration Statement and the
Prospectus do not comply as to form in all material
respects with the applicable accounting requirements
of the Act and with the published rules and
regulations of the Commission with respect to
registration statements on Form S-1; and said
unaudited financial statements are not in conformity
with generally accepted accounting principles applied
on a basis substantially consistent with that of the
audited financial statements included in the
Registration Statement and the Prospectus;
(2) with respect to the period subsequent to
September 30, 1999 there were any changes, at a
specified date not more than five days prior to the
date of the letter, in the long-term debt of the
Company and its subsidiaries or capital stock of the
Company or decreases in the stockholders' equity of
the Company, as compared with the amounts shown on
the September 30, 1999 consolidated balance sheet
included in the Registration Statement and the
Prospectus or the period from October 1, 1999 to such
specified date there were any decreases, as compared
with September 30, 1999 in net revenues or income
before income taxes or in total or per share amounts
of net income of the Company and its subsidiaries,
except in all instances for changes or decreases set
forth in such letter, in which case the letter shall
be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by ING Barings LLC;
36
(3) the information included in the
Registration Statement and Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data),
Item 302 (Supplementary Financial Information), Item
402 (Executive Compensation) and Item 503(d) (Ratio
of Earnings to Fixed Charges) is not in conformity
with the applicable disclosure requirements of
Regulation S-K; and
(4) for the period from October 1, 1999, to
such specified date, there were, as compared to the
corresponding period in the preceding year, any
decrease in consolidated net revenues or increase in
excess of [ ]in the total amount of loss from
continuing operations and total net loss in excess of
[ ], except in all instances for changes, increases,
or decreases that the Registration Statement and the
Prospectus discloses have occurred or may occur.
(iii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of Interim financial information as described in
Statement of Auditing Standards No. 71 ("SAS 71"), Interim
Financial Information, on the unaudited financial statements
included in the Registration Statement and the Prospectus and
are providing their report as described in SAS 71 on such
financial statements;
(iv) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and the Subsidiary) set forth in the Registration
Statement and the Prospectus, which have been specified by you
prior to the date of such letter, agrees with the accounting
records of the Company and its subsidiaries, excluding any
questions of legal interpretation.
(v) they have performed an SSAE 8 examination of the
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" contained in the Registration
Statement and the Prospectus and have determined that:
(1) the presentation includes, in all
material respects, the required elements of the
applicable rules and regulations under the Act;
37
(2) the historical financial amounts have
been accurately derived in all material respects from
the Company's audited financial statements; and
(3) the underlying information,
determinations, estimates and assumptions of the
Company provide a reasonable basis for the
disclosures contained therein.
In addition, ING Barings LLC shall have received from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP a letter addressed to the Company and made available to
you for the use of the Underwriters stating that their review of the
Company's system of internal accounting controls, to the extent they
deemed necessary in establishing the scope of their examination of the
Company's consolidated financial statements as of September 30, 1999,
did not disclose any weaknesses in internal controls that they
considered to be substantial or material weaknesses.
In the event that the letters to be delivered referred to
above set forth note any changes, decreases or increases in the
financial information included in the Registration Statement and the
Prospectus, it shall be a further condition to the obligations of the
Underwriters hereunder that ING Barings LLC shall have determined in
its sole judgment, that such changes, decreases or increases as are set
forth in such letters do not reflect a material adverse change in the
stockholders' equity or long-term debt of the Company as compared with
the amounts shown in the latest balance sheet of the Company included
in the Prospectus, or a material adverse change in total net revenues
or net income of the Company, in each case as compared with the
corresponding period of the prior year.
(g) Subsequent to the date this Agreement is executed or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to
in paragraph (f) of this Section 8 or (ii) any change, or any
development involving a prospective change, in or affecting the
condition (financial or other), earnings, business or properties of the
Company and the Subsidiary, whether or not arising in the ordinary
course of business, the effect of which, in any case referred to in
clause (i) or (ii) above, is, in ING Barings LLC's sole judgment,
material and adverse and that makes it impracticable or inadvisable to
proceed with the offering or delivery of the Shares as contemplated by
the Registration Statement (exclusive of any
38
amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
(h) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall
not have been a material adverse change, or any development involving a
prospective material adverse change, in the general affairs, business,
prospects, properties, management, key personnel, condition (financial
or other) or results of operations of the Company and the Subsidiary,
whether or not arising from transactions in the ordinary course of
business, in each case other than as set forth in the Registration
Statement and the Prospectus (or, in the case of a prospective change,
other than as contemplated by the Registration Statement and the
Prospectus), and (ii) the Company shall not have sustained any material
loss or interference with its business or properties from fire,
explosion, flood, hurricane or other casualty or calamity, whether or
not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not
set forth in the Registration Statement and the Prospectus, if in your
judgment any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares at the public offering
price.
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall
have been no litigation or other proceeding instituted against the
Company or any of its officers or directors in their capacities as
such, before or by any federal, state, or local court, commission,
regulatory body, administrative agency or other governmental body,
domestic or foreign, in which litigation or proceeding an unfavorable
ruling, decision or finding could have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole.
(j) At the time of execution of this Agreement, the Company
shall have furnished to you a letter addressed to you from each officer
and director of the Company and each shareholder or other person
heretofore designated by you, in which each such person agrees not to
(1) offer for sale, contract to sell, sell, pledge or otherwise dispose
of (or enter 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 shares of Common Stock or securities
convertible into, exercisable or exchangeable for, or represent the
right to receive, Common Stock or sell or grant options, rights or
warrants with respect to any shares of Common Stock or register for
sale any outstanding shares of Common Stock; or (2) enter into any swap
or other derivatives
39
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common Stock
or securities, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise for a period of 180 days following the
time of execution of this Agreement without your prior written consent,
other than shares of Common Stock disposed of as gifts or transfers to
immediate family members or trusts or partnerships, the beneficiaries
and sole partners of which are immediate family members, provided that
the donee or transferee agrees in writing to be bound in the same
manner.
(k) The Shares shall be qualified for sale in such
jurisdictions as you shall have requested, each such qualification
shall be in effect and not subject to any stop order or other
proceeding on the Closing Date and the Additional Closing Date, if
applicable.
(l) The Shares shall have been authorized for quotation on the
Nasdaq National Market, subject to official notice of issuance.
(m) You shall not have advised the Company that the
Registration Statement, the preliminary prospectus or the Prospectus,
or any amendment or any supplement thereto, contains an untrue
statement of fact which, in your judgment, is material, or omits to
state a fact which, in your judgment, is material and is required to be
stated therein or necessary to make the statements therein not
misleading and the Company shall not have cured such untrue statement
of fact or omission of such statement of fact.
(n) The Company shall have furnished to you such certificates,
in addition to those specifically mentioned herein, as you may have
requested as to the accuracy and completeness at the Closing Date and
the Additional Closing Date, if applicable, of any statement in the
Registration Statement, the preliminary prospectus or the Prospectus,
as to the accuracy at the Closing Date and the Additional Closing Date,
if applicable, of the representations, warranties and covenants of the
Company herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and
precedent to your obligations hereunder.
(o) Prior to the Closing Date and the Additional Closing Date,
if applicable, the Company shall have furnished to the Underwriters
such further information and documents as you may reasonably request.
If any of the conditions specified in this Section shall not
have been fulfilled in all respects when and as required to be satisfied, or if
any of the
40
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be satisfactory in form and substance to you and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be terminated at, or at any time on or prior to, the Closing Date (and
Additional Closing Date, if applicable) by ING Barings LLC. Notice of such
termination shall be given to the Company promptly in writing or by telephone
confirmed in writing.
9. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or
their obligations to purchase Firm Shares or Option Shares hereunder,
and if the Firm Shares or Option Shares with respect to which such
default relates do not (after giving effect to arrangements, if any,
made by you pursuant to subsection (b) below) exceed in the aggregate
10% of the number of Firm Shares or Option Shares, the Shares to which
the default relates shall be purchased by the non-defaulting
Underwriters in proportion to the respective proportions which the
numbers of Firm Shares set forth opposite their respective names in
Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of
the Firm Shares or Option Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties
(including any non-defaulting Underwriter or Underwriters who so agree)
to purchase such Firm Shares or Option Shares, as the case may be, to
which such default relates on the terms contained herein. In the event
that within 5 calendar days after such a default you do not arrange for
the purchase of the Firm Shares or Option Shares, as the case may be,
to which such default relates as provided in this Section 9, this
Agreement or, in the case of a default with respect to the Option
Shares, the obligations of the Underwriters to purchase and of the
Company to sell the Option Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in
each case as provided in Section 5, 6(a) and 7 hereof) or the
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the
other Underwriters and the Company for damages occasioned by its or
their default hereunder.
(c) In the event that the Firm Shares or Option Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as
aforesaid, you or the Company shall have the right to postpone the
Closing Date or Additional
41
Closing Date, as the case may be, for a period not exceeding five
business days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus or in any
other documents and arrangements, and the Company agrees to file
promptly any amendment or supplement to the Registration Statement or
the Prospectus which, in the opinion of Underwriters' counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used
in this Agreement shall include any party substituted under this
Section 9 with like effect as if it had originally been a party to this
Agreement with respect to such Firm Shares and Option Shares.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements of the Underwriters and
the Company contained in this Agreement, including the agreements contained in
Section 4 and Section 5, the indemnity agreements contained in Section 6 and the
contribution agreements contained in Section 7, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person thereof or by or on behalf of the
Company, any of its officers and directors or any controlling person thereof,
and shall survive delivery of and payment for the Shares to and by the
Underwriters. The representations contained in Section 1 and the agreements
contained in Sections 5, 6, 7 and 11(d) hereof also shall survive the
termination of this Agreement, including termination pursuant to Section 9 or 11
hereof.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective, upon the later of
when (i) you and the Company shall have received notification of the
effectiveness of the Registration Statement or (ii) the execution of
this Agreement. If either the initial public offering price or the
purchase price per Share has not been agreed upon prior to 5:00 P.M.,
New York time, on the fifth full business day after the Registration
Statement shall have become effective, this Agreement shall thereupon
terminate without liability to the Company or the Underwriters except
as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying you or by
you notifying the Company. Notwithstanding the foregoing, the
provisions of this Section 11 and of Sections 1, 5, 6 and 7 hereof
shall at all times be in full force and effect.
(b) ING Barings LLC shall have the right to terminate this
Agreement at any time on or prior to the Closing Date, or the
obligations of the Underwriters to purchase the Option Shares at any
time on or prior to the Additional Closing Date, as the case may be
(but in any event prior
42
to delivery of and payment for the Shares), if (A) any domestic or
international event or act or occurrence has materially disrupted, or
in your opinion will in the immediate future materially disrupt, the
market for the Company's securities or securities in general; or (B) if
trading on the New York Stock Exchange, the American Stock Exchange or
NASDAQ National Market shall have been suspended, or limited, minimum
or maximum prices for trading shall have been fixed, or maximum ranges
for prices for securities shall have been required, on the New York
Stock Exchange, the American Stock Exchange or the NASDAQ National
Market, by the New York Stock Exchange, the American Stock Exchange, or
NASDAQ or by order of the Commission or any other governmental
authority having jurisdiction; or (C) if a banking moratorium has been
declared by a state or federal authority or if any new restriction
materially adversely affecting the distribution of the Firm Shares or
the Option Shares, as the case may be, shall have become effective; or
(D)(i) there shall have occurred any outbreak or escalation of
hostilities or there is an outbreak or escalation of national or
international hostilities or there is a declaration by the United
States of a national emergency or war or (ii) if there has been any
crisis or calamity or any change or development in United States' or
international political, financial or economic conditions, if the
effect of any such event in (D)(i) or (D)(ii), in the sole judgment of
ING Barings LLC makes it impracticable or inadvisable to proceed with
the offering, sale and delivery of the Firm Shares or the Option
Shares, as the case may be, on the terms contemplated by the Prospectus
(exclusive of any supplement thereto) or to enforce contracts for the
sale of securities; or (E) in the sole judgment of ING Barings LLC
there shall have occurred any Material Adverse Effect on the Company
and its subsidiaries taken as a whole or (F) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other
calamity of such character as in the sole judgment of ING Barings LLC
may interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall
have been insured. Any termination pursuant to this Section shall be
without liability on the part of (a) the Company to any Underwriter,
except that the Company shall be obligated to reimburse the expenses of
ING Barings LLC and the underwriters pursuant to Sections 5, 6 and 7
hereof, (b) any Underwriter to the Company or (c) of any party hereto
to any other party except that the provisions of Sections 5, 6 and 7
shall at all times be effective and shall survive such termination.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone or facsimile and confirmed in writing by letter.
43
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to (i) notification by
you as provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b)
hereof), or if the sale of the Shares provided for herein is not
consummated because any condition to the obligations of the
Underwriters set forth herein is not satisfied or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, the Company will,
subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the fees and expenses of their
counsel), incurred by the Underwriters in connection herewith.
12. NOTICES. Any notice or notification in any form to be
given hereunder shall be in writing and shall be delivered in person or sent by
telephone or facsimile transmission (but in the case of a notification by
telephone, with subsequent confirmation by letter or facsimile transmission).
Any notice or notification to you shall be addressed to:
ING Barings LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Office of the General Counsel
Any notice or notification to the Company shall be addressed
to the Company at:
FASTNET Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Any notice or notification shall (subject to confirmation when
required) take effect at the time of receipt.
13. PARTIES. This Agreement shall insure solely to the benefit
of, and shall be binding upon, the Underwriters and the Company and the
controlling persons, directors, officers, employees and agents referred to in
Section 6 and 7, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The term "successors and assigns" shall not include a
purchaser, in
44
its capacity as such, of Shares from any of the Underwriters. Notwithstanding
the foregoing, this Agreement and the terms and provisions hereof are, unless
otherwise specified herein, for the sole benefit of only those persons, except
that (a) the representations, warranties, indemnities and agreements of the
Company contained in this Agreement shall also be deemed to be for the benefit
of each Purchaser Indemnified Party and (b) the indemnity agreement of the
Underwriters contained in Section 6 hereof shall be deemed to be for the benefit
of each Company Indemnified Party.
14. CONSENT TO JURISDICTION. Any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the federal
courts of the United States of America located in the City and County of New
York or the courts of the State of New York in each case located in the City and
County of New York (collectively, the "Specified Courts"), and each party
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"Related Judgment"), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. Service of any process, summons,
notice or document by mail to such party's address set forth above shall be
effective service of process for any suit, action or other proceeding brought in
any such court. The parties irrevocably and unconditionally waive any objection
to the laying of venue of any suit, action or other proceeding in the Specified
Courts and irrevocably and unconditionally waive and agree not to plead or claim
in any such court that any such suit, action or other proceeding brought in any
such court has been brought in an inconvenient forum.
With respect to any Related Proceeding, each party irrevocably
waives, to the fullest extent permitted by applicable law, all immunity (whether
on the basis of sovereignty or otherwise) from jurisdiction, service of process,
attachment (both before and after judgment) and execution to which it might
otherwise be entitled in the Specified Courts or any other court of competent
jurisdiction, and will not raise or claim or cause to be pleaded any such
immunity at or in respect of any such Related Proceeding or Related Judgment,
including, without limitation, any immunity pursuant to the United States
Foreign Sovereign Immunities Act of 1976, as amended.
15. MISCELLANEOUS. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
This Agreement may be executed in one or more counterparts, and if executed in
more than one counterpart, the executed counterparts shall together constitute a
single instrument. The descriptive headings in this Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof.
45
Time shall be of the essence of this Agreement.
This Agreement constitutes the entire agreement of the parties
to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
If any provision or portion of any provision of the Agreement,
or the application of any such provision or any portion thereof to any party or
circumstances, shall be held invalid or unenforceable, the remaining portion of
such provision and the remaining portion of such provision and the remaining
provisions of this agreement, and the application of such provision or portion
of such provision as is held invalid or unenforceable to any parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and such remaining portion of such provision and
the remaining provisions of this Agreement shall continue to be valid and in
full force and effect.
If the foregoing is in accordance with the Underwriters'
understanding of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the Underwriters in accordance with its terms.
46
This Agreement may be signed in counterparts which together
shall constitute one and the same instrument.
Very truly yours,
FASTNET Corporation
By:
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
ING Barings LLC
By: ,
-----------------------------------
Name:
Title:
For itself and the other several Underwriters
named in Schedule I to the foregoing Agreement.
47
SCHEDULE I
NUMBER OF FIRM
SHARES TO BE
UNDERWRITERS PURCHASED
------------ ---------------
ING Barings LLC ...................................
SoundView Technology Group, Inc....................
FAC/Equities, a division of
First Albany Corporation........................
DLJDIRECT Inc......................................
---------------
Total .....................................
===============
48
ANNEX A
Part I
Part II
49