EXHIBIT 1
3,400,000 SHARES/1/
BOTTOMLINE TECHNOLOGIES (DE), INC.
Common Stock
UNDERWRITING AGREEMENT
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_____________, 1999
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.
BT Alex. ▇▇▇▇▇ Incorporated
As Representatives of the several Underwriters
c/o BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Bottomline Technologies (de), Inc., a Delaware corporation (the "Company"),
and certain stockholders of the Company named in Schedule B hereto (hereafter
called the "Selling Stockholders") address you as the Representatives of each of
the persons, firms and corporations listed in Schedule A hereto (herein
collectively called the "Underwriters") and hereby confirm their respective
agreements with the several Underwriters as follows:
1. Description of Shares. The Company proposes to issue and sell
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2,519,466 shares (the "Company Shares") of its authorized and unissued common
stock, $.001 par value per share, to the several Underwriters. The Selling
Stockholders, acting severally and not jointly, propose to sell an aggregate of
880,534 shares (the "Selling Stockholder Shares") of the Company's authorized
and outstanding common stock, $.001 par value per share, to the several
Underwriters. The Company Shares and the Selling Stockholder Shares are
hereinafter collectively referred to as the "Firm Shares." The Company also
proposes to grant, severally and not jointly, to the Underwriters an option to
purchase up to 510,000 additional shares of the Company's common stock, $.001
par value per share (the "Option Shares"), as provided in Section 7. As used in
this Agreement, the term "Shares" shall include the Firm Shares and the Option
Shares. All shares of the Company's common stock, $.001 par value per share, to
be outstanding after giving effect to the sales contemplated hereby, including
the Shares, are hereinafter referred to as "Common Stock."
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/1/ Plus an option to purchase up to 510,000 additional shares from the Company
to cover over-allotments.
2. Representations, Warranties and Agreements of the Company and the
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Selling Stockholders.
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I. The Company represents and warrants to and agrees with each
Underwriter and each Selling Stockholder that:
(a) A registration statement on Form S-1 (File No. 333-67309)
with respect to the Shares, including a prospectus subject to completion, has
been prepared by the Company in conformity in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
applicable rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") under the Act and has
been filed with the Commission; such amendments to such registration
statement, such amended prospectuses subject to completion and such
abbreviated registration statements pursuant to Rule 462(b) of the Rules and
Regulations as may have been required prior to the date hereof have been
similarly prepared and filed with the Commission; and the Company will file
such additional amendments to such registration statement, such amended
prospectuses subject to completion and such abbreviated registration
statements as may hereafter be required. Copies of such registration
statement and amendments, of each related prospectus subject to completion
(the "Preliminary Prospectuses") and of any abbreviated registration
statement pursuant to Rule 462(b) of the Rules and Regulations have been
delivered to you.
If the registration statement relating to the Shares has been
declared effective under the Act by the Commission, the Company will prepare
and promptly file with the Commission the information omitted from the
registration statement pursuant to Rule 430A(a) or, if BancBoston ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc., on behalf of the several Underwriters, shall agree to the
utilization of Rule 434 of the Rules and Regulations, the information
required to be included in any term sheet filed pursuant to Rule 434(b) or
(c), as applicable, of the Rules and Regulations pursuant to subparagraph
(1), (4) or (7) of Rule 424(b) of the Rules and Regulations or as part of a
post-effective amendment to the registration statement (including a final
form of prospectus). If the registration statement relating to the Shares has
not been declared effective under the Act by the Commission, the Company will
prepare and promptly file an amendment to the registration statement,
including a final form of prospectus, or, if BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Inc., on behalf of the several Underwriters, shall agree to the utilization
of Rule 434 of the Rules and Regulations, the information required to be
included in any term sheet filed pursuant to Rule 434(b) or (c), as
applicable, of the Rules and Regulations. The term "Registration Statement"
as used in this Agreement shall mean such registration statement, including
financial statements, schedules and exhibits, in the form in which it became
or becomes, as the case may be, effective (including, if the Company omitted
information from the registration statement pursuant to Rule 430A(a) or files
a term sheet pursuant to Rule 434 of the Rules and Regulations, the
information deemed to be a part of the registration statement at the time it
became effective pursuant to Rule 430A(b) or Rule 434(d) of the Rules and
Regulations) and, in the event of any amendment thereto or the filing of any
abbreviated registration statement pursuant to Rule 462(b) of the Rules and
Regulations relating thereto after the effective date of such registration
statement, shall also mean (from and after the effectiveness of such
amendment or the filing of such abbreviated registration statement) such
registration statement as so amended, together with any such abbreviated
registration statement. The term "Prospectus" as used in this Agreement shall
mean the prospectus relating to the Shares as included in such Registration
Statement at the time it becomes effective (including, if the Company omitted
information from the Registration Statement pursuant to Rule 430A(a) of the
Rules and Regulations, the information deemed to be a part of the
Registration Statement at the time it became effective pursuant to Rule
430A(b) of the Rules and Regulations); provided, however, that if in reliance
on Rule 434 of the Rules and Regulations and with the consent of BancBoston
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., on behalf of the several Underwriters, the Company
shall
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have provided to the Underwriters a term sheet pursuant to Rule 434(b) or
(c), as applicable, prior to the time that a confirmation is sent or given
for purposes of Section 2(10)(a) of the Act, the term "Prospectus" shall mean
the "prospectus subject to completion" (as defined in Rule 434(g) of the
Rules and Regulations) last provided to the Underwriters by the Company and
circulated by the Underwriters to all prospective purchasers of the Shares
(including the information deemed to be a part of the Registration Statement
at the time it became effective pursuant to Rule 434(d) of the Rules and
Regulations). Notwithstanding the foregoing, if any revised prospectus shall
be provided to the Underwriters by the Company for use in connection with the
offering of the Shares that differs from the prospectus referred to in the
immediately preceding sentence (whether or not such revised prospectus is
required to be filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Underwriters
for such use. If in reliance on Rule 434 of the Rules and Regulations and
with the consent of BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., on behalf of the
several Underwriters, the Company shall have provided to the Underwriters a
term sheet pursuant to Rule 434(b) or (c), as applicable, prior to the time
that a confirmation is sent or given for purposes of Section 2(10)(a) of the
Act, the Prospectus and the term sheet, together, will not be materially
different from the prospectus in the Registration Statement.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or instituted proceedings for that
purpose. Each Preliminary Prospectus has conformed in all material respects
to the requirements of the Act and the Rules and Regulations and, as of its
date, has not included any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. At the time
the Registration Statement became or becomes, as the case may be, effective
and at all times subsequent thereto up to and on the Closing Date (as defined
in Section 3) and on any later date on which Option Shares are to be
purchased: (i) the Registration Statement and the Prospectus, and any
amendments or supplements thereto, contained and will contain all material
information required to be included therein by the Act and the Rules and
Regulations and will in all material respects conform to the requirements of
the Act and the Rules and Regulations; (ii) the Registration Statement, and
any amendments or supplements thereto, did not and will 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 (iii) the Prospectus, and any amendments or supplements
thereto, did not and will not include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, none of the representations and warranties
contained in this subparagraph (b) shall apply to information contained in or
omitted from the Registration Statement or Prospectus, or any amendment or
supplement thereto, in reliance upon, and in conformity with, written
information relating to any Underwriter furnished to the Company by such
Underwriter specifically for use in the preparation thereof.
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
full power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Prospectus. The
Company is duly qualified to do business as a foreign corporation and is in
good standing in each of the states listed on Exhibit I hereto, and the
Company's failure to be so qualified or be in good standing in any other
jurisdictions could not reasonably be expected to have a material adverse
effect on the Company's earnings, operations, business or business prospects.
No proceeding has been instituted in any such jurisdiction revoking, limiting
or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification. The Company is in possession of and operating in
3
compliance with all authorizations, licenses, certificates, consents, orders
and permits from state, federal and other regulatory authorities that are
material to the conduct of its business, all of which are valid and in full
force and effect. The Company is not in violation of its certificate of
incorporation or bylaws or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
material bond, debenture, note or other evidence of indebtedness, or in any
material lease, contract, indenture, mortgage, deed of trust, loan agreement,
joint venture or other agreement or instrument to which the Company is a
party or by which it or its properties may be bound. The Company is not in
material violation of any law, order, rule, regulation, writ, injunction,
judgment or decree of any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or its properties
of which it has knowledge. The Company does not own or control, directly or
indirectly, any corporation, association or other entity.
(d) The Company has full legal right, power and authority to enter
into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement on the part of the Company, enforceable in
accordance with its terms, except as rights to indemnification hereunder may
be limited by applicable law and except as the enforcement hereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles. The performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a
material breach or violation of any of the terms and provisions of, or
constitute a default under: (i) any bond, debenture, note or other evidence
of indebtedness, or under any lease, contract, indenture, mortgage, deed of
trust, loan agreement, joint venture or other agreement or instrument to
which the Company is a party or by which it or its properties may be bound;
(ii) the certificate of incorporation or bylaws of the Company; or (iii) any
law, order, rule, regulation, writ, injunction, judgment or decree of any
court, government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or its properties. No consent, approval,
authorization or order of or qualification with any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over
the Company or its properties is required for the execution and delivery of
this Agreement and the consummation by the Company of the transactions herein
contemplated, except such as may be required under the Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or under state or
other securities or Blue Sky laws, all of which requirements have been
satisfied in all material respects.
(e) There is not any pending or, to the Company's knowledge,
threatened action, suit, claim or proceeding against the Company or its
officers (as such), properties, assets or rights before any court, government
or governmental agency or body, domestic or foreign, having jurisdiction over
the Company or its officers (as such), properties or otherwise that (i) could
reasonably be expected to result in any material adverse change in the
earnings, operations, business or business prospects of the Company or could
reasonably be expected to materially and adversely affect the Company's
properties, assets or rights, (ii) could reasonably be expected to prevent
consummation of the transactions contemplated hereby or (iii) is required to
be disclosed in the Registration Statement or Prospectus and is not so
disclosed. There are no agreements, contracts, leases or documents of the
Company of a character required to be described or referred to in the
Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement by the Act or the Rules and Regulations that have not
been accurately described in all material respects in the Registration
Statement or Prospectus or filed as exhibits to the Registration Statement.
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(f) All outstanding shares of capital stock of the Company (including
the Selling Stockholder Shares) 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, were not issued in violation of any
preemptive rights or other rights of stockholders to subscribe for or
purchase securities, and the authorized and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption "Capitalization"
and conforms in all material respects to the statements relating thereto
contained in the Registration Statement and the Prospectus (and such
statements correctly state the substance of the instruments defining the
capitalization of the Company). The Shares to be purchased from the Company
hereunder have been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and delivered by the Company
against payment therefor in accordance with the terms of this Agreement, will
be duly and validly issued and fully paid and nonassessable, and will be sold
free and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest. No preemptive right, co-sale right, registration right,
right of first refusal or other similar right of stockholders exists with
respect to any of the Shares to be purchased from the Company hereunder or
the issuance and sale thereof other than those that have been expressly
waived prior to the date hereof and those that will automatically expire upon
and will not apply to the consummation of the transactions contemplated on
the Closing Date. No further approval or authorization of any stockholder,
the Board of Directors of the Company or others is required for the issuance
and sale or transfer of the Shares except as may be required under the Act,
the Exchange Act or under state or other securities or Blue Sky laws. Except
as disclosed in the Prospectus and the financial statements of the Company,
and the related notes thereto, included in the Prospectus, the Company does
not have any outstanding options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
its capital stock or any such options, rights, convertible securities or
obligations. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted
and exercised thereunder, set forth in the Prospectus accurately and fairly
presents in all material respects the information required to be shown with
respect to such plans, arrangements, options and rights.
(g) Ernst & Young LLP, which has examined the financial statements of
the Company, together with the related schedules and notes, as of June 30,
1997 and 1998 and for each of the years in the three years ended June 30,
1998, filed with the Commission as a part of the Registration Statement,
which are included in the Prospectus, are independent accountants within the
meaning of the Act and the Rules and Regulations. The audited financial
statements of the Company, together with the related schedules and notes, and
the unaudited financial information forming part of the Registration
Statement and the Prospectus fairly present in all material respects the
financial position and the results of operations of the Company at the
respective dates and for the respective periods to which they apply. All
audited financial statements of the Company, together with the related
schedules and notes, and the unaudited financial information filed with the
Commission as part of the Registration Statement have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved except as may be otherwise stated therein.
The selected and summary financial and statistical data included in the
Registration Statement present fairly in all material respects the
information shown therein and have been compiled on a basis consistent with
the audited financial statements presented therein.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been (i)
any material adverse change in the earnings, operations, business or business
prospects of the Company, (ii) any transaction that is material to the
Company, except transactions entered into in the ordinary course of business,
(iii) any
5
material obligation, direct or contingent, incurred by the Company, except
any obligation incurred in the ordinary course of business, (iv) any material
change in the capital stock or outstanding indebtedness of the Company, (v)
any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company, or (vi) any loss or damage (whether or not
insured) to the property of the Company that has been sustained or will have
been sustained that has a material adverse effect on the earnings,
operations, business or business prospects of the Company.
(i) Except as set forth in the Registration Statement and Prospectus,
(i) the Company has good and marketable title to all properties and assets
described in the Registration Statement and Prospectus as owned by it, free
and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest, other than such as would not have a material adverse
effect on the earnings, operations, business or business prospects of the
Company, (ii) the agreements to which the Company is a party described in the
Registration Statement and Prospectus are valid agreements, enforceable by
the Company, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles and, to the Company's knowledge, the other contracting party or
parties thereto are not in material breach or material default under any of
such agreements, and (iii) the Company has valid and enforceable leases for
all properties described in the Registration Statement and Prospectus as
leased by it, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles. Except as set forth in the Registration Statement and Prospectus,
the Company owns or leases all such properties as are necessary to its
operations as now conducted and as set forth in the Prospectus.
(j) The Company has timely filed all necessary federal, state and
foreign income and franchise tax returns and has paid all taxes shown thereon
as due except where the failure to do so would not have a material adverse
effect to the earnings, operations, business or business prospects of the
Company. There is no tax deficiency that has been or, to the best of the
Company's knowledge, might be asserted against the Company that might have a
material adverse effect on the earnings, operations, business or business
prospects of the Company. All tax liabilities are adequately provided for on
the books of the Company.
(k) The Company maintains insurance with insurers of recognized
financial responsibility of the types and in the amounts generally deemed
adequate for its business and consistent with insurance coverage maintained
by similar companies in similar businesses, including insurance covering real
and personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect. The Company does
not have any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
at a cost that would not materially and adversely affect the earnings,
operations, business or business prospects of the Company.
(l) To the best of Company's knowledge, no labor disturbance by the
employees of the Company exists or is imminent. No collective bargaining
agreement exists with any of the Company's employees and, to the best of the
Company's knowledge, no such agreement is imminent.
(m) The Company owns or possesses adequate rights to use all patents,
patent rights, inventions, trade secrets, know-how, trademarks, service
marks, trade names and copyrights that are
6
necessary to conduct its business as described in the Registration Statement
and Prospectus. The Company has not received any notice of, and has no
knowledge of, any infringement of or conflict with asserted rights of the
Company by others with respect to any patent, patent rights, inventions,
trade secrets, know-how, trademarks, service marks, trade names or
copyrights. The Company has not received any notice of, and has no knowledge
of, any infringement of or conflict with asserted rights of others with
respect to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
might have a material adverse effect on the earnings, operations, business or
business prospects of the Company.
(n) The Common Stock has been approved for quotation on the Nasdaq
National Market, subject to official notice of issuance.
(o) The Company has been advised concerning the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder, and has in
the past conducted, and intends in the future to conduct, its affairs in such
a manner as to ensure that it will not become an "investment company" or a
company "controlled" by an "investment company" within the meaning of such
Act and rules and regulations.
(p) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date, or any later date on which Option Shares
are to be purchased, as the case may be, and (ii) completion of the
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than any Preliminary Prospectuses, the
Prospectus, the Registration Statement and other materials, if any, permitted
by the Act.
(q) The Company has not at any time during the last five years (i)
made any unlawful contribution to any candidate for foreign office or failed
to disclose fully any contribution in violation of law or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States or any
jurisdiction thereof.
(r) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(s) Each officer and director of the Company and each record holder
of shares of Common Stock (other than the holders identified in the letter
dated the date hereof from the Company to the Representatives) has agreed in
writing that such person will not, for a period of 180 days after the date of
the Prospectus (the "Lock-Up Period"), offer to sell, contract to sell, or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to
(each a "Disposition") any shares of Common Stock or any securities
convertible into or exchangeable for shares of Common Stock (collectively,
"Securities") now owned or hereafter acquired directly by such person or with
respect to which such person has or hereafter acquires the power of
disposition, otherwise than (i) as a distribution to limited partners,
members, or shareholders of such person, (ii) by gift, will or intestacy,
(iii) in the event such person is an individual, to his or her immediate
family or to a trust the beneficiaries of which are exclusively such person,
his or her parent or parents and/or a member or members of his or her
immediate family, (iv) to such person's affiliates, as such term is defined
in Rule 405 under the Act, provided that the transferees, donees or
distributees thereof under clauses (i), (ii), (iii) and (iv) (as the case may
be) agree in writing to be bound by the terms of this restriction, or
7
(v) with the prior written consent of BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. The
foregoing restriction is expressly agreed to preclude the holder of the
Securities from engaging in any hedging or other transaction that is designed
to or reasonably expected to lead to or result in a Disposition of Securities
during the Lock-Up Period, even if such Securities would be disposed of by
someone other than such person. Such prohibited hedging or other transactions
shall include any short sale (whether or not against the box) or any
purchase, sale or grant of any right (including any put or call option) with
respect to any Securities or with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from the Securities. Notwithstanding the
foregoing, this restriction shall not prohibit (i) the sale of Shares by the
Selling Stockholders to the Underwriters pursuant to this Agreement or (ii)
resales of shares of Common Stock acquired by such person in the public
offering to which the Registration Statement relates or in subsequent open-
market purchases. Such person has agreed and consented to the entry of stop
transfer instructions with the Company's transfer agent against the transfer
of the Securities held by such person except in compliance with this
restriction. The Company has provided to ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ llp, counsel for
the several Underwriters ("Underwriters' Counsel"), a complete and accurate
list of all securityholders of the Company and the number and type of
securities held by each securityholder. The Company has provided to
Underwriters' Counsel true, accurate and complete copies of all of the
agreements pursuant to which its officers, directors and stockholders have
agreed to such or similar restrictions (the "Lock-Up Agreements") presently
in effect or effected hereby. The Company hereby represents and warrants that
it will not release any of its officers, directors or other stockholders from
any Lock-Up Agreements currently existing or hereafter effected without the
prior written consent of BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
(t) Except as set forth in the Registration Statement and Prospectus:
(i) the Company is in compliance with all rules, laws and regulations
relating to the use, treatment, storage and disposal of toxic substances and
protection of health or the environment ("Environmental Laws") that are
applicable to its business, except where the failure to be in compliance is
not reasonably expected to have a material adverse effect on the earnings,
operations, business or business prospects of the Company; (ii) the Company
has received no written notice from any governmental authority or third party
of an asserted claim under Environmental Laws, which claim is required to be
disclosed in the Registration Statement and the Prospectus; (iii) the Company
will not be required to make future material capital expenditures to comply
with Environmental Laws as currently in effect; and (iv) no property that is
owned, leased or occupied by the Company has been designated as a Superfund
site pursuant to the Comprehensive Response, Compensation, and Liability Act
of 1980, as amended (42 U.S.C. (S) 9601, et seq.), or has been otherwise
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designated as a contaminated site under applicable state or local law.
(u) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that: (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(v) 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 to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of
them, except as disclosed in the Registration Statement and the Prospectus.
8
II. Each Selling Stockholder, severally and not jointly, represents
and warrants to and agrees with each Underwriter and the Company that:
(a) Such Selling Stockholder now has and on the Closing Date,
and on any later date on which Option Shares are to be purchased from such
Selling Stockholder, will have valid marketable title to the Shares to be
sold by such Selling Stockholder, free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest other than
pursuant to this Agreement. Upon delivery of such Shares hereunder and
payment of the purchase price as herein contemplated, each of the
Underwriters will obtain valid marketable title to the Shares purchased by it
from such Selling Stockholder, free and clear of any pledge, lien, security
interest pertaining to such Selling Stockholder or such Selling Stockholder's
property, encumbrance, claim or equitable interest, including any liability
for estate or inheritance taxes, or any liability to or claims of any
creditor, devisee, legatee or beneficiary of such Selling Stockholder,
assuming that they are bona fide purchasers within the meaning of the Uniform
Commercial Code.
(b) Such Selling Stockholder has duly authorized, executed and
delivered, in the form heretofore furnished to the Representatives, an
irrevocable Power of Attorney (the "Power of Attorney") appointing ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as attorneys-in-fact
(collectively, the "Attorneys" and individually, an "Attorney") and a Letter
of Transmittal and Custody Agreement (the "Custody Agreement") with the
Company, as custodian (the "Custodian"). Each of the Power of Attorney and
the Custody Agreement constitutes a valid and binding agreement on the part
of such Selling Stockholder, enforceable in accordance with its terms, except
as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles.
Each of the Attorneys, acting alone, is authorized to execute and deliver
this Agreement and the certificate referred to in Section 6(h) on behalf of
such Selling Stockholder, to determine the purchase price to be paid by the
several Underwriters to such Selling Stockholder as provided in Section 3, to
authorize the delivery of the Shares to be sold by such Selling Stockholder
under this Agreement and to duly endorse (in blank or otherwise) the
certificate or certificates representing such Shares or a stock power or
powers with respect thereto, to accept payment therefor, and otherwise to act
on behalf of such Selling Stockholder in connection with this Agreement.
(c) All consents, approvals, authorizations and orders required
for the execution and delivery by such Selling Stockholder of the Power of
Attorney and the Custody Agreement, the execution and delivery by or on
behalf of such Selling Stockholder of this Agreement and the sale and
delivery of the Shares to be sold by such Selling Stockholder under this
Agreement (other than, at the time of the execution hereof (if the
Registration Statement has not yet been declared effective by the
Commission), the issuance of the order of the Commission declaring the
Registration Statement effective and such consents, approvals, authorizations
or orders as may be necessary under state or other securities or Blue Sky
laws) have been obtained and are in full force and effect. Such Selling
Stockholder, if other than a natural person, has been duly organized and is
validly existing in good standing under the laws of the jurisdiction of its
organization as the type of entity that it purports to be. Such Selling
Stockholder has full legal right, power and authority to enter into and
perform its obligations under this Agreement and such Power of Attorney and
Custody Agreement, and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder under this Agreement.
(d) Such Selling Stockholder will not, during the Lock-Up
Period, effect a Disposition of any Securities now owned or hereafter
acquired directly by such Selling Stockholder or with respect to which such
Selling Stockholder has or hereafter acquires the power of disposition,
otherwise than
9
(i) as a distribution to limited partners, members, or shareholders of such
Selling Stockholder, (ii) by gift, will or intestacy, (iii) in the event such
Selling Stockholder is an individual, to his or her immediate family or to a
trust the beneficiaries of which are exclusively such Selling Stockholder,
his or her parent or parents and/or a member or members of his or her
immediate family, (iv) to such Selling Stockholder's affiliates, as such term
is defined in Rule 405 under the Act, provided that the transferees, donees
or distributees thereof under clauses (i), (ii), (iii) and (iv) (as the case
may be) agree in writing to be bound by the terms of this restriction, or (v)
with the prior written consent of BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. The
foregoing restriction is expressly agreed to preclude such Selling
Stockhholder from engaging in any hedging or other transaction that is
designed to or reasonably expected to lead to or result in a Disposition of
Securities during the Lock-Up Period, even if such Securities would be
disposed of by someone other than the Selling Stockholder. Such prohibited
hedging or other transactions include any short sale (whether or not against
the box) or any purchase, sale or grant of any right (including any put or
call option) with respect to any Securities or with respect to any security
(other than a broad-based market basket or index) that includes, relates to
or derives any significant part of its value from the Securities.
Notwithstanding the foregoing, this restriction does not prohibit (i) the
sale of Shares to the Underwriters pursuant to this Agreement or (ii) resales
of shares of Common Stock acquired by such Selling Stockholder in the public
offering to which the Registration Statement relates or in subsequent open-
market purchases. Such Selling Stockholder agrees and consents to the entry
of stop transfer instructions with the Company's transfer agent against the
transfer of the Securities held by such Selling Stockholder except in
compliance with this restriction.
(e) Certificates in negotiable form for all Shares to be sold by
such Selling Stockholder under this Agreement, together with a stock power or
powers duly endorsed in blank by such Selling Stockholder, have been placed
in custody with the Custodian for the purpose of effecting delivery
hereunder.
(f) This Agreement has been duly authorized by each Selling
Stockholder that is not a natural person and has been duly executed and
delivered by or on behalf of such Selling Stockholder and is a valid and
binding agreement of such Selling Stockholder, enforceable in accordance with
its terms, except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles. The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of
any of the terms and provisions of or constitute a default under any bond,
debenture, note or other evidence of indebtedness, or under any lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture
or other agreement or instrument to which such Selling Stockholder is a party
or by which such Selling Stockholder, or any Shares to be sold by such
Selling Stockholder hereunder, may be bound or, to the best of such Selling
Stockholder's knowledge, result in any violation of any law, order, rule,
regulation, writ, injunction, judgment or decree of any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over
such Selling Stockholder or over the properties of such Selling Stockholder,
or, if such Selling Stockholder is other than a natural person, result in any
violation of any provisions of the charter, bylaws or other organizational
documents of such Selling Stockholder.
(g) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
10
(h) Such Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
(i) All information furnished by or on behalf of such Selling
Stockholder relating to such Selling Stockholder and the Shares that is
contained in the representations and warranties of such Selling Stockholder
in such Selling Stockholders Power of Attorney or set forth in the
Registration Statement or the Prospectus is, and at the time the Registration
Statement became or becomes, as the case may be, effective and at all times
subsequent thereto up to and on the Closing Date, was or will be, true,
correct and complete, and does not, and at the time the Registration
Statement became or becomes, as the case may be, effective and at all times
subsequent thereto up to and on the Closing Date, will not, contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make such information not misleading.
(j) Such Selling Stockholder will review the Prospectus and will
comply with all agreements and satisfy all conditions on its part to be
complied with or satisfied pursuant to this Agreement on or prior to the
Closing Date and will advise one of the Attorneys and BancBoston ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc. prior to the Closing Date if any statement to be made on behalf
of such Selling Stockholder in the certificate contemplated by Section 6(h)
would be inaccurate in any material respect if made as of the Closing Date or
such later date on which Option Shares are to be purchased, as the case may
be.
(k) Such Selling Stockholder does not have, or has waived prior to
the date hereof, any preemptive right, co-sale right or right of first
refusal or other similar right to purchase any of the Shares that are to be
sold by the Company or the other Selling Stockholders to the Underwriters
pursuant to this Agreement. Such Selling Stockholder does not have, or has
waived prior to the date hereof, any registration right or other similar
right to participate in the offering made by the Prospectus, other than such
rights of participation as have been satisfied by the participation of such
Selling Stockholder in the transactions to which this Agreement relates in
accordance with the terms of this Agreement. Such Selling Stockholder does
not own any warrants, options or similar rights to acquire, and does not have
any right or arrangement to acquire, any capital stock, rights, warrants,
options or other securities from the Company required to be described in the
Registration Statement and Prospectus, other than those described in the
Registration Statement and the Prospectus.
(l) If such Selling Stockholder is a director or executive officer of
the Company, such Selling Stockholder is not aware that any of the
representations and warranties of the Company set forth in Section 2.I. above
is untrue or inaccurate in any material respect.
3. Purchase, Sale and Delivery of Shares. On the basis of the
-------------------------------------
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and the Selling Stockholders
agree, severally and not jointly, to sell to the Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Stockholders, respectively, at a purchase price of $_____ per share,
the respective number of Company Shares as hereinafter set forth and Selling
Stockholder Shares set forth opposite the names of the Company and the Selling
Stockholders in Schedule B hereto. The obligation of each Underwriter to the
Company and to each Selling Stockholder shall be to purchase from the Company or
such Selling Stockholder that number of Company Shares or Selling Stockholder
Shares, as the case may be, which (as nearly as practicable, as determined by
you) is in the same proportion to the number of Company Shares or Selling
Stockholder Shares, as the case may be, set forth opposite the name of the
Company or such Selling Stockholder in Schedule B hereto as the number of Firm
Shares that is set forth opposite the name of such Underwriter in Schedule A
hereto (subject to
11
adjustment as provided in Section 10) is to the total number of Firm Shares to
be purchased by all the Underwriters under this Agreement.
The certificates in negotiable form for the Selling Stockholder Shares
have been placed in custody (for delivery under this Agreement) under the
Custody Agreement. Each Selling Stockholder agrees that the certificates for
the Selling Stockholder Shares of such Selling Stockholder so held in custody
are subject to the interests of the Underwriters hereunder, that the
arrangements made by such Selling Stockholder for such custody, including the
Power of Attorney is to that extent irrevocable and that the obligations of such
Selling Stockholder hereunder shall not be terminated by the act of such Selling
Stockholder or by operation of law, whether by the death or incapacity of such
Selling Stockholder or the occurrence of any other event, except as specifically
provided herein or in the Custody Agreement. If any Selling Stockholder should
die or be incapacitated, or if any other such event should occur, before the
delivery of the certificates for the Selling Stockholder Shares hereunder, the
Selling Stockholder Shares to be sold by such Selling Stockholder shall, except
as specifically provided herein or in the Custody Agreement, be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such death, incapacity or other event had not occurred, regardless of whether
the Custodian shall have received notice of such death or other event.
Delivery of definitive certificates for the Firm Shares to be purchased
by the Underwriters pursuant to this Section 3 shall be made against payment of
the purchase price therefor by the several Underwriters by wire transfer of
Federal (same-day) funds, payable to the order of the Company with regard to the
Shares being purchased from the Company, and to the order of the Custodian for
the respective accounts of the Selling Stockholders with regard to the Shares
being purchased from such Selling Stockholders, at the offices of ▇▇▇▇ and ▇▇▇▇
LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such other place as may
be agreed upon among the Representatives, the Company and the Attorneys), at 7
A.M., San Francisco time (a) on the third full business day following the first
day that Shares are traded, (b) if this Agreement is executed and delivered
after 1:30 P.M., San Francisco time, the fourth full business day following the
day that this Agreement is executed and delivered or (c) at such other time and
date not later than seven full business days following the first day that Shares
are traded as the Representatives, the Company and the Attorneys may determine
(or at such time and date to which payment and delivery shall have been
postponed pursuant to Section 10), 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 Representatives copies of the Prospectus within
the time provided in Section 4(d), the Representatives may, in their sole
discretion, postpone the Closing Date until no later than two full business days
following delivery of copies of the Prospectus to the Representatives. The
certificates for the Firm Shares to be so delivered will be made available to
you at such office or such other location including, without limitation, in New
York City, as you may reasonably request for checking at least one full business
day prior to the Closing Date and will be in such names and denominations as you
may request, such request to be made at least two full business days prior to
the Closing Date. If the Representatives so elect, delivery of the Firm Shares
may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Representatives.
It is understood that you, individually, and not as the Representatives
of the several Underwriters, may (but shall not be obligated to) make payment of
the purchase price on behalf of any Underwriter or Underwriters whose check or
checks shall not have been received by you prior to the Closing Date for the
Firm Shares to be purchased by such Underwriter or Underwriters. Any such
payment by you shall not relieve any such Underwriter or Underwriters of any of
its or their obligations hereunder.
12
After the Registration Statement becomes effective, the several
Underwriters intend to make an initial public offering (as such term is
described in Section 11) of the Firm Shares at an initial public offering price
of $____ per share. After the initial public offering, the several Underwriters
may, in their discretion, vary the public offering price.
The information set forth in the second, sixth and eighth paragraphs
under the caption "Underwriting" in any Preliminary Prospectus and in the
Prospectus constitutes the only information furnished by the Underwriters to the
Company for inclusion in any Preliminary Prospectus, the Prospectus or the
Registration Statement, and you, on behalf of the respective Underwriters,
represent and warrant to the Company and the Selling Stockholders that the
statements made therein do not include any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
4. Further Agreements of the Company. The Company agrees with the several
---------------------------------
Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date
that this Agreement is executed and delivered by the parties hereto, to
become effective as promptly as possible. The Company will use its best
efforts to cause any abbreviated registration statement pursuant to Rule
462(b) of the Rules and Regulations as may be required subsequent to the date
the Registration Statement is declared effective to become effective as
promptly as possible. The Company will notify you, promptly after it shall
receive notice thereof, of the time when the Registration Statement, any
subsequent amendment to the Registration Statement or any abbreviated
registration statement has become effective or any supplement to the
Prospectus has been filed. If the Company omitted information from the
Registration Statement at the time it was originally declared effective in
reliance upon Rule 430A(a) of the Rules and Regulations, the Company will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed, within the time period prescribed, with the
Commission pursuant to subparagraph (1) or (4) of Rule 424(b) of the Rules
and Regulations or as part of a post-effective amendment to such Registration
Statement as originally declared effective that is declared effective by the
Commission. If the Company files a term sheet pursuant to Rule 434 of the
Rules and Regulations, the Company will provide evidence satisfactory to you
that the Prospectus and term sheet meeting the requirements of Rule 434(b) or
(c), as applicable, of the Rules and Regulations, have been filed, within the
time period prescribed, with the Commission pursuant to subparagraph (7) of
Rule 424(b) of the Rules and Regulations. If for any reason the filing of
the final form of Prospectus is required under Rule 424(b)(3) of the Rules
and Regulations, it will provide evidence satisfactory to you that the
Prospectus contains such information and has been filed with the Commission
within the time period prescribed. The Company will notify you promptly of
any request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information.
Promptly upon your request, the Company will prepare and file with the
Commission any amendments or supplements to the Registration Statement or
Prospectus that, in the opinion of Underwriters' Counsel, may be necessary or
advisable in connection with the distribution of the Shares by the
Underwriters. The Company will promptly prepare and file with the
Commission, and promptly notify you of the filing of, any amendments or
supplements to the Registration Statement or Prospectus that may be necessary
to correct any statements or omissions, if, at any time when a prospectus
relating to the Shares is required to be delivered under the Act, any event
shall have occurred as a result of which the Prospectus or any other
prospectus relating to the Shares as then in effect would include any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading. In case any Underwriter is required to
deliver a prospectus nine
13
months or more after the effective date of the Registration Statement in
connection with the sale of the Shares, it will prepare promptly upon
request, but at the expense of such Underwriter, such amendment or amendments
to the Registration Statement and such prospectus or prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of
the Act. The Company will file no amendment or supplement to the Registration
Statement or Prospectus that shall not previously have been submitted to you
a reasonable time prior to the proposed filing thereof or to which you shall
reasonably object in writing, subject, however, to compliance with the Act
and the Rules and Regulations and the provisions of this Agreement.
(b) The Company will advise you, promptly after it shall receive notice
or obtain knowledge, of the issuance of any stop order by the Commission
suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose. The Company will
promptly use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order
should be issued.
(c) The Company will use its best efforts to qualify the Shares for
offering and sale under the securities laws of such jurisdictions as you may
designate and to continue such qualifications in effect for so long as may be
required for purposes of the distribution of the Shares, except that the
Company shall not be required in connection therewith or as a condition
thereof to qualify as a foreign corporation or to execute a general consent
to service of process in any jurisdiction in which it is not otherwise
required to be so qualified or to so execute a general consent to service of
process. In each jurisdiction in which the Shares shall have been qualified
as above provided, the Company will make and file such statements and reports
in each year as are or may be required by the laws of such jurisdiction.
(d) The Company will furnish to you, as soon as available, and, in the
case of the Prospectus and any term sheet or abbreviated term sheet under
Rule 434, in no event later than the first full business day following the
first day that Shares are traded, copies of the Registration Statement (three
of which will be signed and which will include all exhibits), each
Preliminary Prospectus, the Prospectus and any amendments or supplements to
such documents, including any prospectus prepared to permit compliance with
Section 10(a)(3) of the Act, all in such quantities as you may from time to
time reasonably request. Notwithstanding the foregoing, if BancBoston
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., on behalf of the several Underwriters, shall agree
to the utilization of Rule 434 of the Rules and Regulations, the Company
shall provide to you copies of a Preliminary Prospectus updated in all
respects through the date specified by you in such quantities as you may from
time to time reasonably request.
(e) The Company will make generally available to its securityholders as
soon as practicable, but in any event not later than the forty-fifth day
following the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement, an earnings
statement (which will be in reasonable detail but need not be audited)
complying with the provisions of Section 11(a) of the Act and covering a
twelve-month period beginning after the effective date of the Registration
Statement.
(f) During a period of five years after the date hereof, the Company will
furnish to its stockholders an annual report (including financial statements
audited by independent certified public accountants) as soon as practicable
after the end of each fiscal year and will furnish to you and the other
several Underwriters hereunder, upon request (i) concurrently with furnishing
such reports to its stockholders, statements of operations of the Company for
each of the first three quarters in the
14
form furnished to the Company's stockholders, (ii) concurrently with
furnishing to its stockholders, a balance sheet of the Company as of the end
of such fiscal year, together with statements of operations, of stockholders'
equity, and of cash flows of the Company for such fiscal year, accompanied by
a copy of the certificate or report thereon of independent certified public
accountants, (iii) as soon as they are available, copies of all reports
(financial or other) mailed to stockholders, (iv) as soon as they are
available, copies of all reports and financial statements furnished to or
filed with the Commission, any securities exchange or the National
Association of Securities Dealers, Inc. (the "NASD"), (v) every material
press release and every material news item or article in respect of the
Company or its affairs that was generally released to stockholders or
prepared by the Company, and (vi) any additional information of a public
nature concerning the Company, or its business that you may reasonably
request. During such five-year period, if the Company shall have any active
subsidiaries, the foregoing financial statements shall be on a consolidated
basis to the extent that the accounts of the Company and such subsidiaries
are consolidated and shall be accompanied by similar financial statements for
any significant subsidiary that is not so consolidated.
(g) The Company will apply the net proceeds from the sale of the Shares
being sold by it in the manner set forth under the caption "Use of Proceeds"
in the Prospectus.
(h) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar (which may be
the same entity as the transfer agent) for the Common Stock.
(i) If the transactions contemplated hereby are not consummated by reason
of any failure, refusal or inability on the part of the Company or any
Selling Stockholder to perform any agreement on their respective parts to be
performed hereunder or to fulfill any condition of the Underwriters'
obligations hereunder, or if the Company shall terminate this Agreement
pursuant to Section 11(a), or if the Underwriters shall terminate this
Agreement pursuant to Section 11(b)(i), the Company will reimburse the
several Underwriters for all out-of-pocket expenses (including fees and
disbursements of Underwriters' Counsel) incurred by the Underwriters in
investigating or preparing to market or marketing the Shares.
(j) During the Lock-Up Period, the Company will not, without the prior
written consent of BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., effect the Disposition
of, directly or indirectly, any Securities other than the sale of the Shares
to be sold by the Company, except that the Company may, without such consent,
(i) issue shares upon the exercise of options issued pursuant to its stock
option plans and employee stock purchase plan, (ii) issue shares in respect
of the acquisition by the Company of the assets, capital stock or business of
another person or entity so long as the shares so issued by the Company may
not be resold during the Lock-Up Period and (iii) grant options and sell
shares of Common Stock to its employees, consultants and directors pursuant
to its stock option and employee stock purchase plans.
(k) During a period of ninety days from the effective date of the
Registration Statement, the Company will not file a registration statement
registering shares under the Company's 1997 Stock Option Plan, 1989 Stock
Option Plan or any other benefit plan.
5. Expenses.
--------
(a) The Company and the Selling Stockholders agree with each Underwriter
that:
15
(i) The Company will pay and bear all costs and expenses in
connection with: (A) the preparation, printing and filing of the
Registration Statement (including financial statements, schedules and
exhibits), Preliminary Prospectuses and the Prospectus and any amendments
or supplements thereto; (B) the issuance and delivery of the Shares
hereunder to the several Underwriters, including transfer taxes, if any,
the cost of all certificates representing the Shares, and transfer
agents' and registrars' fees; (C) the fees and disbursements of counsel
for the Company; (D) all fees and other charges of the Company's
independent certified public accountants; (E) the cost of furnishing to
the several Underwriters copies of the Registration Statement (including
appropriate exhibits), Preliminary Prospectuses and the Prospectus and
any amendments or supplements to any of the foregoing; (F) NASD filing
fees and the cost of qualifying the Shares under the laws of such
jurisdictions as you may designate (including filing fees and fees and
disbursements of Underwriters' Counsel in connection with such NASD
filings and Blue Sky qualifications); and (G) all other expenses directly
incurred by the Company and the Selling Stockholders in connection with
the performance of their obligations hereunder; provided, however, that
to the extent any Selling Stockholders engage special legal counsel, if
at all, to represent them in connection with this offering the fees and
expenses of such counsel shall be borne by such Selling Stockholder. The
provisions of this Section 5(a)(i) are intended to relieve the
Underwriters from the payment of the expenses and costs that the Company
and the Selling Stockholders hereby agree to pay, but shall not affect
any agreement that the Company and the Selling Stockholders may make, or
may have made, for the sharing of any of such expenses and costs. Such
agreements shall not impair the obligations of the Company and the
Selling Stockholders hereunder to the several Underwriters.
(ii) In addition to its other obligations under Section 8(a), the
Company agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding described in
Section 8(a), it will reimburse the Underwriters on a monthly basis for
all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Company's
obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper
by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the
Underwriters shall promptly return such payment to the Company together
with interest, compounded daily, determined on the basis of the prime
rate (or other commercial lending rate for borrowers of the highest
credit standing) listed from time to time in The Wall Street Journal that
represents the base rate on corporate loans posted by a substantial
majority of the nation's thirty largest banks (the "Prime Rate"). Any
such interim reimbursement payments that are not made to the Underwriters
within thirty days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request.
(iii) In addition to the other obligations under Section 8(b), each
Selling Stockholder agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
described in Section 8(b) relating to such Selling Stockholder, it will
reimburse the Underwriters on a monthly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the
propriety and enforceability of such Selling Stockholder's obligation to
reimburse the Underwriters for such expenses and the possibility that
such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim
16
reimbursement payment is so held to have been improper, the Underwriters
shall promptly return such payment to the Selling Stockholders, together
with interest, compounded daily, determined on the basis of the Prime
Rate. Any such interim reimbursement payments that are not made to the
Underwriters within thirty days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request.
(b) In addition to their other obligations under Section 8(c), the
Underwriters severally and not jointly agree that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding described in Section 8(c), they will reimburse the Company and
each Selling Stockholder on a monthly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company and
each such Selling Stockholder for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is
so held to have been improper, the Company and each such Selling Stockholder
shall promptly return such payment to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any
such interim reimbursement payments that are not made to the Company and each
such Selling Stockholder within thirty days of a request for reimbursement
shall bear interest at the Prime Rate from the date of such request.
(c) It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in Sections 5(a)(ii), 5(a)(iii)
and 5(b), including the amounts of any requested reimbursement payments, the
method of determining such amounts and the basis on which such amounts shall
be apportioned among the reimbursing parties, shall be settled by arbitration
conducted under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or a written notice of intention
to arbitrate, therein electing the arbitration tribunal. In the event the
party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand
or notice is authorized to do so. Any such arbitration will be limited to
the operation of the interim reimbursement provisions contained in Sections
5(a)(ii), 5(a)(iii) and 5(b) and will not resolve the ultimate propriety or
enforceability of the obligation to indemnify for expenses that is created by
the provisions of Sections 8(a), 8(b) and 8(c) or the obligation to
contribute to expenses that is created by the provisions of Section 8(e).
6. Conditions of Underwriters' Obligations. The obligations of the several
---------------------------------------
Underwriters to purchase and pay for the Shares as provided herein shall be
subject to the accuracy, as of the date hereof and the Closing Date and any
later date on which Option Shares are to be purchased, as the case may be, of
the representations and warranties of the Company and the Selling Stockholders
herein, to the performance by the Company and the Selling Stockholders of their
respective obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than
2 P.M., San Francisco time, on the date following the date of this Agreement,
or such later date as shall be consented to in writing by you. No stop order
suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge
of the Company, any Selling Stockholder or any Underwriter, threatened by the
Commission. Any request
17
of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the satisfaction of Underwriters' Counsel.
(b) All corporate proceedings and other legal matters in connection with
this Agreement, the form of Registration Statement and the Prospectus, and
the registration, authorization, issue, sale and delivery of the Shares,
shall have been reasonably satisfactory to Underwriters' Counsel, and
Underwriters' Counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this Section 6.
(c) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, or any later date on which Option Shares are to be
purchased, as the case may be, there shall not have been any change in the
earnings, operations, business or business prospects of the Company from that
set forth in the Registration Statement or Prospectus that, in your sole
judgment, is material and adverse and that makes it, in your sole judgment,
impracticable or inadvisable to proceed with the public offering of the
Shares as contemplated by the Prospectus.
(d) You shall have received on the Closing Date and on any later date on
which Option Shares are to be purchased, as the case may be, the following
opinion of ▇▇▇▇ and ▇▇▇▇ LLP, counsel for the Company, dated the Closing Date
or such later date on which Option Shares are to be purchased, addressed to
the Underwriters and with reproduced copies or signed counterparts thereof
for each of the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has the corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus.
(iii) The Company is duly qualified to do business as a foreign
corporation and is in good standing in the states listed on Exhibit I
hereto. To such counsel's knowledge, the Company does not own, directly
or indirectly, shares of capital stock or other equity interests in any
corporation, association or other entity.
(iv) The authorized, issued and outstanding (of record) capital
stock of the Company was as set forth in the Prospectus under the caption
"Capitalization" as of the dates stated therein. The issued and
outstanding shares of capital stock of the Company (including the Shares
to be sold by the Selling Stockholders) have been duly and validly issued
and are fully paid and nonassessable and, to such counsel's knowledge,
have not been issued in violation of any preemptive right, co-sale right,
registration right, right of first refusal or other similar right of
stockholders that exists with respect to any of the Shares.
(v) The Firm Shares or the Option Shares, as the case may be, to be
issued by the Company pursuant to the terms of this Agreement have been
duly authorized and, upon issuance and delivery against payment therefor
in accordance with the terms hereof, will be duly and validly issued and
fully paid and nonassessable, and, to such counsel's knowledge, will not
have been issued in violation of or subject to any preemptive right,
co-sale right, registration right, right of first refusal or other similar
right of stockholders that exists with respect to any of the Shares.
18
(vi) The Company has the corporate power and authority to enter
into this Agreement and to issue, sell and deliver to the Underwriters the
Shares to be issued and sold by it hereunder.
(vii) This Agreement has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed and
delivered by the Company.
(viii) The Registration Statement has become effective under the Act,
and to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
threatened under the Act.
(ix) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements,
including supporting schedules, and any other financial, statistical or
accounting data, or information relating to the Underwriters or the method
of distribution of the Shares by the Underwriters included therein, as to
which such counsel need express no opinion), as of the effective date of
the Registration Statement, complied as to form in all material respects
with the requirements of the Act and the applicable Rules and Regulations.
(x) The information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes matters
of law or legal conclusions, has been reviewed by such counsel and is a
fair summary in all material respects of such matters and conclusions. The
form of certificates representing the Common Stock and filed as an exhibit
to the Registration Statement comply with the Delaware General Corporation
Law statute.
(xi) The description in the Registration Statement and the
Prospectus of the certificate of incorporation and bylaws of the Company
and of the Delaware General Corporation Law statute is accurate and fairly
presents in all material respects the information required to be presented
by the Act and the applicable Rules and Regulations.
(xii) To such counsel's knowledge, there are no agreements,
contracts, leases or documents to which the Company is a party of a
character required to be described or referred to in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement that are not described or referred to therein or filed as
required.
(xiii) The performance of this Agreement and the consummation of the
transactions herein contemplated (other than performance of the Company's
indemnification obligations hereunder, concerning which no opinion need be
expressed) will not (a) result in any violation of the Company's
certificate of incorporation or bylaws or (b) to such counsel's knowledge,
result in a material breach or violation of any of the terms and
provisions of, or constitute a default under, (1) any agreement or other
instrument filed as an exhibit to the Registration Statement to which the
Company is a party or by which its properties are bound, (2) any
applicable statute, rule or regulation known to such counsel or (3) any
order, writ or decree specifically naming the Company and known to such
counsel of any court, government or governmental agency or body having
jurisdiction over the Company or any of its properties or operations.
(xiv) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or body
having jurisdiction over the Company or any of its properties or
operations is necessary in connection with the consummation by the Company
of the transactions herein contemplated, except such as have been obtained
under the Act or such
19
as may be required under state or other securities or Blue Sky laws in
connection with the purchase and the distribution of the Shares by the
Underwriters.
(xv) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against the Company that are required to
be disclosed in the Registration Statement or the Prospectus by the Act or
the Rules and Regulations, other than those described therein.
(xvi) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders of Common Stock or other
securities of the Company have registration rights with respect to
securities of the Company and, except as set forth in the Registration
Statement and Prospectus, all holders of securities of the Company having
rights known to such counsel to registration of such shares of Common
Stock or other securities, because of the filing of the Registration
Statement by the Company have, with respect to the offering contemplated
thereby, waived such rights or such rights have expired by reason of lapse
of time following notification of the Company's intent to file the
Registration Statement or have included securities in the Registration
Statement pursuant to the exercise of and in full satisfaction of such
rights.
In addition, such counsel shall also include a statement to the effect
that in connection with the preparation of the Registration Statement and the
Prospectus, such counsel has participated in conferences with officers and
representatives of the Company, counsel for the Underwriters and the
independent accountants of the Company, at which conferences such counsel has
made inquiries of such persons and others and discussed the contents of the
Registration Statement and the Prospectus. While the limitations inherent in
the independent verification of factual matters and the character of
determinations involved in the registration process are such that such
counsel does not pass upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, subject to the foregoing and based
on such participation, inquiries and discussions, no facts have come to the
attention of such counsel which have caused such counsel to believe that the
Registration Statement, as of the Effective Date (but after giving effect to
changes incorporated pursuant to Rule 430A under the Act), contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading (except that such counsel need express no such view
with respect to the financial statements, including the notes and schedules
thereto, or any other financial or accounting information, or information
relating to the Underwriters or the method of distribution of the Shares by
the Underwriters included therein), that the Prospectus, as of the date it
was filed with the Commission pursuant to Rule 424(b)(4) under the Act,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading (except that
such counsel need not express an opinion with respect to the financial
statements, including the notes and schedules thereto, or any other financial
or accounting information, or information relating to the Underwriters or the
method of distribution of the Shares by the Underwriters included therein),
or that the Registration Statement or the Prospectus, as of the date of such
opinion, contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading (except
that such counsel need not express an opinion with respect to the financial
statements, including the notes and schedules thereto, or any other financial
information, or information relating to the Underwriters or the method of
distribution of the Shares by the Underwriters included therein).
20
Counsel rendering the foregoing opinion may rely as to questions
of law not governed by the federal laws of the United States, the state
laws of the Commonwealth of Massachusetts or the Delaware General
Corporation Law statute upon opinions of local counsel, and as to questions
of fact upon representations or certificates of officers of the Company,
the Selling Stockholders, and government officials and also, with respect
to Selling Stockholders, upon opinions of other counsel representing the
respective Selling Stockholder, in which case their opinion is to state
that they are so relying and that they have no actual knowledge of any
material factual misstatement or inaccuracy in any such opinion,
representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of
the Underwriters, and to Underwriters' Counsel.
(e) You shall have received on the Closing Date the following opinion
of one or more counsel for each of the Selling Stockholders that is to sell
more than 10,000 of the Firm Shares (each of which counsel shall be
satisfactory to the Representatives), dated the Closing Date and addressed
to the Underwriters, with reproduced copies or signed counterparts thereof
for each of the Underwriters, to the effect that:
(i) Each such Selling Stockholder that is not a natural person
has the legal right, power and authority to enter into and to perform
its obligations under the Power of Attorney and Custody Agreement to
be executed and delivered by it in connection with the transactions
contemplated herein. The Power of Attorney and Custody Agreement of
each such Selling Stockholder that is not a natural person has been
duly authorized by such Selling Stockholder. The Power of Attorney and
Custody Agreement of each such Selling Stockholder has been duly
executed and delivered by or on behalf of such Selling Stockholder.
The Power of Attorney and Custody Agreement of each such Selling
Stockholder constitutes the valid and binding agreement of such
Selling Stockholder, enforceable in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles.
(ii) Each such Selling Stockholder has the legal right (and, if
such Selling Stockholder is not a natural person, the legal power and
authority) to enter into and to perform its obligations under this
Agreement and to sell, transfer, assign and deliver the Shares to be
sold by such Selling Stockholder hereunder.
(iii) This Agreement has been duly authorized by each such
Selling Stockholder that is not a natural person and has been duly
executed and delivered by or on behalf of each such Selling
Stockholder.
(iv) Upon the Underwriters' obtaining control of the Shares to
be sold by each such Selling Stockholder and assuming the Underwriters
purchase such Shares for value and without notice of an adverse claim
to such Shares within the meaning of Section 8-102 of the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, the
Underwriters will have acquired all rights of such Selling Stockholder
in such Shares free of any adverse claim, any lien in favor of the
Company and any restrictions on transfer imposed by the Company.
Counsel rendering the foregoing opinion may rely as to questions
of fact upon representations or certificates of such Selling Stockholders,
officers of such Selling Stockholders and government officials, in which
case their opinion is to state that they are so relying and that they have
no actual knowledge of any material factual misstatement or inaccuracy in
any such opinion,
21
representation or certificate. Copies of any representation or certificate so
relied upon shall be delivered to you, as Representatives of the Underwriters,
and to Underwriters' Counsel.
(f) You shall have received on the Closing Date and on any later date on
which Option Shares are to be purchased, as the case may be, an opinion of
Underwriters' Counsel, in form and substance satisfactory to you, with respect
to the sufficiency of all such corporate proceedings and other legal matters
relating to this Agreement and the transactions contemplated hereby as you may
reasonably require, and the Company shall have furnished to Underwriters'
Counsel such documents as they may have requested for the purpose of enabling
them to pass upon such matters.
(g) You shall have received on the Closing Date and on any later date on
which Option Shares are to be purchased, as the case may be, a letter from Ernst
& Young LLP addressed to the Underwriters, dated the Closing Date or such later
date on which Option Shares are to be purchased, as the case may be, confirming
that they are independent certified public accountants with respect to the
Company within the meaning of the Act and the applicable published Rules and
Regulations and based upon the procedures described in such letter delivered to
you concurrently with the execution of this Agreement (herein called the
"Original Letter"), but carried out to a date not more than five business days
prior to the Closing Date or such later date on which Option Shares are to be
purchased, as the case may be, (i) confirming, to the extent true, that the
statements and conclusions set forth in the Original Letter are accurate as of
the Closing Date or such later date on which Option Shares are to be purchased,
as the case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter that are necessary
to reflect any changes in the facts described in the Original Letter since the
date of such letter, or to reflect the availability of more recent financial
statements, data or information. The letter shall not set forth any such
revisions or additions taken as a whole that, in your sole judgment, (i) are
material and adverse and (ii) make it impracticable or inadvisable to proceed
with the public offering of the Shares as contemplated by the Prospectus. The
Original Letter from Ernst & Young LLP shall be addressed to or for the use of
the Underwriters in form and substance satisfactory to the Underwriters and
shall (i) represent that they are independent certified public accountants with
respect to the Company within the meaning of the Act and the applicable
published Rules and Regulations, (ii) set forth their opinion with respect to
their examination of the balance sheets of the Company as of June 30, 1997 and
1998 and related statements of operations, stockholders' equity, and cash flows
for each of the years in the three year period ended June 30, 1998, and (iii)
address other matters agreed upon by Ernst & Young LLP and you. In addition, you
shall have received from Ernst & Young 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
financial statements as of June 30, 1998, did not disclose any weaknesses in
internal controls that they considered to be material weaknesses.
(h) You shall have received on the Closing Date and on any later date on
which Option Shares are to be purchased, as the case may be, a certificate of
the Company, dated the Closing Date or such later date on which Option Shares
are to be purchased, as the case may be, signed by the Chief Executive Officer
and Chief Financial Officer of the Company (as such officers and not in their
personal capacities), to the effect that, and you shall be satisfied that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the Closing Date or
any later date on which Option Shares are to be purchased, as the case may
be, and the Company has complied with all the agreements and
22
satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date or any later date on which Option Shares are to
be purchased, as the case may be.
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Act.
(iii) When the Registration Statement became effective and at all
times subsequent thereto up to the delivery of such certificate: (a) the
Registration Statement and the Prospectus, and any amendments or
supplements thereto, contained all material information required to be
included therein by the Act and the Rules and Regulations and in all
material respects conformed to the requirements of the Act and the Rules
and Regulations; (b) the Registration Statement, and any amendment or
supplement 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 (c)
the Prospectus, and any amendment or supplement thereto, did not and does
not include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Since the
effective date of the Registration Statement, there has occurred no event
required to be set forth in an amended or supplemented Prospectus that has
not been so set forth.
(iv) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been: (a)
any material adverse change taken as a whole in the earnings, operations,
business or business prospects of the Company; (b) any transaction that is
material to the Company, except transactions entered into in the ordinary
course of business; (c) any material obligation, direct or contingent,
incurred by the Company, except obligations incurred in the ordinary course
of business; (d) any change in the capital stock (except for issuances
pursuant to the exercise of warrants and stock options described in the
Prospectus) or outstanding indebtedness of the Company that is material to
the Company; (e) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company; or (f) any loss or damage
(whether or not insured) to the property of the Company that has been
sustained or will have been sustained and that has a material adverse
effect taken as a whole on the earnings, operations, business or business
prospects of the Company.
(i) You shall be satisfied that, and you shall have received a certificate
from the Attorneys, dated the Closing Date or any later date on which Option
Shares are to be purchased from a Selling Stockholder, to the effect that, as of
the Closing Date or such later date, as the case may be, they have not been
informed that:
(i) the representations and warranties made by such Selling
Stockholder herein are not true or correct in any material respect on the
Closing Date or on any later date on which Option Shares are to be
purchased from such Selling Stockholder, as the case may be; or
(ii) such Selling Stockholder has not complied with any obligation or
satisfied any condition that is required to be performed or satisfied on
the part of such Selling Stockholder at or prior to the Closing Date or any
later date on which Option Shares are to be purchased from such Selling
Stockholder, as the case may be.
23
(j) The Company shall have obtained and delivered to you an agreement
from each officer and director of the Company, each Selling Stockholder and
each other record holder of Common Stock in writing prior to the date
hereof to the effect set forth in Section 2.I.(s) of this Agreement.
(k) The Company and the Selling Stockholders shall have furnished to
you such further certificates and documents as you shall reasonably request
(including certificates of officers of the Company, the Selling
Stockholders or officers of the Selling Stockholders (when the Selling
Stockholder is not a natural person) as to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
herein, as to the performance by the Company and the Selling Stockholders
of their respective obligations hereunder and as to the other conditions
concurrent and precedent to the obligations of the Underwriters hereunder.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The Company and the Selling Stockholders will furnish
you with such number of conformed copies of such opinions, certificates, letters
and documents as you shall reasonably request.
7. Option Shares.
-------------
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Company hereby grants, to the several Underwriters, for the purpose of
covering over-allotments in connection with the distribution and sale of
the Firm Shares only, nontransferable options to purchase the respective
number of Option Shares as set forth opposite the names of the Company in
Schedule B hereto, all at the purchase price per share for the Firm Shares
set forth in Section 3. Such option may be exercised by the Representatives
on behalf of the several Underwriters on one or more occasions in whole or
in part during the period of thirty days after the date on which the Firm
Shares are initially offered to the public, by giving written notice to the
Company in accordance with Section 12. The number of Option Shares to be
purchased by each Underwriter upon the exercise of such option shall be the
same proportion of the total number of Option Shares to be purchased by the
several Underwriters pursuant to the exercise of such option as the number
of Firm Shares purchased by such Underwriter (set forth in Schedule A
hereto) bears to the total number of Firm Shares purchased by the several
Underwriters (set forth in Schedule A hereto), adjusted by the
Representatives in such manner as to avoid fractional shares.
Delivery of definitive certificates for the Option Shares to be
purchased by the several Underwriters pursuant to the exercise of the
option granted by this Section 7 shall be made against payment of the
purchase price therefor by the several Underwriters by wire transfer of
Federal (same-day) funds, payable to the order of the Company. Such
delivery and payment shall take place at the offices of ▇▇▇▇ and ▇▇▇▇ LLP,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other place as may
be agreed upon among the Representatives, the Company and the Attorneys (i)
on the Closing Date, if written notice of the exercise of such option is
received by the Company at least two full business days prior to the
Closing Date, or (ii) on a date that shall not be later than the third full
business day following the date the Company receives written notice of the
exercise of such option, if such notice is received by the Company less
than two full business days prior to the Closing Date.
The certificates for the Option Shares to be so delivered will be
made available to you at such office or such other location, including in
New York City, as you may reasonably request for checking at least one full
business day prior to the date of payment and delivery and will be in such
names and denominations as you may request, such request to be made at
least two full business days
24
prior to such date of payment and delivery. If the Representatives so
elect, delivery of the Option Shares may be made by credit through full
fast transfer to the accounts at The Depository Trust Company designated by
the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be
obligated to) make payment of the purchase price on behalf of any
Underwriter or Underwriters whose check or checks shall not have been
received by you prior to the date of payment and delivery for the Option
Shares to be purchased by such Underwriter or Underwriters. Any such
payment by you shall not relieve any such Underwriter or Underwriters of
any of its or their obligations hereunder.
(b) Upon exercise of any option provided for in Section 7(a), the
obligations of the several Underwriters to purchase such Option Shares will
be subject (as of the date hereof and as of the date of payment and
delivery for such Option Shares) to the accuracy of and compliance with the
representations, warranties and agreements of the Company herein, to the
accuracy of the statements of the Company and officers of the Company made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, to the conditions set forth in Section 6, and to the
condition that all proceedings taken at or prior to the payment date in
connection with the sale and transfer of such Option Shares shall be
satisfactory in form and substance to you and to Underwriters' Counsel, and
you shall have been furnished with all such documents, certificates and
opinions as you may request in order to evidence the accuracy and
completeness of any of the representations, warranties or statements, the
performance of any of the covenants or agreements of the Company or the
satisfaction of any of the conditions herein contained.
8. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject (including in its
capacity as an Underwriter), under the Act, the Exchange Act or otherwise,
specifically including losses, claims, damages or liabilities (or actions
in respect thereof) arising out of or based upon (i) any breach of any
representation, warranty, agreement or covenant of the Company herein
contained, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment or
supplement thereto, 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 (iii) any untrue statement or alleged
untrue statement of any 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 required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and agrees
to reimburse each Underwriter for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in the Registration Statement, such Preliminary Prospectus or the
Prospectus, or any such amendment or supplement thereto, in reliance upon,
and in conformity with, written information relating to any Underwriter
furnished to the Company by such Underwriter, directly or through you,
specifically for use in the preparation thereof and, provided further that
the indemnity agreement provided in this Section 8(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any losses, claims, damages, liabilities or
actions based upon any untrue statement or alleged untrue statement of
25
material fact or omission or alleged omission to state therein a material
fact purchased Shares, if a copy of the Prospectus in which such untrue
statement or alleged untrue statement or omission or alleged omission was
corrected had not been sent or given to such person within the time
required by the Act and the Rules and Regulations, unless such failure is
the result of noncompliance by the Company with Section 4(d).
The indemnity agreement in this Section 8(a) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the Act
or the Exchange Act. This indemnity agreement shall be in addition to any
liabilities that the Company may otherwise have.
(b) Subject to Section 8(f), each Selling Stockholder, severally and
not jointly, agrees to indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject (including in its capacity as an
Underwriter) under the Act, the Exchange Act or otherwise, arising out of
or based upon (i) any breach of any representation, warranty, agreement or
covenant of such Selling Stockholder herein contained, (ii) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or any amendment or supplement thereto, 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, to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company or the Underwriters by such Selling Stockholder, directly or
through such Selling Stockholder's representatives, specifically for use in
the preparation of the Registration Statement or such amendment or
supplement, or (iii) any untrue statement or alleged untrue statement of
any 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 to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company or the Underwriters by such Selling Stockholder, directly or
through such Selling Stockholder's representatives, specifically for use in
the preparation of such Preliminary Prospectus, the Prospectus or such
amendment or supplement, and agrees to reimburse each Underwriter for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement provided in this
Section 8(b) with respect to any Preliminary Prospectus shall not inure to
the benefit of any Underwriter from whom the person asserting any losses,
claims, damages, liabilities or actions based upon any untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
to state therein a material fact purchased Shares, if a copy of the
Prospectus in which such untrue statement or alleged untrue statement or
omission or alleged omission was corrected had not been sent or given to
such person within the time required by the Act and the Rules and
Regulations, unless such failure is the result of noncompliance by the
Company with Section 4(d).
The indemnity agreement in this Section 8(b) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the Act
or the Exchange Act. This indemnity agreement shall be in addition to any
liabilities that such Selling Stockholder otherwise may have.
(c) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company and each Selling Stockholder against any
losses, claims, damages or liabilities, joint or
26
several, to which the Company or such Selling Stockholder may become subject
under the Act or otherwise, specifically including losses, claims, damages or
liabilities (or actions in respect thereof) arising out of or based upon (i)
any breach of any representation, warranty, agreement or covenant of such
Underwriter herein contained, (ii) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or any
amendment or supplement thereto, 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 (iii) any untrue statement or
alleged untrue statement of any 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 to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, in the case of subparagraphs (ii) and (iii)
of this Section 8(c) to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by such Underwriter, directly or through you, specifically for
use in the preparation thereof, and agrees to reimburse the Company and each
such Selling Stockholder for any legal or other expenses reasonably incurred
by the Company and each such Selling Stockholder in connection with
investigating or defending any such loss, claim, damage, liability or action.
The indemnity agreement in this Section 8(c) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each officer
of the Company who signed the Registration Statement and each director of the
Company, each Selling Stockholder and each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Act or the
Exchange Act. This indemnity agreement shall be in addition to any
liabilities that each Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 8, notify the indemnifying party in writing of the commencement
thereof but the omission so to notify the indemnifying party will not relieve
it from any liability that it may have to any indemnified party otherwise
than under this Section 8. In case any such action is brought against any
indemnified party, and it notified the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and,
to the extent that it shall elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of the indemnifying party's election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with appropriate local counsel) approved by the
indemnifying party representing all the indemnified parties under Section
8(a), 8(b) or 8(c) who are parties to such action), (ii) the indemnifying
party shall not have employed counsel
27
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. In no event shall
any indemnifying party be liable in respect of any amounts paid in settlement
of any action unless the indemnifying party shall have approved the terms of
such settlement; provided that such consent shall not be unreasonably
withheld. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnification could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on all claims that are the
subject matter of such proceeding.
(e) In order to provide for just and equitable contribution in any action
in which a claim for indemnification is made pursuant to this Section 8 but
it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 8 provides
for indemnification in such case, all the parties hereto shall contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that, except
as set forth in Section 8(f), the Underwriters severally and not jointly are
responsible pro rata for the portion represented by the percentage that the
underwriting discount bears to the initial public offering price, and the
Company and the Selling Stockholders are responsible for the remaining
portion, provided, however, that (i) no Underwriter shall be required to
contribute any amount in excess of the amount by which the underwriting
discount applicable to the Shares purchased by such Underwriter exceeds the
amount of damages that such Underwriter has otherwise required to pay and
(ii) no person guilty of a fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation. The
contribution agreement in this Section 8(e) shall extend upon the same terms
and conditions to, and shall inure to the benefit of, each person, if any,
who controls any Underwriter, the Company or any Selling Stockholder within
the meaning of the Act or the Exchange Act and each officer of the Company
who signed the Registration Statement and each director of the Company.
(f) The liability of each Selling Stockholder under the representations,
warranties and agreements contained herein and under the indemnity and
contribution agreements contained in the provisions of this Section 8 shall
be limited to an amount equal to the initial public offering price of any
Shares sold by such Selling Stockholder to the Underwriters minus the amount
of the underwriting discount paid thereon to the Underwriters by such Selling
Stockholder. The Company and such Selling Stockholders may agree, as among
themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
(g) 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 the provisions of this
Section 8, and are fully informed regarding said provisions. They further
acknowledge that the provisions of this Section 8 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 and Prospectus as required by the Act and the Exchange
Act.
9. Representations, Warranties, Covenants and Agreements to Survive
----------------------------------------------------------------
Delivery. All representations, warranties, covenants and agreements of the
--------
Company, the Selling Stockholders and the Underwriters herein or in certificates
delivered pursuant hereto, and the indemnity and contribution agreements
contained in
28
Section 8, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter within the meaning of the Act or the Exchange Act, or by or on
behalf of the Company or any Selling Stockholder, or any of their officers,
directors or controlling persons within the meaning of the Act or the Exchange
Act, and shall survive the delivery of the Shares to the several Underwriters
hereunder or termination of this Agreement.
10. Substitution of Underwriters. If any Underwriter or Underwriters shall
----------------------------
fail to take up and pay for the number of Firm Shares agreed by such Underwriter
or Underwriters to be purchased hereunder upon tender of such Firm Shares in
accordance with the terms hereof, and if the aggregate number of Firm Shares
that such defaulting Underwriter or Underwriters so agreed but failed to
purchase does not exceed ten percent of the Firm Shares, the remaining
Underwriters shall be obligated, severally in proportion to their respective
commitments hereunder, to take up and pay for the Firm Shares of such defaulting
Underwriter or Underwriters.
If any Underwriter or Underwriters so defaults and the aggregate number
of Firm Shares that such defaulting Underwriter or Underwriters agreed but
failed to take up and pay for exceeds ten percent of the Firm Shares, the
remaining Underwriters shall have the right, but shall not be obligated, to take
up and pay for (in such proportions as may be agreed upon among them) the Firm
Shares that the defaulting Underwriter or Underwriters so agreed but failed to
purchase. If such remaining Underwriters do not, at the Closing Date, take up
and pay for the Firm Shares that the defaulting Underwriter or Underwriters so
agreed but failed to purchase, the Closing Date shall be postponed for twenty-
four hours to allow the several Underwriters the privilege of substituting
within twenty-four hours (including non-business hours) another underwriter or
underwriters (which may include any nondefaulting Underwriter) satisfactory to
the Company. If no such underwriter or underwriters shall have been substituted
as aforesaid by such postponed Closing Date, the Closing Date may, at the option
of the Company, be postponed for a further twenty-four hours, if necessary, to
allow the Company the privilege of finding another underwriter or underwriters,
satisfactory to you, to purchase the Firm Shares that the defaulting Underwriter
or Underwriters so agreed but failed to purchase. If it shall be arranged for
the remaining Underwriters or substituted underwriter or underwriters to take up
the Firm Shares of the defaulting Underwriter or Underwriters as provided in
this Section 10, (i) the Company shall have the right to postpone the time of
delivery for a period of not more than seven full 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 or arrangements, and the
Company agrees promptly to file any amendments to the Registration Statement,
supplements to the Prospectus or other such documents that may thereby be made
necessary, and (ii) the respective number of Firm Shares to be purchased by the
remaining Underwriters and substituted underwriter or underwriters shall be
taken as the basis of their underwriting obligation. If the remaining
Underwriters shall not take up and pay for all such Firm Shares so agreed to be
purchased by the defaulting Underwriter or Underwriters or substitute another
underwriter or underwriters as aforesaid and the Company shall not find or shall
not elect to seek another underwriter or underwriters for such Firm Shares as
aforesaid, then this Agreement shall terminate.
In the event of any termination of this Agreement pursuant to the
preceding paragraph of this Section 10, neither the Company nor any Selling
Stockholder shall be liable to any Underwriter (except as provided in Sections 5
and 8) nor shall any Underwriter (other than an Underwriter who shall have
failed, otherwise than for some reason permitted under this Agreement, to
purchase the number of Firm Shares agreed by such Underwriter to be purchased
hereunder, which Underwriter shall remain liable to the Company, the Selling
Stockholders and the other Underwriters for damages, if any, resulting from such
default) be liable to the Company or any Selling Stockholder (except to the
extent provided in Sections 5 and 8).
29
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section 10.
11. Effective Date of this Agreement and Termination.
------------------------------------------------
(a) This Agreement shall become effective at the earlier of (i) 6:30
A.M., San Francisco time, on the first full business day following the
effective date of the Registration Statement or (ii) the time of the initial
public offering of any of the Shares by the Underwriters after the
Registration Statement becomes effective. The time of the initial public
offering shall mean the time of the release by you, for publication, of the
first newspaper advertisement relating to the Shares, or the time at which
the Shares are first generally offered by the Underwriters to the public by
letter, telephone, telegram or telecopy, whichever shall first occur. By
giving notice as set forth in Section 12 before the time this Agreement
becomes effective, you, as Representatives of the several Underwriters, or
the Company, may prevent this Agreement from becoming effective without
liability of any party to any other party, except as provided in Sections
4(i), 5 and 8.
(b) You, as Representatives of the several Underwriters, shall have the
right to terminate this Agreement by giving notice as hereinafter specified
at any time on or prior to the Closing Date or on or prior to any later date
on which Option Shares are to be purchased, as the case may be, (i) if the
Company or any Selling Stockholder shall have failed, refused or been unable
to perform any agreement on its part to be performed, or because any other
condition of the Underwriters= obligations hereunder required to be fulfilled
is not fulfilled, including any change in the earnings, operations, business
or business prospects of the Company from that set forth in the Registration
Statement or Prospectus that, in your sole judgment, is material and adverse,
or (ii) if additional material governmental restrictions, not in force and
effect on the date hereof, shall have been imposed upon trading in securities
generally or minimum or maximum prices shall have been generally established
on the New York Stock Exchange or on the American Stock Exchange or in the
over-the-counter market by the NASD, or trading in securities generally shall
have been suspended on either such exchange or in the over-the-counter market
by the NASD, or if a banking moratorium shall have been declared by federal,
New York or California authorities, or (iii) if the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other
calamity of such character as to interfere materially with the conduct of the
business and operations of the Company regardless of whether or not such loss
shall have been insured or (iv) if there shall have been a material adverse
change in the general political or economic conditions or financial markets
as in your reasonable judgment makes it inadvisable or impracticable to
proceed with the offering, sale and delivery of the Shares, or (v) if there
shall have been an outbreak or escalation of hostilities or of any other
insurrection or armed conflict or the declaration by the United States of a
national emergency that, in the reasonable opinion of the Representatives,
makes it impracticable or inadvisable to proceed with the public offering of
the Shares as contemplated by the Prospectus. In the event of termination
pursuant to subparagraph (i) above, the Company shall remain obligated to pay
costs and expenses pursuant to Sections 4(i), 5 and 8. Any termination
pursuant to any of subparagraphs (ii) through (v) above shall be without
liability of any party to any other party except as provided in Sections 5
and 8.
If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section 11, you shall promptly
notify the Company by telephone, telecopy or telegram, in each case confirmed
by letter. If the Company shall elect to prevent this Agreement from
becoming effective, the Company shall promptly notify you by telephone,
telecopy or telegram, in each case, confirmed by letter.
30
12. Notices. All notices or communications hereunder, except as herein
-------
otherwise specifically provided, shall be in writing and shall be mailed,
delivered, telegraphed (and confirmed by letter) or telecopied (and confirmed by
letter) as follows:
(a) if sent to you, to you c/o BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopier
number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: General Counsel;
(b) if sent to the Company, to Bottomline Technologies (de), Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: Chief Executive Officer, with a copy to ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.; and
(c) if sent to one or more of the Selling Stockholders, to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, as Attorney-in-Fact for the Selling Stockholders, at Bottomline
Technologies (de), Inc.,155 Fleet Street, Portsmouth, New Hampshire,
telecopier number (▇▇▇) ▇▇▇-▇▇▇▇.
13. Parties. This Agreement shall inure to the benefit of and be binding
-------
upon the several Underwriters, the Company and the Selling Stockholders and
their respective executors, administrators, successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person or entity, other than the parties hereto and their respective
executors, administrators, successors and assigns, and the controlling persons
within the meaning of the Act or the Exchange Act, officers and directors
referred to in Section 8, any legal or equitable right, remedy or claim in
respect of this Agreement or any provisions herein contained, this Agreement and
all conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of the parties hereto and their respective executors,
administrators, successors and assigns and said controlling persons and said
officers and directors, and for the benefit of no other person or entity. No
purchaser of any of the Shares from any Underwriter shall be construed a
successor or assign by reason merely of such purchase.
In all dealings with the Company under this Agreement, you shall act on
behalf of each of the several Underwriters, and the Company and the Selling
Stockholders shall be entitled to act and rely upon any statement, request,
notice or agreement made or given by you jointly or by BancBoston ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc. on behalf of you.
14. Applicable Law. This Agreement shall be governed by, and construed in
--------------
accordance with, the internal laws of the State of New York.
15. Construction. The headings in this Agreement are included only for
------------
convenience and shall not affect the meaning or interpretation of this
Agreement. The words "herein" and "hereof" and other words of similar import
refer to this Agreement as a whole and not to any particular part of this
Agreement. The word "including" as used herein shall not be construed so as to
exclude any other thing not referred to or described. All references herein to
Sections shall be deemed references to such parts of this Agreement, except as
otherwise provided.
16. Counterparts. This Agreement may be signed in several counterparts,
------------
each of which will constitute an original.
31
If the foregoing correctly sets forth the understanding among the Company,
the Selling Stockholders and the several Underwriters, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement among the Company, the Selling Stockholders and the several
Underwriters.
Very truly yours,
BOTTOMLINE TECHNOLOGIES (de), INC.
By_____________________________________________
Chairman of the Board of Directors and Chief
Executive Officer
SELLING STOCKHOLDERS
By_____________________________________________
Attorney-in-Fact for the Selling Stockholders
named in Schedule B hereto
Accepted as of the date first above written:
BANCBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORP.
BT ALEX. ▇▇▇▇▇ INCORPORATED
On their behalf and on behalf of each of the
several Underwriters named in Schedule A hereto
By BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
By__________________________________________
Authorized Signatory
32
SCHEDULE A
Number of
Firm Shares
to be
Underwriters Purchased
-------------- -------------
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc....................................................................
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp................................................................................
BT Alex. ▇▇▇▇▇ Incorporated..........................................................................
-------------
Total............................................................................................ 3,400.000
=============
SCHEDULE B
Number of
Firm Shares
Company or Selling Stockholder to be Sold
--------------------------------- --------------
Bottomline Technologies (de), Inc................................................................... 2,519,466
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.................................................................................... 281,250
▇▇▇▇▇ ▇. ▇▇▇▇▇▇..................................................................................... 281,250
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇.................................................................................. 76,500
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.................................................................................... 40,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇............................................................................... 9,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇..................................................................................... 23,906
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇............................................................................. 6,528
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇................................................................................ 994
Case Children's 1991 Irrevocable Trust.............................................................. 8,195
▇▇▇▇▇ ▇. Case....................................................................................... 1,500
▇▇▇▇▇▇▇ ▇. Case..................................................................................... 1,500
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Revocable Trust................................................................... 4,500
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ Venture Investors, L.P............................................................ 35,513
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.................................................................................... 36,976
The ▇▇▇▇▇▇▇▇▇▇ Family Investment, L.P............................................................... 4,015
▇▇▇▇▇ ▇. ▇▇▇▇▇▇..................................................................................... 4,500
▇▇▇▇ ▇▇▇▇▇▇▇........................................................................................ 2,048
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.................................................................................... 4,827
▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇................................................................................. 5,000
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.................................................................................... 23,850
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇................................................................................... 5,463
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇................................................................................... 5,463
▇▇▇▇▇ ▇▇▇▇▇ Revocable Trust......................................................................... 12,293
The Wellington Trust UTA............................................................................ 5,463
--------------
Total........................................................................................... 3,400,000
==============