Exhibit 1.1
ADFORCE, INC.
_____ SHARES (1)
COMMON STOCK
UNDERWRITING AGREEMENT
May 3, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇/▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
AdForce, Inc., a Delaware corporation (referred to herein as the Company),
proposes to issue and sell _______ shares of its authorized but unissued Common
Stock, $0.001 par value (herein called the Common Stock, said _______ shares of
Common Stock being herein called the Underwritten Stock). The Company proposes
to grant to the Underwriters (as hereinafter defined) an option to purchase up
to ______________ additional shares of Common Stock (herein called the Option
Stock and with the Underwritten Stock herein collectively called the Stock).
The Common Stock is more fully described in the Registration Statement and the
Prospectus hereinafter mentioned.
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters, for whom you are acting,
named in Schedule I hereto (herein collectively called the Underwriters, which
term shall also include any underwriter purchasing Stock pursuant to Section
3(b) hereof). You represent and warrant that you have been authorized by each
of the other Underwriters to enter into this Agreement on its behalf and to act
for it in the manner herein provided.
1. REGISTRATION STATEMENT.
The Company has filed with the Securities and Exchange Commission (herein
called the Commission) a registration statement on Form S-1 (No. 333-73231),
including the related preliminary prospectus, for the registration under the
Securities Act of 1933, as amended (herein called the Securities Act) of the
Stock. Copies of such registration statement and of each amendment thereto, if
any, including the related preliminary prospectus (meeting the requirements of
Rule 430A of the rules and regulations of the Commission) heretofore filed by
the Company with the Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean such
registration statement, including all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a Rule
462(b) registration statement), and, in the event of any amendment thereto after
the effective date of such registration statement (herein called the Effective
Date), shall also mean (from and after the effectiveness of such amendment) such
registration statement as so amended (including any Rule 462(b) registration
statement). The term Prospectus as used in this Agreement shall mean the
prospectus relating to the Stock first filed with the Commission pursuant to
Rule 424(b) and Rule 430A (or if no such filing is required, as included in the
Registration
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(1) Plus an option to purchase from the Company up to _______ additional shares
to cover overallotments.
Statement) and, in the event of any supplement or amendment to such prospectus
after the Effective Date, shall also mean (from and after the filing with the
Commission of such supplement or the effectiveness of such amendment) such
prospectus as so supplemented or amended. The term Preliminary Prospectus as
used in this Agreement shall mean each preliminary prospectus included in such
registration statement prior to the time it becomes effective.
The Registration Statement has been declared effective under the Securities
Act, and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. The Company has caused to be delivered
to you copies of each Preliminary Prospectus and has consented to the use of
such copies for the purposes permitted by the Securities Act. To the Company's
knowledge, no stop order suspending the effectiveness of the Registration
Statement or suspending or preventing the use of the Prospectus is in effect and
no proceedings for that purpose have been instituted or are pending or
contemplated by the Commission.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company hereby represents and warrants as follows:
(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, is duly qualified to do business as a foreign corporation and in good
standing in each state of the United States of America in which its ownership or
leasing of property or the nature of the business transacted by it requires such
qualification (except where the failure to be so qualified would not have a
material adverse effect on the business, properties, financial condition or
results of operations of the Company).
(ii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been any
materially adverse change in the business, properties, financial condition or
results of operations of the Company, whether or not arising from transactions
in the ordinary course of business, other than as set forth in the Registration
Statement and the Prospectus, and since such dates, except in the ordinary
course of business, the Company (i) has not entered into any material
transaction or incurred any material liability or obligation, direct or
contingent, not referred to in the Registration Statement and the Prospectus;
(ii) has not purchased any of its outstanding capital stock, or declared, paid
or otherwise made any dividend or distribution of any kind on its capital stock;
or (iii) has not had any material change in the capital stock, short-term debt
or long-term debt of the Company, except in each case as described or
specifically contemplated in the Registration Statement and the Prospectus.
(iii) The Registration Statement and the Prospectus comply, and
on the Closing Date (as hereinafter defined) and any later date on which Option
Stock is to be purchased, the Prospectus will comply, in all material respects,
with the provisions of the Securities Act and the Securities Exchange Act of
1934, as amended (herein called the Exchange Act) and the rules and regulations
of the Commission thereunder; on the Effective Date, the Registration Statement
did not contain any untrue statement of a material fact and did not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, on the Effective Date the
Prospectus did not and, on the Closing Date and any later date on which Option
Stock is to be purchased, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that none of the representations and
warranties in this subparagraph (iii) shall apply to statements in, or omissions
from, the Registration Statement or the Prospectus made in reliance upon and in
conformity with information herein or otherwise furnished in writing to the
Company by or on behalf of the Underwriters for use in the Registration
Statement or the Prospectus.
(iv) As of the closing of the sale of the Underwritten Stock
and assuming the filing of the Second Amended and Restated Certificate of
Incorporation with the Secretary of State of the State of Delaware, the
authorized capital stock of the Company consists of 5,000,000 shares of
Preferred Stock, $0.001 par value, of which there are no shares outstanding, and
100,000,000 shares of Common Stock, $0.001 par value, of which there are ____
outstanding shares (including the Underwritten Stock); proper corporate
proceedings have been taken validly to authorize such authorized capital stock;
all of the outstanding shares of such capital stock
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(including the Underwritten Stock) have been duly and validly issued and are
fully paid and non-assessable; and, except as described in the Prospectus, no
preemptive rights of, or rights of first refusal in favor of, stockholders of
the Company exist with respect to the Stock, or the issue and sale thereof,
pursuant to the First Amended and Restated Certificate of Incorporation or
Bylaws of the Company. Except as set forth in the Prospectus and other than
options to purchase ________shares of the Company's Common Stock granted
pursuant to the Company's 1997 Stock Plan (herein called the 1997 Plan) since
March 31, 1999, the Company does not have outstanding any 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. All outstanding
shares of capital stock and options and other rights to acquire capital stock
have been issued in compliance with the registration and qualification
provisions of all applicable securities laws (or applicable exemptions
thereof) and were not issued in violation of any preemptive rights, rights of
first refusal and other similar rights. The issue and sale by the Company of
the shares of Stock to be sold by the Company as contemplated herein will be
validly issued, fully paid and non-assessable, will not conflict with, or
result in a breach of, the First Amended and Restated Certificate of
Incorporation or Bylaws of the Company or any agreement or instrument filed
as exhibits to the Registration Statement or any federal, Delaware corporate
or California law or regulation applicable to the Company, or any order,
writ, injunction or decree of any court or governmental instrumentality
binding upon the Company. No further approval or authority of the
stockholders or the Board of Directors of the Company will be required for
the transfer and sale of the Stock to be sold by the Company or the issuance
and sale of the Stock as contemplated herein.
(v) The authorized capital stock of the Company conforms as
to legal matters in all material respects to the description thereof contained
in the Prospectus. The form of certificates for the Stock conforms in all
material respects to the corporate law of the jurisdiction of the Company's
incorporation.
(vi) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with this
offering.
(vii) Prior to the Closing Date, the Stock to be sold by the
Company will be authorized for listing by the Nasdaq National Market upon
official notice of issuance.
(viii) The consolidated financial statements of the Company,
together with related notes and schedules as set forth in the Registration
Statement ("Financial Statements"), present fairly the financial position and
the results of operations of the Company, at the indicated dates and for the
indicated periods. The Financial Statements, schedules and related notes have
been prepared in accordance with generally accepted accounting principles,
consistently applied through the period involved, except as may be otherwise
stated therein, and all adjustments necessary for a fair presentation of results
for such periods have been made.
(ix) The Company is not in violation or default under any
provision of its certificate of incorporation or bylaws, as currently in effect,
or any indenture, license, mortgage, lease, franchise, permit, deed of trust or
other agreement or instrument to which the Company is a party or by which the
Company or its properties is bound or may be affected, except where such
violation or default would not have a material adverse effect on the business,
financial condition or results of operations of the Company.
(x) 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 indemnity and contribution
hereunder may be limited by applicable laws and except as the enforcement hereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally, or by general
equitable principles.
(xi) The execution and performance of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of, or violation of, any of the terms or
provisions of, or constitute, either by itself or upon notice or the passage of
time or both, a default under,
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any indenture, license, mortgage, lease, franchise, permit, deed of trust or
other agreement or instrument to which the Company currently is a party or by
which the Company or its properties currently is bound or may be affected,
except where such breach, violation or default would not have a materially
adverse effect on the business, financial condition or results of operations
of the Company or violate any of the provisions of the certificate of
incorporation or bylaws, as currently in effect, of the Company or violate
any material order, judgment, statute, rule or regulation currently
applicable to the Company of any court or of any regulatory, administrative
or governmental body or agency having jurisdiction over the Company or its
properties.
(xii) There are no legal or governmental proceedings pending
or, to the Company's knowledge, threatened to which the Company is a party or to
which any of the properties of the Company is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not described or
filed as required. The contracts so described in the Prospectus are in full
force and effect on the date hereof except as disclosed therein; and the Company
nor, to the Company's knowledge any other party, is in material breach of or
default under any of such contracts.
(xiii) The Company possesses all consents, approvals, orders,
certificates, authorizations and permits issued by, and has made all
declarations and filings with, all appropriate federal, state or foreign
governmental and self-regulatory authorities and all courts and other tribunals,
including but not limited to all required state agencies in connection with
applicable franchise laws, regulations and requirements necessary to conduct its
business and to own, lease, license and use its properties in the manner
described in the Prospectus, except to the extent that the failure to obtain or
file would not have a material adverse effect on the Company, and the Company
has not received any notice of proceedings related to the revocation or
modification of any such consent, approval, order, certificate, authorization or
permit that, singly or in the aggregate, could reasonably be expected to result
in a material adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company.
(xiv) The Company (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
has received all permits, licenses or other approvals required of them under
applicable Environmental Laws with respect to its business as conducted and as
proposed to be conducted in the Registration Statement and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company.
(xv) The Company has good and marketable title in fee simple
to all real property and good and marketable title to all personal property that
it owns free and clear of all liens, encumbrances and defects except such as are
described in the Registration Statement or the Prospectus or such as do not
materially and adversely affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company; and
any real property and buildings held under lease by the Company are held under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company.
(xvi) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which constitutes or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Stock.
(xvii) The Company owns or possesses adequate rights to use, all
material patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names currently employed by the Company in connection with the business
now operated by the Company, and,
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except as described in the Prospectus, the Company has not received any
notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in any
material adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company.
(xviii) The Company is in compliance, in all material respects,
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
with the Company would have any liability; the Company has not incurred and
does not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, that would cause the loss of such
qualification.
(xix) The Company is not and, after giving effect to the
offering and sale of the Stock and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(xx) There is no holder of any securities of the Company who
has any right, not effectively satisfied or waived, to require registration of
any shares of capital stock of the Company in connection with the filing of the
Registration Statement or the sale of any shares thereunder. There are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
or to require the Company to include such securities with the Stock registered
pursuant to the Registration Statement, except in each case as described in the
Prospectus.
(xxi) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principals of the
United States and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxii) No material labor dispute with employees of the Company
exists or to the knowledge of the Company is imminent, and, without conducting
any independent investigation, the Company is not aware of any written
communication of any existing, threatened or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors that
could result in any material adverse change in the condition, financial or
otherwise, the earnings, the business or operations of the Company. Except as
described in the Prospectus, the employment of each officer and employee of the
Company is terminable at the will of the Company. To its knowledge, the Company
has complied in all material respects with all applicable state and federal
equal employment opportunity laws and with other laws related to employment. To
the Company's knowledge, no employee of the Company, nor any consultant or
independent contractor with whom the Company has contracted, is in violation of
any term of any employment contract, proprietary information agreement or any
other agreement relating to the right of any such individual to be employed by,
or to contract with, the Company because of the nature of the business to be
conducted by the Company; and to the Company's knowledge, the continued
employment by the Company of its present employees, and the performance of the
Company's contracts with its independent contractors, will not result in any
such violation. The Company has not received any notice alleging that any such
violation has occurred. Except as described in the Prospectus, no employee of
the Company has been granted the right to continued employment by the Company or
to any other material compensation following termination of employment with the
Company. The Company is not aware that any officer or employee,
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or that any group of employees, intends to terminate their employment with
the Company, nor does the Company have a present intention to terminate the
employment of any of the foregoing.
(xxiii) The Agreement and Plan of Merger dated _________, 1999
(the "Plan of Merger") by and between the Company and Imgis, Inc., a California
corporation ("Imgis"), has been duly authorized by all necessary board of
directors and stockholder action on the part of the Company and Imgis and has
been duly executed and delivered by each of the parties thereto. The execution
and delivery of the Plan of Merger and the consummation of the merger
contemplated thereby does not contravene any provision of applicable federal,
Delaware corporate or California law or the certificate of incorporation or
bylaws of the Company or the certificate of incorporation or bylaws of Imgis,
or, to the knowledge of the Company, any judgment or decree of any governmental
body, agency or court having jurisdiction over the Company or Imgis, and no
consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Company and
Imgis of its obligations under the Plan of Merger except such as have been
obtained. The merger contemplated by the Plan of Merger is effective under the
laws of the State of California and the State of Delaware.
(xxiv) The Company has not offered, or caused the Underwriters
to offer, Stock to any person by way of directed shares with the specific intent
to unlawfully influence (i) a customer or supplier of the Company to alter the
customer's or supplier's level or type of business with the Company, or (ii) a
trade journalist or publication to write or publish favorable information about
the Company or its products.
(xxv) To the Company's knowledge, after due investigation, each
of the Company's products will produce no material, logical or arithmetic
inconsistencies when dealing with leap years or dates beyond the year 1999.
Without limiting the foregoing, to the Company's knowledge, the Company's
services will not materially impede the accurate processing of data, or cause
programming or processing errors resulting from the rollover of two-digit year
values to "00" on January 1, 2000. The foregoing does not constitute a warranty
or representation that the Company's software will be capable of recording,
storing, processing, calculating and displaying correct calendar dates based on
software supplied by any party other than the Company, or that other Company's
software will properly interact with such third party software.
(xxvi) No consent, approval, authorization or order of any
federal, Delaware or California governmental agency or body is required on the
part of the Company for the consummation of the transactions contemplated
herein, except such as have been obtained under the Securities Act and such as
may be required under state securities or blue sky laws in connection with the
purchase and distribution of the Stock by the Underwriters.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to the terms
and conditions herein set forth, the Company agrees to issue and sell
_________ shares of the Underwritten Stock to the several Underwriters, and
each of the Underwriters agrees to purchase from the Company the respective
aggregate number of shares of Underwritten Stock set forth opposite its
name in Schedule I. The price at which such shares of Underwritten Stock
shall be sold by the Company and purchased by the several Underwriters
shall be $___ per share. The obligation of each Underwriter to the Company
shall be to purchase from the Company that number of shares of the
Underwritten Stock set forth opposite the name of such Underwriter in
Schedule I hereto. In making this Agreement, each Underwriter is
contracting severally and not jointly; except as provided in paragraphs (b)
and (c) of this Section 3, the agreement of each Underwriter is to purchase
only the respective number of shares of the Underwritten Stock specified in
Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or refuse
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company shall immediately give notice
thereof to you, and the non-defaulting Underwriters shall have the right
within 24 hours after the receipt by you of such notice to purchase, or
procure one or more other Underwriters to purchase, in such proportions as
may be agreed upon between you and such purchasing Underwriter or
Underwriters and upon the terms herein set
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forth, all or any part of the shares of the Stock which such defaulting
Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such
shares and portion, the number of shares of the Stock which each
non-defaulting Underwriter is otherwise obligated to purchase under this
Agreement shall be automatically increased on a pro rata basis to absorb
the remaining shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase; PROVIDED, HOWEVER, that the
non-defaulting Underwriters shall not be obligated to purchase the
shares and portion which the defaulting Underwriter or Underwriters
agreed to purchase if the aggregate number of such shares of the Stock
exceeds 10% of the total number of shares of the Stock which all
Underwriters agreed to purchase hereunder. If the total number of
shares of the Stock which the defaulting Underwriter or Underwriters
agreed to purchase shall not be purchased or absorbed in accordance with
the two preceding sentences, the Company shall have the right, within 24
hours next succeeding the 24-hour period above referred to, to make
arrangements with other underwriters or purchasers satisfactory to you
for purchase of such shares and portion on the terms herein set forth.
In any such case, either you or the Company shall have the right to
postpone the Closing Date determined as provided in Section 5 hereof for
not more than seven business days after the date originally fixed as the
Closing Date pursuant to said Section 5 in order that any necessary
changes in the Registration Statement, the Prospectus or any other
documents or arrangements may be made. If neither the non-defaulting
Underwriters nor the Company shall make arrangements within the 24-hour
periods stated above for the purchase of all the shares of the Stock
which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall be terminated without further act or
deed and without any liability on the part of the Company to any
non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company. Nothing in this paragraph
(b), and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter
under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase, severally
and not jointly, up to _____________ shares in the aggregate of the Option
Stock from the Company at the same price per share as the Underwriters
shall pay for the Underwritten Stock. Said option may be exercised only to
cover over-allotments in the sale of the Underwritten Stock by the
Underwriters and may be exercised in whole or in part at any time (but not
more than once) on or before the thirtieth day after the date of this
Agreement upon written or telegraphic notice by you to the Company setting
forth the aggregate number of shares of the Option Stock as to which the
several Underwriters are exercising the option. Delivery of certificates
for the shares of Option Stock, and payment therefor, shall be made as
provided in Section 5 hereof. The number of shares of the Option Stock to
be purchased by each Underwriter shall be the same percentage of the total
number of shares of the Option Stock to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten Stock,
as adjusted by you in such manner as you deem advisable to avoid fractional
shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of the Stock
to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after
the closing of the initial public offering and increase or decrease the
concessions and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the front cover page and
under "Underwriting" in the Registration Statement, any Preliminary
Prospectus and the Prospectus relating to the Stock filed by the Company
(insofar as such information relates to the Underwriters) constitutes the
only information furnished by the Underwriters to the Company for inclusion
in the Registration Statement, any Preliminary Prospectus, and the
Prospectus, and you on behalf of the respective Underwriters represent and
warrant to the Company that the statements made therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten Stock and the
Option Stock (if the option granted by Section 3(c) hereof shall have been
exercised not later than 7:00 A.M., San Francisco time, on the date two
business
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days preceding the Closing Date), and payment therefor, shall be
made at the office of Fenwick & West LLP, at 7:00 a.m., San Francisco time,
on the fourth business day after the date of this Agreement, or at such
time on such other day, not later than seven full business days after such
fourth business day, as shall be agreed upon in writing by the Company and
you. The date and hour of such delivery and payment (which may be
postponed as provided in Section 3(b) hereof) are herein called the Closing
Date.
(b) If the option granted by Section 3(c) hereof shall be exercised after
7:00 a.m., San Francisco time, on the date two business days preceding the
Closing Date, delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made at the office of Fenwick & West LLP, at
7:00 a.m., San Francisco time, on the third business day after the exercise
of such option.
(c) Payment for the Stock purchased from the Company shall be made to the
Company or its order by one or more certified or official bank check or
checks in same day funds. Such payment shall be made upon delivery of
certificates for the Stock to you for the respective accounts of the
several Underwriters against receipt therefor signed by you. Certificates
for the Stock to be delivered to you shall be registered in such name or
names and shall be in such denominations as you may request at least one
business day before the Closing Date, in the case of Underwritten Stock,
and at least one business day prior to the purchase thereof, in the case of
the Option Stock. Such certificates will be made available to the
Underwriters for inspection, checking and packaging at the offices of Lewco
Securities Corporation, ▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ on the
business day prior to the Closing Date or, in the case of the Option Stock,
by 3:00 p.m., New York time, on the business day preceding the date of
purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the
Company for shares to be purchased by any Underwriter whose check shall not
have been received by you on the Closing Date or any later date on which
Option Stock is purchased for the account of such Underwriter. Any such
payment by you shall not relieve such Underwriter from any of its
obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company further covenants
and agrees as follows:
(a) The Company will (i) prepare and timely file with the Commission under Rule
424(b) a Prospectus containing information previously omitted at the time
of effectiveness of the Registration Statement in reliance on Rule 430A and
(ii) not file any amendment to the Registration Statement or supplement to
the Prospectus of which you shall not previously have been advised and
furnished with a copy or to which you shall have reasonably objected in
writing or which is not in compliance with the Securities Act or the rules
and regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the event of (i) the
request by the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii)
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, (iii) the institution or
notice of intended institution by the Commission of any action or
proceeding for that purpose, (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction, or (v) the receipt by the Company of
notice of the initiation or threatening of any proceeding for such purpose.
The Company will make every reasonable effort to prevent the issuance of
such a stop order and, if such an order shall at any time be issued, to
obtain the withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto filed prior to the time the Registration Statement
becomes effective and, promptly upon the filing thereof, a conformed copy
of each post-effective amendment, if any, to the Registration Statement
(together with, in each case, all exhibits thereto unless previously
furnished to you) and will also deliver to you, for distribution to the
Underwriters, a sufficient number of additional conformed copies of each of
the foregoing (but without exhibits) so that one copy of each may be
distributed to each Underwriter, (ii) as promptly as possible deliver to
you and send to the several Underwriters, at such office or offices as you
may designate, as many copies of the Prospectus as you may reasonably
request, and (iii) thereafter from time to time
8
during the period in which a prospectus is required by law to be
delivered by an Underwriter or dealer, likewise send to the Underwriters
as many additional copies of the Prospectus and as many copies of any
supplement to the Prospectus and of any amended prospectus, filed by the
Company with the Commission, as you may reasonably request for the
purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required by law
to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing
by you, shall occur as a result of which it is necessary, in the opinion of
counsel for the Company or of counsel for the Underwriters, to supplement
or amend the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser of the Stock, the Company will forthwith prepare and file with
the Commission a supplement to the Prospectus or an amended prospectus so
that the Prospectus as so supplemented or amended will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time such Prospectus is delivered to such
purchaser, not misleading. If, after the initial public offering of the
Stock by the Underwriters and during such period, the Underwriters shall
propose to vary the terms of offering thereof by reason of changes in
general market conditions or otherwise, you will advise the Company in
writing of the proposed variation, and, if in the opinion either of counsel
for the Company or of counsel for the Underwriters such proposed variation
requires that the Prospectus be supplemented or amended, the Company will
forthwith prepare and file with the Commission a supplement to the
Prospectus or an amended prospectus setting forth such variation. The
Company authorizes the Underwriters and all dealers to whom any of the
Stock may be sold by the several Underwriters to use the Prospectus, as
from time to time amended or supplemented, in connection with the sale of
the Stock in accordance with the applicable provisions of the Securities
Act and the applicable rules and regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will submit to
you, for your information, a copy of any post-effective amendment to the
Registration Statement and any supplement to the Prospectus or any amended
prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue
sky laws of such jurisdictions as you may designate and, during the period
in which a prospectus is required by law to be delivered by an Underwriter
or dealer, in keeping such qualifications in good standing under said
securities or blue sky laws; PROVIDED, HOWEVER, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified. The Company will, from time to time, prepare and file such
statements, reports, and other documents as are or may be required to
continue such qualifications in effect for so long a period as you may
reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, the Company
will furnish to you, and to each Underwriter who may so request in writing,
copies of all periodic and special reports furnished to stockholders of the
Company and of all information, documents and reports filed with the
Commission.
(h) Not later than the 45th day following the end of the fiscal quarter first
occurring after the first anniversary of the Effective Date, the Company
will make generally available to its security holders an earnings statement
in accordance with Section 11(a) of the Securities Act and Rule 158
thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of obligations under this Agreement, including all costs and
expenses (excluding counsel fees for Underwriters) incident to (i) the
preparation, printing and filing with the Commission and the National
Association of Securities Dealers, Inc. ("NASD") of the Registration
Statement, any Preliminary Prospectus and the Prospectus, (ii) the
furnishing to the Underwriters of copies of any Preliminary Prospectus and
of the several documents required by paragraph (c) of this Section 6 to be
so furnished, (iii) the printing of this Agreement and related documents
delivered to the Underwriters, (iv) the preparation, printing and filing of
all supplements and amendments to the Prospectus referred to in
paragraph (d) of this Section 6, (v) the furnishing to you and the
Underwriters of the reports and information referred to in
9
paragraph (g) of this Section 6 and (vi) the printing and issuance of
stock certificates, including the transfer agent's fees.
(j) The Company agrees to reimburse you, for the account of the several
Underwriters, for blue sky fees and related disbursements (including
counsel fees and disbursements and cost of printing memoranda for the
Underwriters) paid by or for the account of the Underwriters or their
counsel in qualifying the Stock under state securities or blue sky laws and
in the review of the offering by the National Association of Securities
Dealers, Inc.
(k) THE COMPANY HEREBY AGREES THAT, WITHOUT THE PRIOR WRITTEN CONSENT OF
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC ON BEHALF OF THE UNDERWRITERS, THE COMPANY WILL NOT,
FOR A PERIOD OF 180 DAYS FOLLOWING THE EFFECTIVE DATE, DIRECTLY OR
INDIRECTLY, (i) SELL, OFFER, CONTRACT TO SELL, MAKE ANY SHORT SALE, PLEDGE,
SELL ANY OPTION OR CONTRACT TO PURCHASE, PURCHASE ANY OPTION OR CONTRACT TO
SELL, GRANT ANY OPTION, RIGHT OR WARRANT TO PURCHASE OR OTHERWISE TRANSFER
OR DISPOSE OF ANY SHARES OF COMMON STOCK OR ANY SECURITIES CONVERTIBLE INTO
OR EXCHANGEABLE OR EXERCISABLE FOR OR ANY RIGHTS TO PURCHASE OR ACQUIRE
COMMON STOCK OR (ii) ENTER INTO ANY SWAP OR OTHER AGREEMENT THAT TRANSFERS,
IN WHOLE OR IN PART, ANY OF THE ECONOMIC CONSEQUENCES OR OWNERSHIP OF
COMMON STOCK, WHETHER ANY SUCH TRANSACTION DESCRIBED IN CLAUSE (i) OR (ii)
ABOVE IS TO BE SETTLED BY DELIVERY OF COMMON STOCK OR SUCH OTHER
SECURITIES, IN CASH OR OTHERWISE. THE FOREGOING SENTENCE SHALL NOT APPLY
TO (A) THE STOCK TO BE SOLD TO THE UNDERWRITERS PURSUANT TO THIS AGREEMENT,
(B) SHARES OF COMMON STOCK ISSUED BY THE COMPANY UPON THE EXERCISE OF
OPTIONS.
(l) If at any time during the 25-day period after the Registration Statement
becomes effective any rumor, publication or event relating to or affecting
the Company shall occur as a result of which in your opinion the market
price for the Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after
written notice from you advising the Company to the effect set forth above,
forthwith prepare, consult with you concerning the substance of, and
disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor, publication
or event.
(m) The Company is familiar with the Investment Company Act of 1940, as
amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not
and will not be an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, and the rules and regulations thereunder.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (f) of this Section 7, the Company
agrees to indemnify and hold harmless each Underwriter and each person
(including each partner or officer thereof) who controls any Underwriter
within the meaning of Section 15 of the Securities Act from and against any
and all losses, claims, damages or liabilities, joint or several, to which
such indemnified parties or any of them may become subject under the
Securities Act, the Securities Exchange Act of 1934, as amended (herein
called the Exchange Act), or the common law or otherwise, and the Company
agrees to reimburse each such Underwriter and controlling person for any
legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any
such losses, claims, damages or liabilities or in connection with any
investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including the
Prospectus as part thereof and any Rule 462(b) registration statement) or
any post-effective amendment thereto (including any Rule 462(b)
registration statement), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or (ii) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus or the Prospectus (as amended or as supplemented if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto) or the omission or alleged omission to state therein a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that (1) the indemnity agreements of the Company contained in this
paragraph (a) shall not apply to any such losses, claims, damages,
liabilities or
10
expenses if such statement or omission was made in reliance
upon and in conformity with information furnished as herein stated or
otherwise furnished in writing to the Company by or on behalf of any
Underwriter for use in any Preliminary Prospectus or the Registration
Statement or the Prospectus or any such amendment thereof or supplement
thereto, and (2) the indemnity agreement contained in this paragraph (a)
with respect to any Preliminary Prospectus shall not inure to the benefit
of any Underwriter from whom the person asserting any such losses, claims,
damages, liabilities or expenses purchased the Stock which is the subject
thereof (or to the benefit of any person controlling such Underwriter) if
at or prior to the written confirmation of the sale of such Stock a copy of
the Prospectus (or the Prospectus as amended or supplemented) was not sent
or delivered to such person and the untrue statement or omission of a
material fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as amended or supplemented) unless the
failure is the result of noncompliance by the Company with paragraph (c) of
Section 6 hereof. The indemnity agreements of the Company contained in this
paragraph (a) and the representations and warranties of the Company
contained in Section 2 hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the
Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its officers who signs the Registration Statement on his
own behalf or pursuant to a power of attorney, each of its directors, each
other Underwriter and each person (including each partner or officer
thereof) who controls the Company or any such other Underwriter within the
meaning of Section 15 of the Securities Act, from and against any and all
losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities
Act, the Exchange Act, or the common law or otherwise and to reimburse each
of them for any legal or other expenses (including, except as otherwise
hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection
with any investigation or inquiry of, or other proceeding which may be
brought against, the respective indemnified parties, in each case arising
out of or based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (including the
Prospectus as part thereof and any Rule 462(b) registration statement) or
any post-effective amendment thereto (including any Rule 462(b)
registration statement) or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus (as
amended or as supplemented if the Company shall have filed with the
Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, if such statement or omission was made in
reliance upon and in conformity with information furnished as herein stated
or otherwise furnished in writing to the Company by or on behalf of such
indemnifying Underwriter for use in the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto. The
indemnity agreement of each Underwriter contained in this paragraph (b)
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall
survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and (b) of
this Section 7 agrees that, upon the service of a summons or other initial
legal process upon it in any action or suit instituted against it or upon
its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in
such paragraphs, it will promptly give written notice (herein called the
Notice) of such service or notification to the party or parties from whom
indemnification may be sought hereunder. No indemnification provided for
in such paragraphs shall be available to any party who shall fail so to
give the Notice if the party to whom such Notice was not given was unaware
of the action, suit, investigation, inquiry or proceeding to which the
Notice would have related and was prejudiced by the failure to give the
Notice, but the omission so to notify such indemnifying party or parties of
any such service or notification shall not relieve such indemnifying party
or parties from any liability which it or they may have to the indemnified
party for contribution or otherwise than on account of such indemnity
agreement. Any indemnifying party shall be entitled at its own expense to
participate in the defense of any action, suit or proceeding against, or
investigation or inquiry of, an indemnified party. Any indemnifying party
shall be entitled, if it so elects within a reasonable time after receipt
of the Notice by giving written notice (herein called the Notice of
Defense) to the indemnified party, to assume (alone or in conjunction with
any other indemnifying party or parties) the entire
11
defense of such action, suit, investigation, inquiry or proceeding, in
which event such defense shall be conducted, at the expense of the
indemnifying party or parties, by counsel chosen by such indemnifying
party or parties and reasonably satisfactory to the indemnified party or
parties; PROVIDED, HOWEVER, that (i) if the indemnified party or parties
reasonably determine that there may be a conflict between the positions
of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation,
inquiry or proceeding or that there may be legal defenses available to
such indemnified party or parties different from or in addition to those
available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to
the extent reasonably determined by such counsel to be necessary to
protect the interests of the indemnified party or parties and (ii) in
any event, the indemnified party or parties shall be entitled to have
counsel chosen by such indemnified party or parties participate in, but
not conduct, the defense. If, within a reasonable time after receipt of
the Notice, an indemnifying party gives a Notice of Defense and the
counsel chosen by the indemnifying party or parties is reasonably
satisfactory to the indemnified party or parties, the indemnifying party
or parties will not be liable under paragraphs (a) through (c) of this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party or parties in connection with the defense of the
action, suit, investigation, inquiry or proceeding, except that (A) the
indemnifying party or parties shall bear the legal and other expenses
incurred in connection with the conduct of the defense as referred to in
clause (i) of the proviso to the preceding sentence and (B) the
indemnifying party or parties shall bear such other expenses as it or
they have authorized to be incurred by the indemnified party or parties.
If, within a reasonable time after receipt of the Notice, no Notice of
Defense has been given, the indemnifying party or parties shall be
responsible for any legal or other expenses incurred by the indemnified
party or parties in connection with the defense of the action, suit,
investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under paragraph (a) or
(b) of this Section 7, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in paragraph (a) or (b) of this Section
7 (i) in such proportion as is appropriate to reflect the relative benefits
received by each indemnifying party from the offering of the Stock or (ii)
if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of each indemnifying party in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, or
actions in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Underwriters on the other shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Stock received by the Company and the total underwriting discount received
by the Underwriters, as set forth in the table on the cover page of the
Prospectus, bear to the aggregate public offering price of the Stock.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by each indemnifying party and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro
rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to in the first sentence of
this paragraph (d). The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities, or actions in respect thereof,
referred to in the first sentence of this paragraph (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigation, preparing to defend or defending
against any action or claim which is the subject of this paragraph (d).
Notwithstanding the provisions of this paragraph (d), no Underwriter shall
be required to contribute any amount in excess of the underwriting discount
applicable to the Stock purchased by such Underwriter. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this paragraph (d) to contribute are several in proportion
to their respective underwriting obligations and not joint.
12
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted
against it in respect of which contribution may be sought, it will promptly
give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or
parties of any such service shall not relieve the party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise (except as specifically provided in paragraph (c) of this
Section 7).
(e) The Company will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect
of which indemnification may be sought hereunder (whether or not such
Underwriter or any person who controls such Underwriter within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act is a
party to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of such Underwriter
and each such controlling person from all liability arising out of such
claim, action, suit or proceeding.
8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company if after
the date of this Agreement trading in the Common Stock shall have been
suspended, or if there shall have occurred (i) the engagement in
hostilities or an escalation of major hostilities by the United States or
the declaration of war or a national emergency by the United States on or
after the date hereof, (ii) any outbreak of hostilities or other national
or international calamity or crisis or change in economic or political
conditions if the effect of such outbreak, calamity, crisis or change in
economic or political conditions in the financial markets of the United
States would, in the Underwriters' reasonable judgment, make the offering
or delivery of the Stock impracticable, (iii) suspension of trading in
securities generally or a material adverse decline in value of securities
generally on the New York Stock Exchange, the American Stock Exchange, or
The Nasdaq Stock Market, or limitations on prices (other than limitations
on hours or numbers of days of trading) for securities on either such
exchange or system, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of,
or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
Underwriters' reasonable opinion materially and adversely affects or will
materially and adversely affect the business or operations of the Company,
(v) declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in
the Underwriters' reasonable opinion has a material adverse effect on the
securities markets in the United States. If this Agreement shall be
terminated pursuant to this Section 8, there shall be no liability of the
Company to the Underwriters and no liability of the Underwriters to the
Company; PROVIDED, HOWEVER, that in the event of any such termination the
Company agrees to indemnify and hold harmless the Underwriters from all
costs or expenses incident to the performance of the obligations of the
Company under this Agreement, including all costs and expenses referred to
in paragraphs (i) and (j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to
the performance by the Company of all their respective obligations to be
performed hereunder at or prior to the Closing Date or any later date on
which Option Stock is to be purchased, as the case may be, and to the
following further conditions:
(a) The Registration Statement shall have become effective; and no stop order
suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder and the
validity and form of the certificates representing the Stock, all corporate
proceedings and other legal matters incident to the foregoing, and the form
of the Registration Statement and of the Prospectus (except as to the
financial statements contained therein), shall have been approved at or
prior to the Closing Date by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, LLP, counsel for the Underwriters.
(c) You shall have received from Fenwick & West LLP, counsel for the Company,
an opinion, addressed to the Underwriters and dated the Closing Date,
covering the matters set forth in Annex A hereto, and if Option Stock is
13
purchased at any date after the Closing Date, an additional opinion from
such counsel, addressed to the Underwriters and dated such later date,
confirming that the statements expressed as of the Closing Date in such
opinion remain valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective Date, the statements
made in the Registration Statement and the Prospectus were true and correct
and neither the Registration Statement nor the Prospectus omitted to state
any material fact required to be stated therein or necessary in order to
make the statements therein, respectively, not misleading, (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in
such a supplement or amendment, (iii) since the respective dates as of
which information is given in the Registration Statement in the form in
which it originally became effective and the Prospectus contained therein,
there has not been any material adverse change or any development involving
a prospective material adverse change in or affecting the business,
properties, financial condition or results of operations of the Company,
whether or not arising from transactions in the ordinary course of
business, and, since such dates, except in the ordinary course of business.
The Company has not entered into any material transaction not referred to
in the Registration Statement in the form in which it originally became
effective and the Prospectus contained therein, (iv) the Company does not
have any material contingent obligations which are not disclosed in the
Registration Statement and the Prospectus, (v) there are not any pending or
known threatened legal proceedings to which the Company is a party or of
which property of the Company is the subject which are material and which
are not disclosed in the Registration Statement and the Prospectus,
(vi) there are not any franchises, contracts, leases or documents which are
material which have not been filed as exhibits to the Registration
Statement, (vii) the representations and warranties of the Company herein
are true and correct in all material respects as of the Closing Date or any
later date on which Option Stock is to be purchased, as the case may be,
and (viii) there has not been any material change in the market for
securities in general or in political, financial or economic conditions
from those reasonably foreseeable as to render it impracticable in your
reasonable judgment to make a public offering of the Stock, or a material
adverse change in market levels for securities in general (or those of
companies in particular) or financial or economic conditions which render
it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later date on which
Option Stock is purchased a certificate, dated the Closing Date or such
later date, as the case may be, and signed by the President and the Chief
Financial Officer of the Company, stating that the respective signers of
said certificate have carefully examined the Registration Statement in the
form in which it originally became effective and the Prospectus contained
therein and any supplements or amendments thereto, and that the statements
included in clauses (i) through (vii) of paragraph (d) of this Section 9
are true and correct.
(f) You shall have received from Ernst & Young LLP a letter or letters
addressed to the Underwriters and dated the Closing Date and any later date
on which Option Stock is purchased, confirming that they are independent
public accountants with respect to the Company within the meaning of the
Securities Act and the applicable published rules and regulations
thereunder and based upon the procedures described in their 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 three
business days prior to the Closing Date or such later date on which Option
Stock is purchased (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, as the case may be, and (ii) setting forth
any revisions and additions to the statements and conclusions set forth in
the Original Letter which are necessary to reflect any changes in the facts
described in the Original Letter since the date of the Original Letter or
to reflect the availability of more recent financial statements, data or
information. The letters shall not disclose any change, or any development
involving a prospective change, in or affecting the business or properties
of the Company (or any of its subsidiaries) which, in your sole judgment,
makes it impractical or inadvisable to proceed with the public offering of
the Stock or the purchase of the Option Stock as contemplated by the
Prospectus.
(g) You shall have received from Ernst & Young LLP a letter 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 at March 31, 1999,
did not disclose any weakness in internal controls that they considered
to be material weaknesses.
14
(h) You shall have been furnished evidence in usual written or telegraphic form
from the appropriate authorities of the several jurisdictions, or other
evidence satisfactory to you, of the qualification referred to in
paragraph (f) of Section 6 hereof.
(i) Prior to the Closing Date, the Stock to be issued and sold by the Company
shall have been duly authorized for listing by the Nasdaq National Market
upon official notice of issuance.
(j) On or prior to the Closing Date, you shall have received from all
stockholders agreements, in form reasonably satisfactory to ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ LLC, stating that without the prior written consent of ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ LLC on behalf of the Underwriters, that each such person or entity
will not, for a period of 180 days following the commencement of the public
offering of the Stock by the Underwriters, directly or indirectly, sell,
lend, offer, contract to sell, transfer the economic risk of ownership in,
make any short sale, pledge, or otherwise dispose of any shares of Common
Stock of the Company acquired prior to the Effective Date, or any
securities acquired prior to the Effective Date that are convertible into
or exchangeable or exercisable for or any othre rights to purchase or
acquire Common Stock of the Company.
(k) All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, LLP, counsel for the Underwriters, shall be satisfied that they
comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to
the Underwriters and without liability of the Underwriters to the Company;
PROVIDED, HOWEVER, that (i) in the event of such termination, the Company
agrees to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company
under this Agreement, including all costs and expenses referred to in
paragraphs (i) and (j) of Section 6 hereof, and (ii) if this Agreement is
terminated by you because of any refusal, inability or failure on the part
of the Company to perform any agreement herein, to fulfill any of the
conditions herein, or to comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse
the Underwriters severally upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have
been incurred by them in connection with the transactions contemplated
hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of
the Company to deliver the Stock shall be subject to the conditions that
(a) the Registration Statement shall have become effective and (b) no stop
order suspending the effectiveness thereof shall be in effect and no
proceedings therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall
not be fulfilled, this Agreement may be terminated by the Company by giving
notice to you. Any such termination shall be without liability of the
Company to the Underwriters and without liability of the Underwriters to
the Company; PROVIDED, HOWEVER, that in the event of any such termination
the Company agrees to indemnify and hold harmless the Underwriters from all
costs or expenses incident to the performance of the obligations of the
Company under this Agreement, including all costs and expenses referred to
in paragraphs (i) and (j) of Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other
obligations under Section 7 of this Agreement, the Company agrees to
reimburse on a quarterly basis the Underwriters for all reasonable legal
and other expenses incurred in connection with investigating or defending
any claim, action, investigation, inquiry or other proceeding arising out
of or based upon any statement or omission, or any alleged statement or
omission, described in paragraph (a) of Section 7 of this Agreement,
notwithstanding the absence of a judicial determination as to the propriety
and enforceability of the obligations under this Section 11 and the
possibility that such payments might later be held to be improper;
PROVIDED, HOWEVER, that (i) to the extent any such payment is ultimately
held to be improper, the persons receiving such payments shall promptly
refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when
and if due.
15
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company and the several Underwriters and, with
respect to the provisions of Section 7 hereof, the several parties (in
addition to the Company and the several Underwriters) indemnified under the
provisions of said Section 7, and their respective personal
representatives, successors and assigns. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or
corporation any legal or equitable remedy or claim under or in respect of
this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser,
of any of the Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters,
shall be mailed, telegraphed or delivered to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and if to the Company, shall
be mailed, telegraphed or delivered to it at its office, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. All notices given by
telegraph shall be promptly confirmed by letter.
14. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the
representations, warranties and covenants in this Agreement shall remain in
full force and effect regardless of (a) any termination of this Agreement,
(b) any investigation made by or on behalf of any Underwriter or
controlling person thereof, or by or on behalf of the Company or its
directors or officers, and (c) delivery and payment for the Stock under
this Agreement; PROVIDED, HOWEVER, that if this Agreement is terminated
prior to the Closing Date, the provisions of paragraphs (k) and (l) of
Section 6 hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
16
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement among the Company
and the several Underwriters in accordance with its terms.
Very truly yours,
ADFORCE, INC.
By
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and CEO
The foregoing Agreement is hereby confirmed
and accepted as of the date first above
written.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & CO., INC.
By ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
By
----------------------------------
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I
hereto.
17
SCHEDULE I
UNDERWRITERS
NUMBER OF
SHARES
UNDERWRITERS TO BE PURCHASED
------------ ----------------
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC.......................................
▇▇▇▇▇▇ Brothers Inc.........................................
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & Company, LLC...........................
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co.........................................
----------------
Total.......................................................
S-1
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF FENWICK & WEST LLP
COUNSEL FOR THE COMPANY
(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, to our
knowledge is duly qualified to do business as a foreign corporation and in good
standing in each state of the United States of America in which its ownership or
leasing of property requires such qualification (except where the failure to be
so qualified would not have a material adverse effect on the business,
properties, financial condition or results of operations of the Company), and
has full corporate power and corporate authority to own or lease its properties
and conduct its current business as described in the Registration Statement;
(ii) as of the closing of the sale of the Underwritten Stock and assuming
the filing of the Second Amended and Restated Certificate of Incorporation with
the Secretary of State of the State of Delaware, the authorized capital stock of
the Company consists of 5,000,000 shares of Preferred Stock, $0.001 pare value,
of which, to our knowledge, there are no shares outstanding, and 100,000,000
shares of Common Stock, $0.001 par value, of which, to our knowledge there are
outstanding _________________ shares (including the Underwritten Stock issued on
the date hereof); proper corporate proceedings have been taken validly to
authorize such authorized capital stock; all of the outstanding shares of such
capital stock (including the Underwritten Stock) have been duly and validly
issued and are fully paid and nonassessable; and, except as described in the
Prospectus, no preemptive rights of, or rights of refusal in favor of,
stockholders of the Company exist with respect to the Stock, or the issue and
sale thereof, pursuant to the First Amended and Restated Certificate of
Incorporation or Bylaws of the Company;
(iii) the Registration Statement has become effective under the Securities
Act and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus is in effect and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission;
(iv) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the Securities Act,
the Exchange Act and with the rules and regulations of the Commission
thereunder;
(v) the information required to be set forth in the Registration
Statement in answer to Items 9, 10 (insofar as it relates to such counsel) and
11(c) of Form S-1, to such counsel's knowledge, is accurately and adequately set
forth in the Registration Statement in all material respects or no response is
required with respect to such Items, and the description of the Company's stock
option plans and the options granted and which may be granted thereunder and the
options granted otherwise than under such plans set forth in the Prospectus, to
such counsel's knowledge, accurately and fairly presents the information
required to be set forth in the Registration Statement with respect to said
plans and options to the extent required by the Securities Act and the rules and
regulations of the Commission thereunder;
(vi) such counsel does not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion of
such counsel are of a character required by the Securities Act and the rules and
regulations of the Commission thereunder to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as so required;
(vii) the Underwriting Agreement has been duly authorized, executed and
delivered to the Underwriters by the Company;
A-1
(viii) the issue and sale by the Company of the shares of Stock sold by the
Company as contemplated by the Underwriting Agreement does not conflict with, or
result in a breach of, the First Amended and Restated Certificate of
Incorporation or Bylaws of the Company or any agreement or instrument filed as
exhibits to the Registration Statement or any federal, Delaware state corporate
or California state law or regulation applicable to the Company, or so far as is
known to such counsel, any order, writ, injunction or decree of any court or
governmental instrumentality naming the Company;
(ix) to such counsel's knowledge, all holders of securities of the
Company having rights to the registration of shares of Common Stock, or other
securities, because of the filing of the Registration Statement by the
Company have waived such rights or such rights have expired by reason of
lapse of time following notification of the Company's intent to file the
Registration Statement;
(x) no consent, approval, authorization or order of any federal,
Delaware state or California state governmental agency or body is required on
the part of the Company for the consummation of the transactions contemplated in
the Underwriting Agreement, except such as have been obtained under the
Securities Act and such as may be required under state securities or blue sky
laws (as to which counsel need not express any opinion) in connection with the
purchase and distribution of the Stock by the Underwriters.
-------------------------------------------------------------------------------
Counsel rendering the foregoing opinion will also state that although such
counsel has not independently verified the accuracy or completeness of the
statements made in the Registration Statement or the Prospectus, such counsel
had no reason to believe that the Registration Statement (except as to the
financial statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
not express any belief) at the Effective Date contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus (except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference therein,
as to which such counsel need not express any belief) as of its date or at the
Closing Date, contained or contains any untrue statement of a material fact or
omitted or omits 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; PROVIDED, HOWEVER, that none of the statements of belief in this
paragraph shall apply to statements in, or omissions from, the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information herein or otherwise furnished in writing to the Company by or on
behalf of the Underwriters for use in the Registration Statement or the
Prospectus.
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States or of the State of California, upon
opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to the
Representatives and to counsel for the Underwriters and the foregoing opinion
shall also state that counsel knows of no reason the Underwriters are not
entitled to rely upon the opinions of such local counsel.
A-2