Exhibit 1.01
January __, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
a division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o Morgan ▇▇▇▇▇▇▇ & Co., Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
VeriSign, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the several Underwriters named in Schedule II hereto (the
"Underwriters"), and certain Stockholders of the Company named in Schedule I
hereto (the "Selling Stockholders") severally propose to sell to the several
Underwriters, an aggregate of 2,400,000 shares of the Company's common stock,
$0.001 par value (the "Firm Shares"), of which _________ shares are to be issued
and sold by the Company and _________ shares are to be sold by the Selling
Stockholders, each Selling Stockholder selling the amount set forth opposite
such Selling Stockholder's name in Schedule I hereto.
The Company also proposes to issue and sell to the several
Underwriters not more than an additional 360,000 shares of its common stock,
$0.001 par value (the "Additional Shares"), if and to the extent that you, as
Managers of the offering, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Section 3 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares." The shares of common
stock, $0.001 par value, of the Company to be outstanding after giving effect to
the sales contemplated hereby are hereinafter referred to as the "Common Stock."
The Company and the Selling Stockholders are hereinafter sometimes collectively
referred to as the "Sellers."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the
prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "Prospectus." If the Company has filed an abbreviated
registration statement to register additional shares of Common Stock pursuant to
Rule 462(b) under the Securities Act (the "Rule 462 Registration Statement"),
then any reference herein to the term "Registration Statement" shall be deemed
to include such Rule 462 Registration Statement.
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, 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 the statements
therein not misleading, (ii) the Registration Statement and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
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, except that the representations
and warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and corporate authority to own its
property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiary, taken as a
whole.
(d) The Company has only three subsidiaries, VeriSign Japan K.K., a
corporation incorporated under the laws of Japan ("VeriSign Japan"),
VeriSign AB, a [corporation] organized under the laws of Sweden ("VeriSign
AB") and
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SecureIT, Inc., a Georgia corporation ("SecureIT") (collectively the
"Subsidiaries"). Each of the Subsidiaries has been duly incorporated is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and the Subsidiaries, taken as a
whole. VeriSign Japan has 2,560 shares of capital stock issued and
outstanding, of which the Company owns 1,292 shares. VeriSign AB has
_______ shares of capital stock issued and outstanding, all of which the
Company owns. SecureIT has ______ shares of capital stock issued and
outstanding, all of which the Company owns. All of the issued shares of
capital stock of the Subsidiaries have been duly and validly authorized and
issued, and are fully paid and non-assessable, and those that are owned
directly by the Company are owned free and clear of all liens,
encumbrances, equities or claims. The Company does not own, directly or
indirectly, an interest in any other corporation, partnership, business,
trust or other entity required to be set forth in Exhibit 21.01 to the
Registration Statement.
(e) The Company and each of the Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to
all personal property owned by them which is material to the business of
the Company and the Subsidiaries, taken as a whole, in each case free and
clear of all liens, encumbrances and defects except such as are described
in the Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries; and any real property
and buildings held under lease by the Company and the Subsidiaries are held
by them 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 and the Subsidiaries,
in each case except as described in the Prospectus.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common (including the Shares to be sold by the
Selling Stockholders) Stock outstanding prior to the issuance of the Shares
have been duly authorized, and are validly issued, fully paid and non-
assessable. Except as set forth or contemplated in the Prospectus, neither
the Company nor the Subsidiaries has 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
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capital stock or any such options, rights, convertible securities or
obligations. All outstanding shares of capital stock of the Company and
options and other rights to acquire capital stock have been issued in
compliance with the registration and qualification provisions of all
applicable federal and state securities laws and were not issued in
violation of any preemptive rights, rights of first refusal or other
similar rights.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will
not be subject to any preemptive rights, rights of first refusal or similar
rights.
(i) This Agreement has been duly authorized, executed and delivered by
the Company.
(j) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene
any provision of applicable law or the certificate of incorporation or by-
laws of the Company or any agreement or other instrument binding upon the
Company or any of the Subsidiaries that is material to the Company and the
Subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any of the Subsidiaries, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares or by
the rules and regulations of the National Association of Securities
Dealers, Inc. (the "NASD").
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and the Subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(l) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company and
the Subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and (iii) there has not been any material
change in the capital stock, short-term debt or long-term
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debt of the Company and the Subsidiaries, except in each case as described
in the Prospectus.
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of the Subsidiaries is a party or to
which any of the properties of the Company or any of the Subsidiaries 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.
(n) Each of the Company and the Subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of
and from, and has made all declarations and filings with, all federal,
state, local, foreign and other governmental or regulatory authorities, all
self-regulatory organizations and all courts and other tribunals, to own,
lease, license and use its properties and assets and to conduct its
business 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 Subsidiaries taken as a whole. Neither the Company
nor any of the Subsidiaries has received any notice of proceedings related
to the revocation or modification of any such consent, authorization,
approval, order, certificate or permit which, singly or in the aggregate,
if the subject of any unfavorable decision, ruling or finding, would have a
material adverse effect on the Company and the Subsidiaries taken as a
whole, except as described in the Prospectus.
(o) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, except for the omission of a
price range and other information derived therefrom.
(p) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment Company" as such term is
defined in the Investment Company Act of 1940, as amended.
(q) Except as described in the Prospectus, 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
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Company to include such securities with the Shares registered pursuant to
the Registration Statement.
(r) The Company and each of the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any of the Subsidiaries has been
refused any insurance coverage sought or applied for; and neither the
Company nor any of the Subsidiaries has 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 have a
material adverse effect on the Company and the Subsidiaries taken as a
whole, except as described in the Prospectus.
(s) The Company and the Subsidiaries (i) are 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) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are 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 and the
Subsidiaries, taken as a whole.
(t) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse
effect on the Company and the Subsidiaries, taken as a whole.
(u) Except as disclosed in the Prospectus, (i) the Company and the
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
licenses or other rights to use all material patents, copyrights,
trademarks, service marks, trade names, technology and know-how currently
employed by them to conduct their respective businesses in the manner
described in the Prospectus, (ii) neither the Company nor any of the
Subsidiaries has received any notice of infringement or conflict with (and
neither the Company nor any of the Subsidiaries knows of any infringement
or conflict with) asserted rights of others with respect to any patents,
copyrights, trademarks, service marks, trade names,
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trade secrets, technology or know-how (including, without limitation, trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) which could reasonably be
expected to result in any material adverse effect upon the Company and the
Subsidiaries, taken as a whole, and (iii) the discoveries, inventions,
products or processes of the Company and the Subsidiaries referred to in
the Prospectus do not, to the knowledge of the Company or any of the
Subsidiaries, infringe or conflict with any right or patent of any third
party, or any discovery, invention, product or process which is the subject
of a published patent application filed by any third party, known to the
Company or any of the Subsidiaries which could reasonably be expected to
have a material adverse effect on the Company and the Subsidiaries, taken
as a whole.
(v) The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles 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.
(w) No material labor dispute with the employees of the Company or any
of the Subsidiaries exists, except as described in or contemplated by the
Prospectus, or, to the knowledge of the Company, is imminent; and, without
conducting any independent investigation, the Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of any
of its principal suppliers, manufacturers or contractors that could
reasonably be expected to have a material adverse effect on the Company and
the Subsidiaries, taken as a whole.
(x) The section of the Prospectus entitled "Shares Eligible for Future
Sale" properly describes all agreements (collectively, the "Lock-up
Agreements") that restrict the holders thereof from selling, making any
short sale of, granting any option for the purchase of, or otherwise
transferring or disposing of, any of such shares of Common Stock, or any
such securities convertible into or exercisable or exchangeable for Common
Stock, for the respective periods of time designated in such Lock-Up
Agreements, without the prior written consent of the Company or ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, and all of such Lock-up Agreements are valid
and binding.
(y) The Nasdaq Stock Market, Inc. has approved the Shares to be issued
by the Company for listing on the Nasdaq National Market upon official
notice of issuance.
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(z) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba.
2. Representations and Warranties of the Selling Stockholders. Each
of the Selling Stockholders, including the Insiders (defined below), represents,
warrants and covenants to and agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Stockholder.
(b) The execution and delivery by such Selling Stockholder of, and the
performance by such Selling Stockholder of its obligations under, this
Agreement, the Stockholder Irrevocable Election to Sell (the "Irrevocable
Election"), the Selling Stockholder's Irrevocable Power of Attorney
appointing certain individuals as such Selling Stockholder's attorneys-in-
fact to the extent set forth therein (the "Power of Attorney"), and the
Letter of Transmittal and Custody Agreement signed by such Selling
Stockholder and ChaseMellon Shareholder Services, LLC, as Custodian,
relating to the deposit of the Shares to be sold by such Selling
Stockholder (the "Custody Agreement"), relating to the transactions
contemplated hereby and by the Registration Statement will not contravene
any provision of applicable law, or the articles of incorporation or by-
laws of such Selling Stockholder (if such Selling Stockholder is a
corporation), or any agreement or other instrument binding upon such
Selling Stockholder or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over such Selling Stockholder,
and no consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by such
Selling Stockholder of its obligations under this Agreement, the
Irrevocable Election, the Power of Attorney or the Custody Agreement of
such Selling Stockholder, except such as may be required by the securities
or Blue Sky laws of the various states in connection with the offer and
sale of the Shares.
(c) Such Selling Stockholder has, and on the Closing Date will have,
valid title to the Shares to be sold by such Selling Stockholder and the
legal right and power, and all authorization and approval required by law,
to enter into this Agreement, the Irrevocable Election, the Power of
Attorney or the Custody Agreement and to sell, transfer and deliver the
Shares to be sold by such Selling Stockholder.
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(d) The Shares to be sold by such Selling Stockholder pursuant to this
Agreement that are outstanding as of the date hereof have been duly
authorized and are validly issued, fully paid and non-assessable, and the
Shares to be sold by such Selling Stockholder that are issuable upon
exercise of outstanding options, will be, upon receipt by the Company of
the exercise price thereof, validly issued, fully paid and non-assessable.
(e) The Irrevocable Election, the Custody Agreement and the Power of
Attorney have been duly authorized, executed and delivered by such Selling
Stockholder and each is a valid and binding agreement of such Selling
Stockholder.
(f) Delivery of the Shares to be sold by such Selling Stockholder
pursuant to this Agreement will pass title to such Shares free and clear of
any security interests, claims, liens, equities and other encumbrances.
(g) All information furnished in writing by or on behalf of such
Selling Stockholder for use in the Registration Statement is, and on the
Closing Date will be, true, correct, and complete, and does not, and on the
Closing Date will not, contain any untrue statement of a material fact or
omit to state any material fact necessary to make such information not
misleading, and all information furnished in writing by or on behalf of
such Selling Stockholder for use in the Prospectus is, and on the Closing
Date will be, true, correct, and complete, and does not, and on the Closing
Date will not, contain any untrue statement of a material fact or omit to
state any material fact necessary to make such information not misleading
in the light of the circumstances under which they were made.
(h) Such Selling Stockholder has reviewed the information contained in
the Registration Statement and, based on such review and such Selling
Stockholder's knowledge of the industry, the Company and its business (but
without further investigation), such Selling Stockholder does not have
knowledge that, and nothing has come to such Selling Stockholder's
attention that would give such Selling Stockholder reason to believe that,
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 and on any Option Closing Date, (i) the Registration Statement and the
Prospectus, and any amendments or supplements thereto, contained or will
contain any untrue statement of a material fact or omitted or will omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (ii) the Prospectus, and any
amendments or supplements thereto effective on or prior to the Closing Date
or any Option Closing Date, contained or will contain any untrue statement
of a material fact or omitted or omits to state a material fact necessary
to make the
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statements therein, in the light of the circumstances under which they were
made, not misleading.
3. Additional Representations and Warranties of the Insider Selling
Stockholders. Each of the Selling Stockholders that is an Insider (defined
below) represents and warrants to and agrees with each of the Underwriters that
such Selling Stockholder has reviewed the Company's representations and
warranties contained in Section 2 of this Agreement and, based on such review
and such Selling Stockholder's knowledge of the industry, the Company and its
business (but without further investigation), such Selling Stockholder does not
have knowledge that, and nothing has come to such Selling Stockholder's
attention that would give such Selling Stockholder reason to believe that any of
such Company representations and warranties are not true and correct. "Insider"
shall mean the Selling Stockholders that are officers and/or directors of the
Company.
4. Agreements to Sell and Purchase. Each Seller, severally and not
jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Seller at $_______ a share (the "Purchase
Price") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
number of Firm Shares to be sold by such Seller as the number of Firm Shares set
forth in Schedule II hereto opposite the name of such Underwriter bears to the
total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell to the Underwriters the Additional Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 360,000
Additional Shares at the Purchase Price. If you, on behalf of the Underwriters,
elect to exercise such option, you shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the Underwriters and the date
on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
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Each Seller hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the 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 sale of any Shares to the Underwriters to be sold hereunder, (B) the
issuance by the Company of shares of Common Stock upon the exercise of stock
options or warrants outstanding on the date hereof or described as outstanding
or reserved for issuance under the option plans described in the Prospectus, or
any other issuances of Common Stock or options to acquire Common Stock hereafter
under the option or equity incentive plans described in the Prospectus, or (C)
the issuance by the Company of Common Stock under the employee stock purchase
plan described in the Prospectus. In addition, each Selling Stockholder agrees
that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on
behalf of the Underwriters, it will not, during the period ending 90 days after
the date of the Prospectus, make any demand for, or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
5. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at
$_____ a share (the "Public Offering Price") and to certain dealers selected by
you at a price that represents a concession not in excess of $____ a share under
the Public Offering Price, and that any Underwriter may allow, and such dealers
may reallow, a concession, not in excess of $____ a share, to any Underwriter or
to certain other dealers.
6. Payment and Delivery. Payment for the Firm Shares to be sold by
each Seller shall be made to such Seller in Federal or other funds immediately
available in New York City against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on ________ __, 1999[4 DAYS AFTER DATE OF AGREEMENT], or at such other
time on the same or such other date, not later than ________ __, 1999[5 DAYS
AFTER DATE OF AGREEMENT], as shall be designated in writing by you. The time and
date of such payment are hereinafter referred to as the "Closing Date".
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Payment for any Additional Shares shall be made to [the Company][each
Seller] in Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 4 or at such other time on the same or on such other
date, in any event not later than ________ __, 1999[10 DAYS AFTER OPTION
EXPIR.], as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Option Closing Date".
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
7. Conditions to the Underwriters' Obligations. The obligations of
the Sellers to sell the Shares to the Underwriters and the several obligations
of the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 5:30 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and the Subsidiary, taken as a whole, from that set forth
in the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and
-12-
that makes it, in your judgment, impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 5(a) above and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
The officer signing and delivering such certificate may rely upon his
or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by the Selling Stockholders
(or by their attorney-in-fact on their behalf), to the effect that the
representations and warranties of the Selling Stockholders (and, in the
case of the Selling Stockholders that are Insiders, that the additional
representations and warranties of the Selling Stockholders that are
Insiders) contained in this Agreement are true and correct as of the
Closing Date and that each Selling Stockholder has complied with all of the
agreements and satisfied all of the conditions on its part to be performed
or satisfied hereunder on or before the Closing Date.
(d) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇▇ & West LLP, special securities counsel for the Company,
dated the Closing Date, to the effect that:
(i) each of the Company, VeriSign AB and SecureIT has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and corporate authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and the Subsidiaries,
taken as a whole;
(ii) the authorized capital stock of the Company conforms in
all material respects as to legal matters to the description thereof
contained in the Prospectus;
-13-
(iii) the shares of Common Stock (including the Shares to be
sold by the Selling Stockholders) outstanding prior to the issuance of
the Shares have been duly authorized, are validly issued and non-
assessable, and to such counsel's knowledge, are fully paid;
(iv) the Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms
of this Agreement, will be validly issued, fully paid and non-
assessable, and the issuance of such Shares will not be subject to any
preemptive right or right of first refusal pursuant to the Company's
certificate of incorporation or bylaws or, to such counsel's
knowledge, similar rights;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or, to such counsel's
knowledge, any agreement or other instrument binding upon the Company
or any of the Subsidiaries that is material to the Company and the
Subsidiaries, taken as a whole, or, to such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any of the Subsidiaries that
specifically refers to or is binding on the Company or any of the
Subsidiaries, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale
of the Shares by the Underwriters or the rules and regulations of the
NASD (as to which such counsel need not express any opinion);
(vii) the statements (A) in the Prospectus under the captions
"Risk Factors--Future Sale of Shares Could Affect Our Stock Price,"
"Dividend Policy," "Certain Transactions," "Shares Eligible for Future
Sale," "Description of Capital Stock," "Management" and "Underwriters"
and (B) in the Registration Statement in Items 14 and 15, in each case
insofar as such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents
and proceedings and fairly summarize the matters referred to therein;
-14-
(viii) such counsel does not know of any legal, regulatory or
governmental proceedings pending or threatened to which the Company or
any of the Subsidiaries is a party or to which any of the properties
of the Company or any of the Subsidiaries is subject that are required
to be described in the Registration Statement or the Prospectus and
are not so described or of 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;
(ix) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended;
(x) to such counsel's knowledge: (1) based solely on oral
advice of the Staff of the Commission, the Registration Statement has
become effective under the Securities Act; (2) no stop order
proceedings with respect to the Registration Statement have been
instituted or are pending or threatened under the Securities Act and
nothing has come to such counsel's attention to lead it to believe
that such proceedings are contemplated; and (3) any required filing of
the Prospectus and any supplement thereto pursuant to Rule 424(b)
under the Securities Act has been made in the manner and within the
time period required by such Rule 424(b);
(xi) no shares of Common Stock are required to be registered
under the Registration Statement and no person or entity has any right
to cause any shares of Common Stock to be registered under the
Registration Statement, pursuant to the Company's certificate of
incorporation or by-laws or, to such counsel's knowledge, any
agreement or other right, which rights have not been validly waived;
and
(xii) based on a letter from the NASDAQ Stock Market, the
shares to be sold under this Agreement to the Underwriters are duly
authorized for quotation on the NASDAQ National Market; and
(xiii) in addition to the matters set forth above, counsel
rendering the foregoing opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel that
causes it to believe that (i) the Registration Statement (except as to
the financial statements, the notes thereto and the other financial
and statistical data contained therein, as to which such counsel need
not express any opinion or belief) at the date the Registration
Statement became effective contained any untrue
-15-
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, (2) the Prospectus (except as to the financial
statements, the notes thereto and the other financial and statistical
data contained therein, as to which such counsel need not express any
opinion or belief) as of its date contained or contains any untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading or (3)
the Registration Statement or the Prospectus (except as to the
financial statements, the notes thereto and the other financial and
statistical data contained therein, as to which such counsel need not
express any opinion or belief) did not comply as to form in all
material respects with the Securities Act and the applicable rules and
regulations thereunder.
(e) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇▇ & West LLP, counsel for the Selling Stockholders, dated
the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Stockholders;
(ii) the execution and delivery by or on behalf of each Selling
Stockholder of, and the performance by such Selling Stockholder of its
obligations under, this Agreement and the Irrevocable Election, the Power
of Attorney and the Custody Agreement of such Selling Stockholder will not
contravene any provision of applicable law, or the articles of
incorporation or bylaws or trust documents, as applicable, of such Selling
Stockholder or, to the best of such counsel's knowledge, any agreement or
other instrument binding upon such Selling Stockholder or, to the best of
such counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over such Selling Stockholder;
(iii) no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by each Selling Stockholder of its obligations under this
Agreement and the Irrevocable Election, the Power of Attorney and the
Custody Agreement of such Selling Stockholder, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with offer and sale of the Shares;
(iv) each of the Selling Stockholders is the sole registered
owner of the Shares to be sold by such Selling Stockholder, has valid title
-16-
to the Shares to be sold by such Selling Shareholder and has the legal
right and power and all authorization and approval required by law to enter
into this Agreement and the Irrevocable Election, the Power of Attorney and
the Custody Agreement of such Selling Stockholder and to sell, transfer and
deliver the Shares to be sold by such Selling Stockholder;
(v) the Irrevocable Election, the Power of Attorney and the
Custody Agreement of each Selling Stockholder has been duly authorized,
executed and delivered by such Selling Stockholder and are valid and
binding agreements of such Selling Stockholder;
(vi) upon the delivery of and payment for the Shares as
contemplated in the Underwriting Agreement, each of the Underwriters will
receive valid marketable title to the Shares purchased by it from such
Selling Stockholder, free of any adverse claim, assuming the Underwriters
purchase such Shares for value, in good faith and without notice of any
adverse claim, as such terms are defined in the Uniform Commercial Code in
effect in the State of California.
(f) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
7(d)(iv), 7(d)(v), 7(d)(vii) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "Underwriters") and
7(d)(xiii) above.
With respect to Section 7(d)(xiii) above, ▇▇▇▇▇▇▇ & West and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ may state that their opinion and belief are based
upon their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified.
The opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇ described in Section 7(d) and 7(e) above
shall be rendered to the Underwriters at the request of the Company and
shall so state therein.
With respect to Section 7(e) above, ▇▇▇▇▇▇▇ & West LLP may rely upon
an opinion or opinions of counsel for any Selling Shareholders and, with
respect to factual matters and to the extent such counsel deems
appropriate, upon the representations of each Selling Shareholder contained
herein and in the Irrevocable Election, the Custody Agreement and the Power
of Attorney of such Selling Shareholder and in other documents and
instruments; provided that (A) each such counsel for the Selling
Shareholders is satisfactory to your counsel, (B) a copy of each opinion so
relied upon is delivered to you and is in form and
-17-
substance satisfactory to your counsel, (C) copies of such Irrevocable
Elections, Custody Agreements and Powers of Attorney and of any such other
documents and instruments shall be delivered to you and shall be in form
and substance satisfactory to your counsel and Fenwick & West LLP shall
state in their opinion that they are justified in relying on each such
other opinion.
(g) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters,
from KPMG Peat Marwick LLP, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(h) The "Lock-up Agreements," each substantially in the form of
Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions
of shares of Common Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the Closing
Date.
(i) The Shares shall have received approval for listing, upon official
notice of issuance, on the Nasdaq National Market.
(j) The Underwriters shall have received on the Closing Date an
opinion of counsel to VeriSign Japan, dated the Closing Date, to the effect
that:
(i) VeriSign Japan has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
corporate authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and the Subsidiaries, taken as a whole;
(ii) VeriSign Japan has 2,560 shares of capital stock issued
and outstanding, of which the Company owns 1,292 shares; and all of
the issued shares of capital stock of VeriSign Japan have been duly
and validly authorized and issued, are fully paid and non-assessable
and such
-18-
shares which are owned by the Company are owned directly by the
Company, free and clear of all liens, encumbrances, equities or
claims; and
(iii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of the certificate of incorporation
or by-laws of VeriSign Japan.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed in compliance with the provisions
hereof only if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Underwriters,
shall be reasonably satisfied that they comply in form and scope.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares and other matters related to the issuance of the Additional Shares and an
opinion or opinions of Fenwick & West LLP in form and substance satisfactory to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Underwriters.
8. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, five (5) signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 5:00 p.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 6(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or
-19-
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading, or if, in the reasonable
opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish
to the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the twelve-
month period ending March 31, 2000 that satisfies the provisions of Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder.
(f) During a period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of (i) all
reports to its stockholders and (ii) all reports, financial statements and
proxy or information statements filed by the Company with the Commission or
any national securities exchange.
(g) The Company will apply the proceeds from the sale of the Shares as
set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will use its best efforts to obtain and maintain in
effect the quotation of the Shares on the Nasdaq National Market and will
take all necessary steps to cause the Shares to be included on the Nasdaq
National Market as promptly as practicable and to maintain such inclusion
for a period of three years after the date hereof or until such earlier
date as the Shares shall be listed for regular trading privileges on
another national securities exchange approved by you.
(i) The Company will comply with all registration, filing and
reporting requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), which may from time to time be applicable to the
Company.
-20-
(j) The Company will comply with all provisions of all undertakings
contained in the Registration Statement.
(k) Prior to the Closing Date, the Company will not, directly or
indirectly, issue any press release or other communication and will not
hold any press conference with respect to the Company, or its financial
condition, results of operations, business, properties, assets, or
prospects or this offering, without your prior written consent.
(l) The Company agrees: (i) to enforce the terms of each Lock-up
Agreement and (ii) issue stop-transfer instructions to the transfer agent
for the Common Stock with respect to any transaction or contemplated
transaction that would constitute a breach of or default under the
applicable Lock-up Agreement. In addition, except with the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Company agrees (i) not to amend or
terminate, or waive any right under, any Lock-up Agreement, or take any
other action that would directly or indirectly have the same effect as an
amendment or termination, or waiver of any right under, any Lock-up
Agreement, that would permit any holder of shares of Common Stock, or
securities convertible into or exercisable or exchangeable for Common
Stock, to sell, make any short sale of, grant any option for the purchase
of, or otherwise transfer or dispose of, any of such shares of Common Stock
or other securities prior to the expiration of 90 days after the date of
the Prospectus, and (ii) not to consent to any sale, short sale, grant of
an option for the purchase of, or other disposition or transfer of shares
of Common Stock, or securities convertible into or exercisable or
exchangeable for Common Stock, subject to a Lock-up Agreement.
(m) The Company will place a restrictive legend on any shares of
Common Stock acquired by a person subject to a Lock-Up Agreement pursuant
to the exercise, after the date hereof and prior to the expiration of the
90-day period after the date of the Prospectus, of any option granted under
the option or equity incentive plans described in the Prospectus, which
legend shall restrict the transfer of such shares prior to the expiration
of such 90-day period.
(n) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies
thereof to the Underwriters and dealers, in the quantities
-21-
hereinabove specified, (ii) all costs and expenses related to the transfer
and delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing any
Blue Sky or Legal Investment memorandum in connection with the offer and
sale of the Shares under state securities laws and all expenses in
connection with the qualification of the Shares for offer and sale under
state securities laws as provided in Section 8(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with
the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred
in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v) all
costs and expenses incident to listing the Shares on the Nasdaq National
Market, (vi) the cost of printing certificates representing the Shares,
(vii) the costs and charges of any transfer agent, registrar or depositary,
(viii) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without limitation,
expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any
such consultants, and one half the cost of any aircraft chartered or
limousines hired in connection with the road show, and (ix) all other costs
and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 9
entitled "Indemnity and Contribution", and the last paragraph of Section 11
below, the Underwriters will pay all of their costs and expenses, including
fees and disbursements of their counsel, travel, meals and lodging expenses
of the representatives and officers of the Underwriters, the costs of
conference rooms and meals for "road show" meetings, one half the cost of
any aircraft chartered or limousines hired in connection with the "road
show," stock transfer taxes payable on resale of any of the Shares by them
and any advertising expenses connected with any offers they may make.
9. Indemnity and Contribution. (a) The Company and the Selling
Stockholders that are Insiders, jointly and severally, agree to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
-22-
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein; provided, that the foregoing indemnity agreement 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 or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such losses, claims, damages or liabilities, unless
such failure is the result of noncompliance by the Company with Section 8(a)
hereof. The liability of each Selling Stockholder that is an Insider under the
indemnity agreement contained in this paragraph 9(a) shall be limited to an
amount equal to the net proceeds received by such Selling Stockholder from the
offering of the Shares sold by such Selling Stockholder (and from the offering
of any other Shares hereunder which are reflected in the Prospectus (under
the caption "Principal and Selling Stockholders") as beneficially owned by such
Selling Shareholder prior to the offering (notwithstanding any disclaimer of
beneficial ownership that may be in the Prospectus)).
(b) Each Selling Stockholder (other than the Selling Stockholders that
are Insiders) agrees, severally and not jointly, to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, or is under common control with, or is controlled by, any
Underwriter, and the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only (i) with reference to information relating to such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder expressly for
use in the Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto or (ii) to the extent that the Selling
Stockholder had knowledge that or reason to believe that the Registration
Statement, any
-23-
preliminary prospectus, the Prospectus or any amendments or supplements thereto
contained such untrue statement or alleged untrue statement or omission or
alleged omission, and except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein. The liability of each Selling Stockholder under the indemnity
agreement contained in this paragraph shall be limited to an amount equal to the
net proceeds received by such Selling Stockholder from the offering of the
Shares sold by such Selling Stockholder (and from the offering of any other
Shares hereunder which are reflected in the the Prospectus (under the caption
"Principal and Selling Stockholders") as beneficially owned by such Selling
Shareholder prior to the offering (notwithstanding any disclaimer of beneficial
ownership that may be in the Prospectus)).
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Selling Stockholders, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or any selling Stockholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 9(a), 9(b) or 9(c), such person (the "Indemnified
Party") shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Party") in writing and the Indemnifying Party, upon
request of the Indemnified Party, shall retain counsel reasonably satisfactory
to the Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnifying Party and
-24-
the Indemnified Party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the Indemnifying Party shall not, in respect of the
legal expenses of any Indemnified Party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for (i) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, (ii) the fees and expenses of more than one separate firm (in addition to
any local counsel) for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section and (iii) the fees and expenses of more than
one separate firm (in addition to any local counsel) for all Selling
Stockholders and all persons, if any, who control any Selling Stockholder within
the meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Underwriters and such control persons of any Underwriters, such firm shall be
designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated. In the case of any
such separate firm for the Company, and such directors, officers and control
persons of the Company, such firm shall be designated in writing by the Company.
In the case of any such separate firm for the Selling Stockholders and such
control persons of any Selling Stockholders, such firm shall be designated in
writing by the persons named as attorneys-in-fact for the Selling Stockholders
under the Power of Attorney. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify the Indemnified Party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Party shall have requested
an Indemnifying Party to reimburse the Indemnified Party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the Indemnifying Party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Party of the
aforesaid request and (ii) such Indemnifying Party shall not have reimbursed the
Indemnified Party in accordance with such request prior to the date of such
settlement. No Indemnifying Party shall, without the prior written consent of
the Indemnified Party, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
proceeding.
(e) To the extent the indemnification provided for in Section 9(a),
9(b) or 9(c) is unavailable to an Indemnified Party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Party under such paragraph, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such
-25-
losses, claims, damages or liabilities (i) in such proportion as is appropriate
to reflect the relative benefits received by the Indemnifying Party or parties
on the one hand and the Indemnified Party or parties on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause 9(e)(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 9(e)(i) above
but also the relative fault of the Indemnifying Party or parties on the one hand
and of the Indemnified Party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by each Seller and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the Sellers
on the one hand and the Underwriters on the other hand 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 the Sellers or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 9 are several in proportion
to the respective number of Shares they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 9(e). The amount paid or
payable by an Indemnified Party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. 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 remedies provided for in this Section 9 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Party at law or in equity.
-26-
(g) The indemnity and contribution provisions contained in this
Section 9 and the representations, warranties and other statements of the
Company and the Selling Stockholders contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter, any Selling Stockholder or any person
controlling any Selling Stockholder or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance
of and payment for any of the Shares.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the NASD, the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in your judgment, is material and
adverse and (b) in the case of any of the events specified in clauses 8(a)(i)
through 8(a)(iv), such event, singly or together with any other such event,
makes it, in your judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule II bears to
the aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 10 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Firm Shares and the aggregate number of Firm Shares
with respect to which such default occurs is more than
-27-
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you, the Company and the Selling Stockholders for
the purchase of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders. In any such
case either you or the relevant Selling Stockholders shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. If, on the
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of Additional Shares
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
-28-
In witness whereof, the undersigned have signed this Agreement as of the date
first above written:
Very truly yours,
VERISIGN, INC.
By:
------------------------------------
Name:
Title:
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
a division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule I hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
------------------------------------
Name:
Title:
[VeriSign Follow-On Underwriting Agreement - Company and Underwriter Sig. Page]
The Selling Stockholders named in Schedule I
hereto that are not Insiders, acting severally
By:
------------------------------------
Name:
Title: Attorney-in-fact
The Selling Stockholders named in Schedule I
hereto that are Insiders
By: By:
---------------------------- -------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By: By:
---------------------------- -------------------------
Name: ▇▇▇▇ ▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By: By:
---------------------------- -------------------------
Name: ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: By:
---------------------------- -------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
By:
----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By:
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
[VeriSign Follow-On Underwriting Agreement - Selling Stockholder Sig. Page]
SCHEDULE I
Number of
Firm Shares
Selling Stockholder To Be Sold
_________
_________
_________
_________
_______________
Total...... _________
===============
SCHEDULE II
Number of
Firm Shares
Underwriter To Be Sold
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated _________
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC _________
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ _________
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ _________
_______________
Total......... _________
===============
Exhibit A
[FORM OF LOCK-UP LETTER]
December __, 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇
▇▇▇▇▇▇▇") proposes to enter into an Underwriting Agreement (the "Underwriting
Agreement") with VeriSign, Inc., a Delaware corporation (the "Company"),
providing for the public offering (the "Public Offering") by the several
Underwriters, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Underwriters"), of shares (the
"Shares") of the Common Stock, one-tenth of one cent ($0.001) par value per
share, of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the final prospectus relating
to the Public Offering (the "Prospectus"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of Common Stock,
whether any such transaction described in clause (1) or (2) 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 sale of any Shares
to the Underwriters pursuant to the Underwriting Agreement or (b) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering. In addition, the
undersigned agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
----------------------------------------
(Name)
----------------------------------------
(Address)