Exhibit 1.1
10,000,000 SHARES
▇▇▇▇▇▇▇▇▇.▇▇▇ INCORPORATED
COMMON STOCK (PAR VALUE $.008 PER SHARE)
UNDERWRITING AGREEMENT
March 29, 1999
March 29, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "UNDERWRITERS") an aggregate of 10,000,000 shares of its common
stock (par value $.008 per share) (the "FIRM SHARES"). ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., and ▇▇▇▇▇▇▇▇▇, Lufkin &
▇▇▇▇▇▇▇▇ Securities Corporation shall act as representatives (the
"REPRESENTATIVES") of the several Underwriters.
The Company also proposes to issue and sell to the several Underwriters
not more than an additional 1,500,000 shares of its common stock (par value
$.008 per share) (the "ADDITIONAL SHARES") if and to the extent that the
Representatives 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 2 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES." The shares of common stock
(par value $.008 per share) of the Company to be outstanding after giving effect
to the sales contemplated hereby are hereinafter referred to as the "COMMON
STOCK."
On , 1999, Priceline Travel, Inc. ("PTI") was merged with
and into the Company (the "MERGER") pursuant to the agreement dated as of
1999 (the "MERGER AGREEMENT"). Prior to the Merger, PTI held
all of the consents, licenses and other authorizations necessary to qualify the
Company as a travel agency for purposes of conducting its business. Effective as
of , 1999, the Company issued shares of common stock pursuant to a
1.25-for-1 share split of its common stock (the "STOCK SPLIT").
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 or supplemented 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.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ has agreed to reserve a portion of the Shares to be
purchased by it under this Agreement for sale to the Company's directors,
officers, employees and business associates and other parties related to the
Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus under the
heading "Underwriters" (the "DIRECTED SHARE PROGRAM"). The Shares to be sold by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to the Directed Share Program are hereinafter referred
to as the "DIRECTED SHARES". Any Directed Shares not orally confirmed for
purchase by any Participants by the end of the business day on which this
Agreement is executed will be offered to the public by the Underwriters as set
forth in the Prospectus.
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, to the
knowledge of the Company, 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
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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 is a corporation, validly existing and in good
standing under the laws of the State of Delaware, 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.
(d) The Company has no subsidiaries and does not otherwise own or
control, directly or indirectly, any corporation, association or other
entity.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(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 stock of the Company outstanding prior to
the issuance of the Shares (including the shares issued pursuant to the
Stock Split) have been duly authorized and are validly issued, fully paid
and non-assessable.
(h) The shares of common stock of the Company to be issued upon the
conversion of the Series A Convertible Preferred Stock, par value $.01 per
share, and the Series B Convertible Preferred Stock, par value $.01 per
share, (collectively, the "Convertible Preferred Stock") have been duly
authorized and, when issued and delivered pursuant to the terms of the
applicable certificates of designation, will be validly issued, fully paid
and non-assessable and the issuance of such shares will not be subject to
any preemptive or similar rights.
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(i) 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 or similar rights.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene (i) any provision of applicable law; (ii) the certificate
of incorporation or by-laws of the Company; (iii) any agreement or other
instrument binding upon the Company that is material to the Company or
(iv) any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company, except where, in the case of
(i), (iii) and (iv), such contravention would not, singly or in the
aggregate, have a material adverse effect on the Company, 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 have been obtained
or made or 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
such consents, approvals, authorizations, orders or qualifications the
failure of the Company to obtain would not have a material adverse effect
on the Company or the offering of Shares contemplated hereunder.
(k) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Merger Agreement
did not contravene (i) any provision of applicable law; (ii) the
certificate of incorporation or by-laws of the Company; (iii) any
agreement or other instrument binding upon the Company that is material to
the Company or (iv) any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company, except where,
in the case of (i), (iii) and (iv), such contravention did not, singly or
in the aggregate, have a material adverse effect on the Company, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency was required for the performance by the
Company of its obligations under the Merger Agreement, except such as have
been obtained or made or such consents, approvals, authorizations, orders
or qualifications the failure of the Company to obtain would not have a
material adverse effect on the Company or the offering of Shares
contemplated hereunder.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
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condition, financial or otherwise, or in the earnings, business or
operations of the Company from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
(m) There are no legal (i) 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 (ii) 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 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.
(o) 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.
(p) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company
has 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 (other than in the
ordinary course of business) or long-term debt of the Company, except in
each case as described in the Prospectus.
(q) The Company owns no real property and has good and marketable
title to all personal property owned by it which is material to the
business of the Company, 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
materially interfere with the use made or proposed to be made of such
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property by the Company; and any real property and buildings held under
lease by the Company are held by it under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
materially interfere with the use made or proposed to be made of such
property and buildings by the Company, in each case except as described in
the Prospectus.
(r) Except to the extent described in the Prospectus, the Company
owns, possesses, or has an irrevocable right to use all patents, patent
applications, trademarks, trademark applications, service marks, service
▇▇▇▇ applications, trade names, copyrights, licenses, inventions, trade
secrets, technology and know-how (collectively, "INTELLECTUAL PROPERTY
RIGHTS") currently employed by it in connection with and material to its
business as described in the Prospectus; other than the claims described
in the Prospectus, the Company is not aware of any rights of third parties
to any such Intellectual Property Rights; in connection with the filing of
its patent applications, the Company conducted reasonable investigations
of the published literature and patent references relating to the
inventions claimed in such applications. There are no enforceable United
States or foreign patents known to the Company which the Company believes
to be infringed by its present activities or which the Company believes
would preclude the pursuit of its business as described in the Prospectus
to any material extent; the Company is not aware of any infringement by
third parties of any such Intellectual Property Rights which would have a
material adverse effect on the Company; except as described in the
Prospectus, there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim challenging the validity or scope of the
Company's rights in or to any such Intellectual Property Rights; and,
except as described in the Prospectus, there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company is infringing or otherwise violating intellectual
property rights of others.
(s) The Company possesses all certificates, licenses, authorizations
and permits (collectively, "GOVERNMENTAL LICENSES") issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct its business, except such Governmental Licenses the failure of the
Company to possess would not, singly or in the aggregate, have a material
adverse effect on the Company; the Company has not received any notice of
proceedings relating to the revocation or modification of any Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding,
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would have a material adverse effect on the Company, except as described
in the Prospectus.
(t) No material labor dispute with the employees of the Company
exists, except as described in the Prospectus, or, to the knowledge of the
Company, is imminent.
(u) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as it
believes are reasonable for the business in which it is engaged and the
Company believes it will be able to renew or replace its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from financially responsible insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the Company, except as described in the Prospectus.
(v) 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 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) 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 it under applicable Environmental Laws to conduct its business
and (iii) is in compliance with all terms and conditions of any such
permit, license or approval, except, in each case, 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 have a
material adverse effect on the Company.
(x) 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
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Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
(y) Except as described or referred to in the Registration Statement
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement), the Company has not sold, issued or distributed any
shares of Common Stock during the six-month period preceding the date
hereof, including any sales pursuant to Rule 144A under, or Regulations D
or S of, the Securities Act, other than shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.
(z) The offer and sale of securities of the Company on or prior to
the Closing Date (other than the offering of shares pursuant to this
Agreement) are exempt from the registration requirements of Section 5 of
the Securities Act and are exempt from registration under all applicable
securities or Blue Sky laws of the various states.
(aa) The Company has not offered, or caused the Underwriters to
offer, Shares to any person pursuant to the Directed Share Program 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.
(bb) The Registration Statement, the Prospectus and any preliminary
prospectus comply, and any further amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign jurisdictions
in which the Prospectus or any preliminary prospectus, as amended or
supplemented, if applicable, are distributed in connection with the
Directed Share Program; and no consent, approval, authorization, license,
registration or order of, or qualification with, any governmental body or
agency, other than those obtained, is required under the securities laws
and regulations of foreign jurisdictions in which the Directed Shares are
offered outside the United States.
(cc) The Company has reviewed its operations to the extent and in
the manner described in the Prospectus to evaluate the extent to which the
business or operations of the Company will be affected by the Year 2000
Problem (that is, any significant risk that computer hardware or software
applications used by the Company will not, in the case of dates or time
periods occurring after December 31, 1999, function at least as
effectively
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as in the case of dates or time periods occurring prior to January 1,
2000); as a result of such review, (i) the Company does not believe, that
(A) there are any issues related to the Company's preparedness to address
the Year 2000 Problem that are of a character required to be described or
referred to in the Registration Statement or Prospectus which have not
been accurately described in the Registration Statement or Prospectus or
(B) the Year 2000 Problem will have a material adverse effect on the
Company.
(dd) None of the options issued or to be issued pursuant to any of
the Company's stock option plans are exercisable until 180 days after the
offering, except for options issued to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇ and [▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇] all of whom have signed lock-up agreements.
(ee) The Merger has been effected as described in the Prospectus and
in accordance with all applicable law. The Merger Agreement has been
authorized, executed and delivered by the Company and is a valid and
binding agreement enforceable by the Company in accordance with its terms,
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by general equitable
principles (whether in a proceeding at law or in equity).
(ff) There are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any shares of Common Stock.
2. AGREEMENTS TO SELL AND PURCHASE. Upon the basis of the representations
and warranties herein contained, but subject to the conditions hereinafter
stated, the Company hereby agrees to sell to the several Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company the
respective number of Firm Shares set forth in Schedule I hereto opposite its
name at a purchase price of U.S.$_____ a share ("PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
one-time option to purchase, severally and not jointly, up to 1,500,000
Additional Shares at the Purchase Price. If the Representatives, on behalf of
the Underwriters, elect to exercise such option, the Representatives 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
9
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 the Representatives 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 I hereto opposite
the name of such Underwriter bears to the total number of Firm Shares.
The Company hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
ending 180 days after the date of the Prospectus, (i) file a registration
statement relating to an offering of shares of Common Stock (other than a
registration statement on Form S-8 covering shares of Common Stock subject to
options under the Company's 1997 Omnibus Plan or 1999 Omnibus Plan); (ii) 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 (iii) 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 (ii) or (iii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder; (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof; (C) grants of options
to officers, employees or consultants of the Company in the ordinary course of
business, provided that such options are not exercisable (except in the case of
a change of control or similar event) prior to the end of such 180 day period;
(D) the issuance by the Company of restricted stock awards under existing
employee benefit plans, provided the recipients of such stock agree to be bound
by the above terms; (E) the issuance of performance warrants (or shares of
capital stock on exercise of such warrants) to suppliers or other entities
providing products or services to the Company in connection with entering into
certain supply, adaptive marketing or other similar arrangements, provided that
the recipient of such warrants or shares agrees to be bound by the above terms
or (F) the filing of a Rule 462 Registration Statement.
3. TERMS OF PUBLIC OFFERING. The Company is 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 Company is further
advised by you that the Shares are to be offered to the public initially at
$_____ a share (the
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"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.
4. PAYMENT AND DELIVERY. Payment for the Firm Shares shall be made to the
Company 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 or at such other
time on the same or such other date, not later than , 1999 as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company 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 2 or at such other time on the same or on such other date, in any event
not later than , 1999, as shall be designated in writing by the
Representatives. 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.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligation of the
Company 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 5:00 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
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(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date 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 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 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 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the
Chief Financial Officer of the Company 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 in
all material respects 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.
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The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special outside
counsel for the Company, dated the Closing Date, to the effect set forth
in Annex I hereto.
(d) The Underwriters shall have received on the Closing Date the
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇, general counsel for the Company, dated the
Closing Date, to the effect set forth in Annex II hereto.
(e) The Underwriters shall have received on the Closing Date the
opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, intellectual property and licensing counsel
for the Company dated the Closing Date, to the effect set forth in Annex
III hereto.
(f) The Underwriters shall have received on the Closing Date the
opinion of outside patent counsel for the Company, dated the Closing Date,
to the effect set forth in Annex IV hereto.
The opinions of counsel described in Sections 5(c), 5(d), 5(e) and
5(f) above shall be rendered to the Underwriters at the request of the
Company.
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(g) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated the
Closing Date, in form and substance satisfactory to you.
(h) 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 Deloitte & Touche 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.
(i) The "lock-up" agreements, each substantially in the form of
Exhibit A or Exhibit B hereto, as applicable, or as previously agreed
between you and certain securityholders, 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.
(j) The NASDAQ National Market shall have approved the Common Stock
for quotation, subject only to official notice of issuance.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to the Representatives on the Option
Closing Date of such documents as they 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.
6. 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 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 3:00 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
14
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 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 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 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 or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
(e) To make generally available to the Company's security holders
and to you as soon as reasonably practicable an earning statement covering
the twelve-month period ending March 31, 2000 that satisfies the
15
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) To place stop transfer orders on any Directed Shares that have
been sold to Participants subject to the three month restriction on sale,
transfer, assignment, pledge or hypothecation imposed by NASD Regulation,
Inc. under its Interpretative Material 2110-1 on free-riding and
withholding to the extent necessary to ensure compliance with the three
month restrictions.
(g) To comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program.
(h) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid the following expenses incident to the performance of the Company's
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 herein 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 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 6(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 not to exceed $5,000, (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 NASD Regulation, Inc. not to exceed
$30,000, (v) all fees and expenses in connection with the preparation and
filing of the registration statement on Form 8-A relating to the Common
Stock and all costs and expenses incident to the quotation of the Shares
on the NASDAQ National Market, (vi) the cost of printing certificates
16
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 the cost of any aircraft
chartered in connection with the road show, (ix) all expenses in
connection with any offer and sale of the Shares outside of the United
States, including filing fees and all reasonable fees and disbursements of
the counsel for the Underwriters in connection with offers and sales
outside of the United States, (x) all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program
and stamp duties, similar taxes or duties or other taxes, if any, incurred
by the Underwriters in connection with the Directed Share Program, and
(xi) 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
specifically provided in this Section, Sections 7 and 8, and the last
paragraph of Section 10 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Shares by them and
any advertising expenses connected with any offers they may make.
7. INDEMNITY AND CONTRIBUTION. (a) The Company agrees 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 Securities Exchange Act of 1934, as amended (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, as applicable), 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 (in
the case of the Prospectus, in light of the circumstances under which they were
made) 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
17
such Underwriter through you expressly for use therein PROVIDED, HOWEVER, that
the foregoing indemnity agreement with respect to any preliminary prospectus or
the 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, as applicable) 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 loss, claim, damage or liability.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless 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 to
the same extent as the foregoing indemnity from the Company to such Underwriter,
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.
(c) 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 7(a) or 7(b), 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 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 the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred
18
upon receipt of reasonably detailed invoices thereof. Such firm shall be
designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in the case of parties indemnified
pursuant to Section 7(a), and by the Company, in the case of parties indemnified
pursuant to Section 7(b). 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. 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.
(d) To the extent the indemnification provided for in Section 7(a) or 7(b)
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 losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 7(d)(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 7(d)(i) above but also the relative
fault of the Company on the one hand and of the Underwriters 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 Company 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
the Company 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 Company 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 Company
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
19
pursuant to this Section 7 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 7(d). 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 7, 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 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 7
and the representations, warranties and other statements of the Company
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 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.
8. DIRECTED SHARE PROGRAM INDEMNIFICATION. (a) The Company agrees to
indemnify and hold harmless ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and each person, if any, who controls
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities"), 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) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants in
connection with the Directed Share Program, or caused by any omission or
20
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement therein; (ii) caused by the failure of any
Participant to pay for and accept delivery of Directed Shares that the
Participant agreed to purchase; or (iii) related to, arising out of, or in
connection with the Directed Share Program, other than losses, claims, damages
or liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Entities.
(b) In case any proceeding (including any governmental investigation) shall
be instituted involving any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity in respect of which indemnity
may be sought pursuant to Section 8(a), the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity seeking
indemnity, shall promptly notify the Company in writing and the Company, upon
request of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity, shall retain counsel reasonably
satisfactory to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity to represent the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity
and any others the Company may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity unless (i) the Company shall have agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Company and the ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Entity and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. The
Company shall not, in respect of the legal expenses of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Entities in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities. Any such
separate firm for the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities shall be designated in writing by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇. The Company 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 Company agrees to
indemnify the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities from and against any loss or liability by
reason of such settlement or judgment. The Company shall not, without the prior
written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, effect any settlement of any pending or
threatened proceeding in respect of which any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity is or could
have been a party and indemnity could have been sought hereunder by such ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Entity, unless such settlement includes an unconditional release of the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities from all liability on claims that are the subject matter
of such proceeding.
(c) To the extent the indemnification provided for in Section 8(a) is
unavailable to a ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then the Company in lieu of
21
indemnifying the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity thereunder, shall contribute to the
amount paid or payable by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities on the other hand from the offering of the Directed
Shares or (ii) if the allocation provided by clause 8(c)(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 8(c)(i) above but also the
relative fault of the Company on the one hand and of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities
on the other hand in connection with any 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 Company on the
one hand and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities on the other hand in connection with
the offering of the Directed Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Directed Shares (before
deducting expenses) and the total underwriting discounts and commissions
received by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities for the Directed Shares, bear to the
aggregate Public Offering Price of the Directed Shares. If the loss, claim,
damage or liability is caused by an untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact, the
relative fault of the Company on the one hand and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement or the omission or alleged omission
relates to information supplied by the Company or by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(d) The Company and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities agree that it would not be
just or equitable if contribution pursuant to this Section 8 were determined by
PRO RATA allocation (even if the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities 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 8(c). The amount
paid or payable by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities 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 the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Entities in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity shall
be required to contribute any amount under this Section 8 in excess of the
amount by which the total price at which the Directed Shares distributed to the
public were offered to the public exceeds the amount of any damages that such
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity has otherwise been required to pay. The remedies provided
for in this Section 8
22
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.
(e) The indemnity and contribution provisions contained in this Section 8
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Directed Shares.
9. 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, either the New
York Stock Exchange, the American Stock Exchange or the NASD, (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 9(a)(i) through 9(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.
10. 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 I 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
23
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 one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company 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 or the
Company. In any such case either you or the Company 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 the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. 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.
12. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
13. 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.
24
Very truly yours,
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
By:
----------------------------------
Name:
Title:
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation
Acting severally on behalf of themselves and the
several Underwriters named in Schedule I
hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
------------------------------------------------
Name:
Title:
25
SCHEDULE I
U.S. UNDERWRITERS
UNDERWRITER NUMBER OF FIRM SHARES
TO BE PURCHASED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.........
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated...............
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. .......
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation...............................
Total Firm Shares................... 10,000,000
==========
EXHIBIT A
[FORM OF LOCK-UP LETTER]
____________, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ International
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited ("MSIL")
propose to enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT")
with ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, a Delaware corporation (the "COMPANY")
providing for the public offering (the "PUBLIC OFFERING") by the several
underwriters, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL (the "UNDERWRITERS") of shares
(the "SHARES") of the Common Stock (par value $.01 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
27
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 the 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. 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.
The foregoing provisions shall not apply to the sale or other transfer of
shares of Common Stock by the undersigned to any associate (as such term is
defined in Rule 12b-2 of the Securities Exchange Act of 1934) of the
undersigned; PROVIDED THAT, prior to any such sale or other transfer of shares
of Common Stock, any such associated transferee agrees in writing to the
restrictions on transfer set forth herein.
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. In the event that the
Public Offering shall not have been consummated on or before May 15, 1999, this
Lock-Up Agreement shall be of no further force or effect.
Very truly yours,
-----------------------------------
Name
-----------------------------------
Address
2
EXHIBIT B
[FORM OF LOCK-UP LETTER FOR OFFICERS, DIRECTORS AND GREATER THAN 5% SECURITY
HOLDERS]
____________, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ International
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited ("MSIL")
propose to enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT")
with ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, a Delaware corporation (the "COMPANY")
providing for the public offering (the "PUBLIC OFFERING") by the several
underwriters, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL (the "UNDERWRITERS") of shares
(the "SHARES") of the Common Stock (par value $.01 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 the 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. 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. In the event that the
Public Offering shall not have been consummated on or before May 15, 1999, this
Lock-Up Agreement shall be of no further force or effect.
Very truly yours,
-----------------------------------
Name
-----------------------------------
Address
3
Annex I
Opinion of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
_____________ __, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
BANCBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
As Representatives of the
several Underwriters
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
Initial Public Offering of Common
Stock, par value $.008 per share
---------------------------------
Ladies and Gentlemen:
We have acted as special counsel to ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated, a Delaware corporation (the "Company"), relating to the sale by
the Company to the several underwriters (the "Underwriters") named in Schedule I
to the Underwriting Agreement dated March __, 1999 (the "Underwriting
Agreement") of ___________ shares (the "Shares") of the Company's common stock,
par value $.008 per share ("Common Stock").
This opinion is being furnished pursuant to Section 5(c) of
the Underwriting Agreement.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the
Registration Statement on Form S-1 (File No. 333-69657) relating to the Shares,
filed with the Securities and Exchange Commission (the "Commission") on December
23, 1998 under the Securities Act of 1933, as amended, (the "Act"), Amendment
No. 1 thereto filed with the Commission on February 16, 1999, Amendment No. 2
thereto filed with the Commission on March 18, 1999 and Amendment No. 3 thereto
filed with the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
________ __, 1999
Page 2
Commission on March __, 1999, including information deemed to be a part of the
registration statement at the time of effectiveness pursuant to Rule 430A of the
General Rules and Regulations under the Act (the "Rules and Regulations") (such
Registration Statement, as so amended, being hereinafter referred to as the
"Registration Statement"); (ii) the final prospectus dated March __, 1999,
relating to the Shares in the form filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations (the "Prospectus"); (iii) a specimen
certificate representing the Common Stock; (iv) an executed copy of the
Underwriting Agreement; (v) the Certificate of Incorporation of the Company, as
currently in effect (the "Certificate of Incorporation"); (vi) the By-laws of
the Company, as currently in effect (the "By-laws");(vii) certain resolutions of
the Board of Directors of the Company and a Pricing Committee of the Board of
Directors of the Company; (viii) those agreements and instruments listed on
Schedule I hereto (the "Applicable Contracts"); and (ix) an officer's
certificate, dated the date hereof, a copy of which is attached as Exhibit A
hereto. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of the Company and such
agreements, certificates of public officials, certificates of officers or other
representatives of the Company and others, and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of executed documents, we have assumed that the parties thereto,
other than the Company, had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
________ __, 1999
Page 3
and delivery by such parties of such documents and the validity and binding
effect thereof on such parties. As to any facts material to the opinions
expressed herein which we did not independently establish or verify, we have
relied upon oral or written statements and representations of officers and other
representatives of the Company and others. In rendering the opinions set forth
in paragraph 3 below, we have assumed, with your consent, that the certificates
representing the Shares will be manually signed by one of the authorized
officers of the Transfer Agent and Registrar for the Common Stock and registered
by such Transfer Agent and Registrar and will conform to the specimen thereof
examined by us.
As used herein, (i) the term "Applicable Laws" means those
laws of the State of New York, the State of Delaware and the United States of
America that, in each case, in our experience, are normally applicable to
transactions of the type contemplated by the Underwriting Agreement (except for
United States, state and foreign securities or Blue Sky laws, anti-fraud laws
and the rules and regulations of the National Association of Securities Dealers,
Inc.) but without our having made any special investigation regarding any other
laws; (ii) the term "Governmental Authorities" means any federal, New York or
Delaware executive, legislative, judicial, administrative or regulatory body;
(iii) the term "Applicable Orders" means those judgments, orders or decrees of
any Governmental Authorities specifically identified to us by the Company to be
applicable to the Company, as identified on Schedule II hereto and (iv) the term
"Governmental Approval" means any consent, approval, license, authorization or
validation of, or filing, qualification or registration with, any Governmental
Authority required to be made or obtained by the Company pursuant to Applicable
Laws, other than any consent, approval, license, authorization, validation,
filing, qualification or registration which may have become applicable as a
result of your involvement in the transactions contemplated by the Underwriting
Agreement or because of your legal or regulatory status or because of any other
facts specifically pertaining to you.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
________ __, 1999
Page 4
Our opinion set forth in paragraph 1 below as to the existence
and good standing of the Company under the laws of the State of Delaware is
based solely on our review of a certificate to such effect from the Secretary of
State of the State of Delaware.
To the extent that any Applicable Contract, by its terms or
otherwise, is governed by the laws of any jurisdiction other than the United
States, the State of Delaware or the State of New York, our opinion in paragraph
6 is based solely upon our understanding of the plain language of such contract,
agreement, instrument or other document and we express no opinion herein with
respect to the meaning, interpretation, validity, binding nature or
enforceability of any contract, agreement, instrument or other document which by
its terms or otherwise is governed by the laws of any jurisdiction other than
the United States, the State of Delaware or the State of New York and we do not
assume any responsibility with respect to the effect on the opinions set forth
herein of any interpretation thereof inconsistent with such understanding.
Members of our firm are admitted to the bar in the State of
New York and the State of Delaware and we do not express any opinion as to the
laws of any other jurisdiction other than the laws of the United States of
America to the extent referred to specifically herein.
Based upon and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:
1. The Company is a corporation validly existing and in good
standing under the laws of the State of Delaware.
2. The Company has the corporate power and corporate authority
to own, lease and operate its properties and to conduct its business as
described in the Registration Statement.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
________ __, 1999
Page 5
3. The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
4. The Shares have been duly authorized by the Company and,
when delivered to and paid for by the Underwriters in accordance with the terms
of the Underwriting Agreement, will be validly issued, fully paid and
non-assessable shares of Common Stock; and the issuance of the Shares will not
be subject to any preemptive or similar rights arising under the Certificate of
Incorporation or the By-laws or the General Corporation Law of the State of
Delaware.
5. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
6. The execution and delivery of the Underwriting Agreement by
the Company and the consummation by the Company of the transactions contemplated
thereby will not contravene (i) the Certificate of Incorporation or the By-laws;
(ii) any Applicable Law; (iii) any Applicable Contract; or (iv) any Applicable
Order.
7. No Governmental Approval is required for the execution and
delivery by the Company of the Underwriting Agreement or the issuance and sale
of the Shares by the Company pursuant to the Underwriting Agreement, except such
as have been obtained and made.
8. The statements set forth in the Prospectus under the
caption "Description of Capital Stock" and in Item 14 of the Registration
Statement, insofar as such statements constitute summaries of legal matters or
certain provisions of the documents referred to therein, fairly summarize the
matters referred to therein in all material respects.
9. The Registration Statement, at the time it became
effective, and the Prospectus, as of its date, appeared on their face to be
appropriately responsive in
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
________ __, 1999
Page 6
all material respects to the requirements of the Act and the Rules and
Regulations, except that, in each case, we express no opinion as to the
financial statements, schedules and other financial and statistical data
included therein or excluded therefrom or the exhibits thereto, and, except to
the extent expressly stated in paragraph 8 above, we do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus.
10. The Company is not and, upon the consummation of the
transactions contemplated by the Underwriting Agreement, will not be, an
investment company under the Investment Company Act of 1940, as amended.
We have been orally advised by the Commission that the
Registration Statement was declared effective under the Securities Act at _____
a.m. on March ___, 1999. We have been orally advised by the Commission that no
stop order suspending the effectiveness of the Registration Statement has been
issued and, to the best of our knowledge, no proceedings for that purpose have
been instituted or are pending or threatened by the Commission.
In addition, we have participated in conferences with officers
and other representatives of the Company, counsel for the Company,
representatives of the independent accountants of the Company, your counsel and
you at which the contents of the Registration Statement and the Prospectus and
related matters were discussed and, although we are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus and have
made no independent check or verification thereof (except to the extent
expressly stated in paragraph 8 above), on the basis of the foregoing, no facts
have come to our attention that have led us to believe that the Registration
Statement, at the time it became effective, contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
________ __, 1999
Page 7
to make the statements therein not misleading, or that the Prospectus, as of its
date and as of the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except that we express no opinion or belief with respect
to the financial statements, schedules and other financial and statistical data
included therein or excluded therefrom or the exhibits to the Registration
Statement.
This opinion is furnished to you solely for your benefit in
connection with the closing under the Underwriting Agreement occurring today and
is not to be used, circulated, quoted or otherwise referred to for any other
purpose or relied upon by any other person without our express written
permission.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
________ __, 1999
Page 8
SCHEDULE I
APPLICABLE CONTRACTS
Amended and Restated Registration Rights Agreement, dated as of December 8,
1998, among ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, General Atlantic Partners 48, L.P., GAP
Coinvestment Partners, L.P., General Atlantic Partners 50, L.P., and the
Stockholders named therein
Stock Purchase Agreement, dated July 31, 1998, by and among ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated, General Atlantic Partners 48, L.P. and GAP Coinvestment Partners,
L.P., as amended on September 18, 1998
Stock Purchase Agreement, dated December 8, 1998, by and between ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated and the Investors listed on Schedule 2.1 thereto
Airline Participation Agreement, dated April 1998, by and among ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated, Priceline Travel, Inc. and Trans World Airlines, Inc.
Airline Participation Agreement, dated October 2, 1998, by and among
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, Priceline Travel, Inc. and Northwest Airlines, Inc.
Airline Participation Agreement, dated December 31, 1998, by and among
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, Priceline Travel, Inc. and America West Airlines
Airline Participation Agreement, dated August 31, 1998, by and among
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, Priceline Travel, Inc. and Delta Air Lines, Inc., as
amended on January 19, 1999
General Agreement, dated August 31, 1998, by and among ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated, Priceline Travel, Inc. and Delta Air Lines, Inc., as amended on
January 19, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
________ __, 1999
Page 9
Participation Warrant Agreement, dated August 31, 1998, between ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated and Delta Air Lines, Inc., as amended on December 31, 1998
Participation Warrant Agreement, dated December 31, 1999, between ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated and Northwest Airlines, Inc.
Participation Warrant Agreement, dated December 31, 1998, between ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated and America West Airlines, Inc.
Participation Warrant Agreement, dated December 31, 1998, between ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated and Trans World Airlines, Inc.
Participation Warrant Agreement, dated December 31, 1998, between ▇▇▇▇▇▇▇▇▇.▇▇▇
Incorporated and Northwest Airlines, Inc., as amended on February 4, 1999 and
March 3, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
________ __, 1999
Page 10
SCHEDULE II
APPLICABLE ORDERS
None
Exhibit A
▇▇▇▇▇▇▇▇▇.▇▇▇ INCORPORATED
OFFICER'S CERTIFICATE
I, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, am Chief Financial Officer of
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, a Delaware corporation (the "Company"). I
understand that pursuant to Section 5(c) of the Underwriting Agreement dated
March __, 1999 (the "Underwriting Agreement") among the Company and the
several underwriters (the "Underwriters") named in Schedule I thereto,
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP is rendering an opinion, to be dated
March __, 1999 (the "Opinion") to the Underwriters. I further understand that
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP is relying on this officer's
certificate and the statements made herein in rendering such opinion.
With regard to the foregoing, on behalf of the Company, I
certify that:
(i) the Company's sole business is the ownership and operation, of an
electronic commerce business, primarily over the Internet; and
(ii) the Company (a) is not engaged and does not propose to engage in the
business of issuing face-amount certificates of the installment type, and has
not been engaged in such business and does not have any such certificate
outstanding, and (b) is not engaged and does not propose to engage in the
business of investing, reinvesting, owning, holding or trading in securities,
and does not own or propose to acquire investment securities (as defined in
Section 3(a) of the Investment Company Act of 1940, as amended) having a value
exceeding 40 percent of the value of the Company's total assets (exclusive of
government securities and cash items) on an unconsolidated basis.
(iii) there are no Applicable Orders (as such term is defined in the Opinion).
IN WITNESS WHEREOF I have executed this certificate in the
name and on behalf of ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated this ____ day of March 1999.
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
By:
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
Annex II
Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Senior Vice President, General Counsel and Secretary
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
Five ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
BANCBOSTON ROBERTSTON ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
As Representatives of the
several Underwriters
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
Initial Public Offering of Common
Stock, par value $.008 per share
---------------------------------
Ladies and Gentlemen:
I am Senior Vice President, General Counsel and Secretary of
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, a Delaware corporation (the "Company"), and have
acted as general counsel to the Company in relation to the sale by the
Company to the several underwriters (the "Underwriters") named in Schedule I
to the Underwriting Agreement dated March __, 1999 (the "Underwriting
Agreement") of ___ shares (the "Shares") of the Company's common stock, par
value $.008 per share the ("Common Stock").
This opinion is being furnished pursuant to Section 5(d) of the
Underwriting Agreement.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of (i) the Registration
Statement on Form S-1 (File No. 333-69657) relating to the Shares, filed with
the Securities and Exchange Commission (the "Commission") on December 23, 1998
under the Securities Act of 1933, as amended (the "Act"), Amendment No. 1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED ET AL.
_________________________________, 1999
Page 2
thereto filed with the Commission on February 16, 1999, Amendment No. 2
thereto filed with the Commission on March 18, 1999 and Amendment No. 3 thereto
filed with the Commission on March __, 1999, including information deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A of the General Rules and Regulations under the Act (the "Rules and
Regulations") (such Registration Statement, as so amended, being hereinafter
referred to as the "Registration Statement"); (ii) the final prospectus dated
March __, 1999, relating to the Shares in the form filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations (the "Prospectus"); (iii) a
specimen certificate representing the Common Stock; (iv) an executed copy of the
Underwriting Agreement; (v) the Certificate of Incorporation of the Company, as
currently in effect, (the "Certificate of Incorporation"); (vi) the By-laws of
the Company, as currently in effect, (the "By-laws"); (vii) the Certificate of
Merger ("Certificate of Merger") dated March 24, 1999, relating to merger of the
Company and Priceline Travel, Inc. (the "Merger"); (viii) the Merger Agreement
dated March __, 1999 relating to the Merger; (ix) certain resolutions of the
Board of Directors of the Company and a Pricing Committee of the Board of
Directors of the Company; (x) a certificate of the Chief Executive Officer and
Chief Financial Officer of the Company as to the factual matters covered
thereby, a copy of which is attached hereto (the "Officers' Certificate") and
(ix) the agreements listed in Exhibit A to the Officer's Certificate (the
"Material Contracts"). I have also examined originals or copies, certified or
otherwise identified to my satisfaction, of such records of the Company and such
agreements, certificates of public officials, certificates of officers or other
representatives of the Company and others, and such other documents,
certificates and records as I have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED ET AL.
_________________________________, 1999
Page 3
of all documents submitted to me as certified, conformed or photostatic copies
and the authenticity of the originals of such latter documents. In making my
examination of executed documents, I have assumed that the parties thereto,
other than the Company, had the power, corporate or other, to enter into and
perform all obligations thereunder and I have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity and binding effect thereof on such
parties.
As used herein, (i) the term "Applicable Laws" means the General
Corporation Law of the State of Delaware and those laws of the State of
Connecticut and the United States of America that, in each instance, are
normally applicable to transactions of the type contemplated by the Underwriting
Agreement (except for United States, state and foreign securities or Blue Sky
laws, anti-fraud laws, laws affecting creditors rights generally and the rules
and regulations of the National Association of Securities Dealers, Inc.) but
without my having made any investigation regarding any other laws; (ii) the term
"Governmental Authorities" means any federal or Connecticut executive,
legislative, administrative or regulatory body and the Secretary of State of the
State of Delaware and (iii) the term "Governmental Approval" means any consent,
approval, license, authorization or validation of, or filing, qualification or
registration with, any Governmental Authority required to be obtained or made by
the Company pursuant to Applicable Laws, other than any consent, approval,
license, authorization, validation, filing, qualification or registration which
may have become applicable as a result of your involvement in the transactions
contemplated by the Underwriting Agreement or because of your legal or
regulatory status or because of any other facts specifically pertaining to you.
In providing the opinions set forth in paragraphs 3, 5 and 6 below, I
have made no investigation or search of public docket records of any court,
governmental or administrative agency or body, or of any filings, applications
or registrations with the United States
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED ET AL.
_________________________________, 1999
Page 4
Patent and Trademark Office or the United States Copyright Office.
For the purposes of the opinions set forth in paragraphs 3, 5 and 6,
the expression "to my knowledge" is limited to those matters brought to my
attention after reasonable inquiry of officers of the Company.
The opinion set forth in paragraph 7 below is based solely on my
examination of a copy of the Certificate of Merger certified by the Secretary of
State of the State of Delaware.
Insofar as the opinion in paragraph 1 below relates to the laws of the
State of Ohio or the State of New York, I have relied solely on certificates of
due qualification and good standing from the Secretary of State of Ohio and the
Secretary of State of New York, respectively.
I am the Senior Vice President, General Counsel and Secretary of the
Company, and have held such position since September 1998. I am admitted to the
bar in the State of Connecticut and, except to the extent set forth in the
preceding paragraph, I do not express any opinion as to the laws of any other
jurisdiction other than the General Corporation Law of the State of Delaware and
the laws of the United States of America to the extent referred to specifically
herein. In addition, I express no opinion with respect to any intellectual
property rights or intellectual property matters of the Company, which are
addressed in the opinion of special intellectual property counsel to the
Company.
Based upon and subject to the limitations, qualifications, exceptions
and assumptions set forth herein, I am of the opinion that:
1. The Company 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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED ET AL.
_________________________________, 1999
Page 5
in good standing could not reasonably be expected to have a material adverse
effect on the Company.
2. The execution and delivery of the Underwriting Agreement and the
Merger Agreement by the Company and the consummation by the Company of the
transactions contemplated thereby will not contravene (a) any Applicable Law or
(b) to my knowledge, any Material Contract; or (c) to my knowledge, any
judgement, order or decree of any court or Governmental Authority, applicable to
the Company.
3. No Governmental Approval is required by the Company for the
execution and delivery of the Underwriting Agreement or the Merger Agreement or
the consummation of the transactions contemplated therein, except such as have
been obtained or made.
4. The statements in the Prospectus under the captions "Risk
Factors-We Face Potential Conflicts of Interest relating to ▇▇▇▇▇▇ Digital,"
"Risk Factors-Our Success Depends on Our Ability to Protect Our Intellectual
Property Rights-Pending Litigation," "Risk Factors-Regulatory and Legal
Uncertainties Could Harm Our Business," "Business-Governmental Regulation," and
"Certain Transactions" and the final four paragraphs under the caption
"Business-Legal Proceedings," in each case, insofar as such statements
constitute summaries of legal matters, legal proceedings or certain provisions
of the documents referred to therein, fairly summarize the legal matters, legal
proceedings or provisions referred to therein in all material respects.
5. To my knowledge, except as described in the Prospectus, there are
no legal or governmental proceedings pending or threatened to which the Company
is a party or to which any of the properties of the Company is subject, the
unfavorable outcome of which could reasonably be expected to have a material
adverse effect on the Company.
6. To my knowledge, there are no statutes or regulations applicable to
the Company or its properties
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED ET AL.
_________________________________, 1999
Page 6
or material contracts or documents to which the Company is party, that, in
either case, are required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement, but are
not described or filed as required.
7. The Merger became effective on the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware on March 24, 1999.
8. The shares of Common Stock outstanding immediately prior to
issuance of the Shares (including the shares of Common Stock issued on
conversion of the convertible preferred stock, par value $0.01, of the Company)
have been duly authorized and are validly issued, fully paid and non-assessable.
This opinion is given as of the date hereof, and I assume no
obligation to update or supplement this opinion to reflect any facts or
circumstances that may come to my attention or any change in the law that may
occur or become effective after the time of delivery hereof. This opinion is
provided to you as a legal opinion only, and not as a guaranty or warranty of
the matters discussed herein or of any transaction or obligation.
This opinion is furnished to you solely for your benefit in connection
with the closing under the Underwriting Agreement occurring today and is not to
be used, circulated, quoted or otherwise referred to for any other purpose or
relied upon by any other person without my express written permission.
Very truly yours,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Annex III
Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Senior Vice President and Counsel, Intellectual Property and Licensing
▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
Five ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
BANCBOSTON ROBERTSTON ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
As Representatives of the
several U.S. Underwriters
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated
Initial Public Offering of Common
Stock, par value $.008 per share
---------------------------------
Ladies and Gentlemen:
I am Senior Vice President and Counsel, Intellectual Property and
Licensing of ▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated, a Delaware corporation (the
"Company"), and have acted as intellectual property and licensing counsel to
the Company in relation to the sale by the Company to the several
underwriters (the "Underwriters") named in Schedule I to the Underwriting
Agreement dated March __, 1999 (the "Underwriting Agreement") of ___ shares
(the "Shares") of the Company's common stock, par value $.008 per share the
("Common Stock").
This opinion is being furnished pursuant to Section 5(e) of the
Underwriting Agreement.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of (i) the Registration
Statement on Form S-1 (File No. 333-69657) relating to the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED ET AL.
March __, 1999
Page 2
Shares, filed with the Securities and Exchange Commission (the "Commission") on
December 23, 1998 under the Securities Act of 1933, as amended (the "Act"),
Amendment No. 1 thereto filed with the Commission on February 16, 1999,
Amendment No. 2 thereto filed with the Commission on March 18, 1999 and
Amendment No. 3 thereto filed with the Commission on March ___, 1999 including
information deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A of the General Rules and Regulations under
the Act (the "Rules and Regulations") (such Registration Statement, as so
amended, being hereinafter referred to as the "Registration Statement"); (ii)
the final prospectus dated March __, 1999, relating to the Shares in the form
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
(the "Prospectus") and (iii) certain documents purporting to assign the rights
to United States patents No. 5,794,207 and No. 5,797,127 (collectively, the
"Patents") to ▇▇▇▇▇▇ Digital and/or the Company . I have also examined originals
or copies, certified or otherwise identified to my satisfaction, of such records
of the Company and such agreements, certificates of public officials,
certificates of officers or other representatives of the Company and others, and
such other documents, certificates and records as I have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making my examination
of executed documents, I have assumed that the parties thereto, other than the
Company, had the power, corporate or other, to enter into and perform all
obligations thereunder and I have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such parties
of such documents and the validity and binding effect thereof on such parties.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED ET AL.
March __, 1999
Page 3
In providing the opinions set forth in paragraphs 2, 3 and 4 below, I
have made no investigation or search of public docket records of any court,
governmental or administrative agency or body, or of any filings, applications
or registrations with the United States Patent and Trademark Office or the
United States Copyright Office.
For the purposes of the opinions set forth in paragraphs 2, 3 and 4
below, the expression "to my knowledge" and the reference to "knowlege" is
limited to those matters brought to my attention after my making reasonable
inquiry of officers of the Company.
For the purposes of the opinion set forth in paragraph 4 below, the
term "Liens" means all presently asserted liens or other encumbrances.
I have held the position of Senior Vice President and Counsel,
Intellectual Property and Licensing of the Company since August, 1998. I am
admitted to the bar in the State of Maryland and am registered to practice
before the US Patent and Trademark Office as a Patent Attorney, Registration No.
31,490. I do not express any opinion as to the laws of any jurisdiction other
than the laws of the United States of America to the extent referred to
specifically herein.
Based upon and subject to the limitations, qualifications, exceptions
and assumptions set forth herein, I am of the opinion that:
1. The statements in the Prospectus under the caption "Risk
Factors-Our Success Depends on Our Ability to Protect Our Intellectual Property
Rights," (other than statements under the subheading "Pending Litigation") and
"Business-Intellectual Property and Proprietary Rights," and in the first three
paragraphs under the caption "Business-Legal Proceedings," in each case, insofar
as such statements constitute summaries of legal matters, legal proceedings or
certain provisions of the documents referred to therein, fairly summarize the
matters referred to therein in all material respects.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED ET AL.
March __, 1999
Page 4
2. To my knowledge, there are currently no pending or threatened
claims of infringement of any material patent, trademark, service ▇▇▇▇ or
copyright or of misappropriation of trade secrets, necessary for the Company to
conduct the business currently conducted by it, the unfavorable outcome of which
could reasonably be expected to have a material adverse effect on the Company
and that are required to be described in the Registration Statement or the
Prospectus but are not described as required.
3. Except as described in the Prospectus, I have no knowledge that the
Company will be unable to continue to operate under any current license of a
patent, trademark, service ▇▇▇▇, copyright or trade secret, which license is
necessary for the Company to conduct the business currently conducted by it.
4. To my knowledge, the Company owns the Patents, free and clear of
all Liens, other than those that may arise from matters disclosed in the
Prospectus.
This opinion is furnished to you solely for your benefit in connection
with the closing under the Underwriting Agreement occurring today and is not to
be used, circulated, quoted or otherwise referred to for any other purpose or
relied upon by any other person without my express written permission.
Very truly yours,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Annex IV
Opinion of Outside Patent Counsel
We have been asked by ▇▇▇▇▇▇▇▇▇.▇▇▇ ("Priceline") to comment on
certain statements made in the Prospectus under the captions "Risk Factors - Our
Success Depends on Our Ability to Protect Our Intellectual Property"
(specifically, the subsections entitled "Patents", "Pending Interference
Action", and "Trademarks, Copyrights, and Trade Secrets") and "Business - Legal
Proceedings" (the first three paragraphs related to the potential ▇▇▇▇▇▇▇▇
interference matter), a copy of which is attached.
As you know, the only potentially relevant analysis performed by our
Firm was to review the above-identified ▇▇▇▇▇▇▇▇ application for the sole
purpose of considering whether or not the interference requested by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ with the Priceline '207 patent could be declared and ultimately
concluded adversely to Priceline. We did not consider such other issues as the
possible existence of claims (including patent infringement claims) that might
be asserted against Priceline, the validity, enforceability, scope or title to
any patents or patent applications filed by Priceline, etc. Nevertheless, based
on our limited analysis of the above-identified ▇▇▇▇▇▇▇▇ application for the
specific purpose noted, we are not currently aware of any error in the
aforementioned sections and, on that basis, they appear to be fair and accurate.
However, because of the limited nature of our analysis, we cannot, of course,
opine on the absolute accuracy or completeness of these sections.
We have been asked by ▇▇▇▇▇▇▇▇▇.▇▇▇ ("Priceline") to relay to you the
conclusion we reached with regard to a request filed in the United States Patent
and Trademark Office ("PTO") by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ for the declaration of an
interference between a patent application filed by ▇▇▇▇▇▇▇▇ and Priceline's U.S.
patent No. 5,794,207.
Based on the materials we reviewed, we have concluded that there is no
substantial basis for the interference requested by ▇▇▇▇▇▇▇▇ to be declared and
ultimately concluded adversely to Priceline. Of course, we cannot guarantee that
a PTO examiner will not declare the interference requested by ▇▇▇▇▇▇▇▇ or that,
if declared, the interference will not ultimately be concluded adversely to
Priceline.
2
CROSS-REFERENCE TARGET LIST
NOTE: DUE TO THE NUMBER OF TARGETS SOME TARGET NAMES MAY NOT
APPEAR IN THE TARGET PULL-DOWN LIST.
(This list is for the use of the wordprocessor only, is not a part of
this document and may be discarded.)
ARTICLE/SECTION TARGET NAME
===============================================
1...........................represents warrants
1(a)..................................regst.eff
1(b)............................regstmnt untrue
1(c)..............................valid company
1(d)...................................agt auth
1(f).........................auth capital stock
1(g)..........................outstanding stock
1(i)................................shares auth
1(j)..........................co applicable law
1(l).............................adverse change
1(m).........................no pending proceed
1(n).............................prosp complies
1(o).........................co. not investment
1(w)................................co. and sub
1(w)(i)..............................compliance
1(w)(ii)............................all permits
1(w)(iii)..............all terms and conditions
1(x)...............................no contracts
2.........................agt to sell and purch
3..............................public off terms
4..........................payment and delivery
5........................obligations underwrtrs
5(a)........................subsequent to execu
5(b).......................cert of exec officer
5(c)............................counsel opinion
13(a)(i)..........................company valid
13(a)(v)..............................agt execu
13(a)(ii)....................capital stock auth
13(a)(iii)....................stock outstanding
13(a)(iv)...........................auth shares
13(a)(v)..............................agt execu
13(a)(vi).................contra applicable law
13(a)(vii)...........................statements
13(a)(vii)(A)........................prospectus
13(a)(vii)(B).....................reg statement
13(a)(viii).........................due inquiry
13(a)(ix).....................not investment co
13(a)(xii).........................such counsel
13(a)(xii)(A)..................regstmnt opinion
13(a)(xii)(B)......................believe that
13(a)(xii)(C)......................no reason to
?...................................dpw opinion
5(h).........................underwrtr received
5(i)....................................lock-up
6..................................co covenants
6(a)..........................furnish signed cc
6(b)............................cc before amend
6(c)............................after pub offer
6(d)........................endeavor to qualify
6(e).............................make available
6(g)...............................not to offer
7.............................indem and contrib
7(a)..........................company indemnify
7(b)........................underwrtr indemnify
7(c)............................promptly notify
7(d)............................each contribute
7(d)(i)..............................proportion
7(e)..........................just or equitable
7(f)...........................remain operative
8...........................directed.share.prog
8(a)...........................directed.share.a
8(c)...........................directed.share.c
8(c)(i)......................directed.share.c.i
9...................................termination
9(a)............................after execution
9(a)(i).......................trading generally
9(a)(ii).....................trading securities
9(a)(iii)............................moratorium
9(a)(iv)...............................outbreak
10...........................default underwrtrs
11.................................counterparts
12...............................applicable law
13.....................................headings