Exhibit 1.1
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INTERNET CAPITAL GROUP, INC.
(A Delaware corporation)
___ Shares of Common Stock
U.S. PURCHASE AGREEMENT
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Dated: ______ __, 1999
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TABLE OF CONTENTS
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Page
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U.S. PURCHASE AGREEMENT
Section 1. Representations and Warranties......................................5
(a) Representations and Warranties by the Company......................5
(i) Compliance with Registration Requirements.................5
(ii) Independent Accountants...................................6
(iii) Financial Statements......................................7
(iv) No Material Adverse Change in Business....................7
(v) Good Standing of the Company..............................8
(vi) Good Standing of Subsidiaries and Material
Holdings..................................................8
(vii) Capitalization............................................8
(viii) Authorization of Agreements...............................9
(ix) Authorization and Description of Securities...............9
(x) Absence of Defaults and Conflicts.........................9
(xi) Absence of Labor Dispute.................................10
(xii) Absence of Proceedings...................................11
(xiii) Accuracy of Exhibits.....................................11
(xiv) Possession of Intellectual Property......................11
(xv) Absence of Further Requirements..........................12
(xvi) Possession of Licenses and Permits.......................12
(xvii) Title to Property........................................12
(xviii) Investment Company Act...................................13
(xix) Environmental Laws.......................................13
(xx) Registration Rights......................................14
(xxi) Year 2000................................................14
(b) Officer's Certificates............................................14
Section 2. Sale and Delivery to U.S. Underwriters; Closing...................14
(a) Initial Securities................................................14
(b) Option Securities.................................................15
(c) Payment...........................................................15
(d) Denominations; Registration.......................................16
Section 3. Covenants of the Company..........................................16
(a) Compliance with Securities Regulations and Commission Requests....16
(b) Filing of Amendments..............................................17
(c) Delivery of Registration Statements...............................17
(d) Delivery of Prospectuses..........................................17
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(e) Continued Compliance with Securities Laws.........................18
(f) Blue Sky Qualifications...........................................18
(g) Rule 158..........................................................18
(h) Use of Proceeds...................................................19
(i) Listing...........................................................19
(j) Restriction on Sale of Securities.................................19
(k) Reporting Requirements............................................19
(l) Compliance with NASD Rules........................................20
(m) Compliance with Rule 463..........................................20
Section 4. Payment of Expenses................................................20
(a) Expenses..........................................................20
(b) Termination of Agreement..........................................21
Section 5. Conditions of U.S. Underwriters' Obligations.......................21
(a) Effectiveness of Registration Statement...........................21
(b) Opinions of Counsel for Company...................................21
(c) Opinion of Counsel for U.S. Underwriters..........................22
(d) Officers' Certificate.............................................22
(e) Accountant's Comfort Letters......................................22
(f) Bring-down Comfort Letter.........................................22
(g) Approval of Listing...............................................23
(h) No Objection......................................................23
(i) Lock-up Agreements................................................23
(j) Purchase of Initial International
Securities and DSSP Securities....................................23
(k) Closing of Concurrent Private Placement...........................23
(l) Stand-by Purchase Agreement.......................................23
(m) Conditions to Purchase of U.S. Option.............................23
Securities.
(i) Officers' Certificate.......................................23
(ii) Opinion of Counsel for Company..............................24
(iii) Opinion of Special 1940 Act Counsel.........................24
(iv) Opinion of Counsel for U.S. Underwriters....................24
(v) Bring-down Comfort Letter...................................24
(n) Additional Documents..............................................24
(o) Termination of Agreement..........................................24
Section 6. Indemnification....................................................25
(b) Indemnification of Company, Directors and Officers................26
(c) Actions against Parties; Notification.............................26
Section 7. Contribution.......................................................28
Section 8. Representations, Warranties and Agreements to Survive
Delivery...............................................................29
Section 9. Termination of Agreement...........................................29
(a) Termination; General...............................................29
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(b) Liabilities....................................................30
Section 10. Default by One or More of the U.S. Underwriters..................30
Section 11. Notices..........................................................31
Section 12. Parties..........................................................31
Section 13. GOVERNING LAW AND TIME...........................................32
Section 14. Effect of Headings...............................................32
SCHEDULE A...............................................................Sch A-1
SCHEDULE B...............................................................Sch B-1
SCHEDULE C...............................................................Sch C-1
Exhibit A................................................................Ex. A-1
Exhibit B................................................................Ex. B-1
Exhibit C................................................................Ex. C-1
iii
INTERNET CAPITAL GROUP, INC.
(A Delaware corporation)
___ Shares of Common Stock
(Par Value $.001 Per Share)
U.S. PURCHASE AGREEMENT
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______ __, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
Banc of America Securities LLC
Deutsche Bank Securities Inc.
Wit Capital Corporation
as U.S. Representatives of the several U.S. Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Internet Capital Group, Inc., a Delaware corporation (the "Company"),
confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other U.S. Underwriters
named in Schedule A hereto (collectively, the "U.S. Underwriters," which term
shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.,
Deutsche Bank Securities Inc., Banc of America Securities LLC and Wit Capital
Corporation are acting as representatives (in such capacity, the "U.S.
Representatives"), with respect to the issue and sale by the Company and the
purchase by the U.S. Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.001 per share, of the
Company ("Common Stock") set forth in said Schedule A, and with respect to the
grant by the Company to the U.S. Underwriters, acting severally and not jointly,
of the option described in Section 2(b) hereof to purchase all or any part of
___ additional shares of Common Stock to cover over-allotments, if any. The
aforesaid ___ shares of Common Stock (the "Initial U.S. Securities") to be
purchased by the U.S. Underwriters and all or any part of the ___ shares of
Common Stock subject to the option described in Section 2(b) hereof (the "U.S.
Option Securities") are hereinafter collectively called the "U.S. Securities."
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of an aggregate of ___ shares of
Common Stock (the "Initial International Securities") through arrangements with
certain underwriters outside the United States and Canada (the "International
Managers") for which ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
International Limited, Banc of America Securities LLC and Deutsche Banc AG
London are acting as lead managers (the "Lead Managers") and the grant by the
Company to the International Managers, acting severally and not jointly, of an
option to purchase all or any part of the International Managers' pro rata
portion of up to ___ additional shares of Common Stock solely to cover
overallotments, if any (the "International Option Securities" and, together with
the U.S. Option Securities, the "Option Securities"). The Initial International
Securities and the International Option Securities are hereinafter collectively
called the "International Securities." It is understood that the Company is not
obligated to sell and the U.S. Underwriters are not obligated to purchase, any
Initial U.S. Securities unless all of the Initial International Securities are
contemporaneously purchased by the International Managers.
It is understood that certain shareholders of Safeguard Scientifics, Inc.
("Safeguard"), one of the Company's founding shareholders, are concurrently
subscribing with the Company to purchase up to an aggregate of ____ shares of
Common Stock , _______ of which will be newly issued shares of Common Stock (the
"Primary DSSP Securities") and, to the extent necessary to satisfy all purchases
under the Program, up to ______ of which will be shares of Common Stock held by
Safeguard (the "Secondary DSSP Securities" and, collectively with the Primary
DSSP Securities, the "DSSP Securities") pursuant to a directed share
subscription program (the "Directed Share Subscription Program"). Only Safeguard
shareholders owning at least [500] shares of common stock of Safeguard as of
June [11], 1999 are eligible to participate in the Directed Share Subscription
Program. These shareholders may subscribe for one share of the DSSP Securities
for every ten shares of common stock of Safeguard held by them and may not
transfer their subscription rights to another person. [In addition, it is
understood that Safeguard holders of at least 100 but less than 500 shares of
common stock will be entitled to purchase shares of a unit investment trust (the
"Safeguard UIT") that will acquire up to an aggregate of ____ of the DSSP
Securities]. The purchase price for each share of the DSSP Securities will
equal the public offering price per share of Common Stock of the Company set
forth on
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the cover page of the final prospectus relating to the Company's initial public
offering. Payments and deliveries of DSSP Securities under the Directed Share
Subscription Program will occur at the Closing Time (as defined in Section 2(c)
hereof). If any of the Primary DSSP Securities are not purchased by shareholders
of Safeguard or the Safeguard UIT, then Safeguard or its designee will purchase
those shares pursuant to a stand-by subscription agreement between Safeguard and
the Company of even date herewith (the "Standby Subscription Agreement").
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters"; the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities"; and the U.S. Securities, the International Securities and
the DSSP Securities are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (in
such capacity, the "Global Coordinator").
The Company understands that the U.S. Underwriters propose to make a public
offering of the U.S. Securities as soon as the U.S. Representatives deem
advisable after this Agreement has been executed and delivered.
The Company and the U.S. Underwriters agree that up to _______ shares of
the Initial U.S. Securities to be purchased by the U.S. Underwriters and that up
to _______ shares of the Initial International Securities to be purchased by the
International Managers (collectively, the "Reserved Securities") shall be
reserved for sale by the Underwriters to certain eligible employees, directors
and certain other persons having business relationships with the Company, as
part of the distribution of the Securities by the Underwriters, subject to the
terms of this Agreement, the applicable rules, regulations and interpretations
of the National Association of Securities Dealers, Inc. (the "NASD") and all
other applicable laws, rules and regulations. To the extent that such Reserved
Securities are not orally confirmed for purchase by such eligible employees,
directors and certain other persons having business relationships with the
Company by the end of the first business day after the date of this Agreement,
such Reserved Securities may be offered to the public as part of the public
offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-78193) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or
3
prospectuses. Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b). Three forms of prospectus are to be used in connection with
the offering and sale of the Securities: (i) a form relating to the U.S.
Securities (the "Form of U.S. Prospectus"), (ii) a form relating to the
International Securities (the "Form of International Prospectus") and (iii) a
form relating to the Directed Share Subscription Program Securities (the "Form
of DSSP Prospectus"). The Form of International Prospectus is identical to the
Form of U.S. Prospectus, except for the front cover and back cover pages and the
information under the caption "Underwriting" and the inclusion in the Form of
International Prospectus of a section under the caption "Certain United States
Tax Considerations for Non-United States Holders." The Form of DSSP Prospectus
is identical to the Form of U.S. Prospectus except that a letter to the
shareholders of Safeguard Scientifics, Inc. detailing the procedures for the
Directed Share Subscription Program will be bound to the cover of the prospectus
to be used in that program. The information included in any such prospectus or
in any such Term Sheet, as the case may be, that was omitted from such
registration statement at the time it became effective but that is deemed to be
part of such registration statement at the time it became effective (i) pursuant
to paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (ii)
pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information."
Each Form of U.S. Prospectus, Form of International Prospectus and Form of DSSP
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus, Form of International Prospectus and Form of DSSP Prospectus in the
forms first furnished to the Underwriters for use in connection with the
offering of the Securities are herein called the "U.S. Prospectus," the
"International Prospectus" and "DSSP Prospectus," respectively, and
collectively, the "Prospectuses." If Rule 434 is relied on, the terms "U.S.
Prospectus," "International Prospectus" and the
4
"DSSP Prospectus" shall refer to the preliminary U.S. Prospectus dated _____,
1999, the preliminary International Prospectus dated ____, 1999 and the
preliminary DSSP Prospectus dated _____, 1999, respectively, each together with
the applicable Term Sheet, and all references in this Agreement to the date of
such Prospectuses shall mean the date of the applicable Term Sheet. [The
Safeguard UIT has filed with the Commission a registration statement on Form S-6
(No. ________) (the "UIT Registration Statement") covering the registration of
units of the Safeguard UIT under the 1933 Act, including the related prospectus
(the "UIT Prospectus").]
For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the U.S. Prospectus, the International
Prospectus, the DSSP Prospectus or any Term Sheet or any amendment or supplement
to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("▇▇▇▇▇").
Section 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each U.S. Underwriter as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b), hereof and agrees with each U.S.
Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any U.S. Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit
5
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Prospectuses, any preliminary
prospectus and any supplement thereto or prospectus wrapper prepared in
connection therewith, at their respective times of issuance and at the Closing
Time, complied and will comply in all material respects with any applicable
laws or regulations of foreign jurisdictions in which the Prospectuses and any
preliminary prospectuses, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of the Reserved Securities
and the DSSP Securities. None of the Prospectuses nor any amendments or
supplements thereto (including any prospectus wrapper), at the time the
Prospectuses or any amendments or supplements thereto were issued and at the
Closing Time (and, if any U.S. Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the Prospectuses shall not be "materially
different," as such term is used in Rule 434, from the prospectuses included
in the Registration Statement at the time it became effective. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the U.S.
Prospectus made in reliance upon and in conformity with information furnished
to the Company in writing by any U.S. Underwriter through the U.S.
Representatives expressly for use in the Registration Statement or the U.S.
Prospectus.
Each preliminary prospectus and the prospectuses 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 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each of the
preliminary prospectuses and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified the financial
statements and supporting schedules included in the Registration Statement and
the financial statements and supporting schedules of each of VerticalNet, Inc.
and Breakaway Solutions, Inc. since their respective inceptions are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
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(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectuses, together with the related schedules
and notes, present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
supporting schedules included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included in the
Prospectuses present fairly the information shown therein and have been compiled
on a basis consistent with that of the audited financial statements included in
the Registration Statement. The pro forma financial statements and the related
notes thereto included in the Registration Statement and the Prospectuses
present fairly the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein, and
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and the
Prospectuses, except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects (a "Material Adverse Effect") of the
Company, its subsidiaries, as of the date hereof, and each of VerticalNet, Inc.,
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇.▇▇▇, Inc., Universal Access, Inc., MessageQuest, Inc.,
and Benchmarking Partners, Inc. (each, a "Material Holding" and, collectively,
the "Material Holdings"), considered as one enterprise reflecting the Company's
ownership interests in its subsidiaries and the Material Holdings, whether or
not arising in the ordinary course of business, (B) there have been no
transactions entered into by the Company, any of its subsidiaries or Material
Holdings, other than those in the ordinary course of business, which are
material with respect to the Company, its subsidiaries and the Material
Holdings, considered as one enterprise reflecting the Company's ownership
interests in its subsidiaries and the Material Holdings, and (C) there has been
no dividend or distribution of
7
any kind declared, paid or made by the Company on any class of its capital
stock.
(v) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of the
State of Delaware and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under this Agreement,
the International Purchase Agreement, the Standby Subscription Agreement and any
other Agreement relating to the Directed Share Subscription Program; and the
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries and Material Holdings. Each of the
Company's subsidiaries and each Material Holding has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; the issued and
outstanding capital stock of each of the Company's subsidiaries and each
Material Holding has been duly authorized and validly issued, is fully paid and
non-assessable, and the Company owns its interests in its subsidiaries and the
Material Holdings, in each case in the amounts and percentages (subject to
rounding) disclosed in the Registration Statement, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; and none of the outstanding shares of capital
stock of any of its subsidiaries or Material Holdings owned by the Company was
issued in violation of the preemptive or similar rights of any securityholder of
such subsidiary or Material Holding.
(vii) Capitalization. The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectuses in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to this Agreement, the International
8
Purchase Agreement, the Standby Subscription Agreement and any other Agreement
relating to the Directed Share Subscription Program or pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectuses or pursuant
to the exercise of convertible securities or options referred to in the
Prospectuses). The shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are fully paid and non-
assessable; none of the outstanding shares of capital stock of the Company was
issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(viii) Authorization of Agreements. Each of this Agreement, the
International Purchase Agreement, the Standby Subscription Agreement, and any
other agreement relating to the Directed Share Subscription Program and the
Safeguard UIT has been duly authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. The Securities have
been duly authorized for issuance and sale to the U.S. Underwriters pursuant to
this Agreement, the International Managers pursuant to the International
Purchase Agreement and to the shareholders of Safeguard, the Safeguard UIT and
Safeguard pursuant to their respective agreements and the Standby Subscription
Agreement, as the case may be, and, when issued and delivered by the Company
hereunder and thereunder, against payment of the consideration set forth herein
and therein, respectively, will be validly issued, fully paid and non-
assessable; the Common Stock conforms to all statements relating thereto
contained in the Prospectuses and such description conforms to the rights set
forth in the instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the issuance
of the Securities is not subject to the preemptive or other similar rights of
any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor any of its
subsidiaries nor any Material Holding is in violation of its charter or by-laws
or in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or instrument to
which the Company, any of its subsidiaries or any Material Holding is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Company, any of its subsidiaries or any Material Holding is
subject (collectively, "Agreements and Instruments"), except for such defaults
9
that would not result in a Material Adverse Effect; and the execution, delivery
and performance of this Agreement, the International Purchase Agreement, the
Standby Subscription Agreement and any other agreement relating to the Directed
Share Subscription Program and the Safeguard UIT and the consummation of the
transactions contemplated herein and therein and in the Registration Statement
(including the issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Prospectuses under the
caption "Use of Proceeds") and compliance by the Company with its obligations
under this Agreement, the International Purchase Agreement, the Standby
Subscription Agreement and any other agreement relating to the Directed Share
Subscription Program and the Safeguard UIT have been duly authorized by all
necessary corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries or Material Holdings
pursuant to, the Agreements and Instruments (except for such conflicts, breaches
or defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its subsidiaries
or Material Holdings or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or Material Holdings or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries or Material Holdings.
(xi) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any of its subsidiaries or Material Holdings exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its or any
subsidiary's or Material Holding's principal suppliers, manufacturers, customers
or contractors, which, in either case, may reasonably be expected to result in a
Material Adverse Effect.
10
(xii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its subsidiaries or
Material Holdings, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets of the
Company, its subsidiaries and the Material Holdings, considered as one
enterprise reflecting the Company's ownership interests in its subsidiaries and
the Material Holdings or the consummation of the transactions contemplated in
this Agreement, the International Purchase Agreement, the Standby Subscription
Agreement and any other agreement relating to the Directed Share Subscription
Program and the Safeguard UIT or the performance by the Company of its
obligations hereunder or thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any of its subsidiaries or
Material Holdings is a party or of which any of their respective property or
assets is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement or the Prospectuses or to
be filed as exhibits thereto which have not been so described and filed as
required.
(xiv) Possession of Intellectual Property. The Company, its subsidiaries
and its Material Holdings own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them, and neither
the Company nor any of its subsidiaries or Material Holdings has received any
notice or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or inadequate
to protect the interest of the Company or any of its subsidiaries or Material
Holdings therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or
in the aggregate, would result in a Material Adverse Effect.
11
(xv) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
court or governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder, in connection with the
offering, issuance or sale of the Securities under this Agreement, the
International Purchase Agreement, the Standby Subscription Agreement, and any
other agreement relating to the Directed Share Subscription Program and the
Safeguard UIT or the consummation of the transactions contemplated herein and
therein, except (i) such as have been already obtained or as may be required
under the 1933 Act or the 1933 Act Regulations and foreign or state securities
or blue sky law and (ii) such as have been obtained under the laws and
regulations of jurisdictions outside the United States in which the Reserved
Securities and the DSSP Securities are offered.
(xvi) Possession of Licenses and Permits. The Company, its subsidiaries
and its Material Holdings possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company, its
subsidiaries and its Material Holdings are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a Material
Adverse Effect; and neither the Company nor any of its subsidiaries or Material
Holdings has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
(xvii) Title to Property. The Company, its subsidiaries and its Material
Holdings have good and marketable title to all real property owned by the
Company, its subsidiaries and its Material Holdings and good title to all other
properties owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectuses or (b) do not, singly
or in the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries or
12
Material Holdings; and all of the leases and subleases material to the business
of the Company, its subsidiaries and its Material Holdings, considered as one
enterprise, and under which the Company or any of its subsidiaries or Material
Holdings holds properties described in the Prospectuses, are in full force and
effect, and neither the Company nor any subsidiary nor any Material Holding has
any notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any of its subsidiaries or Material
Holdings under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or any such subsidiary or Material Holding
to the continued possession of the leased or subleased premises under any such
lease or sublease.
(xviii) Investment Company Act. The Company is not, and upon the issuance
and sale of the Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectuses will not be, required to
register as an "investment company" under the Investment Company Act of 1940, as
amended (the "1940 Act")
(xix) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, have a Material
Adverse Effect, (A) neither the Company nor any of its subsidiaries or Material
Holdings is in violation of any federal, state, local or foreign statute, law,
rule, regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company, its
subsidiaries and its Material Holdings have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company, any of its
subsidiaries or any of its Material Holdings and (D) there are no events or
circumstances that might reasonably be expected to form the basis
13
of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting
the Company, any of its subsidiaries or any of its Material Holdings
relating to Hazardous Materials or any Environmental Laws.
(xx) Registration Rights. Other than rights that have been waived,
there are no persons with registration rights or other similar rights to
have any securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.
(xxi) Year 2000. The Company has reviewed its operations and those of
its subsidiaries and any Material Holdings to evaluate the extent to which
the businesses or operations of the Company or any of its subsidiaries or
Material Holdings will be affected by the Year 2000 Problem; as a result
of such review, the Company believes that the disclosure in the
Prospectuses relating to the Year 2000 Problem is accurate in all material
respects. As used in clause (xxi), the "Year 2000 Problem" means any
significant risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval, transmission
or other utilization of data or in the operation of mechanical or
electrical systems of any kind will not, in the case of dates or time
periods occurring after December 31,1999, function at least as effectively
as in the case of dates or time periods occurring prior to January 1,
2000.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries or Material Holdings delivered to the Global
Coordinator, the U.S. Representatives or to counsel for the U.S. Underwriters
shall be deemed a representation and warranty by the Company to each U.S.
Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to U.S. Underwriters; Closing.
(a) Initial Securities. In On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each U.S. Underwriter, severally and not
jointly, and each U.S. Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price per share set forth in Schedule B, the
number of Initial U.S. Securities set forth in Schedule A opposite the name of
such U.S. Underwriter, plus any additional number of Initial U.S. Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
14
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the U.S. Underwriters, severally
and not jointly, to purchase up to an additional [__] shares of Common Stock at
the price per share set forth in Schedule B, less an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial U.S. Securities but not payable on the U.S. Option Securities. The
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial U.S. Securities upon notice by the Global
Coordinator to the Company setting forth the number of U.S. Option Securities as
to which the several U.S. Underwriters are then exercising the option and the
time and date of payment and delivery for such U.S. Option Securities. Any such
time and date of delivery for the U.S. Option Securities (a "Date of Delivery")
shall be determined by the Global Coordinator, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the U.S. Option Securities, each of the U.S. Underwriters,
acting severally and not jointly, will purchase that proportion of the total
number of U.S. Option Securities then being purchased which the number of
Initial U.S. Securities set forth in Schedule A opposite the name of such U.S.
Underwriter bears to the total number of Initial U.S. Securities, subject in
each case to such adjustments as the Global Coordinator in its discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of certificates
for, the Initial Securities shall be made at the offices of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Global Coordinator and the Company (such time and date of payment and delivery
being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Company, on each Date of Delivery as specified in the
notice from the Global Coordinator to the Company.
15
Payment shall be made to the Company by wire transfer of immediately available
funds to a bank account designated by the Company, against delivery to the U.S.
Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such U.S. Underwriter from
its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
Section 3. Covenants of the Company. The Company covenants with each U.S.
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Global Coordinator immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectuses or any amended Prospectuses shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for
16
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company will give the Global Coordinator
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectuses,
will furnish the Global Coordinator with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the Global Coordinator
or counsel for the U.S. Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the U.S. Representatives and counsel for the U.S. Underwriters,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the U.S. Representatives,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the U.S.
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus as
such U.S. Underwriter reasonably requested, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each U.S. Underwriter, without charge, during the period when the
U.S. Prospectus is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934 (the "1934 Act"), such number of copies of the U.S.
Prospectus (as amended or supplemented) as such U.S. Underwriter may reasonably
request. The U.S. Prospectus and any amendments or supplements thereto
furnished to the U.S. Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations so as to permit the
17
completion of the distribution of the Securities as contemplated in this
Agreement, the International Purchase Agreement, the Standby Subscription
Agreement and any other agreement relating to the Directed Share Subscription
Program and the Safeguard UIT and in the Prospectuses. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the U.S. Underwriters or
for the Company, to amend the Registration Statement or amend or supplement any
Prospectus in order that the Prospectuses will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement any Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectuses comply with such requirements, and
the Company will furnish to the U.S. Underwriters such number of copies of such
amendment or supplement as the U.S. Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the U.S. Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Global Coordinator may designate and
to maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; 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. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the 1934
Act as are necessary in order to make generally available to its securityholders
as soon as practicable an earnings statement for the purposes of, and to provide
the benefits contemplated by, the last paragraph of Section 11(a) of the 1933
Act.
18
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectuses
under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect and maintain the
quotation of the Securities on the Nasdaq National Market and will file with the
Nasdaq National Market all documents and notices required by the Nasdaq National
Market of companies that have securities that are traded in the over-the-counter
market and quotations for which are reported by the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 180 days from the
date of the Prospectuses, the Company will not, without the prior written
consent of the Global Coordinator, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of,
or otherwise transfer or dispose of or transfer any shares of Common Stock or
any securities convertible into or exchangeable or exercisable for Common Stock
or file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, the economic consequence of ownership of
the Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or other securities,
in cash or otherwise. The foregoing sentence shall not apply to (A) the
Securities to be sold hereunder, under the International Purchase Agreement, the
Standby Subscription Agreement and any other agreement relating to the Directed
Share Subscription Program and the Safeguard UIT [and the IBM private placement
securities], (B) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof and referred to in the Prospectuses, (C) any shares of Common
Stock issued or options to purchase Common Stock granted pursuant to existing
employee benefit plans of the Company referred to in the Prospectuses or (D) any
shares of Common Stock issued pursuant to any non-employee director stock plan
or dividend reinvestment plan.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
(l) Compliance with NASD Rules. The Company hereby agrees that it will ensure
that the Reserved Securities will be restricted as required by the NASD or the
NASD rules from sale, transfer, assignment, pledge or hypothecation for a
19
period of three months following the date of this Agreement. The Underwriters
will notify the Company as to which persons will need to be so restricted. At
the request of the Underwriters, the Company will direct the transfer agent to
place a stop transfer restriction upon such securities for such period of time.
Should the Company release, or seek to release, from such restrictions any of
the Reserved Securities, the Company agrees to reimburse the Underwriters for
any reasonable expenses (including, without limitation, legal expenses) they
incur in connection with such release.
(m) Compliance with Rule 463. The Company will file with the Commission such
reports as may be required pursuant to Rule 463 of the 1933 Act Regulations.
Section 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, the International Purchase Agreement,
the Standby Subscription Agreement and any other agreement relating to the
Directed Share Subscription Program and the Safeguard UIT including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters and the transfer of
the Securities between the U.S. Underwriters and the International Managers,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of the Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Securities and (ix) the filing fees incident to, and
the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Securities and (x) the fees
and expenses incurred in connection with the inclusion of the Securities in the
Nasdaq National
20
Market and (y) all costs and expenses of the Underwriters, including the fees
and disbursements of counsel for the Underwriters, in connection with matters
related to the Reserved Securities and the DSSP Securities.
(b) Termination of Agreement. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the U.S. Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the U.S. Underwriters.
Section 5. Conditions of U.S. Underwriters' Obligations. The obligations of
the several U.S. Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any of its subsidiaries or
Material Holdings of the Company delivered pursuant to the provisions hereof, to
the performance by the Company of its covenants and other obligations hereunder,
and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the U.S. Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinions of Counsel for Company. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of Closing
Time, of (x) Dechert Price & ▇▇▇▇▇▇, counsel for the Company, and (y) ▇▇▇▇▇ ▇▇▇▇
& ▇▇▇▇▇▇▇▇, special 1940 Act counsel for the Company, in form and substance
satisfactory to counsel for the U.S. Underwriters, together with signed or
reproduced copies of such letter for each of the other U.S. Underwriters to the
effect set forth in Exhibit A and Exhibit B hereto, respectively, and to such
further effect as counsel to the U.S. Underwriters may reasonably request.
(c) Opinion of Counsel for U.S. Underwriters. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of Closing
21
Time, of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the U.S. Underwriters, together with
signed or reproduced copies of such letter for each of the other U.S.
Underwriters in form and substance satisfactory to the U.S. Representatives, and
the penultimate paragraph of Exhibit A hereto. Such counsel may also state
that, insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company, its
subsidiaries and its Material Holdings and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have been, since
the date hereof or since the respective dates as of which information is given
in the Prospectuses, any Material Adverse Effect, whether or not arising in the
ordinary course of business, and the U.S. Representatives shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of Closing Time,
to the effect that (i) there has been no such Material Adverse Effect, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, and (iv)
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(e) Accountant's Comfort Letters. At the time of the execution of this
Agreement, the U.S. Representatives shall have received one or more letters from
KPMG LLP dated such date, in form and substance satisfactory to the U.S.
Representatives, together with signed or reproduced copies of such letter(s) for
each of the other U.S. Underwriters 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 Prospectuses for the Company, VerticalNet,
Inc. and Breakaway Solutions, Inc.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from KPMG LLP letter(s), dated as of Closing Time, to the effect
that they reaffirm the statements made in the letters furnished pursuant to
subsection (e) of this Section, except that the specified date referred to shall
be a date not more than three business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have been
approved for inclusion in the Nasdaq National Market, subject only to official
notice of issuance.
22
(h) No Objection. The NASD has confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form of
Exhibit C hereto signed by [each shareholder of the Company, each holder of the
Company's convertible notes and each holder of warrants].
(j) Purchase of Initial International Securities and DSSP Securities.
Contemporaneously with the purchase by the U.S. Underwriters of the Initial U.S.
Securities under this Agreement, (x) the International Managers shall have
purchased the Initial International Securities under the International Purchase
Agreement and (y) the shareholders of Safeguard, the Safeguard UIT and Safeguard
pursuant to their respective agreements and the Standby Purchase Agreement, as
the case may be, shall have purchased the Primary DSSP Securities.
(k) Closing of Concurrent Private Placement. [closing of IBM private
placement].
(l) Stand-by Purchase Agreement. At the date of this Agreement, the Standby
Purchase Agreement shall have been executed, substantially in the form reviewed
by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and shall be in full force and effect.
(m) Conditions to Purchase of U.S. Option Securities. In the event that the
U.S. Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the U.S. Option Securities, the representations
and warranties of the Company contained herein and the statements in any
certificates furnished by the Company or any subsidiary of the Company hereunder
shall be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, the U.S. Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company confirming
that the certificate delivered at the Closing Time pursuant to Section
5(d) hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
Dechert Price & ▇▇▇▇▇▇, counsel for the Company, in form and substance
satisfactory to counsel for the U.S. Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities to be
23
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.
(iii) Opinion of Special 1940 Act Counsel. The favorable opinion
of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special 1940 Act counsel for the Company, dated
such Date of Delivery, relating to the 1940 Act and otherwise to the same
effect as the opinion required by Section 5(b) hereof.
(iv) Opinion of Counsel for U.S. Underwriters. The favorable
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the U.S. Underwriters,
dated such Date of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(v) Bring-down Comfort Letter. One or more letters from KPMG
LLP, in form and substance satisfactory to the U.S. Representatives and
dated such Date of Delivery, substantially in the same form and substance
as the letter furnished to the U.S. Representatives pursuant to Section
5(f) hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days prior
to such Date of Delivery.
(n) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the U.S. Underwriters shall have been furnished with such documents
and opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the U.S.
Representatives and counsel for the U.S. Underwriters.
(o) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of U.S. Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several U.S. Underwriters to purchase the relevant Option
Securities, may be terminated by the U.S. Representatives by notice to the
Company at any time at or prior to Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 1, 6, 7
and 8 shall survive any such termination and remain in full force and effect.
24
Section 6. Indemnification.
(a) Indemnification of U.S. Underwriters. The Company agrees to indemnify
and hold harmless each U.S. Underwriter and each person, if any, who controls
any U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of (A) the violation of any applicable
laws or regulations of foreign jurisdictions where Reserved Securities and
DSSP Securities have been offered and (B) any untrue statement or alleged
untrue statement of a material fact included in the supplement or
prospectus wrapper material distributed in _____________ in connection with
the reservation and sale of the Reserved Securities and DSSP Securities or
the omission or alleged omission therefrom of a material fact necessary to
make the statements therein, when considered in conjunction with the
Prospectuses or preliminary prospectuses, not misleading;
(iii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission or in connection with any violation of
the nature referred to in Section 6(a)(ii)(A) hereof; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company; and
(iv) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably
25
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission or
in connection with any violation of the nature referred to in Section
6(a)(ii)(A) hereof, to the extent that any such expense is not paid under
(i), (ii) or (iii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each U.S.
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary U.S. prospectus or
the U.S. Prospectus (or any amendment or supplement thereto) in reliance upon
and in conformity with written information furnished to the Company by such U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the U.S. Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties
26
shall be selected by the Company. An indemnifying party may participate at its
own expense in the defense of any such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(iii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Company agrees, promptly upon a
request, in writing to indemnify and hold harmless the Underwriters from and
against any and all losses, liabilities, claims, damages and expenses incurred
by them as a result of the failure of eligible employees, directors and certain
other persons having business relationships with the Company to pay for and
accept delivery of Reserved Securities which, by the end of the first business
day following the date of this Agreement, were subject to a properly confirmed
agreement to purchase.
Section 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses
27
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the U.S. Underwriters on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the U.S.
Underwriters on the other hand in connection with the statements or omissions,
or in connection with any violation of the nature referred to in Section
6(a)(ii)(A) hereof, which resulted in such losses, liabilities, claims, damages
or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the U.S.
Underwriters on the other hand in connection with the offering of the U.S.
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the U.S.
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus, or,
if Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the U.S. Securities as set forth on
such cover.
The relative fault of the Company on the one hand and the U.S. Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the U.S. Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission or any violation of the nature referred to in Section
6(a)(ii)(A) hereof.
The Company and the U.S. Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the U.S. Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim
28
whatsoever based upon any such untrue or alleged untrue statement or omission or
alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the U.S. Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
U.S. Underwriter has otherwise been required to pay by reason of any 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
Section 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or its
Material Holdings submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
U.S. Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the U.S. Underwriters.
Section 9. Termination of Agreement.
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the U.S. Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial
29
markets in the United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the U.S.
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the Nasdaq
National Market, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
Section 10. Default by One or More of the U.S. Underwriters. If one or
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
if the number of Defaulted Securities does not exceed 10% of the
number of U.S. Securities to be purchased on such date, each of the
non-defaulting U.S. Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or
if the number of Defaulted Securities exceeds 10% of the number of
U.S. Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the U.S. Underwriters to purchase and of the Company to sell
the Option Securities to be purchased and sold on such Date of Delivery
30
shall terminate without liability on the part of any non-defaulting U.S.
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives or the Company
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "U.S. Underwriter" includes
any person substituted for a U.S. Underwriter under this Section 10.
Section 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Esq.; and notices to the Company shall be directed to it at Building 800, ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇. Nassau, Esq.
Section 12. Parties. This Agreement shall each inure to the benefit of
and be binding upon the U.S. Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the U.S.
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the U.S. Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any U.S.
Underwriter shall be deemed to be a successor by reason merely of such purchase.
Section 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH
31
THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
Section 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
32
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the U.S. Underwriters and the Company in accordance with its terms.
Very truly yours,
INTERNET CAPITAL GROUP,
INC.
By
--------------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
BANCBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
DEUTSCHE BANK SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
WIT CAPITAL CORPORATION
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By
-------------------------------------
Authorized Signatory
For itself and as U.S. Representative of the
other U.S. Underwriters named in Schedule A hereto.
SCHEDULE A
Number of
Initial
U.S.
Name of U.S. Underwriter Securities
------------------------ ----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
Deutsche Bank Securities Inc.
Banc of America Securities LLC
Wit Capital Corporation
------------
Total
============
Sch A-1
SCHEDULE B
INTERNET CAPITAL GROUP, INC.
[__] Shares of Common Stock
(Par Value $.001 Per Share)
The initial public offering price per share for the Securities, determined
as provided in said Section 2, shall be $..
The purchase price per share for the U.S. Securities to be paid by the
several U.S. Underwriters shall be $., being an amount equal to the initial
public offering price set forth above less $. per share; provided that the
purchase price per share for any U.S. Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall be reduced
by an amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial U.S. Securities but not payable on the U.S.
Option Securities.
Sch B-1
