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EXHIBIT 1.1
SHARES
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▇▇▇▇▇▇▇▇▇.▇▇▇ INC.
COMMON STOCK, $0.01 PAR VALUE
UNDERWRITING AGREEMENT
, 1998
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, 1998
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
▇▇▇▇▇▇▇▇▇.▇▇▇, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters named in Schedule II
hereto (the "UNDERWRITERS"), an aggregate of _______________ shares of the
Common Stock, $0.01 par value of the Company (the "FIRM SHARES").
The Company and a certain stockholder of the Company (the
"Selling Stockholder") named in Schedule I hereto severally also propose to
issue and sell to the several Underwriters not more than an additional
______________ shares of its Common Stock, $0.01 par value, (the "ADDITIONAL
SHARES"), of which ______ shares are to be issued and sold by the Company and
____ shares are to be sold by the Selling Stockholder, if and to the extent
that you, as Managers of the offering, shall have determined to exercise, on
behalf of the Underwriters, the right to purchase such shares of common stock
granted to the Underwriters in Section 3 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "SHARES".
The shares of Common Stock, $0.01 par value, of the Company to be outstanding
after giving effect to the sales contemplated hereby are hereinafter referred
to as the "COMMON STOCK". The Company and the Selling Stockholder are
hereinafter sometimes collectively referred to as the "SELLERS".
The Company has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement, including a prospectus,
relating to the Shares. The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS".
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the
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Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such
Rule 462 Registration Statement.
As part of the offering contemplated by this Agreement,
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC ("H&Q") has agreed to reserve out of the Shares set forth
opposite its name on Schedule II to this Agreement, up to ___________ shares,
for sale to the Company's employees, officers, and directors and other parties
associated with the Company (collectively, "PARTICIPANTS"), as set forth in the
Prospectus under the heading "Underwriting" (the "DIRECTED SHARE PROGRAM").
The Shares to be sold by H&Q pursuant to the Directed Share Program (the
"DIRECTED SHARES") will be sold by H&Q pursuant to this Agreement at the public
offering price. Any Directed Shares not orally confirmed for purchase by any
Participants by the end of the business day on which this Agreement is executed
will be offered to the public by H&Q as set forth in the Prospectus.
1. Representations and Warranties of the Company. The
Company represents and warrants to and agrees with each of the Underwriters
that:
(a) The Registration Statement has become effective; no
stop order suspending the effectiveness of the Registration Statement
is in effect, and no proceedings for such purpose are pending before,
or to the Company's knowledge, threatened by the Commission.
(b) (i) The Registration Statement, when it became
effective, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iii) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties set forth in this paragraph do not apply to statements
or omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
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(d) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the
Prospectus.
(g) The shares of Common Stock (including the Shares to be
sold by the Selling Stockholder) outstanding prior to the issuance of
the Shares to be sold by the Company have been duly authorized and are
validly issued, fully paid and non-assessable; except as described in
the Prospectus, and except for preemptive rights which will terminate
by their terms on or before the Closing Date, the Company does not have
any outstanding options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible
securities or obligations; and all outstanding shares of capital stock
and options and other rights to acquire capital stock have been issued
in compliance with the registration and qualification provisions of all
applicable securities laws and were not issued in violation of any
preemptive rights, rights of first refusal or other similar rights, or
the Company has obtained a waiver of such a violation.
(h) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered against payment therefor in
accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
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governmental body or agency ("Approval") is required for the
performance by the Company of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Shares,
and except for Approvals which if not obtained would not have a
material adverse effect on the Company and would not materially impair
the Company's performance of its obligations under this Agreement.
(j) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending
or to the Company's knowledge threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not
so described or any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(l) The Company has all necessary consents,
authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all foreign,
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not, singly or in the
aggregate, have a material adverse effect on the Company.
(m) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder,
except that the preliminary prospectus filed as part of the
registration statement as initially filed (which was not circulated by
the Company) omitted certain information relating to the number and
dollar amount of shares registered, the estimated offering price range,
and related data derived from this information.
(n) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
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(o) The Company and its subsidiaries (i) are in material
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) have received
all material permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and (iii) are in material compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(q) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
(i) the Company has not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in
the ordinary course of business; (ii) the Company has not purchased any
of its outstanding capital stock, nor declared, paid or otherwise made
any dividend or distribution of any kind on its capital stock other
than ordinary and customary dividends; and (iii) there has not been any
material change in the capital stock, short-term debt or long-term debt
of the Company, except in each case as described in the Prospectus.
(r) The Company does not own any real property or a
non-leasehold interest in real property. All personal property owned
by the Company that is material to the business of the Company is owned
by the Company free and clear of any security interest, lien,
encumbrance, claim, defect or adverse interest of any nature except
such as are described in the Prospectus or such as do not have a
material adverse effect on the Company and its subsidiaries taken as a
whole; and any real property and buildings held under lease by the
Company are held by it under valid, subsisting and enforceable leases
with such exceptions as do not have a material adverse effect on the
Company and its subsidiaries taken as a whole, in each case except as
described in the Prospectus.
(s) Except as disclosed in the Prospectus, (i) the Company
owns or possesses, or can acquire on reasonable terms, adequate
licenses or other rights to use all patents, patent rights, inventions,
trade secrets, copyrights, trademarks, service marks, trade names,
technology and know-how employed by it in connection with its business
as described in the Prospectus; (ii) the Company is not obligated to
pay a royalty, grant a license, or provide
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other consideration to any third party in connection with its patents,
copyrights, trademarks, service marks, trade names, or technology;
(iii) the Company has not received any notice of infringement or
conflict with (and the Company does not know of any infringement or
conflict with) asserted rights of others with respect to any patents,
patent rights, inventions, trade secrets, copyrights, trademarks,
service marks, trade names, technology or know-how which would result
in any material adverse effect upon the Company and its subsidiaries
taken as a whole; and (iv) the discoveries, inventions, products or
processes of the Company referred to in the Prospectus do not, to the
knowledge of the Company, infringe or conflict with any right or patent
of any third party, or any discovery, invention, product or process
which is the subject of a patent application filed by any third party
known to the Company and its subsidiaries taken as a whole, which would
have a material adverse effect on the Company.
(t) No material labor dispute with the employees of the
Company exists, except as described in the Prospectus, or, to the
knowledge of the Company, is imminent; other than those that would not
have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(u) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they
are engaged; and the Company does not believe that it will not be able
to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole, except as described in the Prospectus.
(v) The Company possesses all material certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct its business, and
the Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse
effect on the Company, except as described the Prospectus.
(w) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or
specific authorizations; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(3) access to assets is permitted only in accordance with management's
general or specific authorization; and (4) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
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(x) The Nasdaq Stock Market, Inc. has approved the Common
Stock for quotation on the Nasdaq National Market, subject only to
official notice of issuance.
(y) The Company has delivered to the Underwriters or their
counsel a complete and accurate list of all holders of Common Stock or
options, warrants or rights to buy Common Stock (collectively "Company
Securities"). The Company has delivered to the Underwriters or their
counsel an originally executed "Lock-Up Agreement", to the Company's
knowledge signed by each such holder of a Company Security, in the form
of Exhibit A (with exceptions to such form as approved by Underwriters'
counsel in each instance). To the Company's knowledge, each person who
signed a Lock-Up Agreement was authorized to do so and signing the
Lock-Up Agreement did not conflict with or violate the security
holder's constitutive documents or any agreement binding on the
security holder or the security.
(z) The Company (i) has notified each stockholder who is
party to the Registration Rights Agreement dated February 24, 1997, as
amended (the "REGISTRATION RIGHTS AGREEMENT"), that pursuant to the
terms of the Registration Rights Agreement, none of the shares of the
Company's capital stock held by such stockholder may be sold or
otherwise transferred or disposed of for a period of 180 days after the
date of the initial public offering of the Shares and (ii) has imposed
a stop-transfer instruction with the Company's transfer agent in order
to enforce the foregoing lock-up provision imposed pursuant to the
Registration Rights Agreement. There are no other contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement. There is no legal or beneficial owner of any securities of
the Company who has any rights, not effectively satisfied or waived, to
require registration of any shares of capital stock of the Company in
connection with the filing of the Registration Statement.
(aa) The Company has not offered, or caused the
Underwriters to offer, Shares to any person pursuant to the Directed
Share Program with the specific intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer's or
supplier's level or type of business with the Company, or (ii) a trade
journalist or publication to write or publish favorable information
about the Company or its products.
(bb) The Company has complied with all provisions of
Section 517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
2. Representations and Warranties of the Selling
Stockholder. The Selling Stockholder represents and warrants to and agrees
with each of the Underwriters that:
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(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder.
(b) The execution and delivery by the Selling Stockholder
of, and the performance by the Selling Stockholder of the Selling
Stockholder's obligations under, this Agreement will not contravene any
provision of applicable law (excluding any violation arising from a
breach of the Company's representation in Section 1(b)), or any
agreement or other instrument binding upon the Selling Stockholder or
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Selling Stockholder, and no Approval is
required for the issuance and sale of the Additional Shares by the
Selling Stockholder to the Underwriters pursuant to the terms of this
Agreement, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Additional Shares by the Selling Stockholder, and except for Approvals
which if not obtained would not have a material adverse effect on the
Selling Stockholder and would not materially impair the Selling
Stockholder's performance of its obligations under this Agreement.
(c) The Selling Stockholder has, and on the Closing Date
will have, valid title to the Additional Shares to be sold by the
Selling Stockholder and the legal right and power, and all
authorization and approval required by law, to enter into this
Agreement and to sell, transfer and deliver the Additional Shares to be
sold by the Selling Stockholder.
(d) Delivery of the Shares to be sold by the Selling
Stockholder pursuant to this Agreement will pass title to such Shares
free and clear of any security interests, claims, liens, equities and
other encumbrances created or suffered by the Selling Stockholder
except restrictions imposed by applicable securities laws.
(e) All information furnished in writing by or on behalf
of such Selling Stockholder relating to the Selling Stockholder for use
in the Registration Statement does not, and on the Closing Date will
not, contain any untrue statement of a material fact or omit to state
any material fact necessary to make such information not misleading,
and all information furnished in writing by or on behalf of such
Selling Stockholder relating to the Selling Stockholder expressly for
use in the Prospectus does not contain any untrue statement of a
material fact or omit to state any material fact necessary to make such
information not misleading in the light of the circumstances under
which they were made.
3. Agreements to Sell and Purchase. The Company hereby
agrees to sell to the several Underwriters, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agrees, severally and not jointly, to
purchase from the Company the respective numbers of Firm Shares set forth in
Schedule II hereto opposite its name at $______ a share (the "PURCHASE PRICE").
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On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, each Seller,
severally and not jointly, agrees to sell to the Underwriters the Additional
Shares, and the Underwriters shall have a one-time right to purchase, severally
and not jointly, up to _______________ Additional Shares at the Purchase Price,
of which _______shares are to be issued and sold by the Company and ______
shares are to be sold by the Selling Stockholder. If you, on behalf of the
Underwriters, elect to exercise such option, you shall so notify the Company
and the Selling Stockholder in writing not later than 30 days after the date of
this Agreement, which notice shall specify the number of Additional Shares to
be purchased by the Underwriters and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below)
but not earlier than the Closing Date nor later than ten business days after
the date of such notice. Additional Shares may be purchased as provided in
Section 5 hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. If any Additional Shares are
to be purchased, each Underwriter agrees, severally and not jointly, to
purchase the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same
proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
Each Seller hereby agrees that, without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during
the period ending 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Shares to be sold hereunder, (B) the issuance by the
Company of shares of Common Stock upon the exercise of an option or warrant or
the conversion of a security outstanding on the date hereof, (C) transactions
by any person other than the Company relating to shares of Common Stock or
other securities acquired in open market transactions after the completion of
the offering of the Shares, (D) the issuance by the Company of shares of Common
Stock under the employee stock purchase plan described in the Prospectus, or
(E) the grant by Company of options to purchase Common Stock under the stock
option plan described in the Prospectus.
4. Terms of Public Offering. The Sellers are advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Sellers
are further advised by you that the Shares are to be offered to the public
initially at $_____________ a share (the "PUBLIC OFFERING PRICE") and to
certain dealers selected by you at a price that represents a concession not in
excess of $______ a share under the Public
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Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $_____ a share, to any Underwriter or
to certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares
shall be made to the Company in Federal or other funds immediately available in
New York City against delivery of such Firm Shares for the respective accounts
of the several Underwriters at 10:00 a.m., New York City time, on ____________,
1998, or at such other time on the same or such other date, not later than
_________, 1998, as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made to each Seller
in Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 3 or at such other time on the same or on such
other date, in any event not later than _______, 1998, as shall be designated
in writing by you. The time and date of such payment are hereinafter referred
to as the "OPTION CLOSING DATE".
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The
obligations of the Company to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares on
the Closing Date are subject to the condition that the Registration Statement
shall have become effective not later than 2:00 p.m. (New York City time) on
the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date there shall not have occurred
any change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in
your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
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(b) The Underwriters shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect that (i) there has not occurred
any material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or
in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement); (ii) the representations and warranties of the
Company contained in this Agreement are true and correct in all
material respects as of the Closing Date and (iii) the Company has
complied with all of the agreements and satisfied all of the conditions
on its part to be performed or satisfied hereunder on or before the
Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing
Date an opinion of ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, outside counsel for the
Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the State of Delaware, has the corporate power and
corporate authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified
to transact business and is in good standing in the States of
_______________, _______________, _______________ and
_______________;
(ii) [AudioNet, Inc.] has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the State of Delaware, has the corporate power and
corporate authority to own its property and to conduct its
business as presently conducted;
(iii) the authorized capital stock of the Company
conforms in all material aspects as to legal matters to the
description thereof contained in the Prospectus;
(iv) the shares of Common Stock outstanding prior to
the issuance of the Shares have been duly authorized are
validly issued and non-assessable and to such counsel's
knowledge are fully paid; except as described in the
Prospectus, and except for preemptive rights which by their
terms will terminate on or before the Closing Date such
counsel is not aware that any person has outstanding any
options to purchase, or any preemptive rights or other rights
to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or
sell, shares of the Company's capital stock or any such
options, rights, convertible securities or obligations; and
all outstanding shares of capital stock of the Company
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and options and other rights to acquire capital stock issued
since September 1, 1996 have been issued in compliance with
the registration and qualification provisions of all
applicable securities laws and such capital stock were not
issued in violation of any preemptive rights contained in the
Company's Certificate of Incorporation or Bylaws, or to such
counsel's knowledge any rights of first refusal or other
similar rights (and excluding any violation for which the
Company has obtained a waiver).
(v) all of the issued shares of capital stock of each
subsidiary of the Company have been duly authorized and
validly issued, are non-assessable, to such counsel's
knowledge are fully paid and are owned directly by the
Company, free and clear of all liens, encumbrances, equities
or claims;
(vi) the Shares to be sold by the Company have been
duly authorized and, when issued and delivered in accordance
with the terms of this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights
pursuant to the Company's certificate of incorporation or
bylaws or to such counsel's knowledge, any other agreement or
instrument binding on the Company;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of applicable
law or the certificate of incorporation or bylaws of the
Company or, to such counsel's knowledge, any agreement or
other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or, to such counsel's
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or
agency ("Approval") is required for the performance by the
Company of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Shares, and except for Approvals which if not obtained would
not have a material adverse effect on the Company and would
not materially impair the Company's performance of its
obligations under this Agreement;
(ix) the statements (A) in the Prospectus under the
captions "Risk Factors--Shares Eligible for Future
Sale,""Management--Director Compensation,"
"Management--Employee Benefit Plans,"
"Management--Indemnification of Directors and Executive
Officers and Limitation of Liability," "Certain Transactions,"
"Description of Capital Stock," and "Shares Eligible for
Future Sale" and (B) in the Registration Statement in Items 14
and 15, in each case insofar as such statements
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constitute summaries of the legal matters, documents or
proceedings referred to therein, have been reviewed by such
counsel, fairly present the information called for with
respect to such legal matters, documents and proceedings, and
are accurate in all material respects;
(x) to such counsel's knowledge, such counsel does
not know of any legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is
a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and
are not so described or of any statutes, regulations,
contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not
described or filed as required;
(xi) the Company is not and, after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be
an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(xii) to such counsel's knowledge there is no legal
or beneficial owner of any securities of the Company who has
any rights, not effectively satisfied or waived, to require
registration of any shares of capital stock of the Company in
connection with the filing of the Registration Statement;
(xiii) to the best of such counsel's knowledge: (A)
based solely on oral advice of the Staff of the Commission the
Registration Statement has become effective under the
Securities Act, (B) based solely on oral advice of the Staff
of the Commission no stop order proceedings with respect
thereto have been instituted or are pending or threatened
under the Securities Act, and nothing has come to such
counsel's attention to lead it to believe that such
proceedings are contemplated; and (C) any required filing of
the Prospectus and any supplement thereto pursuant to Rule
424(b) under the Securities Act has been made in the manner
and within the time period required by such Rule 424(b); and
(xiv) based on a letter from the Nasdaq Stock Market,
the Shares to be sold under this Agreement to the Underwriters
are duly authorized for quotation on the Nasdaq National
Market.
(xv) in addition, such counsel shall state that they
have participated in conferences with officers and other
representatives of the Company; representatives of the
independent auditors of the Company and the Underwriters
representatives and counsel at which the contents of the
Registration Statement and Prospectus and related matters were
discussed, and shall state that because the purpose of such
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counsel's professional engagement was not to establish or
confirm factual matters and because the scope of their
examination of the affairs of the Company did not permit them
to verify the accuracy, completeness or fairness of the
statements set forth in the Registration Statement or
Prospectus, such counsel are not passing upon and do not
assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or Prospectus except to the extent set forth below
(and in response to Section 6(c)(ix)). On the basis of the
foregoing and except for the financial statements and
schedules and the other financial and statistical data
included therein, as to which such counsel shall express no
opinion or belief, such counsel shall state that: (A) the
Registration Statement at the time it became effective, and
the Prospectus as of the date thereof and as of the date of
such opinion, appeared on their face to be appropriately
responsive in all material respects to the relevant
requirements of the Securities Act and the applicable rules
and regulations of the Commission promulgated thereunder, (B)
no facts have come to such counsel's attention that lead them
to believe that (1) the Registration Statement at the time it
became effective contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or (2) the Prospectus as of its date or as of the
date of such opinion contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
In rendering the opinion referred to in this Section
6(c), such counsel may rely upon certificates of officers of the
Company as to matters of fact and upon certificates of public
officials. Such opinion shall expressly be limited to the federal laws
of the United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware.
(d) The Underwriters shall have received on the Option
Closing Date an opinion of ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Selling Stockholder, dated the Option Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by the Selling Stockholder;
(ii) the execution and delivery by the Selling
Stockholder of, and the performance by the Selling Stockholder
of his obligations under, this Agreement will not contravene
any provision of applicable law, or, to such counsel's
knowledge, any agreement or other instrument binding upon the
Selling Stockholder or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Selling
Stockholder, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency
("Approval") is required for the sale of the Additional Shares
by the Selling
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Stockholder to the Underwriters pursuant to the terms of this
Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the
offer and sale of the Additional Shares by the Selling
Stockholder, and except for Approvals which if not obtained
would not have a material adverse effect on the Selling
Stockholder and would not materially impair the Selling
Stockholder's performance of the Selling Stockholder's
obligations under this Agreement;
(iii) the Selling Stockholder has the legal power,
and all authorization and approval required by law, to enter
into this Agreement and to sell, transfer and deliver the
Additional Shares to be sold by the Selling Stockholder;
(iv) upon delivery of certificates issued to the
Underwriters for the Additional Shares being sold by the
Selling Stockholder in registered form and payment thereof,
each Underwriter who takes such delivery and makes such
payment in good faith and without notice of any adverse claim,
will acquire all the rights of the Selling Stockholder in such
Additional Shares free of any adverse claim, lien in favor of
the Company and restriction on transfer imposed by the
Company; and
(v) in addition, such counsel shall state that they
have participated in conferences with officers and other
representatives of the Company, representatives of the
independent auditors of the Company and the Underwriters'
representatives and counsel at which the contents of the
Registration Statement and Prospectus and related matters were
discussed, and shall state that because the purpose of such
counsel's professional engagement was not to establish or
confirm factual matters and because the scope of their
examination of the affairs of the Company did not permit them
to verify the accuracy, completeness or fairness of the
statements set forth in the Registration Statement or
Prospectus, such counsel are not passing upon and do not
assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement except to the extent set forth below (and in
response to Section 6(c)(ix)). On the basis of the foregoing,
and except for the financial statements and schedules and the
other financial and statistical data included therein, as to
which such counsel shall express no opinion or belief, such
counsel shall state that: (A) the Registration Statement at
the time it became effective, and the Prospectus as of the
date thereof and as of the date of such opinion, appeared on
their face to be appropriately responsive in all material
respects to the relevant requirements of the Securities Act
and the applicable rules and regulations of the Commission
promulgated thereunder, (B) no facts have come to such
counsel's attention that lead them to believe that (1) the
Registration Statement at the time it became effective
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading or (2)
the Prospectus as of its date or as of the date of such
opinion contained an untrue statement of a material fact or
omitted to state a material fact
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required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
In rendering the opinion referred to in this Section 6(d),
such counsel may rely upon certificates of officers of the Company as
to matters of fact and upon certificates of public officials. Such
opinion shall expressly be limited to the federal laws of the United
States, the laws of the State of New York and the General Corporation
Law of the State of Delaware.
(e) The Underwriters shall have received on the Closing
Date an opinion of Fish and ▇▇▇▇▇▇▇▇▇▇, outside counsel for the
Company, dated the Closing Date, to the effect that the statements in
the Prospectus under the captions "Risk Factors--Intellectual Property"
and "Business--Intellectual Property", insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, have been reviewed by such counsel, fairly present
the information called for with respect to such legal matters,
documents and proceedings, and are accurate in all material respects.
(f) The Underwriters shall have received on the Closing
Date an opinion of ▇▇▇▇▇▇▇▇▇, Will and ▇▇▇▇▇, counsel to the Company,
dated the Closing Date, to the effect that the statements in the
Prospectus under the captions "Risk Factors--Government Regulation
Legal Uncertainty" and "Business--Governmental Regulation", insofar as
such statements constitute summaries of the legal matters, documents or
proceedings referred to therein, have been reviewed by such counsel,
fairly present the information called for with respect to such legal
matters, documents and proceedings, and are accurate in all material
respects.
(g) The Underwriters shall have received on the Closing
Date an opinion of Block & ▇▇▇▇▇▇▇▇, counsel to the Company, dated the
Closing Date, covering the matters referred to in Sections 6(c)(iv)
(without limitations based on time), 6(c)(x) and 6(c)(xii).
(h) The Underwriters shall have received on the Closing
Date an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the
Underwriters, dated the Closing Date, covering the matters referred to
in Sections 6(c)(vi), 6(c)(vii), 6(c)(ix) (but only as to the
statements in the Prospectus under "Description of Capital Stock" and
"Underwriters") and 6(c)(xiii) above.
The opinions of ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP described in
Sections 6(c) and 6(d) , of Fish and ▇▇▇▇▇▇▇▇▇▇ described in Section
6(e), of ▇▇▇▇▇▇▇▇▇, Will and ▇▇▇▇▇ described in Section 6(f) and of
Block & ▇▇▇▇▇▇▇▇ described in Section 6(g) shall be rendered to the
Underwriters at the request of the Company or the Selling Stockholder,
as the case may be, and shall so state therein.
(i) The Underwriters shall have received, on each of the
date hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form
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and substance satisfactory to the Underwriters, from Price Waterhouse
LLP, independent public accountants, stating that Price Waterhouse LLP
are, and during the periods covered by their report included in the
Registration Statement were, independent certified public accountants
with respect to the Company within the meaning of the Securities Act;
and containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect
to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus; provided that the
letter delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
(j) The "Lock-Up" Agreements, each substantially in the
form of Exhibit A hereto, between you and certain stockholders,
optionholders, warrantholders, officers and directors of the Company
relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the
date hereof, shall be in full force and effect on the Closing Date.
(k) The Underwriters shall have received on the Option
Closing Date a certificate, dated the Option Closing Date and signed by
the Selling Stockholder, to the effect that the representations and
warranties of the Selling Stockholder contained in this Agreement are
true and correct as of the Option Closing Date and that the Selling
Stockholder has complied with all of the agreements and satisfied all
of the conditions to be performed or satisfied on the part of the
Selling Stockholder hereunder on or before the Option Closing Date.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the Option
Closing Date of such documents as you may reasonably request with respect to
the good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
7. Covenants of the Company. In further consideration of
the agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, four signed copies
of the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to you in New York
City, without charge, prior to 3:00 p.m. New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 7(c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
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(c) If, during such period after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances under which they were made when the
Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to
the Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances under which they were made when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request; provided, however, than in no event shall the
Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would
subject it to general service or process in any jurisdiction where it
is not now so subject.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending September 30, 1999 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) In connection with the Directed Share Program, the
Company will ensure that the Directed Shares will be restricted to the
extent required by the National Association of Securities Dealers, Inc.
(the "NASD") or the NASD rules from sale, transfer, assignment, pledge
or hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. H&Q will notify the
Company as to which Participants will need to be so restricted. The
Company will direct the transfer agent to place stop transfer
restrictions upon such securities for such period of time.
(g) To pay all fees and disbursements of counsel incurred
by the Underwriters in connection with the Directed Share Program and
stamp duties, similar taxes or duties or other taxes, if any, incurred
by the Underwriters in connection with the Directed Share Program.
(h) To (i) enforce the terms of each Lock-up Agreement,
(ii) issue stop-transfer instructions to the transfer agent for the
Common Stock with respect to any transaction or contemplated
transaction that would constitute a breach of or default under the
applicable Lock-up Agreement and (iii) upon written request of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporation
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("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") to release from the Lock-up Agreements those shares
of Common Stock held by those holders set forth in such request. In
addition, except with the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the
Company agrees (i) not to amend or terminate, or waive any right under,
any Lock-up Agreement, or take any other action that would directly or
indirectly have the same effect as an amendment or termination, or
waiver of any right under, any Lock-up Agreement, that would permit any
holder of shares of Common Stock, or securities convertible into or
exercisable or exchangeable for Common Stock, to sell, make any short
sale of, grant any option for the purchase of, or otherwise transfer or
dispose of, any of such shares of Common Stock or other securities
prior to the expiration of 180 days after the date of the Prospectus in
violation of the terms of such Lock-Up Agreement, and (ii) not to
consent to any sale, short sale, grant of an option for the purchase
of, or other disposition or transfer of shares of Common Stock, or
securities convertible into or exercisable or exchangeable for Common
Stock, subject to a Lock-up Agreement.
(i) Without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
the Company will not release any stockholder or option holder from the
market standoff provision imposed by the Company pursuant to the terms
of the Registration Rights Agreement or other agreement earlier than
180 days after the date of the initial public offering of the Shares.
8. Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Sellers agree to pay or cause to be paid all of their respective expenses
incident to the performance of their obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel,
the Company's accountants and counsel for the Selling Stockholder of the
Company in connection with the registration and delivery of the Shares under
the Securities Act and all other fees or expenses of the Company in connection
with the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any
Blue Sky or Legal Investment memorandum in connection with the offer and sale
of the Shares under state securities laws and all expenses in connection with
the qualification of the Shares for offer and sale under state securities laws
as provided in Section 7(d) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the NASD, (v) all fees and
expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Common Stock and all costs and expenses
incident to listing the Shares on the Nasdaq National Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and charges of
any transfer agent, registrar or depository, (viii) the costs and expenses of
the Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
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limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any
such consultants, and one-half of the cost of any aircraft chartered in
connection with the road show, and (ix) all other costs and expenses incident
to the performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood, however,
that except as provided in this Section, Section 9 entitled "Indemnity and
Contribution", and the last paragraph of Section 11 below, the Underwriters
will pay all of their costs and expenses, including fees and disbursements of
their counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may make.
The provisions of this Section shall not supersede or
otherwise affect any agreement that the Sellers may otherwise have for the
allocation of such expenses among themselves.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus or any
preliminary prospectus, in light of the circumstances under which they were
made) not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein; and provided further that the foregoing indemnity with respect
to any preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or liabilities,
purchased Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law to have been so delivered
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such losses, claims, damages or liabilities, unless
such failure is the result of noncompliance by the Company with Section 7(a)
hereof.
(b) The Selling Stockholder agrees to indemnify and hold
harmless each Underwriter and each person, if any who controls any Underwriter
within the meaning of either
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Section 15 of the Securities Act or Section 20 of the Exchange Act, or is under
common control with, or is controlled by, any Underwriter, and the Company, its
directors, its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus or any
preliminary prospectus, in light of the circumstances under which they were
made) not misleading, but only with reference to information relating to such
Selling Stockholder furnished in writing by or on behalf of such Selling
Stockholder expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto, except
insofar as such losses, claims, damages, or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein; and provided further
that the foregoing indemnify with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law to have been so delivered at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus
(as so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 7(a) hereof. The liability of the
Selling Stockholder under this Agreement shall be limited to an amount equal to
the net proceeds received by the Selling Stockholder from the offering of
Additional Shares sold by such Selling Stockholder, except with respect to (i)
any breaches of the representations and warranties set forth in paragraphs (a),
(b), (c) and (d) of Section 2 hereof, (ii) intentional misrepresentation or
(iii) fraud.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholder, the directors
of the Company, the officers of the Company who sign the Registration Statement
and each person, if any, who controls the Company or any Selling Stockholder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case
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of the Prospectus or any preliminary prospectus, in light of the circumstances
under which they were made) not misleading, but only with reference to
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use in the Registration Statement,
any preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 9, such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding, and to the extent
that it shall wish, the indemnifying party, jointly with any other indemnifying
party similarly notified, may assume the defense thereof. Notwithstanding the
prior sentence, in any such proceeding, any indemnified party shall have the
right to retain its own counsel and assume its own defense in such proceeding,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified party
shall have mutually agreed in writing to the retention of such counsel, (ii)
the indemnifying party shall have failed to assume the defense and employ
counsel; or (iii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (i) the fees and expenses
of more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, (ii) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section and (iii) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Selling Stockholder, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Underwriters and such control persons of any Underwriters, such firm shall be
designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. In the case of any such separate firm
for the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Selling Stockholder.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request and (ii) such
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indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(e) To the extent the indemnification provided for in this
Section 9 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party or parties on the
other hand from the offering of the Shares or (ii) if the allocation provided
by clause 9(e)(i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause 9(e)(i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers on the one hand
and the Underwriters on the other hand in connection with the offering of the
Shares shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Shares (before deducting expenses) received
by each Seller and the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the Shares. The
relative fault of the Sellers on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Sellers or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 9 are several in proportion to the respective number of Shares
they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would
not be just or equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in Section 9(e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required
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to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission, and the Selling Stockholder shall not be required to
contribute any amount in excess of the net proceeds received by the Selling
Stockholder from the offering of Additional Shares sold by the Selling
Stockholder, except with respect to (i) any breach of the representations and
warranties in Section 2(a), (b), (c) and (d), (ii) intentional
misrepresentation or (iii) fraud. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Except as provided in the last sentence of
Section 9(b), the remedies provided for in this Section 9 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in
this Section 9 and the representations, warranties and other statements of the
Company and the Selling Stockholder contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any Underwriter
or any person controlling any Underwriter, the Selling Stockholder, or the
Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Shares.
10. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the National Association of
Securities Dealers, Inc., or the Nasdaq Stock Market (ii) trading of any
securities of the Company shall have been suspended on the Nasdaq Stock Market,
(iii) a general moratorium on commercial banking activities in New York shall
have been declared by either Federal or New York State authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your judgment,
is material and adverse and (b) in the case of any of the events specified in
clauses 10(a)(i) through 10(a)(iv), such event, singly or together with any
other such event, makes it, in ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the
Prospectus.
11. Effectiveness; Defaulting Underwriters. This
Agreement shall become effective upon the execution and delivery hereof by the
parties hereto.
If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it has or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Shares to be purchased on such date,
the other Underwriters shall be obligated severally in the proportions that the
number of Firm Shares set forth opposite their respective names in Schedule II
bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused
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to purchase on such date; provided that in no event shall the number of Shares
that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Firm Shares to be purchased, and arrangements satisfactory to you, the Company
and the Selling Stockholders for the purchase of such Firm Shares are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Stockholders. In any such case either you or the relevant Sellers
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter
or Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of any Seller to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason any Seller shall be unable to perform its obligations under
this Agreement, the Sellers will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
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Very truly yours,
▇▇▇▇▇▇▇▇▇.▇▇▇ inc.
By:
----------------------------
Name:
Title:
Selling Stockholder
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule II hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:---------------------------
Name: D. ▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
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SCHEDULE I
Number of
Additional Shares
Selling Stockholder To Be Sold
--------------------------------------------------------------------------------- -----------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
--------------
Total . . . . . . . . . . . . . . . . . . . . . . . . .
==============
29
SCHEDULE II
Number of
Firm Shares
Underwriter To Be Purchased
--------------------------------------------------------------------------------- ---------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated . . . . . . . . . . . . . . . . . . . . . . . .
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation . . . . . . . . . . . . . . .
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
--------------
Total . . . . . . . . . . . . . . . . . . . . . . . . .
==============
30
EXHIBIT A
[FORM OF LOCK-UP LETTER]
____________, 1998
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") proposes to enter into an Underwriting
Agreement (the "UNDERWRITING AGREEMENT") with ▇▇▇▇▇▇▇▇▇.▇▇▇, a Delaware
corporation (the "COMPANY"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the
"UNDERWRITERS"), of shares (the "SHARES") of the Common Stock, $0.01 par value
of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (a) the sale of any Shares to the
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Underwriters pursuant to the Underwriting Agreement or (b) transactions
relating to shares of Common Stock acquired in the Public Offering or in open
market transactions after the completion of the Public Offering. In addition,
the undersigned agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on
a number of factors, including market conditions. Any Public Offering will
only be made pursuant to an Underwriting Agreement, the terms of which are
subject to negotiation between the Company and the Underwriters.
Very truly yours,
-------------------------
(Name)
-------------------------
(Address)
2