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Exhibit 1.2
INTERLIANT, INC.
(Delaware corporation)
_____________ Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: May ____, 1999
2
Table of Contents
SECTION 1. Representations and Warranties. 5
(a) Representations and Warranties by the Company. ............................... 5
(i) Compliance with Registration Requirements.................... 5
(ii) Incorporated Documents....................................... 6
(iii) Independent Accountants...................................... 6
(iv) Financial Statements......................................... 6
(v) No Material Adverse Change in Business....................... 7
(vi) Good Standing of the Company................................. 7
(vii) Good Standing of Subsidiaries................................ 7
(viii) Capitalization............................................... 8
(ix) Authorization of Agreement................................... 8
(x) Authorization and Description of Securities.................. 8
(xi) Absence of Defaults and Conflicts............................ 9
(xii) Absence of Labor Dispute..................................... 9
(xiii) Absence of Proceedings....................................... 10
(xiv) Accuracy of Exhibits......................................... 10
(xv) Possession of Intellectual Property.......................... 10
(xvi) Absence of Further Requirements.............................. 10
(xvii) Possession of Licenses and Permits........................... 11
(xviii) Title to Property............................................ 11
(xix) Compliance with Cuba Act..................................... 12
[(xx) Investment Company Act....................................... 12
(xxi) Environmental Laws........................................... 12
(b) Officer's Certificates.12
SECTION 2. Sale and Delivery to International Managers; Closing.................. 13
(a) Initial Securities ........................................................... 13
(b) Option Securities ............................................................ 13
(c) Payment. ..................................................................... 14
(d) Denominations; Registration. ................................................. 14
[(e) Appointment of Qualified Independent Underwriter.] ........................... 15
SECTION 3. Covenants of the Company. ............................................ 15
(a) Compliance with Securities Regulations and Commission Requests. .............. 15
(b) Filing of Amendments. 15
(c) Delivery of Registration Statements. ......................................... 16
(d) Delivery of Prospectuses. .................................................... 16
(e) Continued Compliance with Securities Laws..................................... 16
(f) Blue Sky Qualifications....................................................... 17
(g) Rule 158...................................................................... 17
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(h) Use of Proceeds....................................................... 17
(i) Listing............................................................... 17
(j) Restriction on Sale of Securities..................................... 17
(k) Reporting Requirements................................................ 18
[(l)Compliance with NASD Rules]........................................... 18
SECTION 4. Payment of Expenses. 18
(a) Expenses .......................................................... 19
(b) Termination of Agreement. ......................................... 19
SECTION 5. Conditions of International Managers' Obligations. ..... 19
(a) Effectiveness of Registration Statement............................. 19
(b) Opinion of Counsel for Company...................................... 20
(c) Opinion of Counsel for International Managers....................... 20
(d) Officers' Certificate............................................... 21
(e) Accountant's Comfort Letter......................................... 21
(f) Bring-down Comfort Letter........................................... 22
(g) Approval of Listing................................................. 22
[(h) No Objection.]...................................................... 22
[(i) Lock-up Agreements.]................................................ 22
(j) Purchase of Initial U.S. Securities................................. 22
(k) Conditions to Purchase of International Option Securities........... 22
(l) Additional Documents................................................ 23
(m) Termination of Agreement............................................ 23
SECTION 6. Indemnification. ....................................... 24
(a) Indemnification of International Managers. ...................... 24
(b) Indemnification of Company, Directors and Officers. ............. 26
(c) Actions against Parties; Notification. .......................... 26
(d) Settlement without Consent if Failure to Reimburse. ............. 27
[(e) Indemnification for Reserved Securities.] ....................... 27
SECTION 7. Contribution. .......................................... 27
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. ...................................... 29
SECTION 9. Termination of Agreement. .............................. 29
(a) Termination; General. .......................................... 29
(b) Liabilities. ................................................... 30
SECTION 10. Default by One or More of the International Managers. .. 30
SECTION 11. Notices. ............................................... 31
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SECTION 12. Parties. ............................................... 31
SECTION 13. GOVERNING LAW AND TIME. ................................ 31
SECTION 14. Effect of Headings. .................................... 31
SCHEDULES
Schedule A - List of Underwriters......................................................... Sch A-1
Schedule B - Pricing Information.......................................................... Sch B-1
[Schedule C - List of Subsidiaries........................................................ Sch C-1]
[Schedule D - List of Persons subject to Lock-up.......................................... Sch D-1]
EXHIBITS
Exhibit A - Form of Opinion of Company=s Counsel........................................... A-1
[Exhibit B - Form of Lock-up Letter........................................................ B-1]
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INTERLIANT, INC.
(Delaware corporation)
______________ Shares of Common Stock
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
Dated: May ___, 1999
XXXXXXX XXXXX INTERNATIONAL
XXXXXXXXX, LUFKIN & XXXXXXXX INTERNATIONAL
CIBC WORLD MARKETS INTERNATIONAL LIMITED
as Lead Manager(s) of the several International Managers
c/o Merrill Xxxxx International
Ropemaker Place
00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Ladies and Gentlemen:
Interliant, a Delaware corporation (the "Company"), confirms its
agreement with Xxxxxxx Xxxxx International ("Xxxxxxx Xxxxx") and each of the
other international underwriters named in Schedule A hereto (collectively, the
"International Managers", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Xxxxxxx
Xxxxx and Xxxxxxxxx, Xxxxxx & Xxxxxxxx International and CIBC World Markets
International Limited acting as representative(s) (in such capacity, the "Lead
Managers"), with respect to the issue and sale by the Company and the purchase
by the International Managers, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.01 per share, of the
Company ("Common Stock") set forth in said Schedule A, and with respect to the
grant by the Company to the International Managers, 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 International
Securities") to be purchased by the International Managers and all or any part
of the 130,000 shares of Common Stock subject to the option described in Section
2(b) hereof (the "International Option Securities") are hereinafter called,
collectively, the "International Securities".
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It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Company of an aggregate of ___________ shares of Common
Stock (the "Initial U.S. Securities") through arrangements with certain
underwriters in the United States and Canada (the "U.S. Underwriters") for which
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxxxxx, Lufkin &
Xxxxxxxx and CIBC World Markets Corp. are acting as representatives (the "U.S.
Representatives") and the grant by the Company to the U.S. Underwriters, acting
severally and not jointly, of an option to purchase all or any part of the U.S.
Underwriters' pro rata portion of up to ________ additional shares of Common
Stock solely to cover overallotments, if any (the "U.S. Option Securities" and,
together with the International Option Securities, the "Option Securities"). The
Initial U.S. Securities and the U.S. Option Securities are hereinafter called
the "U.S. Securities". It is understood that the Company is not obligated to
sell and the International Managers are not obligated to purchase, any Initial
International Securities unless all of the Initial U.S. Securities are
contemporaneously purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities", and the International Securities, and the U.S. 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 Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the International Managers propose to make
a public offering of the International Securities as soon as the Lead Managers
deem advisable after this Agreement has been executed and delivered.
The Company and the International Managers agree that up to _______
shares of the Initial International Securities to be purchased by the
International Managers and that up to __________ shares of the Initial U.S.
Securities to be purchased by the U.S. Underwriters (collectively, the "Reserved
Securities") shall be reserved for sale by the Underwriters to certain eligible
employees and other persons designated by 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. 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 and such persons designated by
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")
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a registration statement on Form S-1 (No. 333-74403) covering the registration
of the Securities under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus or 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). Two forms
of prospectus are to be used in connection with the offering and sale of the
Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. 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". 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
(a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of International Prospectus and Form of U.S.
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,
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-1 under the 1933 Act, 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 International Prospectus and the final Form of U.S.
Prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-1 under the 1933 Act, in the forms first furnished to the
Underwriters for use in connection with the offering of the Securities are
herein called the "International Prospectus" and the "U.S. Prospectus,"
respectively, and collectively, the "Prospectuses." If Rule 434 is relied on,
the terms AInternational Prospectus" and "U.S. Prospectus" shall refer to the
preliminary International Prospectus dated April, 1999 and preliminary U.S.
Prospectus dated April 30, 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. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. 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 ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information
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which is "contained," "included" or "stated" in the Registration Statement, any
preliminary prospectus (including the Form of U.S. Prospectus and Form of
International Prospectus) or the Prospectuses (or other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is incorporated by reference in the
Registration Statement, any preliminary prospectus (including the Form of U.S.
Prospectus and Form of International Prospectus) or the Prospectuses, as the
case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each International Manager 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
International Manager, 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
International 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 to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
the Prospectuses, any preliminary prospectuses 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 Prospectus and such preliminary
prospectus, as amended or supplemented, if applicable, are distributed in
connection with the offer and sale of Reserved Securities. Neither of the
Prospectuses nor any amendments or supplements thereto (including any
prospectus wrapper), at the time the Prospectuses or any such amendment
or supplement was issued and at the Closing Time (and, if any
International 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
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warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or International Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by any International Manager through the Lead Managers
expressly for use in the Registration Statement or International
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 preliminary prospectus 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 XXXXX, 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 are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectuses, together with the related
notes, present fairly in all material respects 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 in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
selected financial data and the summary financial information included
in the Prospectuses have been derived from the consolidated financial
statements of the Company. The pro forma financial statements and the
related notes thereto included in the Registration Statement and the
Prospectuses comply as to form in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X under the 1933
Act, and the pro forma adjustments have been applied properly in all
material respects to the historical amounts in the compilation of such
pro forma financial statements.
(iii) 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 of the Company
and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
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(iv) 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; 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.
(v) Good Standing of Subsidiaries. Each "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Subsidiary" and, collectively, the "Subsidiaries") 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; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The only subsidiaries of the
Company are the subsidiaries listed on Exhibit 21 to the Registration
Statement.
(vi) Capitalization. The authorized, issued and outstanding capital
stock of the Company on March 31, 1999 and as of the date hereof are as
set forth in the Prospectuses in the columns entitled "Actual" and "Pro
Forma", respectively, under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements, acquisitions 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.
(vii) Authorization of Agreement. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(viii) Authorization and Description of Securities. The Securities to
be purchased
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by the International Managers and the U.S. Underwriters from the Company
have been duly authorized for issuance and sale to the International
Managers pursuant to this Agreement and the U.S. Underwriters pursuant
to the U.S. Purchase Agreement, respectively, and, when issued and
delivered by the Company pursuant to this Agreement and the U.S.
Purchase Agreement, respectively, against payment of the consideration
set forth herein and the U.S. Purchase Agreement, respectively, will be
validly issued, fully paid and non-assessable; the Common Stock conforms
in all material respects to all statements relating thereto contained in
the Prospectuses and such description conforms in all material respects
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.
(ix) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries 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 or any of its subsidiaries 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 or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the U.S. Purchase
Agreement and the consummation of the transactions contemplated in this
Agreement, the U.S. Purchase Agreement 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 and the U.S. Purchase
Agreement 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 subsidiary pursuant to, the
Agreements and Instruments or violation of 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 subsidiary or any of their assets,
properties or operations (except for such conflicts, violations,
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 subsidiary. 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 subsidiary.
(x) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, and
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the Company is not aware of any existing or imminent labor disturbance
by the employees of any of its or any subsidiary's principal suppliers,
manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xi) 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
subsidiary, which is required to be disclosed in the Registration
Statement or the Prospectuses (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 consummation of the transactions contemplated in
this Agreement and the U.S. Purchase Agreement 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
subsidiary 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.
(xii) 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.
(xiii) Possession of Intellectual Property. Except as disclosed in
the Prospectuses, the Company and its subsidiaries 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 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 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.
(xiv) 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 and the U.S. Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement and the U.S. Purchase Agreement or the consummation of the
transactions contemplated by this Agreement, except (i) such as have
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been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws or pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), (ii) such
as may be required by the rules and regulations of the National
Association of Securities Dealers, Inc. and (iii) such as have been
obtained under the laws and regulations of jurisdictions outside the
United States in which the Reserved Shares are offered.
(xv) Possession of Licenses and Permits. The Company and its
subsidiaries 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 except
where the failure to possess such Governmental Licenses would not have a
Material Adverse Effect; the Company and its subsidiaries 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 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.
(xvi) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries 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, have a Material Adverse Effect; and all of the leases and
subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectuses, are in full
force and effect, and neither the Company nor any subsidiary 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 subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such subsidiary to the continued possession
of the leased or subleased premises under any such lease or sublease.
(xvii) Compliance with Cuba Act. The Company has complied in all
material respects with, and is and will be in compliance in all material
respects with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of
the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xviii) Investment Company Act. The Company is not, and upon the
issuance and
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sale of the Securities as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectuses will not be, an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 Act").
(xix) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in
a Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries 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 and its subsidiaries 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 to
the knowledge of the Company 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 or any of its subsidiaries and
(D) there are no events or circumstances that might reasonably be
expected to form the basis 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 or any of its subsidiaries
relating to Hazardous Materials or any Environmental Laws.
(xx) Registration Rights. Except as disclosed in the Prospectuses,
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 Compliance. The Company is using reasonable
procedures to verify that the software used in its products will
recognize and process date fields after the turn of the century, and
perform date-dependent calculations and operations (including sorting,
comparing and reporting) after the turn of the century correctly, and is
using reasonable efforts to ensure that its software will not produce
invalid and/or incorrect results as a result of the change of century
(all without human intervention, other than original data entry of valid
dates), except where the failure to use such procedures or efforts would
not have a Material Adverse Effect, provided that the software receives
correct and properly
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formatted date inputs from all software and hardware that exchanges data
with or provides data to the software.
(xxii) Systems and Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit timely preparation of financial statements in
conformity in all material respects with generally accepted accounting
principles and to maintain asset accountability; and (iii) access to
assets is permitted only in accordance with management's general or
specific authorization.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Global Coordinator, the Lead
Managers or to counsel for the International Managers shall be deemed a
representation and warranty by the Company to each International Manager as to
the matters covered thereby.
SECTION 2. Sale and Delivery to International Managers; Closing.
(a) Initial Securities. 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 International Manager, severally and
not jointly, and each International Manager, severally and not jointly, agrees
to purchase from the Company, at the price per share set forth in Schedule B,
the number of Initial International Securities set forth in Schedule A opposite
the name of such International Manager, plus any additional number of Initial
International Securities which such International Manager may become obligated
to purchase pursuant to the provisions of Section 10 hereof.
(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 International Managers,
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 International Securities but not payable on the
International 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 International Securities upon
notice by the Global Coordinator to the Company setting forth the number of
International Option Securities as to which the several International Managers
are then exercising the option and the time and date of payment and delivery for
such International Option Securities. Any such time and date of delivery (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 International Option Securities, each
of the International Managers, acting severally and not jointly, will purchase
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that proportion of the total number of International Option Securities then
being purchased which the number of Initial International Securities set forth
in Schedule A opposite the name of such International Manager bears to the total
number of Initial International Securities, subject in each case to such
adjustments as the Global Coordinator in their 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 Xxxxx
Xxxxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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 International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International 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.
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 Lead Manager(s) for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Manager(s),
for its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager 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 International Manager from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers 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
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Manager(s) 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
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of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
International Manager 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 known to the Company 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 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 International Managers shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Lead Managers and counsel for the International Managers,
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 Lead Manager(s), without
charge, a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the International
Managers. The copies of the Registration Statement and each amendment thereto
furnished to the International Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T.
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(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager 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 International Manager, without charge,
during the period when the International Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, such number of copies of the International
Prospectus (as amended or supplemented) as such International Manager may
reasonably request. The International Prospectus and any amendments or
supplements thereto furnished to the International Managers will be identical to
the electronically transmitted copies thereof filed with the Commission pursuant
to XXXXX, 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 completion of
the distribution of the Securities as contemplated in this Agreement, the U.S.
Purchase Agreement 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 International Manager 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 International Managers such number of copies of
such amendment or supplement as the International Managers may reasonably
request.
(f) Blue Sky Qualifications. The Company will use its commercially
reasonable efforts, in cooperation with the International Managers, 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.
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(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.
(f) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in all material respects in the manner
specified in the Prospectuses under "Use of Proceeds".
(g) Listing. The Company will use its commercially reasonable 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.
(h) 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 Global Coordinator, (i) directly or indirectly, 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 or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable 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, directly or indirectly, 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 such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder or under the U.S. Purchase Agreement, (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 in connection with acquisitions of other entities by the Company if
the recipient of such shares executes a similar lock-up agreement with Xxxxxxx
Xxxxx.
(i) 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.
(j) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as 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 this Agreement. The Underwriters
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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.
(k) Compliance with Rule 463. The Company will file with the Commission
such reports or take such other actions 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, 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
International Managers of this Agreement, any Agreement among International
Managers 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 U.S.
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 International Managers 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 International Managers 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
International Managers 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 International Managers in connection with, the
review by the National Association of Securities Dealers, Inc. (the "NASD") of
the terms of the sale of the Securities, (x) the fees and expenses incurred in
connection with the inclusion of the Securities in the Nasdaq National Market
and (xi) all costs and expenses of the International Managers, including the
reasonable fees and disbursements of counsel for the International Managers, in
connection with matters related to the Reserved Securities which are designated
by the Company for sale to employees, directors and other people designated by
the Company.
(b) Termination of Agreement. If this Agreement is terminated by the
Lead Manager(s) in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the International Managers for all
of their out-of-pocket expenses, including the reasonable fees and disbursements
of counsel for the International Managers.
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SECTION 5 Conditions of International Managers' Obligations. The obligations of
the several International Managers 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 subsidiary 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 International Managers. 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) Opinion of Counsel for Company. At Closing Time, the Lead Managers
shall have received the favorable opinion, dated as of Closing Time, of Xxxxx
Xxxxxxxxxx LLP, counsel for the Company, in form and substance satisfactory to
counsel for the International Managers, together with signed or reproduced
copies of such letter for each of the other International Managers to the effect
set forth in Exhibit A hereto and to such further effect as counsel to the
International Managers may reasonably request.
(c) Opinion of Counsel for Digiweb, Inc. At Closing Time, the Lead
Managers shall have received the favorable opinion, dated as of Closing Time, of
Xxxxxxx & Associates, P.C., counsel for Digiweb, Inc, in form and substance
satisfactory to counsel for the International Managers, together with signed or
reproduced copies of such letter for each of the other International Managers to
the effect set forth in Exhibit B hereto and to such further effect as counsel
to the International Managers may reasonably request.
(d) Opinion of Counsel for Net Daemons Associates, Inc. At Closing
Time, the Lead Managers shall have received the favorable opinion, dated as of
Closing Time, of Sheetman & Halperin, counsel for Net Daemons Associates, Inc.,
in form and substance satisfactory to counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the other
International Managers to the effect set forth in Exhibit C hereto and to such
further effect as counsel to the International Managers may reasonably request.
(e) Opinion of Counsel for International Managers. At Closing Time, the
Lead Managers shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for
the International Managers, together with signed or reproduced copies of such
letter for each of the other International Managers with respect to the matters
set forth in clauses (i), (ii), (v), (vi) (solely as to preemptive or other
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similar rights arising by operation of law or under the charter or by-laws of
the Company), (viii) through (x), inclusive, (xii), (xiv) (solely as to the
information in the Prospectuses under "Description of Capital Stock--Common
Stock") and the penultimate paragraph of Exhibit A hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of California, the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Lead Managers. 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 and
its subsidiaries and certificates of public officials.
(f) 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 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, and the Lead Managers
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 change, (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.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Lead Managers shall have received from Ernst & Young LLP a letter
dated such date, in form and substance satisfactory to the Lead Managers,
together with signed or reproduced copies of such letter for each of the other
International Managers 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. Additionally, at the time of
the execution of this Agreement, the Lead Managers shall have received from
Xxxxxx Xxxx & Xxxxxx PC, BSC&E, PriceWaterhouseCoopers LLC, Frankel, Lodgen,
Lacher, Golditch, Sardi & Xxxxxx, BDO Xxxxxxx, LLP, Deloitte & Touche LLP and
Ernst & Young LLP letters dated such date, in form and substance satisfactory to
the Lead Managers, together with signed or reproduced copies of such letter for
each of the other International Managers 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 of Tri Star Web Creations Inc., Gen International, Inc and
Consolidated subsidiaries, Digiweb, Inc., Clever Computers, Inc., Homecom
Communications, Inc. (Host America Division), B.N. Technology, Inc. (DBA
Internet Communications), Telephonetics International, Inc. and affiliate, Net
Daemons Associates and Interliant, Inc. contained in the Registration Statement
and the Prospectuses.
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(h) Bring-down Comfort Letter. At Closing Time, the Lead Managers shall
have received from each of Ernst & Young LLP dated as of Closing Time, to the
effect that they reaffirm the statements made in the letters furnished pursuant
to subsection (g) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing Time.
(i) 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.
(j) 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.
(k) Lock-up Agreements. At the date of this Agreement, the Lead
Managers shall have received an agreement substantially in the form of Exhibit D
hereto signed by the persons listed on Schedule C hereto.
(l) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International Securities
under this Agreement, the U.S. Underwriters shall have purchased the Initial
U.S. Securities under the U.S. Purchase Agreement.
(m) Conditions to Purchase of International Option Securities. In the
event that the Lead Managers exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the International 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 Lead Managers shall have received:
(i) Officers' Certificate. A certificate, on behalf of the
Company, 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
Xxxxx Xxxxxxxxxx LLP, counsel for the Company, in form and substance
satisfactory to counsel for the International Managers, dated such Date of
Delivery, relating to the International Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion required
by Section 5(b) hereof.
(iii) Opinion of Counsel for International Managers. The
favorable opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation,
counsel for the International Managers, dated such Date of Delivery, relating to
the International Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required
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by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from Ernst & Young
LLP, in form and substance satisfactory to the Lead Managers and dated such Date
of Delivery, substantially in the same form and substance as the letter
furnished to the Lead Managers 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 International Managers 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 Lead
Managers and counsel for the International Managers.
(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 International
Option Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several International Managers to purchase the relevant
International Option Securities, may be terminated by the International Managers
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.
SECTION 6 Indemnification.
(a) Indemnification of International Managers. The Company agrees to
indemnify and hold harmless each International Manager and each person, if any,
who controls any International Manager 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),
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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 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 foreign jurisdictions in connection
with the reservation and sale of the Reserved Securities to
eligible employees, directors and other persons having
relationships with the Company 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 prospectus, 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 reasonable fees and disbursements of
counsel chosen by Xxxxxxx Xxxxx), reasonably 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
International Manager through the Lead Managers 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 Prospectuses (or any amendment or supplement thereto); and
provided further that the Company will not be liable to any
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International Manager with respect to any Prospectuses to the extent that the
Company shall sustain the burden of proving that any such loss, liability,
claim, damage or expense resulted from the fact that such International Manager,
in contravention of a requirement of this Agreement or applicable law, sold
securities to a person to whom such International Manager failed to send or
give, at or prior to the Closing Date, a copy of the Prospectuses, as then
amended or supplemented if: (i) the Company has previously furnished copies
thereof (sufficiently in advance of the Closing Date to allow for distribution
by the Closing Date) to the International Manager and the loss, liability,
claim, damage or expense of such International Manager resulted from an untrue
statement or omission of a material fact contained in or omitted from the
preliminary prospectus which was corrected in the Prospectuses as, if
applicable, amended or supplemented prior to the Closing Date and such
Prospectuses was required by law to be delivered at or prior to the written
confirmation of sale to such person and (ii) such failure to give or send such
Prospectuses by the Closing Date to the party or parties asserting such loss,
liability, claim, damage, or expense would have constituted a valid defense to
the claim asserted by such person.
(b) Indemnification of Company, Directors and Officers. Each
International Manager 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
prospectus or the Prospectuses (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such International Manager through the Lead Managers expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectuses (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
Xxxxxxx Xxxxx, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties 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
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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 to which such
indemnified party is entitled under this Section 6, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) and 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 International
Managers from and against any and all losses, liabilities, claims, damages and
expenses incurred by them as a result of the failure of employees, directors and
other persons designated by 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
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 International Managers 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
International Managers 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.
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The relative benefits received by the Company on the one hand
and the International Managers on the other hand in connection with the offering
of the International 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 International Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet, bear to the aggregate initial public offering price of the
Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
International Managers 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 International Managers 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 International Managers 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 International Managers 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 whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no
International Manager shall be required to contribute any amount in excess of
the amount by which the total price at which the International Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such International Manager 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 0000 Xxx) 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 an International Manager 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 International Manager, 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 International
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Managers' respective obligations to contribute pursuant to this Section 7 are
several in proportion to the number of Initial International 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 submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any International Manager or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the International Managers.
SECTION 9 Termination of Agreement.
(a) Termination; General. The Lead Managers 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 International
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 markets in the United States, 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 Lead Managers,
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 International Managers. If one or more
of the International Managers 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 Lead Managers shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting International Managers or any other underwriters, to purchase
all, but not
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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 Lead Managers shall not
have completed such arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not
exceed 10% of the number of International Securities to be purchased on such
date, each of the non-defaulting International Managers 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 International Managers, or
(ii) if the number of Defaulted Securities exceeds
10% of the number of International 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 International Managers to purchase and of
the Company to sell the International Option Securities to be purchased and sold
on such Date of Delivery shall terminate without liability on the part of any
non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any
defaulting International Manager 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 International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers 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 Prospectuses or
in any other documents or arrangements. As used herein, the term "International
Manager" includes any person substituted for an International Manager 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 International Managers
shall be directed to the Lead Managers at North Tower, World Financial Center,
New York, New York 10281-1201, attention of Xxxxxx Xxxxxxxx; and notices to the
Company shall be directed to it at Interliant, Inc., 00 Xxxxxxx Xxxxxx, Xxxxx
Xxxxxx, XX 00000, attention: General Counsel; copy to Xxxxx Xxxxxxxxxx LLP,
attention: Xxxxxxxx Xxxxxxxx.
SECTION 12 Parties. This Agreement shall inure to the benefit of and be binding
upon the International Managers 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 International
Managers 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
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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 International Managers 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
International Manager 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 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.
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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 International Managers and the Company in
accordance with its terms.
Very truly yours,
INTERLIANT, INC.
By
---------------------------------------------
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXXX XXXXX INTERNATIONAL
XXXXXXXXX, LUFKIN & XXXXXXXX INTERNATIONAL
CIBC OPPENHEIMER INTERNATIONAL LIMITED
By: XXXXXXX XXXXX INTERNATIONAL
By
-------------------------------------------
Authorized Signatory
For themselves and as Lead Managers of the other International Managers named in
Schedule A hereto.
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SCHEDULE A
Name of International Manager Number of Initial
----------------------------- International Securities
------------------------
Xxxxxxx Xxxxx International................................................
Xxxxxxxxx, Lufkin & Xxxxxxxx International.................................
CIBC Oppenheimer International Limited
---------
Total...................................................................... [1]
====================
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SCHEDULE B
INTERLIANT, INC.
__________ Shares of Common Stock
(Par Value $.01Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $C.
2. The purchase price per share for the International Securities to be
paid by the several International Managers shall be $C, being an amount equal to
the initial public offering price set forth above less $C per share; provided
that the purchase price per share for any International 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 International
Securities but not payable on the International Option Securities.
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SCHEDULE C
[List of subsidiaries]
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[SCHEDULE D]
[List of persons and entities
subject to lock-up]
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Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i)The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii)The Company 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 the Purchase
Agreement.
(iii)The Company 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.
(iv)The authorized, and to such counsel's best knowledge, issued and
outstanding capital stock of the Company on March 31, 1999 and as of the date
hereof are as set forth in the Prospectuses in the columns entitled "Actual" and
"Pro Forma", respectively under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to the Purchase Agreement or pursuant to
reservations, acquisitions, 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; and none of the outstanding shares of capital
stock of the Company was issued in violation of the statutory (or to such
counsel's best knowledge contractual) preemptive or other similar rights of any
securityholder of the Company.
(v)The Securities have been duly authorized for issuance and sale to
the International Managers pursuant to the International Purchase Agreement and,
when issued and delivered by the Company pursuant to the International Purchase
Agreement against payment of the consideration set forth in the International
Purchase Agreement, will be validly issued and fully paid and non-assessable and
no holder of the Securities is or will be subject to personal liability by
reason of being such a holder.
(vi)The issuance of the Securities is not subject to statutory (or to
such counsel's best knowledge contractual) preemptive or other similar rights of
any securityholder of the Company.
(vii)Sage Networks Acquisition Corp., Telephonetics, Inc., B.N.
Technology, Inc. (dba ICOM) and Interliant of Texas, inc. (the "Designated
Subsidiaries") have been duly incorporated and are validly
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existing as corporations in good standing under the laws of the jurisdiction of
their incorporation, have corporate power and authority to own, lease and
operate their properties and to conduct their business as described in the
Prospectuses and are duly qualified as foreign corporations to transact business
and are 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; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each Designated Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and, to the best of our knowledge, is
owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of any Designated Subsidiary was issued
in violation of the statutory (or to such counsel's best knowledge contractual)
preemptive or similar rights of any securityholder of each such subsidiary.
(viii)The International Purchase Agreement has been duly authorized,
executed and delivered by the Company.
(ix)The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectuses pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and, to the best of our
knowledge, 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 threatened by the Commission.
(x)The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectuses and each amendment or supplement to the
Registration Statement and Prospectuses as of their respective effective or
issue dates (other than the financial statements and financial, statistical or
accounting data derived therefrom, as to which we need express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(xi)If Rule 434 has been relied upon, the Prospectuses was not
"materially different," as such term is used in Rule 434, from the Prospectuses
included in the Registration Statement at the time it became effective.
(xii)The form of certificate used to evidence the Common Stock complies
in all material respects with all applicable requirements of the Delaware
General Corporation Law, with any applicable requirements of the charter and
by-laws of the Company and the requirements of the Nasdaq National Market.
(xiii)To the best of our knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any subsidiary is a party, or to which the property of the Company or any
subsidiary is subject, before or brought by any court or governmental agency or
body, domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect, or
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which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Purchase Agreement or the performance by the
Company of its obligations thereunder.
(xiv) The information in the Prospectuses under "Description of Capital
Stock--Common Stock", "Business-- Facilities", "Business--Government
Regulation", "Business--Litigation", and "Description of Capital
Stock--Preferred Stock," and in the Registration Statement under Item 14, to the
extent that it constitutes matters of law, summaries of legal matters, the
Company's charter and by-laws or legal proceedings, or legal conclusions, has
been reviewed by us and is correct in all material respects.
(xv) To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Prospectuses that are not described as
required.
(xvi) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects; to the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto.
(xvii) To the best of our knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws.
(xviii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree under the General Corporation Law
of the state of Delaware (except for the filing of the Amended and Restated
Certificate of Incorporation of the Company) or of, any New York or federal
court or governmental authority or agency, domestic or foreign (other than under
the 1933 Act and the 1933 Act Regulations or pursuant to the 1934 Act and the
1934 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the International Purchase Agreement or for the
offering, issuance or sale of the Securities.
(xix) The execution, delivery and performance of the International
Purchase Agreement and the consummation of the transactions contemplated in the
International Purchase Agreement 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 the
International Purchase Agreement do not and will not, whether with or without
the giving of notice or lapse of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined in Section 1(a)(x) of the
International Purchase Agreement) under or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company or
any subsidiary pursuant to any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreement or instrument,
known to us, to
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which the Company or any Designated Subsidiary 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
or any Designated Subsidiary is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have 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 Designated Subsidiary, the
General Corporation Law of the state of Delaware or any applicable New York or
Federal law, statute, rule, regulation, judgment, order, writ or decree, known
to us, of any New York or Federal government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
Designated Subsidiary or any of their respective properties, assets or
operations.
(xx) To the best of our knowledge, except as disclosed in the
Prospectuses 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 0000 Xxx.
(xxi) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
Such counsel shall also state that nothing has come to our attention
that would lead us to believe that the Registration Statement or any amendment
thereto, including the Rule 430A Information and Rule 434 Information (if
applicable), (except for financial statements and financial, statistical or
accounting data derived therefrom, as to which we need make no statement), at
the time such Registration Statement or any such amendment 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 that the Prospectuses or any amendment or supplement thereto
(except for financial statements and financial, statistical or accounting data
derived therefrom, as to which we need make no statement), at the time the
Prospectuses were issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion and making such statement, such counsel may
rely as to matters of fact (but not as to legal conclusions), to the extent they
deem proper, on certificates of responsible officers of the Company and public
officials and may rely as to materiality as to facts upon the judgment of
officers of the Company. Such opinion shall not state that it is to be governed
or qualified by, or that it is otherwise subject to, any treatise, written
policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
For purposes of the opinion, "best knowledge" is without inquiry other than
inquiring of officers of the Company.
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Exhibit B
FORM OF OPINION OF DIGIWEB INC.'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
(i) Digiweb, Inc. ("Digiweb") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland.
(ii) Based solely upon various corporate governance documents, Digiweb
has corporate power and authority to own, lease and operate its properties and
to conduct its business activities for the purpose set forth in the Articles.
(iii) Based soley upon a certificate from Digiweb and to the best of
such counsel's knowledge, information and belief, Digiweb 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.
(iv) Based soley upon a certificate from Digiweb and to the best of
such counsel's knowledge, information and belief, (a)all of the issued and
outstanding capital stock of Digiweb has been duly authorized and validly issued
and is fully paid and non-assessable and is owned by the Company directly, free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity and (b)none of the issued and outstanding shares of capital stock of
Digiweb was issued in violation of the preemptive or other similar rights of any
person or entity arising by operation of law or under the certificate of
incorporation or the by-laws of Digiweb, or under any agreement or obligation
known to us to which Digiweb is a party or by which it is bound.
(v) Based soley upon a certificate from Digiweb and to the best of such
counsel's knowledge, information and belief, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which Digiweb is a
party, or to which the property of Digiweb is subject, before or brought by any
court or governmental agency or body, domestic or foreign, 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 thereof or the consummation of the transactions contemplated in the
Purchase Agreement or the performance by the Company of its obligations
thereunder.
(xvii) Based soley upon a certificate from Digiweb and to the best of
such counsel's knowledge, information and belief, Digiweb is not in violation of
its charter or by-laws and no default by Digiweb exists in the due performance
or observance of any material obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan agreement, note,
lease or other agreement
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or instrument in which it is a party.
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Exhibit C
FORM OF OPINION OF NET DAEMONS ASSOCIATES INC.'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(d)
(i) Net Daemons Associates, Inc. ("NDA") has been duly organized, is
validly existing and is in good standing as a corporation under the laws of the
Commonwealth of Massachusetts and has the power and authority to own its
properties and assets.
(ii) NDA is duly qualified as a foreign corporation to transact
business and is in good standing in the states of California and Colorado.
(iii) The Company is the sole owner of and has good title to all of the
issued and outstanding shares of capital stock of NDA.
(iv) According to a certificate provided by NDA, none of the issued and
outstanding shares of capital stock of NDA were issued in violation of the
preemptive or other similar rights of any person or entity arising by operation
of law or under the certificate of incorporation or the by-laws of NDA, or under
any agreement or obligation known to such counsel to which NDA is a party or by
which it is bound.
(v) According to a certificate provided by NDA, NDA is not in violation
of its charter or by-laws and no default by NDA exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument in which it is a party.
(vi) According to a certificate provided by NDA, there is not pending
or threatened any action, suit, proceeding, inquiry or investigation, to which
NDA is a party, or to which the property of NDA is subject, before or brought by
any court or governmental agency or body, domestic or foreign, 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 thereof or the consummation of the transactions contemplated in the
Purchase Agreement or the performance by the Company of its obligations
thereunder.
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO
SECTION 5(i)]
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Exhibit D
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Annex A
FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)
We are independent public accountants with respect to the Company
within the meaning of the 1933 Act and the applicable published 1933 Act
Regulations
(i) in our opinion, the audited financial statements and the related
financial statement schedules included in the Registration Statement and the
Prospectuses comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the published rules and regulations
thereunder;
(ii) on the basis of procedures (but not an examination in accordance
with generally accepted auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of the Company for the three
month period ended March 31, 1999 included in the Registration Statement and the
Prospectuses (collectively, the "Quarterly Financials"), a reading of the latest
available unaudited interim consolidated financial statements of the Company, a
reading of the minutes of all meetings of the stockholders and directors of the
Company and its subsidiaries and the Audit and Compensation Committees of the
Company's Board of Directors since January 1, 1999, inquiries of certain
officials of the Company and its subsidiaries responsible for financial and
accounting matters, a review of interim financial information in accordance with
standards established by the American Institute of Certified Public Accountants
in Statement on Auditing Standards No. 71, Interim Financial Information ("SAS
71"), with respect to the Quarterly Financials and such other inquiries and
procedures as may be specified in such letter, nothing came to our attention
that caused us to believe that:
(A) the Quarterly Financials included in the Registration Statement and
the Prospectuses do not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the 1933 Act Regulations
or any material modifications should be made to the unaudited consolidated
financial statements included in the Registration Statement and the Prospectuses
for them to be in conformity with generally accepted accounting principles;
(B) at a specified date not more than five days prior to the date of
this Agreement, there was any change in the capital stock of the Company and its
subsidiaries or any decrease in the net current assets or stockholders equity of
the Company and its subsidiaries or any increase in the long-term debt of the
Company and its subsidiaries, in each case as compared with amounts shown in the
latest balance sheet included in the Registration Statement, except in each case
for changes, decreases or increases that the Registration Statement discloses
have occurred or may occur; or
(C) for the period from March 31, 1999_ to a specified date not more
than five days prior to the date of this Agreement, there was any decrease in
consolidated net revenues or operating profit, or any increase in net loss or
basic net loss per share in each case as compared with the comparable period in
the preceding year, except in each case for any decreases that the Registration
Statement discloses have occurred or may occur;
M-1-
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(iii) based upon the procedures set forth in clause (ii) above and a
reading of the Selected Consolidated Financial Data included in the Registration
Statement and a reading of the financial statements from which such data were
derived, nothing came to our attention that caused us to believe that the
Selected Consolidated Financial Data included in the Registration Statement do
not comply as to form in all material respects with the disclosure requirements
of Item 301 of Regulation S-K of the 1933 Act, that the amounts included in the
Selected Consolidated Financial Data are not in agreement with the corresponding
amounts in the audited consolidated financial statements for the respective
periods or that the financial statements not included in the Registration
Statement from which certain of such data were derived are not in conformity
with generally accepted accounting principles;
(iv) we have compared the information in the Registration Statement
under selected captions with the disclosure requirements of Regulation S-K of
the 1933 Act and on the basis of limited procedures specified herein. nothing
came to our attention that caused us to believe that this information does not
comply as to form in all material respects with the disclosure requirements of
Items 302, 402 and 503(d), respectively, of Regulation S-K;
(v) we are unable to and do not express any opinion on the Pro Forma
Combining Statement of Operations (the "Pro Forma Statement") included in the
Registration Statement or on the pro forma adjustments applied to the historical
amounts included in the Pro Forma Statement; however, for purposes of this
letter we have:
(A) read the Pro Forma Statement;
(B) performed an audit or a review in accordance with SAS 71 of the
financial statements to which the pro forma adjustments were applied;
(C) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the basis for their
determination of the pro forma adjustments and whether the Pro Forma Statement
complies as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the Pro Forma Statement; and on the
basis of such procedures and such other inquiries and procedures as specified
herein, nothing came to our attention that caused us to believe that the Pro
Forma Statement included in the Registration Statement does not comply as to
form in all material respects with the applicable requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those statements; and
(vi) in addition to the procedures referred to in clause (ii) above, we
have performed other procedures, not constituting an audit, with respect to
certain amounts, percentages, numerical data and financial information appearing
in the Registration Statement, which are specified herein, and have compared
certain of such items with, and have found such items to be in agreement with,
the accounting and financial records of the Company.
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M-3
