EXHIBIT 1.01
8,300,000 Shares
XXXXXXXXX.XXX, INC.
Common Stock, $0.001 Par Value
UNDERWRITING AGREEMENT
[ ], 2000
[ ], 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxxxxxx & Xxxxx LLC
Wit Capital Corporation
As Representatives of the several Underwriters
c/o Morgan Xxxxxxx & Co., Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Xxxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the several Underwriters named in Schedule II hereto (the
"Underwriters"), and certain Stockholders of the Company named in Schedule I
hereto (the "Selling Stockholders") severally propose to sell to the several
Underwriters, an aggregate of 8,300,000 shares of the Company's common stock,
$0.001 par value (the "Firm Shares"), of which 4,073,139 shares are to be issued
and sold by the Company and 4,226,861 shares are to be sold by the Selling
Stockholders, each Selling Stockholder selling the amount set forth opposite
such Selling Stockholder's name in Schedule I hereto.
The Company also proposes to issue and sell to the several Underwriters not
more than an additional 1,245,000 shares of its common stock, $0.001 par value
(the "Additional Shares"), if and to the extent that you, as Managers of the
offering, shall have determined to exercise, on behalf of the Underwriters, the
right to purchase such shares of common stock granted to the Underwriters in
Section 3 hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares." The shares of common stock, $0.001
par value, of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "Common Stock." The
Company and the Selling Stockholders are hereinafter sometimes collectively
referred to as the "Sellers."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "Prospectus."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement.
1. Representations and Warranties. The Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the knowledge of the
Company, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole; all of the issued shares of
capital stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned directly
by the Company, free and clear of all liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and delivered by
the Company.
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(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock (including Shares to be sold by the
Selling Stockholders) outstanding prior to the issuance of the Shares have been
duly authorized and are validly issued, fully paid and non-assessable.
(h) The Shares to be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene any
provision of applicable law or the certificate of incorporation or bylaws of the
Company or any agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its subsidiaries, taken as
a whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its obligations
under this Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of the
Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.
(l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(m) Except as described in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, (1) the Company and its subsidiaries have not incurred any
material liability or obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business; (2) except for the
repurchase of shares of its capital stock in connection with the termination of
service by employees, consultants or
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directors of the Company pursuant to its stock options plans or restricted stock
purchase agreements, the Company has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or distribution
of any kind on its capital stock other than ordinary and customary dividends;
and (3) there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company and its subsidiaries taken as a whole,
except in each case as described in the Prospectus.
(n) The Company and its subsidiaries have good and marketable to all
personal property owned by them which is material to the business of the Company
and its subsidiaries taken as a whole, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not interfere in
any material respect with the use made and proposed to be made of such property
by the Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries, in each case except as described
in the Prospectus.
(o) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material 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 and trade names currently employed by them in
connection with the business now operated by them, and, except as described in
the Prospectus, neither the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a material
adverse affect on the Company and its subsidiaries, taken as a whole.
(p) No material labor dispute with the employees of the Company or any
of its subsidiaries exists, except as described in the Prospectus, or, to the
knowledge of the Company, is imminent; and the Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of any of
its principal suppliers, manufacturers or contractors that could reasonably be
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(q) The Company and its subsidiaries are collectively insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are reasonable and customary in the businesses in which
they are engaged; neither the Company nor any of its subsidiaries has been
refused any insurance coverage sought or applied for; and neither the Company
nor any of its subsidiaries has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, except as described in the
Prospectus.
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(r) The Company and its subsidiaries have complied and are in
compliance with all federal, state, local and foreign statutes, executive
orders, proclamations, regulations, rules, directives, decrees, ordinances and
similar provisions having the force or effect of law and all judicial and
administrative orders, rulings, determinations and common law concerning the
importation of merchandise, the export or reexport of products, services and
technology, and the terms and conduct of international transactions applicable
to the Company and its subsidiaries in connection with the conduct of the
Company's or any subsidiary's business (including as the same relates to record
keeping requirements) ("International Trade Laws and Regulations"); neither the
Company nor any of its subsidiaries has made or provided any material false
statement or material omission to any agency of any federal, state or local
government, purchasers of products, or foreign government or foreign agency, in
connection with the exportation of merchandise (including with respect to export
licenses, exceptions and other export authorizations and any filings required
for or related to exportation of any item), the importation of merchandise or
other approvals required by a foreign government or agency or any other
requirement relating to any International Trade Laws and Regulations; neither
the Company nor any of its subsidiaries has made any payment, offer, gift,
promise to give, or authorized or otherwise participated in, assisted or
facilitated any payment or gift related to the Company's or any subsidiary's
business that is prohibited by the United States Foreign Corrupt Practices Act.
(s) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective business, except to
the extent that the failure to obtain such certificates, authorizations and
permits would not have a material adverse effect on the Company and its
subsidiaries taken as a whole, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the Company and its
subsidiaries, taken as a whole, except as described the Prospectus.
(t) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(u) PricewaterhouseCoopers LLP are independent public accountants with
respect to the Company and its subsidiaries as required by the Securities Act.
(v) The historical consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), together with related schedules and notes, present fairly the
consolidated financial position, results of operations and changes in financial
position of the respective entities listed therein on the basis stated therein
at the respective dates or for the respective periods to which they apply; such
statements and related
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schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; the supporting schedules, if any, included in the
Registration Statement present fairly in accordance with generally accepted
accounting principles the information required to be stated therein; and the
other financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company.
(w) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be required to register as an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(x) The Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(y) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(z) There are no contracts, agreements or understandings between the
Company and any person (i) except as described in the Prospectus, granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company or (ii)
granting such person the right to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement, except such
as have been validly waived.
(aa) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or with
any person or affiliate located in Cuba.
(bb) The Nasdaq Stock Market, Inc. has approved the Shares to be issued
by the Company for listing on the Nasdaq National Market, subject only to
official notice of issuance.
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(cc) Except for the Shares and approximately [ ] shares
of Common Stock currently outstanding, all outstanding shares of Common Stock,
and all securities convertible into or exercisable or exchangeable for Common
Stock, are subject to valid and binding agreements (collectively, the "Lock-up
Agreements") that restrict the holders thereof from selling, making any short
sale of, granting any option for the purchase of, or otherwise transferring or
disposing of, any of such shares of Common Stock, or any such securities
convertible into or exercisable or exchangeable for Common Stock, for a period
of 90 days after the date of the Prospectus without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated.
2. Representations and Warranties of the Selling Stockholders. Each of the
Selling Stockholders, including the Insiders (defined below) severally and not
jointly, represents, warrants and covenants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Stockholder.
(b) The execution and delivery by such Selling Stockholder of, and the
performance by such Selling Stockholder of its obligations under, this
Agreement, the Stockholder Irrevocable Election to Sell (the "Irrevocable
Election"), the Selling Stockholder's Irrevocable Power of Attorney appointing
certain individuals as such Selling Stockholder's attorneys-in-fact to the
extent set forth therein (the "Power of Attorney"), and the Letter of
Transmittal and Custody Agreement signed by such Selling Stockholder and
ChaseMellon Shareholder Services, L.L.C., as Custodian, relating to the deposit
of the Shares to be sold by such Selling Stockholder (the "Custody Agreement"),
relating to the transactions contemplated hereby and by the Registration
Statement will not result in a breach of any of the terms and provisions of or
constitute a default under, the certificate of incorporation or bylaws of such
Selling Stockholder (if such Selling Stockholder is a corporation), or any
agreement or other instrument to which such Selling Stockholder is a party (or
by which any property or assets of such Selling Stockholder is bound or to which
any property or assets of such Selling Stockholder is subject) or any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over such Selling Stockholder which judgment, order or decree names the Selling
Stockholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by such Selling Stockholder of its obligations under this Agreement,
the Irrevocable Election, the Power of Attorney or the Custody Agreement of such
Selling Stockholder, except such as may be required by the Securities Act or by
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Shares.
(c) Such Selling Stockholder has, and on the Closing Date will have,
good and marketable title to the Shares to be sold by such Selling Stockholder
and full right, power (including, if such Selling Stockholder is a corporation
or similar entity, corporate power) and authority to enter into this Agreement,
the Irrevocable Election, the Power of Attorney and the Custody Agreement and to
sell, transfer and deliver the Shares to be sold by such Selling Stockholder.
(d) To such Selling Stockholder's knowledge, the Shares to be sold by
such Selling Stockholder pursuant to this Agreement have been duly authorized
and are validly issued, fully paid and non-assessable.
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(e) The Irrevocable Election, the Custody Agreement and the Power of
Attorney have been duly authorized, executed and delivered by such Selling
Stockholder and each is a valid and binding agreement of such Selling
Stockholder.
(f) Upon the delivery of and against payment for such Shares pursuant
to this Agreement, the Underwriters will obtain good and marketable title
thereto, free and clear of any security interests, claims liens, equities and
other encumbrances.
(g) All information furnished in writing by or on behalf of such
Selling Stockholder for use in the Registration Statement is, and on the Closing
Date will be, true, correct, and complete, and does not, and on the Closing Date
will not, contain any untrue statement of a material fact or omit to state any
material fact necessary to make such information not misleading, and all
information furnished in writing by or on behalf of such Selling Stockholder for
use in the Prospectus is, and on the Closing Date will be, true, correct, and
complete, and does not, and on the Closing Date will not, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make such information not misleading in the light of the circumstances under
which they were made.
(h) The sale of the Shares by such Selling Stockholder pursuant hereto
is not prompted by any material information concerning the Company or any of its
subsidiaries which is not set forth in the Registration Statement or the
documents incorporated by reference therein.
3. Additional Representations and Warranties of the Insider Selling
Stockholders. Each of the Selling Stockholders that is an Insider (defined
below) further represents and warrants to and agrees with each of the
Underwriters that such Selling Stockholder has reviewed the Company's
representations and warranties contained in Section 2 of this Agreement and,
based on such review (but without further investigation), such Selling
Stockholder does not have knowledge that, and nothing has come to such Selling
Stockholder's attention that would give such Selling Stockholder reason to
believe, (A) the representations and warranties of the Company contained in
Section 3 hereof are not true and correct or (B) the Registration Statement, at
the time it became effective, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, or that the Prospectus, as of the date of
the Prospectus, contains any untrue statement of a material fact or omits to
state a material fact required be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. "Insider" shall mean any Selling Stockholder that is (i)
an executive officer or director of the Company or (ii) a corporation or other
entity of which any person who is (or within the past twelve months was) a
director, executive officer, general partner, principal or member of such entity
is (or within the past twelve months was) an executive officer or director of
the Company.
4. Agreements to Sell and Purchase. Each Seller, severally and not
jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Seller at $_______ a share (the "Purchase
Price") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you
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may determine) that bears the same proportion to the number of Firm Shares to be
sold by such Seller as the number of Firm Shares set forth in Schedule II hereto
opposite the name of such Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell to the Underwriters the Additional Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 1,245,000
Additional Shares at the Purchase Price. If you, on behalf of the Underwriters,
elect to exercise such option, you shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the number of Additional Shares to be purchased by the Underwriters and the date
on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing, or which is described in the
Prospectus, (C) the grant of options to purchase Common Stock pursuant to the
Company's 1999 Stock Incentive Plan, (D) the issuance by the Company of shares
of Common Stock pursuant to the Company's 1999 Employee Stock Purchase Plan, (E)
the issuance by the Company of shares of Common Stock issuable under the
Registration Statement on Form S-1, file no. 333-80419 and (F) warrants issued
to real estate industry participants in consideration of listings. In addition,
each Selling Stockholder agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, initiate any
demand for the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
5. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable.
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The Sellers are further advised by you that the Shares are to be offered to the
public initially at $_________ a share (the "Public Offering Price") and to
certain dealers selected by you at a price that represents a concession not in
excess of $________ a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of $________ a share, to any Underwriter or to certain other dealers.
6. Payment and Delivery. Payment for the Firm Shares to be sold by each
Seller shall be made to such Seller in Federal or other funds immediately
available in New York City against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on ________ __, 2000 [4 DAYS AFTER DATE OF AGREEMENT], or at such other
time on the same or such other date, not later than ________ __, 2000 [5 DAYS
AFTER PRIOR DATE], as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the "Closing Date."
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 4 or at such other time on the same or on such other
date, in any event not later than ________ __, 2000 [9 DAYS AFTER OPTION
EXPIR.], as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
7. Conditions to the Underwriters' Obligations. The obligations of the
Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 5:30 p.m. (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any review
for a possible change that does not indicate the direction of the possible
change, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act; and
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(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or in
the earnings, business or operations of the Company and the Subsidiaries, taken
as a whole, from that set forth in the Prospectus (exclusive of any amendments
or supplements thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, to the effect set forth in Section 7(a) above and to the effect that
the representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has complied
with all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon his
or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by the Selling Stockholders (or
by their attorney-in-fact on their behalf), to the effect that the
representations and warranties of the Selling Stockholders (and, in the case of
the Selling Stockholders that are Insiders, that the additional representations
and warranties of the Selling Stockholders that are Insiders) contained in this
Agreement are true and correct as of the Closing Date and that each Selling
Stockholder has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before the
Closing Date.
(d) The Underwriters shall have received on the Closing Date an
opinion of Fenwick & West LLP, outside counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of Delaware, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ii) each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and each
significant subsidiary of the Company (as defined in Reg. (S)210.1-02 of
Regulation S-X) is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
-11-
(iii) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(iv) the shares of Common Stock (including Shares to be sold by
the Selling Stockholders) outstanding prior to the issuance of the Shares have
been duly authorized and are validly issued, non-assessable and to such
counsel's knowledge, fully paid;
(v) all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and, except as described in the Prospectus, are
owned directly by the Company or through a subsidiary of the Company and to such
counsel's knowledge are free and clear of all liens, encumbrances, equities or
claims;
(vi) the Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar rights
contained in the Company's Certificate of Incorporation or Bylaws, under the
Delaware General Corporation Law or under agreements filed as an Exhibit to the
Registration Statement, except such as have been waived;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will not
contravene any provision of applicable law or the certificate of incorporation
or bylaws of the Company or, to such counsel's knowledge, any agreement or other
instrument binding upon the Company or any of its subsidiaries that is material
to the Company and its subsidiaries, taken as a whole, or, to such counsel's
knowledge, any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its obligations
under this Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of the
Shares;
(ix) the statements (A) in the Prospectus under the captions
"Risk Factors-A relatively small number of our existing stockholders own a large
percentage of our voting stock," "Risk Factors-Future sales of our common stock
may depress our stock price," "Risk Factors-Our certificate of incorporation,
bylaws, Delaware law and other agreements contain provisions that could
discourage a takeover," "Risk Factors-Our agreement with the National
Association of REALTORS could be terminated by it," "Risk Factors-Our agreement
with the NAR contains a number of provisions that could restrict our
operations," "Risk Factors-If our operating agreement for XXXXXXX.xxx
terminates, the NAR would be able to operate the XXXXXXX.xxx web site," "Risk
Factors-We are subject to noncompetition provisions with the NAR which could
adversely affect our business," "Risk Factors-Our agreement with the National
Association of Home Builders contains provisions that could restrict our
operations," "Risk Factors-Our XxxxxxXxxxxx.xxx web site is subject to a number
of restrictions on how it may be operated," "Risk Factors-The NAR
-12-
could revoke its consent to our operating XxxxxxXxxxxx.xxx," "Risk Factors-The
National Association of REALTORS has significant influence over aspects of our
RealSelect subsidiary's corporate governance," "Risk Factors-The NAR can
restrict a change of control of Xxxxxxxxx.xxx," "Management-Indemnification of
Directors and Executive Officers and Limitation of Liability," "Related Party
Transactions," "Description of Capital Stock," "Shares Eligible for Future Sale"
and "Underwriters" and (B) in the Registration Statement in Items 14 and 15, in
each case insofar as such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(x) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required;
(xi) the Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as described
in the Prospectus, will not be required to register as an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended; and
(xii) such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and schedules included
therein and financial and statistical data derived therefrom, as to which such
counsel need not express any opinion) comply as to form in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder, (B) has no reason to believe that (except for financial
statements and schedules included therein and financial and statistical data
derived therefrom, as to which such counsel need not express any belief) the
Registration Statement and the prospectus included therein at the time the
Registration Statement became effective contained any 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 and (C) has no reason
to believe that (except for financial statements and schedules included therein
and financial and statistical data derived therefrom, as to which such counsel
need not express any belief) the Prospectus contains any untrue statement of a
material fact 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.
(e) The Underwriters shall have received on the Closing Date an
opinion of Fenwick & West LLP, counsel for the Selling Stockholders, dated the
Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Stockholders;
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(ii) the execution and delivery by or on behalf of each Selling
Stockholder of, and the performance by such Selling Stockholder of its
obligations under, this Agreement and the Irrevocable Election, the Power of
Attorney and the Custody Agreement of such Selling Stockholder will not result
in a breach of any of the terms and provisions of, or constitute a default
under, the certificate of incorporation or bylaws or trust documents, as
applicable, of such Selling Stockholder or, to such counsel's knowledge, any
agreement or other instrument to which upon such Selling Stockholder is a party
or, to such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over such Selling
Stockholder, which judgment, order or decree names such Selling Stockholder;
(iii) no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by each Selling Stockholder of its obligations under this Agreement
and the Irrevocable Election, the Power of Attorney and the Custody Agreement of
such Selling Stockholder, except such as may be required by the Securities Act
or by the securities or Blue Sky laws of the various states in connection with
offer and sale of the Shares;
(iv) each of the Selling Stockholders has the right, power
(including if such Selling Stockholder is a corporation or similar entity,
corporate power) and authority to enter into this Agreement and the Irrevocable
Election, the Power of Attorney and the Custody Agreement of such Selling
Stockholder and to sell, transfer and deliver the Shares to be sold by such
Selling Stockholder;
(v) the Irrevocable Election, the Power of Attorney and the
Custody Agreement of each Selling Stockholder has been duly authorized, executed
and delivered by such Selling Stockholder and are valid and binding agreements
of such Selling Stockholder, except as rights to indemnification and
contribution thereunder may be limited by applicable law and except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles;
(vi) upon the Underwriters obtaining control of the Shares to be
sold by the Selling Stockholders, the Underwriters will have acquired all rights
of the Selling Stockholders in such Shares free of any adverse claim.
(f) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in Sections 7(d)(vi),
7(d)(vii), 7(d)(ix) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriters") and 7(d)(xii) above.
With respect to Section 7(d)(xii) above, Fenwick & West and Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and discussion
of the contents thereof, but are without independent check or verification,
except as specified.
-14-
The opinion of Fenwick & West described in Section 7(d) and 7(e) above
shall be rendered to the Underwriters at the request of the Company and shall so
state therein.
With respect to Section 7(e) above, Fenwick & West LLP may rely upon
an opinion or opinions of counsel for any Selling Stockholders and, with respect
to factual matters, upon the representations of each Selling Stockholder
contained herein and in the Irrevocable Election, the Custody Agreement and the
Power of Attorney of such Selling Stockholder and in other documents and
instruments; provided that (A) each such counsel for the Selling Stockholders is
satisfactory to your counsel; (B) a copy of each opinion so relied upon is
delivered to you and is in form and substance satisfactory to your counsel; and
(C) copies of such Irrevocable Elections, Custody Agreements and Powers of
Attorney and of any such other documents and instruments shall be delivered to
you and shall be in form and substance satisfactory to your counsel and Fenwick
& West LLP shall state in their opinion that they are justified in relying on
each such other opinion.
(g) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from
PricewaterhouseCoopers LLP, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus; provided that the letter delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.
(h) The "Lock-up Agreements," each substantially in the form of
Exhibit A hereto, between you and certain shareholders, officers and directors
of the Company relating to sales and certain other dispositions of shares of
Common Stock or certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date.
(i) The Shares shall have received approval for listing, upon official
notice of issuance, on the Nasdaq National Market.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares and other matters related to the issuance of the Additional Shares.
8. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, five (5) signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without charge, prior
to 5:00 p.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 8(c) below, as many
copies of the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
-15-
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
you reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the Prospectus
is required by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the reasonable opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have been sold by
you on behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the twelve-month
period ending March 31, 2001 that satisfies the provisions of Section 11(a) of
the Securities Act and the rules and regulations of the Commission thereunder.
(f) During a period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of (i) all
reports to its stockholders and (ii) all reports, financial statements and proxy
or information statements filed by the Company with the Commission or any
national securities exchange.
(g) The Company will apply the proceeds from the sale of the Shares as
set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will use its best efforts to obtain and maintain in
effect the quotation of the Shares on the Nasdaq National Market and will take
all necessary steps to cause the Shares to be included on the Nasdaq National
Market as promptly as practicable and to maintain such inclusion for a period of
three years after the date hereof or until such earlier date as the Shares shall
be listed for regular trading privileges on another national securities exchange
approved by you.
(i) The Company will comply with all registration, filing and
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which may from time to time be applicable to the Company.
-16-
(j) The Company will comply with all provisions of all undertakings
contained in the Registration Statement.
(k) Prior to the Closing Date, the Company will not, directly or
indirectly, issue any press release or other communication and will not hold any
press conference with respect to the Company, or its financial condition,
results of operations, business, properties, assets, or prospects or this
offering, without your prior written consent.
(l) The Company agrees: (i) to enforce the terms of each Lock-up
Agreement and (ii) issue stop-transfer instructions to the transfer agent for
the Common Stock with respect to any transaction or contemplated transaction
that would constitute a breach of or default under the applicable Lock-up
Agreement. In addition, except with the prior written consent of Xxxxxx Xxxxxxx,
the Company agrees (i) not to amend or terminate, or waive any right under, any
Lock-up Agreement, or take any other action that would directly or indirectly
have the same effect as an amendment or termination, or waiver of any right
under, any Lock-up Agreement, that would permit any holder of shares of Common
Stock, or securities convertible into or exercisable or exchangeable for Common
Stock, to sell, make any short sale of, grant any option for the purchase of, or
otherwise transfer or dispose of, any of such shares of Common Stock or other
securities prior to the expiration of 90 days after the date of the Prospectus,
and (ii) not to consent to any sale, short sale, grant of an option for the
purchase of, or other disposition or transfer of shares of Common Stock, or
securities convertible into or exercisable or exchangeable for Common Stock,
subject to a Lock-up Agreement.
(m) The Company will place a restrictive legend on any shares of
Common Stock acquired by a person subject to a Lock-Up Agreement pursuant to the
exercise, after the date hereof and prior to the expiration of the 90-day period
after the date of the Prospectus, of any option granted under the option or
equity incentive plans described in the Prospectus, which legend shall restrict
the transfer of such shares prior to the expiration of such 90-day period.
(n) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel,
the Selling Stockholders' counsel and the Company's accountants in connection
with the registration and delivery of the Shares under the Securities Act and
all other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
cost of printing or producing any Blue Sky or Legal Investment memorandum in
connection with the offer and sale of the Shares under state securities laws and
all expenses in connection with the qualification of the Shares for offer and
sale under state securities laws as provided in Section 8(d) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky or Legal Investment memorandum, (iv) all filing fees and the reasonable
fees and disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Shares by the National
Association of Securities
-17-
Dealers, Inc., (v) all costs and expenses incident to listing the Shares on the
Nasdaq National Market, (vi) the cost of printing certificates representing the
Shares, (vii) the costs and charges of any transfer agent, registrar or
depositary, (viii) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the offering of the Shares, including, without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
pro rata cost of any aircraft chartered or limousines hired in connection with
the road show (allocated on the basis of representatives), and (ix) all other
costs and expenses incident to the performance of the obligations of the Company
and the Selling Stockholders hereunder for which provision is not otherwise made
in this Section. It is understood, however, that except as provided in this
Section, Section 9 entitled "Indemnity and Contribution", and the last paragraph
of Section 11 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes payable
on resale of any of the Shares by them and any advertising expenses connected
with any offers they may make.
9. Indemnity and Contribution. (a) The Company and the Selling
Stockholders that are Insiders, jointly and severally, agree to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein; provided, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such losses, claims, damages or liabilities, unless
such failure is the result of noncompliance by the Company with Section 8(a)
hereof. The liability of each Selling Stockholder that is an Insider under the
indemnity agreement contained in this paragraph 9(a) and the contribution
agreement contained in paragraphs 9(e) and 9(f) below shall be limited to an
amount equal to the proceeds received by such Selling Stockholder from the
offering of the Shares sold by such Selling Stockholder (and from the offering
of any other Shares hereunder which are reflected in the Prospectus (under the
caption "Principal and Selling Stockholders") as beneficially owned by such
Selling Shareholder prior to the offering (notwithstanding any disclaimer of
beneficial ownership
-18-
that may be in the Prospectus)). Notwithstanding anything herein to the
contrary, the Underwriters agree that they shall not seek indemnification under
this Section 9(a) from any Selling Stockholder that is an Insider unless the
Underwriters shall first have sought indemnity from the Company under Section
9(a) and the Company has not agreed to satisfy such request for indemnification
in full within 30 days; provided, however, that the Underwriters shall not be
-------- -------
required to effect such initial demand upon the Company and wait such 30-day
period if it would prejudice their right to indemnification from such Selling
Stockholders or if the Underwriters have a reasonable factual basis to believe
and actually believe that the Company will be unable to satisfy such initial
request for indemnification; and provided, further, that liability to each
-------- -------
Selling Stockholder that is an Insider under this Section 9(a) shall be limited
to an amount equal to the gross proceeds to such Selling Stockholder from the
sale of Shares sold by such Selling Stockholder under this agreement.
(b) Each Selling Stockholder (other than the Selling Stockholders that
are Insiders) agrees, severally and not jointly, to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, or is under common control with, or is controlled by, any
Underwriter, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder in its capacity
as a Selling Stockholder expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto,
and except insofar as such losses, claims, damages or liabilities are caused by
any such untrue statement or omission or alleged untrue statement or omission
based upon information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein; provided,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such failure
is the result of noncompliance by the Company with Section 8(a) hereof. The
aggregate liability of each Selling Stockholder under the indemnity agreement
contained in this paragraph and the contribution agreement contained in
paragraphs 9(e) and 9(f) below shall be limited to an amount equal to the
proceeds received by such Selling Stockholder from the offering of the Shares
sold by such Selling Stockholder.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Selling Stockholders, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company
-19-
or any Selling Stockholder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 9(a), 9(b) or 9(c), such person (the "Indemnified
Party") shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Party") in writing. If a party fails to give notice as
provided in this Section 9(d) and the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
prejudiced by the failure to give such notice, the party to whom notice was not
given shall, to the extent prejudiced by such failure to give notice, be
relieved from the obligation to provide indemnification under Section 9(a), 9(b)
or 9(c) in respect of the proceeding to which such notice would have related.
Notwithstanding the foregoing sentence, the failure to give such notice shall
not relieve the Indemnifying Party or parties from any liability which it or
they may have to the Indemnified Party for contribution or otherwise than on
account of the provisions of Section 9(a), 9(b) or 9(c). In case any such
proceeding shall be brought against any Indemnified Party, the Indemnifying
Party, upon request of the Indemnified Party, shall retain counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party and any
others the Indemnifying Party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own counsel
to conduct its defense, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel,
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them or (iii) there is or may be legal
defenses available to such Indemnified Party different from or in addition to
those available to the Indemnifying Party. It is understood that the
Indemnifying Party shall not, in respect of the legal expenses of any
Indemnified Party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (i) the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Underwriters and all
persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, (ii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section and (iii) the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Selling Stockholders and all
persons, if any, who
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control any Selling Stockholder within the meaning of either such Section, and
that all such fees and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for the Underwriters and such control persons of
any Underwriters, such firm shall be designated in writing by Xxxxxx Xxxxxxx &
Co. Incorporated. In the case of any such separate firm for the Company, and
such directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Stockholders and such control persons of any Selling Stockholders,
such firm shall be designated in writing by the Selling Stockholders
representing a majority of the Shares sold by all Selling Stockholders. The
Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnified Party from and against any loss or liability by reason
of such settlement or judgment. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such proceeding.
(e) To the extent the indemnification provided for in Section 9(a),
9(b) or 9(c) is unavailable to an Indemnified Party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Party under such paragraph, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Indemnifying Party or parties on the one hand and the
Indemnified Party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 9(e)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 9(e)(i) above but also the relative
fault of the Indemnifying Party or parties on the one hand and of the
Indemnified Party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Sellers on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the proceeds from the offering of the Shares (before
deducting expenses) received by each Seller and the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate Public Offering
Price of the Shares. The relative fault of the Sellers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Sellers or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 9 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint. The aggregate liability of
each Selling Stockholder under the contribution agreement contained in this
paragraph and paragraph 9(f) and under the indemnification agreement contained
in paragraphs 9(a) and 9(b) above shall be limited to an amount equal to the
proceeds
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received by such Selling Stockholder from the offering of the Shares sold by
such Selling Stockholder.
(f) The Sellers and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 9(e). The amount paid or payable
by an Indemnified Party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 9 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any Indemnified Party at law or in equity.
(g) The indemnity and contribution provisions contained in this
Section 9 and the representations, warranties and other statements of the
Company and the Selling Stockholders contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter, any Selling Stockholder or any person
controlling any Selling Stockholder or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance
of and payment for any of the Shares.
10. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the NASD, the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade,
(ii) trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses 10(a)(i) through 10(a)(iv),
such event, singly or together with any other such event, makes it, in your
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
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If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule II bears to
the aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 10 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Firm Shares and the aggregate number of Firm Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares to be purchased, and arrangements satisfactory
to you, the Company and the Selling Stockholders for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Stockholders. In any such case either you or the
relevant Selling Stockholders shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, on the Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional Shares
and the aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
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14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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In witness whereof, the undersigned have signed this Agreement as of the
date first above written:
Very truly yours,
XXXXXXXXX.XXX, INC.
By: ______________________________________
Name: ____________________________________
Title: ____________________________________
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
FleetBoston Xxxxxxxxx Xxxxxxxx, Inc.
Xxxxxxxxx & Xxxxx LLC
Wit Capital Corporation
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By: _____________________________________
Name: ___________________________________
Title: ___________________________________
[Xxxxxxxxx.xxx Follow-On Underwriting Agreement--Selling Stockholder Sig. Page]
The Selling Stockholders named in Schedule I
hereto, acting severally
By: _____________________________________
Name: ___________________________________
Title: Attorney-in-fact
[Xxxxxxxxx.xxx Follow-On Underwriting Agreement--Selling Stockholder Sig. Page]
SCHEDULE I
Number of
Firm Shares
Selling Stockholder To Be Sold
---------------------------------------------------- --------------
_________
_________
_________
_________
--------------
Total........ _________
==============
SCHEDULE II
Number of
Firm Shares
To Be
Underwriter Purchased
-------------------------------------------------------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated _________
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated _________
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation _________
FleetBoston Xxxxxxxxx Xxxxxxxx Inc. _________
Xxxxxxxxx & Xxxxx LLC _________
Wit Capital Corporation _________
---------------
Total............ _________
===============
Exhibit A
[FORM OF LOCK-UP LETTER]
December ___, 1999
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxxxxxx & Xxxxx LLC
Wit Capital Corporation
c/o Morgan Xxxxxxx & Co., Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx") propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with Xxxxxxxxx.xxx, Inc., a Delaware corporation (the "Company"),
providing for the public offering (the "Public Offering") by the several
Underwriters, including Xxxxxx Xxxxxxx (the "Underwriters"), of shares (the
"Shares") of the Common Stock, par value $0.001 per share, of the Company (the
"Common Stock").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 90 days after the date of the final prospectus relating
to the Public Offering (the "Prospectus"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (a) the sale of any Shares
to the Underwriters pursuant to the Underwriting Agreement or (b) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the
Public Offering. In addition, the undersigned agrees that, without the prior
written consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not,
during the period commencing on the date hereof and ending 90 days after the
date of the Prospectus, make any demand for or exercise any right with respect
to, the registration of any shares of Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock.
Notwithstanding the foregoing, if the undersigned is an individual, he or
she may transfer any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock either during his or her lifetime
or on death by will or intestacy to his or her immediate family or to a trust
the beneficiaries of which are exclusively the undersigned and/or a member or
members of his or her immediate family; provided further, if the undersigned is
a partnership, it may transfer any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock to a partner of
such partnership or a retired partner of such partnership who retires after the
date hereof, or to the estate of any such partner or retired partner, and any
partner who is an individual may transfer such shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock
either during his or her lifetime or on death by will or intestacy to his or her
immediate family or to a trust the beneficiaries of which are exclusively the
undersigned and/or a member or members of his or her immediate family; provided,
however, that prior to any transfer pursuant to this paragraph, each transferee
shall execute an agreement, satisfactory to Xxxxxx Xxxxxxx, pursuant to which
each transferee shall agree to receive and hold such shares of Common Stock, or
securities convertible into or exchangeable or exercisable for Common Stock,
subject to the provisions hereof, and there shall be no further transfer except
in accordance with the provisions hereof. For the purposes of this paragraph,
"immediate family" shall mean spouse, lineal descendant, father, mother, brother
or sister of the transferor.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
In the event that the Registration Statement shall not have been declared
effective on or before March 31, 2000, this Agreement shall be of no further
force or effect.
Very truly yours,
--------------------------------------------
(Name of Shareholder)
--------------------------------------------
(Signature of Authorized Signatory)
--------------------------------------------
(Address)
-2-
