3,575,000 Shares of Common Stock
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
UNDERWRITING AGREEMENT
_______________ __ , 1999
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
ING Barings LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC and
Wit Capital Corporation
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Company"), proposes, subject to the terms
and conditions stated herein, to issue and sell to the several underwriters
named in Schedule I hereto (the "Underwriters") an aggregate of 3,575,000
shares (the "Firm Shares") of its common stock, par value $.01 per share (the
"Common Stock"), and, for the sole purpose of covering over-allotments in
connection with the sale of the Firm Shares, at the option of the Underwriters,
up to an additional 536,250 shares (the "Additional Shares") of Common Stock.
The Firm Shares and any Additional Shares purchased by the Underwriters are
referred to herein as the "Shares." The Shares are more fully described in the
Registration Statement referred to below.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1
(No. 333-80593), and may have filed an amendment or amendments
thereto, for the registration of the Shares under the Securities Act
of 1933, as amended (the "Act"). Such registration statement,
including the prospectus, financial statements and schedules,
exhibits and all other documents filed as a part thereof, as amended
at the time of effectiveness of the registration statement, including
any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 of
the Rules and Regulations of the Commission under the Act (the
"Regulations"), is herein called the "Registration Statement" and the
prospectus, in the form first filed with the Commission pursuant to
Rule 424(b) of the Regulations or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) or Rule 434
filing is required, is herein called the
"Prospectus." The term "preliminary prospectus" as used herein means
a preliminary prospectus as described in Rule 430 of the Regulations.
(b) At the time of the effectiveness of the Registration
Statement or the effectiveness of any post-effective amendment to the
Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b) or Rule 434 of the Regulations,
when any supplement to or amendment of the Prospectus is filed with
the Commission and at the Closing Date and the Additional Closing
Date, if any (as hereinafter respectively defined), the Registration
Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects
with the applicable provisions of the Act and the Regulations and do
not or will not contain an untrue statement of a material fact and do
not or will not omit to state any material fact required to be stated
therein or necessary in order to make the statements therein (i) in
the case of the Registration Statement, not misleading and (ii) in
the case of the Prospectus, in light of the circumstances under which
they were made, not misleading. When the preliminary prospectus
relating to the Shares was first filed with the Commission (whether
filed as part of the registration statement for the registration of
the Shares or any amendment thereto or pursuant to Rule 424(a) of the
Regulations) and when any amendment thereof or supplement thereto was
first filed with the Commission, such preliminary prospectus and any
amendments thereof and supplements thereto complied in all material
respects with the applicable provisions of the Act and the
Regulations and did not contain an untrue statement of a material
fact and did not omit 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. No representation and warranty is made in this subsection
(b), however, with respect to any information contained in or omitted
from the Registration Statement or the Prospectus or any related
preliminary prospectus or any amendment thereof or supplement thereto
in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through the
Representatives as herein stated expressly for use in connection with
the preparation thereof. If Rule 434 is used, the Company will comply
with the requirements of Rule 434.
(c) PricewaterhouseCoopers LLP, who have certified the financial
statements and supporting schedules included in the Registration
Statement, are independent public accountants as required by the Act
and the Regulations.
(d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
set forth in the Registration Statement and the Prospectus, there has
been no material adverse change or any development involving a
prospective material adverse change in the business, prospects,
properties, operations, condition (financial or other) or results of
operations of the Company and its subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course of
business ("Material Adverse Effect"), and since the date of the
latest balance sheet presented in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries has
incurred or undertaken any liabilities or obligations, direct or
contingent, whether or not arising from transactions in the ordinary
course of business, which are material to the Company and its
subsidiaries taken as a
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whole, except for liabilities or obligations that are reflected in
the Registration Statement and the Prospectus.
(e) This Agreement and the transactions contemplated herein have
been duly and validly authorized by the Company and this Agreement
has been duly and validly executed and delivered by the Company.
(f) Neither the Company nor any of its subsidiaries is (i) in
violation of its respective certificate of incorporation or by-laws
(or other organizational documents), (ii) in violation of any law,
ordinance or regulation applicable to it, its business as now being
conducted and as described in the Registration Statement or the
ownership of its assets or (iii) in default in the performance of any
obligation, agreement or condition contained in any agreement,
instrument, franchise, license, permit, judgment, order or decree to
which the Company or any of its subsidiaries is a party or by which
it or any of its subsidiaries or their respective property or assets
is bound.
(g) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby do not
and will not (i) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an event which
with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any agreement, instrument, franchise,
license or permit to which the Company or any of its subsidiaries is
a party or by which any of such corporations or their respective
properties or assets may be bound or (ii) violate or conflict with
any provision of applicable law or the certificate of incorporation
or by-laws (or other organizational documents) of the Company or any
of its subsidiaries or any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets. No
consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective
properties or assets is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby, including the issuance, sale and delivery of the
Shares to be issued, sold and delivered by the Company hereunder,
except the registration under the Act of the Shares and such
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(h) All of the outstanding shares of Common Stock are duly and
validly authorized and issued, fully paid and nonassessable and were
not issued and are not now in violation of or subject to any
preemptive or similar rights. The Shares, when issued, delivered and
sold in accordance with this Agreement, will be duly and validly
issued and outstanding, fully paid and nonassessable, and will not
have been issued in violation of or be subject to any preemptive or
similar rights. The Company had, at June 30, 1999, an authorized and
outstanding capitalization as set forth under the caption
"Capitalization" in
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the Registration Statement and the Prospectus. The Common Stock, the
Firm Shares and the Additional Shares conform to the descriptions
thereof contained in the Registration Statement and the Prospectus.
(i) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. Each of the
Company and its subsidiaries is duly qualified and in good standing
as a foreign corporation in each jurisdiction in which the character
or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary,
except for those failures to be so qualified or in good standing
which will not, individually or in the aggregate, have a Material
Adverse Effect. Each of the Company and its subsidiaries has all
requisite power and authority, and all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses and
permits of and from all public, regulatory or governmental agencies
and bodies, to own, lease and operate its properties and conduct its
business as now being conducted and as described in the Registration
Statement and the Prospectus, and no such consent, approval,
authorization, order, registration, qualification, license or permit
contains a materially burdensome restriction not adequately disclosed
in the Registration Statement and the Prospectus. Each of the Company
and its subsidiaries has complied with all Federal, state, local and
foreign laws, ordinances, regulations and orders applicable to it,
its business as now being conducted and as described in the
Registration Statement or the ownership of its assets. 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
nonassessable and were not issued in violation of any preemptive or
similar rights and are owned directly or indirectly by the Company,
free and clear of any lien, encumbrance, claim, security interest,
restriction on transfer, stockholder's agreement, voting trust or
other defect of title whatsoever.
(j) Except as described in the Prospectus, there is no
litigation or governmental proceeding to which the Company or any of
its subsidiaries is a party or to which any property of the Company
or any of its subsidiaries is subject or which is pending or, to the
knowledge of the Company, contemplated against the Company or any of
its subsidiaries which might result in a Material Adverse Effect or
which is required to be disclosed in the Registration Statement and
the Prospectus, and there are no 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.
(k) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common
Stock to facilitate the sale or resale of the Shares.
(l) The financial statements, including the notes thereto, and
supporting schedules included in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the
Company as of the dates indicated and the results of its operations
and changes in cash flows for the periods specified; except as
otherwise
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stated in the Registration Statement, said financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the supporting
schedules included in the Registration Statement present fairly the
information required to be stated therein; and the pro forma
financial information included in the Registration Statement and the
Prospectus has been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial statements
and the assumptions used in the preparation thereof are, in the
Company's opinion, reasonable; and the other financial and
statistical information and data included in the Registration
Statement and the Prospectus is, in all material respects, accurately
presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
(m) Except as described in the Prospectus, no holder of
securities of the Company has any rights to the registration of
securities of the Company because of the filing of the Registration
Statement or otherwise in connection with the sale of the Shares
contemplated hereby.
(n) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration
as an "investment company" under the Investment Company Act of 1940.
(o) The Shares have been approved for quotation subject to
notice of issuance on the Nasdaq National Market System.
(p) No labor dispute with the employees of the Company or any of
its subsidiaries exists or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or
imminent labor dispute or disturbance by the employees of any of its
principal customers, suppliers, contractors or providers of
outsourced services that might have a Material Adverse Effect.
(q) Except as described in the Registration Statement and the
Prospectus, the Company and its subsidiaries own or possess valid and
enforceable licenses or other rights to use all inventions, patents,
patent applications, trademarks, service marks, trade names,
copyrights, technology, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), proprietary techniques
(including processes and substances) and other intellectual property
rights necessary to conduct the business now conducted or presently
contemplated to be conducted by the Company and its subsidiaries,
taken as a whole, as described in the Registration Statement and the
Prospectus ("Intellectual Property"), subject to such exceptions as
would not have a Material Adverse Effect. Other than as described in
the Registration Statement and the Prospectus: (i) there are no third
parties who have any rights in the Intellectual Property that could
preclude the Company or its subsidiaries from conducting its business
as currently conducted or as presently contemplated to be conducted
as described in the Registration Statement and the Prospectus; (ii)
there are no pending or, to the Company's knowledge, threatened
actions, suits, proceedings, investigations or claims by others
challenging the rights of the Company, its subsidiaries or (if the
Intellectual Property is licensed) the licensor thereof
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in any Intellectual Property owned or licensed to the Company or its
subsidiaries; (iii) the Company, its subsidiaries and (if the
Intellectual Property is licensed) to the Company's knowledge the
licensor thereof has not infringed, or received any notice of
infringement of or conflict with, any rights of others with respect
to the Intellectual Property; and (iv) there is no dispute between it
or any licensor with respect to any Intellectual Property, subject,
with respect to any of (i), (ii), (iii) or (iv), to such exceptions,
individually or in the aggregate, as would not have a Material
Adverse Effect.
(r) 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.
(s) 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.
(t) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the
business of the Company and its subsidiaries, 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 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 or contemplated by
the Prospectus.
(u) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any
such subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such subsidiary 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 result in a Material
Adverse Effect.
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(v) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(w) Except as described in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), the Company has not sold, issued or distributed any
shares of Common Stock during the six-month period preceding the date
hereof, including any sales pursuant to Rule 144A under, or
Regulation D or S of, the Act, other than shares issued pursuant to
employee benefit plans, qualified stock option plans or other
employee compensation plans or pursuant to outstanding options,
rights or warrants.
(x) No relationship, direct or indirect, exists between or among
the Company or any of its subsidiaries on the one hand, and the
directors, officers, stockholders, customers, suppliers or providers
of outsourced services of the Company or any of its subsidiaries on
the other hand, which is required by the Act to be described in the
Registration Statement and the Prospectus which is not so described.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the
Underwriters and the Underwriters, severally and not jointly, agree
to purchase from the Company, at a purchase price per share of
$__________, the number of Firm Shares set forth opposite the
respective names of the Underwriters in Schedule I hereto plus any
additional number of Shares which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the Shares shall be made at the offices of
Proskauer Rose LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at
such other place as shall be agreed upon by the Representatives and
the Company, at 9:00 A.M. on the third or fourth business day (as
permitted under Rule 15c6-1 under the Exchange Act) (unless postponed
in accordance with the provisions of Section 9 hereof), following the
date of the effectiveness of the Registration Statement (or, if the
Company has elected to rely upon Rule 430A of the Regulations, the
third or fourth business day (as permitted under Rule 15c6-1 under
the Exchange Act) after the determination of the initial public
offering price of the Shares), such time and date of payment and
delivery being herein called the "Closing Date". Payment shall be
made to the Company by certified or official bank check or checks
drawn in federal funds or similar same day funds payable to the order
of the Company or by wire transfer in same day funds at the option of
the Underwriters, against delivery to the Representatives
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for the respective accounts of the Underwriters of certificates for
the Shares to be purchased by them. Certificates for the Shares shall
be registered in such name or names and in such authorized
denominations as the Representatives may request in writing at least
two full business days prior to the Closing Date. The Company will
permit the Representatives to examine and package such certificates
for delivery at least one full business day prior to the Closing
Date.
(c) In addition, the Company hereby grants to the Underwriters
options to purchase up to an aggregate of 536,250 Additional Shares
at the same purchase price per share to be paid by the Underwriters
to the Company for the Firm Shares as set forth in this Section 2,
for the sole purpose of covering over-allotments in the sale of Firm
Shares by the Underwriters. Such options may be exercised at any time
and from time to time, in whole or in part, on or before the
thirtieth day following the date of the Prospectus, by written notice
by the Representatives to the Company. Each such notice shall set
forth the aggregate number of Additional Shares as to which an option
is being exercised and the date and time, as reasonably determined by
the Representatives, when the Additional Shares are to be delivered
(each such date and time being herein sometimes referred to as the
"Additional Closing Date"); provided, however, that no Additional
Closing Date shall be earlier -------- ------- than the Closing Date
or earlier than the second full business day after the date on which
the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been
exercised (unless such time and date are postponed in accordance with
the provisions of Section 9 hereof). Certificates for Additional
Shares shall be registered in such name or names and in such
authorized denominations as the Representatives may request in
writing at least two full business days prior to the applicable
Additional Closing Date. The Company will permit the Representatives
to examine and package such certificates for delivery at least one
full business day prior to the applicable Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter on an
Additional Closing Date shall be the number which bears the same ratio to the
aggregate number of Additional Shares being purchased on such Additional
Closing Date as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to 3,575,000, subject, however, to such adjustments to
eliminate any fractional shares as the Representatives in their sole discretion
shall make.
Payment for the Additional Shares shall be made by certified or
official bank check or checks drawn in federal funds or similar same day funds,
payable to the order of the Company, or by wire transfer in same day funds at
the option of the Underwriters at the offices of Proskauer Rose LLP, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other location as may be mutually
acceptable, upon delivery of the certificates for the Additional Shares to the
Representatives for the respective accounts of the Underwriters.
3. Offering.
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(a) Upon the Representatives' authorization of the release of
the Firm Shares, the Underwriters propose to offer the Shares for
sale to the public upon the terms set forth in the Prospectus.
(b) The Company and the Underwriters hereby agree that up to
178,750 of the Firm Shares to be purchased by the Underwriters (the
"Directed Shares") shall be reserved for sale by the Underwriters to
eligible employees of and certain persons designated by the Company
(the "Directed Shares Purchasers"), as part of the distribution of
the Offered Shares 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, provided, however, that under
no circumstances will Bear, ▇▇▇▇▇▇▇ & Co. Inc. or any other
Underwriter be liable to the Company or to any of the Directed Shares
Purchasers for any action taken or omitted in good faith in
connection with transactions effected with regard to the Directed
Shares Purchasers. To the extent that such Directed Shares are not
orally confirmed for purchase by such persons by the end of the first
day after the date of this Agreement, such Directed Shares will be
offered to the public as part of the underwritten offering
contemplated hereby.
4. Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
(a) If the Registration Statement has not yet been declared
effective, the Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective
as promptly as possible, and if Rule 430A is used or the filing of
the Prospectus is otherwise required under Rule 424(b) or Rule 434,
the Company will file the Prospectus (properly completed if Rule 430A
has been used) pursuant to Rule 424(b) or Rule 434 within the
prescribed time period and will provide evidence satisfactory to you
of such timely filing. If the Company elects to rely on Rule 434, the
Company will prepare and file a term sheet that complies with the
requirements of Rule 434.
The Company will notify you immediately (and, if requested by
you will confirm such notice in writing) (i) when the Registration
Statement and any amendments thereto become effective, (ii) of any
request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional
information, (iii) of the mailing or the delivery to the Commission
for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of the
initiation, or the threatening, of any proceedings therefor, (v) of
the receipt of any comments from the Commission, and (vi) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for
that purpose. If the Commission shall propose or enter a stop order
at any time, the Company will use its best effort to prevent the
issuance of any such stop order and, if issued, to obtain the lifting
of such order as soon as possible. The Company will not file any
amendment to the Registration
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Statement or any amendment of or supplement to the Prospectus
(including the prospectus required to be filed pursuant to Rule
424(b) or Rule 434) that differs from the prospectus on file at the
time of the effectiveness of the Registration Statement before or
after the effective date of the Registration Statement to which the
Representatives shall reasonably object in writing after being timely
furnished in advance a copy thereof.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred
as a result of which the Prospectus as then amended or supplemented
would, in the judgment of the Representatives or the Company, include
an untrue statement of a material fact or omit to state any material
fact required to be stated therein, in light of the circumstances
under which they were made, not misleading, or if it shall be
necessary, in the judgment of the Representatives or the Company, at
any time to amend or supplement the Prospectus or the Registration
Statement to comply with the Act or the Regulations, the Company will
notify you promptly and prepare and file with the Commission an
appropriate amendment or supplement (in form and substance
satisfactory to the Representatives) which will correct the statement
or omission and will use its best efforts to have any amendment to
the Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to you one signed copy of
the Registration Statement, including exhibits and all amendments
thereto, and the Company will promptly deliver to each of the
Underwriters such number of copies of any preliminary prospectus, the
Prospectus, the Registration Statement and all amendments of and
supplements to such documents, if any, as the Representatives may
reasonably request.
(d) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time of effectiveness of the Registration
Statement, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of
such jurisdictions as the Representatives may designate and to
maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be
obligated in connection therewith to qualify as a foreign corporation
or to execute a general consent to service of process.
(e) The Company will make generally available (within the
meaning of Section 11(a) of the Act) to its security holders and to
you as soon as practicable, but not later than 45 days after the end
of its fiscal quarter in which the first anniversary date of the
effective date of the Registration Statement occurs, an earnings
statement (in form complying with the provisions of Rule 158 of the
Regulations) covering a period of at least twelve consecutive months
beginning after the effective date of the Registration Statement.
(f) During the period of 180 days from the date of the
Prospectus, the Company will not, without the prior written consent
of Bear, ▇▇▇▇▇▇▇ & Co. Inc., issue, sell, offer or agree to sell,
grant any option for the sale of, pledge, make any short sale,
establish an open "put equivalent position" within the meaning of
Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended),
or otherwise dispose of, any Common
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Stock (or any securities convertible into, exercisable for or
exchangeable for Common Stock) of the Company or of any of its
subsidiaries or (ii) enter into any swap, derivative transaction 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, provided that the foregoing shall not apply to
(A) -------- the Shares to be sold hereunder, and (B) the issuance by
the Company of shares of Common Stock upon the exercise of any option
or warrant outstanding or the automatic conversion of any class of
securities outstanding on the date hereof and disclosed in the
Prospectus; and the Company will obtain the undertaking of each of
its officers, directors and stockholders not to engage in any of the
aforementioned transactions on their own behalf.
(g) 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.
(h) The Company will apply the proceeds from the sale of the
Shares as set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will use its best efforts to cause the Shares to
continue to qualify for inclusion in the Nasdaq National Market
System.
(j) The Company will use its best efforts to ensure that the
Directed Shares are restricted as required by the National
Association of Securities Dealers Inc. or the National Association of
Securities Dealers Inc. rules from sale, transfer, assignment, pledge
or hypothecation for a period of three (3) months following the date
of this Agreement. The Underwriters will notify the Company as to
which persons will need to be so restricted. At the request of the
Underwriters, the Company will direct the transfer agent to place a
stop transfer restriction upon such securities for such a period of
time. Should the Company release, or seek to release, from such
restrictions any of the Directed Shares, the Company agrees to
reimburse the Underwriters for any reasonable expenses (including,
without limitation, legal expenses) they incur in connection with
such release.
5. Payment of Expenses. Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including those in connection with (i)
preparing, printing, duplicating, filing and distributing the Registration
Statement, as originally filed and all amendments thereof (including all
exhibits thereto), any preliminary prospectus, the Prospectus and any
amendments or supplements thereto (including, without limitation, fees and
expenses of the Company's accountants and counsel), the underwriting documents
(including this Agreement and the Agreement Among Underwriters) and all other
documents related to the public offering of the Shares (including those
supplied to the Underwriters in quantities as hereinabove stated), (ii) the
issuance, transfer and delivery of the Shares to the Underwriters, including
any transfer or other taxes payable thereon, (iii) the
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qualification of the Shares under state or foreign securities or Blue Sky laws,
including the costs of printing and mailing a preliminary and final "Blue Sky
Survey", (iv) the fees of counsel for the Underwriters in connection with the
qualification of the Shares under state or foreign securities or Blue Sky laws
and in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers Inc., and such
counsel's disbursements in relation thereto, (v) quotation of the Shares on the
Nasdaq National Market System, (vi) filing fees of the Commission and the
National Association of Securities Dealers, Inc., (vii) the cost of printing
certificates representing the Shares and (viii) the cost and charges of any
transfer agent or registrar.
6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6, "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Proskauer Rose LLP
("Underwriters' Counsel"), pursuant to this Section 6 of any misstatement or
omission, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) The Registration Statement shall have become effective not
later than, if pricing pursuant to Rule 430A, 5:30 P.M., New York
time, on the date of this Agreement or, if pricing pursuant to a
pricing amendment, 12:00 P.M., New York time on the date an amendment
to the Registration Statement containing the public offering price
has been filed with the Commission, or at such later time and date as
shall have been consented to in writing by the Representatives; if
the Company shall have elected to rely upon Rule 430A or Rule 434 of
the Regulations, the Prospectus shall have been filed with the
Commission in a timely fashion in accordance with Section 4(a)
hereof; and, at or prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof shall have been issued and no
proceedings therefor shall have been initiated or threatened by the
Commission.
(b) At the Closing Date, you shall have received the opinion of
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for the Company, dated the
Closing Date addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, to the effect that:
(i) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation.
Each of the Company and its subsidiaries is duly qualified and
in good standing as a foreign corporation in each jurisdiction
in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures to
be so qualified or in good standing which will not, individually
or in the aggregate, have a Material Adverse Effect. Each of the
Company and its subsidiaries has all requisite power and
authority, and all necessary consents,
-12-
approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public,
regulatory or governmental agencies and bodies, to own, lease
and operate its respective properties and conduct its business
as now being conducted and as described in the Registration
Statement and the Prospectus. All of the issued and outstanding
capital stock of each subsidiary of the Company has been duly
and validly authorized and issued and is fully paid and
nonassessable and was not issued in violation of any preemptive
or similar rights and, is owned directly or indirectly by the
Company, free and clear of any lien, encumbrance, claim,
security interest, restriction on transfer, stockholders'
agreement, voting trust or other defect of title whatsoever.
(ii) The Company has authorized and outstanding capital
stock as set forth in the Registration Statement and the
Prospectus. All of the outstanding shares of Common Stock are
duly and validly authorized and issued, are fully paid and
nonassessable and were not issued in violation of or subject to
any preemptive or similar rights. The Shares to be delivered on
the Closing Date have been duly and validly authorized and, when
delivered by the Company in accordance with this Agreement, will
be duly and validly issued, fully paid and nonassessable and
will not have been issued in violation of or subject to any
preemptive or similar rights. The Common Stock, the Firm Shares
and the Additional Shares conform to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(iii) The Common Stock is duly authorized for quotation on
the Nasdaq National Market System.
(iv) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(v) To the knowledge of such counsel, there is no
litigation or governmental or other action, suit, proceeding or
investigation before any court or before or by any public,
regulatory or governmental agency or body pending or threatened
against, or involving the properties or business of, the Company
or any of its subsidiaries, which is of a character required to
be disclosed in the Registration Statement and the Prospectus
which has not been properly disclosed therein and there are no
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.
(vi) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
hereby by the Company do not and will not (A) conflict with or
result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of
time, or both, would constitute a default) under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any
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of its subsidiaries pursuant to, any agreement, instrument,
franchise, license or permit known to such counsel to which the
Company or any of its subsidiaries is a party or by which any of
such corporations or their respective properties or assets may
be bound or (B) violate or conflict with any provision of
applicable law or the certificate of incorporation or by-laws
(or other organizational documents) of the Company or any of its
subsidiaries, or, to the best knowledge of such counsel, any
judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of its subsidiaries
or any of their respective properties or assets. No consent,
approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any
public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any
of their respective properties or assets is required for the
execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except for
(1) such as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Shares by the Underwriters (as to which such counsel need
express no opinion) and (2) such as have been made or obtained
under the Act.
(vii) The statements (A) in the Prospectus under the
captions "Risk Factors--We face extensive government regulation
and legal uncertainties," "Business--Government Regulation and
Legal Uncertainties,""--Legal Proceedings,"
"Management--Executive Officers and Directors," "--Employment
Agreements," "--Stock Option Plans," "Description of Capital
Stock," "Shares Eligible for Future Sale" and "Underwriting" 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.
(viii) The Company is not, and upon consummation of the
transactions contemplated hereby, will not be, an "investment
company" as such term is defined in the Investment Company Act
of 1940, as amended.
(ix) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the
financial statements and schedules and other financial data
included therein, as to which no opinion need be rendered)
comply as to form in all material respects with the requirements
of the Act and the Regulations.
(x) The Registration Statement is effective under the Act,
and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or
any post-effective amendment thereof has been issued and no
proceedings therefor have been initiated or threatened by the
Commission and all filings required by Rule 424(b) of the
Regulations have been made.
(xi) To the best of such counsel's knowledge, no holder of
any security of the Company has any right, not effectively
satisfied or waived, to require
-14-
inclusion of shares of Common Stock or any other security of the
Company in the Registration Statement.
In addition, such opinion shall also contain a statement
that such counsel has participated in conferences with officers
and representatives of the Company, representatives of the
independent public accountants for the Company and the
Underwriters at which the contents of the Registration Statement
and the Prospectus and related matters were discussed and, no
facts have come to the attention of such counsel which would
lead such counsel to believe that either the Registration
Statement at the time it became effective (including the
information deemed to be part of the Registration Statement at
the time of effectiveness pursuant to Rule 430A(b) or Rule 434,
if applicable), or any amendment thereof made prior to the
Closing Date as of the date of such amendment, contained an
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus as
of its date (or any amendment thereof or supplement thereto made
prior to the Closing Date as of the date of such amendment or
supplement) and as of the Closing Date contained or contains an
untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading (it being understood that
such counsel need express no belief or opinion with respect to
the financial statements and schedules and other financial data
included therein).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of
the United States, the General Corporation Law of the State of
Delaware, the laws of the State of New York and jurisdictions in
which they are admitted, to the extent such counsel deems proper
and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably
satisfactory to Underwriters' Counsel) of other counsel
reasonably acceptable to Underwriters' Counsel, familiar with
the applicable laws; and (B) as to matters of fact, to the
extent they deem proper, on certificates of responsible officers
of the Company and certificates or other written statements of
officers of departments of various jurisdictions having custody
of documents respecting the corporate existence or good standing
of the Company and its subsidiaries, provided that copies of any
such statements or certificates shall be delivered to
Underwriters' Counsel. The opinion of such counsel for the
Company shall state that the opinion of any such other counsel
is in form satisfactory to such counsel and, in their opinion,
you and they are justified in relying thereon.
The opinion of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP described in
this Section 6(b) shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
(c) At the Closing Date you shall have received the opinion of
▇▇▇▇▇▇▇▇▇ Traurig ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇, regulatory counsel
for the Company, dated the
-15-
Closing Date addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, with respect to the
sufficiency of the disclosure contained in the Registration Statement
relating to regulatory matters and with respect to the Company's
compliance with all applicable government regulations relating to the
conduct of its business as described in the Registration Statement
and the Prospectus.
(d) All proceedings taken in connection with the sale of the
Firm Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to you and to Underwriters'
Counsel, and the Underwriters shall have received from said
Underwriters' Counsel a favorable opinion, dated as of the Closing
Date, with respect to the issuance and sale of the Shares, the
Registration Statement and the Prospectus and such other related
matters as the Representatives may reasonably require, and the
Company shall have furnished to Underwriters' Counsel such documents
as they request for the purpose of enabling them to pass upon such
matters.
(e) At the Closing Date, you shall have received a certificate
of the Chief Executive Officer and Chief Financial Officer of the
Company, dated the Closing Date, to the effect that (i) the condition
set forth in subsection (a) of this Section 6 has been satisfied,
(ii) as of the date hereof and as of the Closing Date, the
representations and warranties of the Company set forth in Section 1
hereof are accurate, (iii) as of the Closing Date, the obligations of
the Company to be performed hereunder on or prior thereto have been
duly performed and (iv) subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, the Company and its subsidiaries have not sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and there has not been any material
adverse change, or any development involving a material adverse
change, in the business, prospects, properties, operations, condition
(financial or otherwise) or results of operations of the Company and
its subsidiaries taken as a whole, except in each case as described
in or contemplated by the Prospectus.
(f) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter, from PricewaterhouseCoopers
LLP, independent public accountants for the Company, dated,
respectively, as of the date of this Agreement and as of the Closing
Date addressed to the Underwriters and in form and substance
satisfactory to the Representatives, to the effect that: (i) they are
independent certified public accountants with respect to the Company
within the meaning of the Act and the Regulations and stating that
the answer to Item 10 of the Registration Statement is correct
insofar as it relates to them; (ii) stating that, in their opinion,
the financial statements and schedules of the Company included in the
Registration Statement and the Prospectus and covered by their
opinion therein comply as to form in all material respects with the
applicable accounting requirements of the Act and the applicable
published rules and regulations of the Commission thereunder; (iii)
on the basis of procedures consisting of a reading of the latest
available unaudited interim consolidated financial statements of the
Company, and its subsidiaries, a reading of the minutes of meetings
and consents of the stockholders and boards of directors of the
Company and its subsidiaries and the
-16-
committees of such boards subsequent to December 31, 1998, inquiries
of officers and other employees of the Company and its subsidiaries
who have responsibility for financial and accounting matters of the
Company and its subsidiaries with respect to transactions and events
subsequent to December 31, 1998 and other specified procedures and
inquiries to a date not more than five days (three days in the case
of the letter delivered on the Closing Date) prior to the date of
such letter, nothing has come to their attention that would cause
them to believe that: (A) the unaudited consolidated financial
statements and schedules of the Company presented in the Registration
Statement and the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the applicable published rules and regulations of the Commission
thereunder or that such unaudited consolidated financial statements
are not fairly presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited consolidated financial statements of the
Company included in the Registration Statement and the Prospectus;
(B) with respect to the period subsequent to June 30, 1999, there
were, as of the date of the most recent available monthly
consolidated financial statements of the Company and its
subsidiaries, if any, and as of a specified date not more than five
days (three days in the case of the letter delivered on the Closing
Date) prior to the date of such letter, any changes in the capital
stock or long-term indebtedness of the Company or any decrease in the
net current assets or stockholders' equity of the Company, in each
case as compared with the amounts shown in the most recent balance
sheet presented in the Registration Statement and the Prospectus,
except for changes or decreases which the Registration Statement and
the Prospectus disclose have occurred or may occur or which are set
forth in such letter or (C) that during the period from June 30, 1999
to the date of the most recent available monthly consolidated
financial statements of the Company and its subsidiaries, if any, and
to a specified date not more than five days (three days in the case
of the letter delivered on the Closing Date) prior to the date of
such letter, there was (1) any decrease, as compared with the
corresponding period in the prior fiscal year, in total revenues, or
any increase, as compared with the corresponding period in the prior
fiscal year, in operating loss or the total or per share net loss or
(2) any decrease, as compared with the corresponding period in the
prior fiscal quarter, in revenues, except in any such case for
decreases or increases which the Registration Statement and the
Prospectus disclose have occurred or may occur or which are set forth
in such letter; (iv) nothing has come to their attention that would
cause them to believe that the pro forma financial information
included in the Registration Statement do not comply in all material
respects with the applicable accounting 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 such
financial information; and (v) stating that they have compared
specific dollar amounts, numbers of shares, percentages of revenues
and earnings, and other financial information pertaining to the
Company and its subsidiaries set forth in the Registration Statement
and the Prospectus, which have been specified by you prior to the
date of this Agreement, to the extent that such amounts, numbers,
percentages, and information may be derived from the general
accounting and financial records of the Company and its subsidiaries
or from schedules furnished by the Company, and excluding any
questions requiring an interpretation by legal counsel, with the
results
-17-
obtained from the application of specified readings, inquiries, and
other appropriate procedures specified by you set forth in such
letter, and found them to be in agreement.
(g) Prior to the Closing Date, the Company shall have furnished
to you such further information, certificates and documents as you
may reasonably request.
(h) You have shall received from each person who is a director,
officer or stockholder of the Company an agreement to the effect that
such person will not, directly or indirectly, without the prior
written consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc., offer, sell, offer or
agree to sell, grant any option to purchase, pledge, make any short
sale, establish an open "put equivalent position" within the meaning
of Rule 16a-1(h) under the Securities Exchange Act of 1934, as
amended), or otherwise dispose of, any Common Stock (or any
securities convertible into, exercisable for or exchangeable for
Common Stock) of the Company or of any of its subsidiaries or (ii)
enter into any swap, derivative transaction 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, for a period of 180 days after the date of the Prospectus.
(i) At the Closing Date, the Shares shall have been approved for
quotation on the Nasdaq National Market System.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to the Representatives
and to their counsel, all obligations of the Underwriters hereunder may be
cancelled by the Representatives at, or at any time prior to, the Closing Date
and the obligations of the Underwriters to purchase the Additional Shares may
be cancelled by the Representatives at, or at any time prior to, the Additional
Closing Date. Notice of such cancellation shall be given to the Company in
writing, or by telephone, telex or telegraph, confirmed in writing.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
against any and all losses, liabilities, claims, damages and expenses
whatsoever as incurred (including but not limited to attorneys' fees
and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which
they or any of them may become subject under the Act, the Exchange
Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the
registration of the Shares, as originally filed
-18-
or any amendment thereof, or any related preliminary prospectus or
the Prospectus, or in any supplement thereto or amendment thereof, or
arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that the Company will not be liable in any such case to the
extent but only to the extent that any such loss, liability, claim,
damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any
Underwriter through the Representatives expressly for use therein.
This indemnity agreement will be in addition to any liability which
the Company may otherwise have, including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed
the Registration Statement, and each other person, if any, who
controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against any losses, liabilities,
claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever
incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any
and all amounts paid in settlement of any claim or litigation),
jointly or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
registration statement for the registration of the Shares, as
originally filed or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue statement or alleged untrue statement
or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives expressly for
use therein; provided, however, that in no case shall any Underwriter
be liable or responsible for any amount -------- --------- in excess
of the underwriting discount applicable to the Shares purchased by
such Underwriter hereunder. This indemnity will be in addition to any
liability which any Underwriter may otherwise have including under
this Agreement. The Company acknowledges that the statements set
forth in the fifth, eighth and eleventh paragraphs under the caption
"Underwriting" in the Prospectus constitute the only information
furnished in writing by or on behalf of any Underwriter expressly for
use in the Registration Statement relating to the Shares as
originally filed or in any amendment thereof, any related preliminary
prospectus or the Prospectus or in any amendment thereof or
supplement thereto, as the case may be.
(c) In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon a request in writing, to indemnify and
hold harmless the Underwriters from and against any and all losses,
liabilities, claims, damages and
-19-
expenses incurred by them as a result of the failure of the Directed
Shares Purchasers to pay for and accept delivery of the Directed
Shares which, by the end of the day following the date of this
Agreement, were subject to a properly confirmed agreement to purchase
such Directed Shares.
(d) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof
is to be made against the indemnifying party under such subsection,
notify each party against whom indemnification is to be sought in
writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which it
may have under this Section 7). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled
to participate therein, and to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless (i) the employment of such
counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action,
(ii) the indemnifying parties shall not have retained counsel to have
charge of the defense of such action within a reasonable time after
notice of commencement of the action, or (iii) such indemnified party
or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to
those available to one or all of the indemnifying parties (in which
case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be
borne by the indemnifying parties. Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be liable
for any settlement of any claim or action effected without its
written consent; provided, however, that such consent was not
unreasonably withheld.
8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to which the Company and one or more of
the Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company and the Underwriters from
the offering of the Shares or, if such allocation is not permitted by
applicable law or indemnification is not available
-20-
as a result of the indemnifying party not having received notice as provided in
Section 7 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
and the Underwriters in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Underwriters shall be deemed to be in the same proportion
as (x) the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and (y) the
underwriting discounts and commissions received by the Underwriters,
respectively, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and of the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 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 which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
Section 8, (i) in no case shall any Underwriter be liable or responsible for
any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding the provisions of this Section 8
and the preceding sentence, 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. For purposes of this Section 8, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 8. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties,
notify each party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 8 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
provided, however, that such consent was not unreasonably withheld.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares
hereunder, and if the Firm Shares or
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Additional Shares with respect to which such default relates do not
(after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of
Firm Shares or Additional Shares, the Firm Shares and Additional
Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Shares set forth opposite their
respective names in Schedule I hereto bear to the aggregate number of
Firm Shares set forth opposite the names of the non-defaulting
Underwriters.
(b) In the event that such default relates to more than 10% of
the Firm Shares or Additional Shares, as the case may be, the
Representatives may in their discretion arrange for yourself or for
another party or parties (including any non-defaulting Underwriter or
Underwriters who so agree) to purchase such Firm Shares or Additional
Shares, as the case may be, to which such default relates on the
terms contained herein. In the event that within five calendar days
after such a default you do not arrange for the purchase of the Firm
Shares or Additional Shares, as the case may be, to which such
default relates as provided in this Section 9, this Agreement or, in
the case of a default with respect to the Additional Shares, the
obligations of the Underwriters to purchase and of the Company to
sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in
each case as provided in Section 5, 7(a) and 8 hereof) or the
Underwriters, but nothing in this Agreement shall relieve a
defaulting Underwriter or Underwriters of its or their liability, if
any, to the other Underwriters and the Company for damages occasioned
by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as
aforesaid, the Representatives or the Company shall have the right to
postpone the Closing Date or the applicable Additional Closing Date,
as the case may be, for a period, not exceeding five business days,
in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly
any amendment or supplement to the Registration Statement or the
Prospectus which, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "Underwriter" as
used in this Agreement shall include any party substituted under this
Section 9 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares and Additional
Shares.
10. Survival of Representations and Agreements. All representations
and warranties, covenants and agreements of the Underwriters and the Company
contained in this Agreement, including the agreements contained in Section 5,
the indemnity agreements contained in Section 7 and the contribution agreements
contained in Section 8, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
-22-
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the later of
when (i) the Representatives and the Company shall have received
notification of the effectiveness of the Registration Statement or
(ii) the execution of this Agreement. If either the initial public
offering price or the purchase price per Share has not been agreed
upon prior to 5:00 P.M., New York time, on the fifth full business
day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to the
Company or the Underwriters except as herein expressly provided.
Until this Agreement becomes effective as aforesaid, it may be
terminated by the Company by notifying you or by the Representatives
notifying the Company. Notwithstanding the foregoing, the provisions
of this Section 11 and of Section 1, 5, 7 and 8 hereof shall at all
times be in full force and effect.
(b) You shall have the right to terminate this Agreement at any
time prior to the Closing Date or the obligations of the Underwriters
to purchase Additional Shares at any time prior to the applicable
Additional Closing Date, as the case may be, if (A) any domestic or
international event or act or occurrence has materially disrupted, or
in the opinion of the Representatives will in the immediate future
materially disrupt, the market for the Company's securities or
securities in general; or (B) if trading on the New York or American
Stock Exchanges or the Nasdaq shall have been suspended, or minimum
or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, on the New
York or American Stock Exchanges or the Nasdaq by the New York or
American Stock Exchanges, the National Association of Securities
Dealers, Inc. or by order of the Commission or any other governmental
authority having jurisdiction; or (C) if a banking moratorium has
been declared by a state or federal authority or if any new
restriction materially adversely affecting the distribution of the
Firm Shares or the Additional Shares, as the case may be, shall have
become effective; or (D) (i) if the United States becomes engaged in
hostilities or there is an escalation of hostilities involving the
United States or there is a declaration of a national emergency or
war by the United States or (ii) if there shall have been such change
in political, financial or economic conditions if the effect of any
such event in (i) or (ii) as in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the offering,
sale and delivery of the Firm Shares or the Additional Shares, as the
case may be, on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall
be by telephone, telex, or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by the
Representatives as provided in Section 11(a) hereof or (ii) Section
9(b) or 11(b) hereof), or if the sale of the Shares provided for
herein is not consummated because any condition to the obligations of
the Underwriters set forth herein is not satisfied or because of any
refusal, inability or failure on the part of the Company to perform
any agreement herein or comply with any provision hereof, the Company
will, subject to demand by the Representatives, reimburse
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the Underwriters for all out-of-pocket expenses (including the fees
and expenses of their counsel), incurred by the Underwriters in
connection herewith.
12. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and
confirmed in writing, to such Underwriter c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇; if sent to the
Company, shall be mailed, delivered, or telegraphed and confirmed in writing to
the Company, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: Chief Financial
Officer.
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriters and the Company and the controlling
persons, directors, officers, employees and agents referred to in Section 7 and
8, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its
capacity as such, of Shares from any of the Underwriters.
14. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
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If the foregoing correctly sets forth the understanding
between you and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.
Very truly yours,
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer
Accepted as of the date first above written
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
ING Barings LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC and
Wit Capital Corporation
on behalf of themselves and the other
Underwriters named in Schedule I hereto
BY: BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By --------------------------
Name:
Title:
SCHEDULE I
Number of Firm
Name of Underwriter Shares to be Purchased
Bear, ▇▇▇▇▇▇▇ & Co. Inc
ING Barings LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
Wit Capital Corporation
Total.................... __________
