Exhibit 1.1
[Draft--2/4/00]
Juno Online Services, Inc.
5,000,000 Shares 1/
Common Stock
($.01 par value)
Form of Underwriting Agreement
New York, New York
February [ ], 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
PaineWebber Incorporated
Xxxxxxxxx & Xxxxx LLC
Xxxxxxxxx & Company, Inc.
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Juno Online Services, Inc., a corporation organized under
the laws of Delaware (the "Company"), proposes to sell to the several
underwriters named in Schedule I hereto (the "Underwriters"), for whom you
(the "Representatives") are acting as representatives, [3,320,000] shares of
Common Stock, $.01 par value ("Common Stock") of the Company, and the persons
named in Schedule II hereto (the "Selling Stockholders"), propose to sell to
the several Underwriters [1,680,000] shares of Common Stock) (said shares to
be issued and sold by the Company and shares to be sold by the Selling
Stockholders collectively being hereinafter called the "Underwritten
Securities"). The shares of Common Stock (the "Exercise Shares") to be sold
by the Selling Stockholders named in Schedule IV hereto (the "Management
Selling Stockholders") shall be issued by the Company to the Management
Selling Stockholders pursuant to the exercise of certain options (the
"Selling Stockholder Options"). The Company and the Selling Stockholders
named in Schedule II hereto also propose to grant to the Underwriters an
option to purchase up to 750,000 additional shares of Common Stock to cover
over-allotments (the "Option Securities"; the Option Securities, together
with the Underwritten Securities, being hereinafter called the "Securities").
To the extent there are no additional Underwriters listed on Schedule I other
than you, the term Representatives as used herein shall mean you, as
Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. Certain terms used
herein are defined in Section 17 hereof.
1. REPRESENTATIONS AND WARRANTIES.
(i) The Company represents and warrants to, and agrees
with, each Underwriter that:
--------
1/ Plus an option to purchase from the Company and the Selling Stockholders
up to 750,000 additional Securities to cover over-allotments.
2
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-94275) on Form S-1, including a
related preliminary prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a related preliminary prospectus,
each of which has previously been furnished to you. The Company will
next file with the Commission either (1) prior to the Effective Date of
such registration statement, a further amendment to such registration
statement (including the form of final prospectus) or (2) after the
Effective Date of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b). In the case of clause (2), the
Company has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in such
registration statement and the Prospectus. As filed, such amendment and
form of final prospectus, or such final prospectus, shall contain all
Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree
in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any date on which Option Securities are purchased, if such date
is not the Closing Date (a "settlement date"), the Prospectus (and any
supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and the rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement
did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and,
on the Effective Date, the Prospectus, if not filed pursuant to Rule
424(b), will not, and on the date of any filing pursuant to Rule 424(b)
and on the Closing Date and any settlement date, the Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no representations or warranties as to
the information contained in or omitted from the Registration
Statement, or the Prospectus (or any 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
specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto).
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation with full corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires such
qualification, except where the failure to be so qualified or be in
good standing would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and any of its subsidiaries considered as one enterprise
(a "Material Adverse Effect").
3
(d) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities have been duly and validly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the Securities are
duly listed, and admitted and authorized for trading, subject to
official notice of issuance, on the Nasdaq National Market; the
certificates for the Securities comply with the requirements of
Delaware law; the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for
the Securities except for such rights as have been effectively waived;
and, except as set forth in the Prospectus, no options, warrants or
other rights to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any securities for,
shares of capital stock of or ownership interests in the Company are
outstanding.
(e) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required.
(f) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company.
(g) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(h) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required (i) under the blue
sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus, (ii) by the National
Association of Securities Dealers, LLC (the "NASD") and (iii) by the
federal and provincial laws of Canada.
(i) None of the exercise of the Selling Stockholder Options,
the issue of the Exercise Shares by the Company, the issue and sale of
the Securities nor the consummation of any other of the transactions
herein contemplated nor the fulfillment of the terms hereof will (a)
conflict with, result in a breach or violation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
pursuant to the charter or by-laws of the Company, (b) conflict with,
result in a material breach or violation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
pursuant to (i) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company is a
party or bound or to which its property is subject or (ii) any statute,
law, rule, regulation, judgment, order or decree applicable to the
Company of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties.
4
(j) Except as disclosed in the Registration Statement, no
holders of securities of the Company have rights to the registration of
such securities under the Registration Statement.
(k) The historical financial statements and schedules of the
Company included in the Prospectus and the Registration Statement
present fairly in all material respects the financial condition,
results of operations and cash flows of the Company as of the dates and
for the periods indicated, comply as to form with the applicable
accounting requirements of the Act and have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted
therein). The selected financial and subscriber data set forth under
the caption "Selected Consolidated Financial Data" in the Prospectus
and Registration Statement fairly present, on the basis stated in the
Prospectus and the Registration Statement, the information included
therein.
(l) Except as disclosed in the Registration Statement, no
action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or
its property is pending or, to the best knowledge of the Company,
threatened that (i) could reasonably be expected to have a material
adverse effect on the performance of this Agreement or the consummation
of any of the transactions contemplated hereby or (ii) could reasonably
be expected to have a Material Adverse Effect, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(m) The Company owns or leases all such properties as are
reasonably necessary to the conduct of its operations as presently
conducted.
(n) The Company is not in violation or default of (i) any
provision of its charter or bylaws, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order
or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties, as applicable, except in the
case of clauses (ii) or (iii), any such violation or default which
would not, singly or in the aggregate, result in a Material Adverse
Effect.
(o) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and delivered their report with
respect to the audited financial statements and schedules included in
the Prospectus, are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published
rules and regulations thereunder.
(p) There are no transfer taxes or other similar fees or
charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Securities.
(q) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the
5
failure so to file would not have a Material Adverse Effect, whether or
not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto)) and has paid all taxes required to be paid by
it and any other assessment, fine or penalty levied against it, to the
extent that any of the foregoing is due and payable, except for any
such assessment, fine or penalty that is currently being contested in
good faith or as would not have a Material Adverse Effect, whether or
not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto).
(r) To the Company's knowledge, no labor problem or dispute
with the employees of the Company exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers,
contractors or customers, that could have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(s) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
adequate in accordance with customary industry standards in the
businesses in which it is engaged; all policies of insurance and
fidelity or surety bonds insuring the Company or its businesses,
assets, employees, officers and directors are in full force and effect;
the Company is in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the
Company under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights
clause; and the Company has no 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, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto).
(t) The Company possesses all licenses, certificates, permits
and other authorizations issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct its businesses,
except where the failure to possess such licenses, certificates,
permits and authorization, would not, singly or in the aggregate,
result in a Material Adverse Effect, and the Company has not received
any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(u) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit 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.
6
(v) The Company has not taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(w) The Company (i) is 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) has received and is in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct its businesses and (iii) to its
knowledge, has not received notice of any actual or potential liability
for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants,
except where such non-compliance with Environmental Laws, failure to
receive required permits, licenses or other approvals, or liability
would not, individually or in the aggregate, have a Material Adverse
Effect, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto). The Company has not been named
as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended.
(x) The Company has fulfilled its obligations, if any, under
the minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to
each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company are
eligible to participate and each such plan is in compliance in all
material respects with the presently applicable provisions of ERISA and
such regulations and published interpretations. The Company has not
incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary
course) or to any such plan under Title IV of ERISA.
(y) The Company owns, possesses, licenses or has other rights
to use, on reasonable terms, all patents, patent applications, trade
and service marks, trade and service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how
and other intellectual property (collectively, the "Intellectual
Property") necessary for the conduct of the Company's business as now
conducted or as proposed in the Prospectus to be conducted. Except as
set forth in the Prospectus under the caption "Business--Intellectual
Property," (a) to the Company's knowledge, there are no rights of third
parties to any such Intellectual Property; (b) to the Company's
knowledge, there is no material infringement by third parties of any
such Intellectual Property; (c) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by
others challenging the Company's rights in or to any such Intellectual
Property, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (d) to the Company's knowledge,
there is no pending or threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual
Property, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (e) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a
reasonable basis for any such claim; (f) to the Company's knowledge,
there is no
7
U.S. patent or published U.S. patent application which contains claims
that dominate any Intellectual Property described in the Prospectus as
being owned by or licensed to the Company or that interferes with the
issued or pending claims of any such Intellectual Property; and (g)
there is no prior act of which the Company is aware that would render
any U.S. patent held by the Company invalid or any U.S. patent
application held by the Company unpatentable which has not been
disclosed to the U.S. Patent and Trademark Office.
(z) The statements contained in the Prospectus under the
captions "Risk Factors --If we fail to adequately protect our
intellectual property or face a claim of intellectual property
infringement by a third party, we could lose our intellectual property
rights or be liable for significant damages" and "Business --
Intellectual Property," insofar as such statements summarize legal
matters, agreements, documents, or proceedings discussed therein, are
accurate and fair summaries of such legal matters, agreements,
documents or proceedings.
(aa) The Company has implemented a comprehensive, detailed
program to analyze and address the risk that the computer hardware and
software used by it may be unable to recognize and properly execute
date-sensitive functions involving certain dates prior to and any dates
after December 31, 1999 (the "Year 2000 Problem"), and has determined
that such risk will be remedied on a timely basis without material
expense and will not have a Material Adverse Effect; and the Company
believes that each supplier, vendor, customer service organization used
by the Company has remedied or will remedy on a timely basis the Year
2000 Problem, except to the extent that a failure to remedy by any such
supplier, vendor or customer service organization would not have a
Material Adverse Effect. The Company is in substantial compliance with
the Commission's staff legal bulletin No. 5 dated January 12, 1998
related to Year 2000 compliance, as amended to date.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
(ii) Each Selling Stockholder represents and warrants to,
and agrees with, each Underwriter that:
(a) Such Selling Stockholder is, or in the case of the
Management Selling Stockholders, will be upon exercise of their Selling
Stockholder Options, the record and beneficial owner of the Securities
to be sold by it hereunder free and clear of all liens, encumbrances,
equities and claims and has or will have duly endorsed such Securities
in blank, and, assuming that each Underwriter acquires its interest in
the Securities it has purchased from such Selling Stockholder without
notice of any adverse claim (within the meaning of Section 8-105 of the
New York Uniform Commercial Code ("UCC")), each Underwriter that has
purchased such Securities delivered on the Closing Date to The
Depository Trust Company or other securities intermediary by making
payment therefor as provided herein, and that has had such Securities
credited to the securities account or accounts of such Underwriters
maintained with The Depository Trust Company or such other securities
intermediary will have acquired a security entitlement (within the
meaning of Section 8-102(a)(17) of the UCC) to such Securities
purchased by such Underwriter,
8
and no action based on an adverse claim (within the meaning of Section
8-105 of the UCC) may be asserted against such Underwriter with respect
to such Securities.
(b) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(c) Certificates in negotiable form for such Selling
Stockholder's Securities have been placed in custody, or in the case of
the Management Selling Stockholders, will be placed into custody
immediately prior to the Closing upon irrevocable exercise of the
Selling Stockholder Options (as represented to the Custodian in a
letter of assurances to be executed by the Management Selling
Stockholders prior to the Execution Time), for delivery pursuant to the
terms of this Agreement, under a Custody Agreement and Power of
Attorney duly authorized (if applicable) executed and delivered by such
Selling Stockholder, in the form heretofore furnished to you (the
"Custody Agreement") with Continental Stock Transfer & Trust Company,
as Custodian (the "Custodian"); the Securities represented by the
certificates so held in custody for each Selling Stockholder are
subject to the interests hereunder of the Underwriters; the
arrangements for custody and delivery of such certificates, made by
such Selling Stockholder hereunder and under the Custody Agreement, are
not subject to termination by any acts of such Selling Stockholder, or
by operation of law, whether by the death or incapacity of such Selling
Stockholder or the occurrence of any other event; and if any such
death, incapacity or any other such event shall occur before the
delivery of such Securities hereunder, certificates for the Securities
will be delivered by the Custodian in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if such
death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice of such death,
incapacity or other event.
(d) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except
such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters in
the manner contemplated herein and in the Prospectus and such other
approvals as have been obtained.
(e) Neither the sale of the Securities being sold by such
Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder or the
fulfillment of the terms hereof by such Selling Stockholder will
conflict with, result in a material breach or violation of, or
constitute a default under (i) any law or the charter or by-laws of
such Selling Stockholder, (ii) the terms of any indenture or other
agreement or instrument to which such Selling Stockholder or any of its
subsidiaries is a party or bound, or (iii) any judgment, order or
decree applicable to such Selling Stockholder or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Stockholder or any of its subsidiaries.
(f) Such Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in this Section
1 are not true and correct in all material respects, is familiar with
the Registration Statement and has no actual knowledge
9
of any material fact, condition or information not disclosed in the
Prospectus or any supplement thereto which has adversely affected or
may adversely affect the business of the Company or any of its
subsidiaries; and the sale of Securities by such Selling Stockholder
pursuant hereto is not prompted by any information concerning the
Company or any of its subsidiaries which is not set forth in the
Prospectus or any supplement thereto.
(g) In respect of any statements in or omissions from the
Registration Statement or the Prospectus or any supplements thereto
made in reliance upon and in conformity with information furnished in
writing to the Company by any Selling Stockholder specifically for use
in connection with the preparation thereof, such Selling Stockholder
hereby makes the same representations and warranties to each
Underwriter as the Company makes to such Underwriter under paragraph
(i)(b) of this Section.
Any certificate signed by any Selling Stockholder (or if
applicable, any officer of any Selling Stockholder) and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by such Selling
Stockholder, as to matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company and the Selling Stockholders agree, severally and not jointly, to sell
to each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company and the Selling Stockholders, at a purchase price of
$[ ] per share, the amount of the Underwritten Securities set forth opposite
such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company and the Selling
Stockholders hereby grant an option to the several Underwriters to purchase,
severally and not jointly, up to 750,000 Option Securities at the same purchase
price per share as the Underwriters shall pay for the Underwritten Securities.
Said option may be exercised only to cover over-allotments in the sale of the
Underwritten Securities by the Underwriters. Said option may be exercised in
whole or in part at any time (but not more than once) on or before the 30th day
after the date of the Prospectus upon written or telegraphic notice by the
Representatives to the Company setting forth the number of shares of the Option
Securities as to which the several Underwriters are exercising the option and
the settlement date. The number of Option Securities to be purchased by each
Underwriter shall be the same percentage of the total number of shares of the
Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional shares. The number of Option Securities to be sold by the Company and
each Selling Stockholder shall be the same percentage of the total number of
Option Securities to be sold by each of the Company and the Selling Stockholders
as each of the Company and the Selling Stockholders is selling of the
Underwritten Securities.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
[ ], 2000, or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, which date and
time may be postponed by agreement among the Representatives, the Company and
the Selling Stockholders or as provided in Section 9 hereof (such date and time
of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall
10
be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the respective aggregate purchase prices of the Securities
being sold by the Company and the Selling Stockholders to or upon the order of
the Company and the Selling Stockholder by wire transfer payable in same-day
funds to the accounts specified by the Company and the Selling Stockholders.
Delivery of the Underwritten Securities and the Option Securities shall be made
through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct and except for Securities only
represented by physical certificates. Delivery of Securities represented by
physical certificates shall be made at such location as Xxxxxxx Xxxxx Xxxxxx
shall reasonably designate at least one Business Day in advance of the Closing
Date. Certificates for such Securities shall be registered in such names and in
such denominations as Xxxxxxx Xxxxx Barney may request not less than two
Business Days in advance of the Closing Date. The Company agrees to have such
Securities available for inspection, checking and packaging by the
Representatives in New York, New York, not later than 1:00 PM on the Business
Day prior to the Closing Date.
Each Selling Stockholder will pay all applicable state
transfer taxes, if any, involved in the transfer to the several Underwriters of
the Securities to be purchased by them from such Selling Stockholder and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company and the
Custodian, on behalf of the Selling Stockholders named in Schedule II hereto,
will deliver the Option Securities (at the expense of the Company) through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct and except for Securities represented by physical
certificates, for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company and the Selling Stockholders
by wire transfer payable in same-day funds to the accounts specified by the
Company and the Selling Stockholders hereto. Delivery of any Option Securities
represented by physical certificates and any Option Securities to be sold by the
Management Selling Stockholders shall be made in the same manner as the
Underwritten Securities represented by physical certificates and sold by the
Management Selling Stockholders. If settlement for the Option Securities occurs
after the Closing Date, the Company and the Selling Stockholders will deliver to
the Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. AGREEMENTS.
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any such
proposed amendment or supplement to
11
which you reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under Rule
424(b), the Company will cause the Prospectus, properly completed, and
any supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence satisfactory to the Representatives of such
timely filing. The Company will promptly advise the Representatives (1)
when the Registration Statement, if not effective at the Execution
Time, shall have become effective, (2) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
Statement shall have been filed with the Commission, (3) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (4)
of any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or
for any supplement to the Prospectus or for any additional information,
(5) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if, in the
reasonable discretion of the Company, after consultation with the
Representatives, it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act or the
rules thereunder, the Company promptly will (1) notify the
Representatives of any such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance; and (3) supply any supplemented
Prospectus to you in such quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary Prospectus and
the Prospectus and any supplement thereto as the Representatives may
reasonably request.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate and will maintain
such qualifications in effect so long as required for the distribution
of the
12
Securities; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale
of the Securities, in any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish
or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange
Act, any other shares of Common Stock or any securities convertible
into, or exercisable, or exchangeable for, shares of Common Stock or
publicly announce an intention to effect any such transaction, for a
period of 90 days after the date of the Underwriting Agreement,
PROVIDED, HOWEVER, that the Company may issue and sell Common Stock
pursuant to any employee stock option plan, stock ownership plan or
dividend reinvestment plan of the Company in effect at the Execution
Time and the Company may issue Common Stock issuable upon the
conversion of securities or the exercise of warrants outstanding at the
Execution Time, and PROVIDED, FURTHER, that the Company may issue
shares of Common Stock in connection with any acquisition of another
company if the terms of such issuance provide that such Common Stock
shall not be resold prior to the expiration of the 90-day period
referred in this paragraph (f).
(g) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary
Prospectus, the Prospectus, and each amendment or supplement to any of
them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, each Preliminary Prospectus,
the Prospectus, and all amendments or supplements to any of them, as
may, in each case, be reasonably requested for use in connection with
the offering and sale of the Securities; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the
Securities, including any stamp or transfer taxes in connection with
the original issuance of the Exercise Shares or the issuance and sale
of the Securities; (iv) the printing (or reproduction) and delivery of
this Agreement, any blue sky memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (v) the registration of the Securities
under the Exchange Act and the listing of the Securities on the Nasdaq
National Market; (vi) any registration or qualification of the
Securities for offer and sale under the securities or blue sky laws of
the several states (including filing fees and the reasonable fees and
expenses of counsel for the Underwriters relating to such registration
and qualification); (vii) any filings required to be made with the
National Association of Securities Dealers, Inc. (including filing fees
and the reasonable fees and expenses of counsel for the Underwriters
relating to such filings); (viii) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities; (ix) the
fees and expenses of the Company's accountants and the fees and
expenses of counsel (including local and special counsel, if
13
any) for the Company; and (x) all other costs and expenses incident to
the performance by the Company of its obligations hereunder.
(ii) Each Selling Stockholder agrees with the several
Underwriters that:
(a) If such Selling Stockholder is listed on Schedule III
hereto, such Selling Stockholder will not, without the prior written
consent of Xxxxxxx Xxxxx Barney Inc., offer, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, or file (or
participate in the filing of) a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act with respect to, any shares
of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock, or publicly
announce an intention to effect any such transaction, for a period of
90 days after the date of the Underwriting Agreement, other than shares
of Common Stock disposed of as bona fide gifts approved by Xxxxxxx
Xxxxx Xxxxxx Inc; PROVIDED, HOWEVER, that such Selling Stockholder may
transfer the Common Stock (i) as a BONA FIDE gift or gifts, provided
that the donee or donees thereof agree to be bound by the restrictions
set forth herein, (ii) as a distribution to partners, members or
stockholders of such Selling Stockholder, provided that such
distributees agree in writing to be bound by the restrictions set forth
herein, or (iii) to any trust for the direct or indirect benefit of
such Selling Stockholder or the immediate family of such Selling
Stockholder, provided that the trustee of the trust agrees to be bound
by the restrictions set forth herein. For purposes herein, "immediate
family" shall mean any relationship by blood, marriage or adoption, not
more remote than first cousin; and PROVIDED, FURTHER, that this
paragraph shall not include any shares of capital stock acquired by
such Selling Stockholder in the public markets after the date of this
Agreement.
(b) Such Selling Stockholder will not take any action designed
to or which has constituted or which might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(c) Such Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Securities by an underwriter
or dealer may be required under the Act, of (i) any material change in
the Company's condition (financial or otherwise), prospects, earnings,
business or properties, (ii) any change in information in the
Registration Statement or the Prospectus relating to such Selling
Stockholder or (iii) any new material information relating to the
Company or relating to any matter stated in the Prospectus, in each
case which comes to the attention of such Selling Stockholder.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and the Selling Stockholders made in any certificates pursuant to
the provisions hereof,
14
to the performance by the Company and the Selling Stockholders of their
respective obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Prospectus,
or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused Xxxxxxx,
Phleger & Xxxxxxxx LLP, counsel for the Company, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed
to the Representatives, to the effect that:
(i) the Company is duly incorporated and is validly
existing as a corporation in good standing under the
laws of the State of Delaware; the Company has the
corporate power and authority to own or lease, as the
case may be, and to operate its properties and
conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or
supplement thereto); and the Company is duly
qualified to transact business and is in good
standing under the laws of the State of New York;
(ii) the authorized capital stock of the Company under the
heading "Actual" under the caption "Capitalization"
is as set forth in the Prospectus; the statements set
forth under the caption "Description of Capital
Stock" in the Prospectus, insofar as such statements
purport to summarize certain provisions of the
capital stock of the Company, provide a fair summary
of such provisions; the shares of Common Stock
underlying the Selling Stockholder Options have been
duly authorized; the shares of Common Stock of the
Company outstanding prior to the issuance of the
Securities have been duly authorized and validly
issued and, to such counsel's knowledge, are fully
paid and nonassessable; the Securities have been duly
authorized, and, when issued and delivered to the
Underwriters against payment therefor in accordance
with the terms of this Agreement, will be fully paid
and nonassessable; the Securities have been approved
for quotation on the Nasdaq National Market, upon
issuance as contemplated by this Agreement; the form
of certificate for the Securities conforms in all
material respects to the requirements of the Delaware
General Corporation Law; to such counsel's knowledge,
the holders of outstanding shares of capital stock of
the Company are not entitled to preemptive or other
rights to subscribe for the Securities except for
such rights as have been effectively waived; and, to
such counsel's knowledge, except as described in the
Prospectus, there are no outstanding securities of
the Company convertible or exchangeable into, or
evidencing the right to purchase or subscribe for,
any shares of capital stock of the Company and there
are no outstanding or authorized options, warrants or
rights of
15
a similar character obligating the Company to issue
any shares of its capital stock or any securities
convertible or exchangeable into or evidencing the
right to purchase or subscribe for, any shares of
such stock;
(iii) to the knowledge of such counsel (A) there are no
legal or governmental proceedings pending or
threatened against the Company, or to which the
Company or any of its properties are subject, which
are required to be disclosed in the Registration
Statement or Prospectus (or any amendment or
supplement thereto) that are not so described and (B)
there are no agreements, contracts, indentures,
leases or other instruments that are required to be
described in the Registration Statement or Prospectus
(or any amendment or supplement thereto) or to be
filed as an exhibit to the Registration Statement
that are not so described or filed, as the case may
be;
(iv) the Registration Statement and all post-effective
amendments, if any, have become effective under the
Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been
made in accordance with Rule 424(b); to the knowledge
of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceedings for that purpose are
pending before or contemplated by the Commission;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the Company is not an Investment Company as defined
in the Investment Company Act of 1940, as amended;
(vii) no consent, approval, authorization or other order
of, or registration or filing with, any court,
regulatory body, administrative agency or other
governmental body, agency or official is required on
the part of the Company (except (A) as have been
obtained under the Act or (B) such as may be required
under state securities or Blue Sky laws governing the
purchase and distribution of the Securities, as to
which such counsel expresses no opinion) for the
valid issuance and sale of the Securities to the
Underwriters as contemplated by this Agreement;
(viii) none of the exercise of the Selling Stockholder
Options, the issue of the Exercise Shares, the offer,
sale or delivery of the Securities, the execution,
delivery or performance by the Company of this
Agreement, compliance by the Company with the
provisions of this Agreement, nor the consummation by
the Company of the transactions herein contemplated
(A) violates the charter or by-laws of the Company,
or (B) constitutes a breach of, or a default under,
any agreement, indenture, lease, or other instrument
to which the Company is a party or any of its
properties is bound (i) as a result of the private
placement of the Company's Series B Convertible
Preferred Stock in March 1999 or (ii) that is an
exhibit to the Registration Statement, which breach
or default, individually or in the aggregate, would
reasonably be expected to have a Material Adverse
Effect on the Company or (C) will result in any
violation of any existing
16
law or regulation (other than applicable state
securities and blue sky laws, as to which such
counsel need express no opinion), or any ruling,
judgment, injunction, order or decree known to us and
applicable to the Company or any of its or their
properties; and
(ix) to such counsel's knowledge and except as disclosed
in the Prospectus, no holders of securities of the
Company have the right to have any Common Stock or
other securities of the Company included in the
Registration Statement (except for such rights as
have been effectively waived).
In addition, such counsel shall state that:
Such counsel participated in conferences with certain officers
and other representatives of the Company, its independent public
accountants, the Underwriters and the Underwriters' counsel at which
the contents of the Registration Statement, the Prospectus and related
matters were discussed. Such counsel is not, however, passing upon, and
does not assume any responsibility for, and has not independently
checked or verified, the accuracy, completeness or fairness of the
information contained in the Registration Statement and the Prospectus.
Such counsel shall state, however, that based upon their
participation as described in the preceding paragraph, (i) they are of
the opinion that the Registration Statement and Prospectus (other than
the consolidated financial statements, including the notes and
schedules thereto, and the other financial and statistical data
included in the Registration Statement and Prospectus, as to which they
express no opinion), at the time the Registration Statement became
effective, complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations
thereunder, (ii) they confirm that they have no reason to believe that
the Registration Statement (other than the consolidated financial
statements including notes and schedules and other financial
statistical information included in the Registration Statement, as to
which they express no belief), 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, or (iii) they
confirm that they have no reason to believe the Prospectus (other than
the consolidated financial statements included the notes and schedules
thereto, and the other financial and statistical data included in the
Prospectus, as to which they express no belief), on the date such
opinion is delivered, contains any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Delaware or the Federal laws of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials. References to the Prospectus in this paragraph (b) include any
supplements thereto at the Closing Date.
(c) The Selling Stockholders shall have requested and caused
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel for the Selling Stockholders,
to have furnished to the
17
Representatives their opinion dated the Closing Date and addressed to
the Representatives, to the effect that:
(i) this Agreement and the Custody Agreement for each
Selling Stockholder that is not a natural person have
been duly authorized by such Selling Stockholder; the
Custody Agreement of such Selling Stockholder has
been duly executed and delivered by such Selling
Stockholder and is a valid and binding agreement of
such Selling Stockholder, enforceable against it in
accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting
creditors' rights and remedies generally, and
subject, as to enforceability, to general equitable
principles (whether relief is sought in a proceeding
at law or in equity) and except as rights to
indemnification and contribution thereunder may be
limited by applicable law or public policy relating
thereto; each Selling Stockholder has the right,
power and authority to sell, transfer, assign and
deliver in the manner provided in this Agreement and
the Custody Agreement the Securities to be sold by
such Selling Stockholder hereunder;
(ii) upon the delivery of and payment for the Securities
as contemplated in this Agreement, each of the
Underwriters will receive valid marketable title to
the Securities purchased by it from such Selling
Stockholder, free of any adverse claim, assuming the
Underwriters purchase such Securities for value, in
good faith and without notice of any adverse claim,
as such terms are defined in the Uniform Commercial
Code in effect in the State of New York;
(iii) 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 his, her or its obligations under this
Agreement or the Custody Agreement of such Selling
Stockholder, except such as may be required by the
securities or Blue Sky laws of the various states in
connection with offer sale of the Shares, as to which
we express no opinion, and such other approvals (if
any) as have been obtained; and
(iv) the execution and delivery by each Selling
Stockholder of, and the performance by such Selling
Stockholder of its obligations under, this Agreement
and the Custody Agreement of such Selling Stockholder
will not contravene any provision of applicable law,
or to our knowledge, any agreement or other
instrument binding upon such Selling Stockholder or,
to our knowledge, any judgment, order or decree of
any governmental body, agency or court having
jurisdiction over such Selling Stockholder.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
State of New York or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other counsel of
good standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters, and (B) as to matters of fact, to the extent they
deem proper, on certificates of the Selling Stockholders (or, if applicable,
responsible officers of the Selling Stockholders) and public officials.
18
(d) The Representatives shall have received from Cravath,
Swaine & Xxxxx, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with
respect to the issuance and sale of the Securities, the Registration
Statement, the Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require,
and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have examined the Registration Statement, the Prospectus,
any supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material
respects on and as of the Closing Date with the same
effect as if made on the Closing Date and the Company
has complied with all the agreements and satisfied
all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no
proceedings for that purpose have been instituted or,
to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of
any supplement thereto), there has been no Material
Adverse Effect, whether or not arising from
transactions in the ordinary course of business,
except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(f) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by the Selling Stockholder (or
the Chairman of the Board or the President and the principal financial
or accounting officer of the Selling Stockholder, if applicable), dated
the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement and that the
representations and warranties of the Selling Stockholder in this
Agreement are true and correct in all material respects on and as of
the Closing Date to the same effect as if made on the Closing Date.
(g) The Company shall have requested and caused
PricewaterhouseCoopers LLP to have furnished to the Representatives, at
the Execution Time and at the Closing Date, letters, dated respectively
as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the
applicable rules and regulations adopted by the Commission thereunder,
stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the
Registration Statement and the Prospectus and
reported on by them comply as to form in all material
respects with the applicable accounting requirements
of the Act and the related rules and regulations
adopted by the Commission; and
19
(ii) they have performed certain other specified
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company) set forth
in the Registration Statement and the Prospectus,
including the information set forth under the
captions "Management's Discussion and Analysis of
Financial Condition and Results of Operations",
"Selected Consolidated Financial Data", "Prospectus
Summary", "Capitalization", "Business" and "Risk
Factors" in the Prospectus, agrees with the
accounting records of the Company, excluding any
questions of legal interpretation.
References to the Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(g) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company, whether or
not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
(i) The Securities shall have been approved for inclusion on
the Nasdaq National Market, subject only to official notice of
issuance.
(j) At the Execution Time, the Company shall have furnished to
the Representatives letters substantially in the form of Exhibit A
hereto from the individuals and entities set forth in a schedule to be
provided by the Company (such schedule to be in form reasonably
acceptable to the Representatives) including each officer and director
of the Company and each Selling Stockholder named in Schedule III
hereto, addressed to the Representatives.
(k) Prior to the Closing Date, the Company and the Selling
Stockholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may
reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancelation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
20
The documents required to be delivered by this Section 6 shall
be delivered at the office of Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the
Company, at 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the Closing
Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or the Selling
Stockholders to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through Xxxxxxx Xxxxx Barney on demand for
all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been reasonably incurred by them in connection with the
proposed purchase and sale of the Securities. If the Company is required to make
any payments to the Underwriters under this Section 7 because of any Selling
Stockholder's refusal, inability or failure to satisfy any condition to the
obligations of the Underwriters set forth in Section 6, such Selling Stockholder
shall reimburse the Company on demand for all amounts so paid.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (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 Securities as originally filed or in any amendment thereof, or in any
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, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability 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
specifically for inclusion therein; PROVIDED, FURTHER, that with respect to any
untrue statement or omission of material fact made in any Preliminary
Prospectus, the indemnity agreement contained in this Section 8(a) shall not
inure to the benefit of any Underwriter from whom the person asserting any such
loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of such Underwriter occurs
under the circumstance where it shall have been determined by a court of
competent jurisdiction by final judgment that (w) the Company had previously
furnished copies of the Prospectus to the Representatives, (x) delivery of the
Prospectus was required by the Act to be made to such person, (y) the untrue
statement or omission of a material fact contained in the Preliminary Prospectus
was corrected in the Prospectus and (z) there was not sent or given to such
person, at or prior to the written confirmation of the sale of such securities
to such person, a copy of the Prospectus. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
21
(b) Each Selling Stockholder severally agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers
who signs the Registration Statement, each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person who
controls the Company or any Underwriter within the meaning of either
the Act or the Exchange Act and each other Selling Stockholder, if any,
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to written information furnished
to the Company by or on behalf of such Selling Stockholder specifically
for inclusion in the documents referred to in the foregoing indemnity.
This indemnity agreement will be in addition to any liability which any
Selling Stockholder may otherwise have.
(c) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of
its officers who signs the Registration Statement, and each person who
controls the Company within the meaning of either the Act or the
Exchange Act and each Selling Stockholder, to the same extent as the
foregoing indemnity to each Underwriter, but only with reference to
written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have. The Company and
each Selling Stockholder acknowledge that the statements set forth in
the last paragraph of the cover page regarding delivery of the
Securities, and, under the heading "Underwriting" (i) the sentences
related to concessions and reallowances and (ii) the paragraph related
to stabilization, syndicate covering transactions and penalty bids in
any Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify
the indemnifying party (i) will not relieve it from liability under
paragraph (a), (b) or (c) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a), (b) or (c) above. The
indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification
is sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained
by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying
22
party shall not have employed counsel satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after
notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a),
(b) or (c) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company, the Selling
Stockholders and the Underwriters agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company, one or
more of the Selling Stockholders and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company, by the Selling Stockholders
and by the Underwriters from the offering of the Securities; PROVIDED,
HOWEVER, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering
of the Securities) be responsible for any amount in excess of the
underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by
the immediately preceding sentence is unavailable for any reason, the
Company, the Selling Stockholders and the Underwriters shall contribute
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company, of the Selling
Stockholders and of the Underwriters in connection with the statements
or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company and
by the Selling Stockholders shall be deemed to be equal to the total
net proceeds from the offering (before deducting expenses) received by
each of them, and benefits received by the Underwriters shall be deemed
to be equal to the total underwriting discounts and commissions, in
each case as set forth on the cover page of the Prospectus. Relative
fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information provided by the Company, the Selling Stockholders on the
one hand or the Underwriters on the other, the intent of the parties
and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company, the
Selling Stockholders and the Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (e), 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. For purposes of this
Section 8, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person who controls the
Company within the meaning of either the Act or 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
23
contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (e).
(f) The liability of each Selling Stockholder under each
Selling Stockholder's representations and warranties contained in
Section 1 hereof and under the indemnity and contribution agreements
contained in this Section 8 shall be limited to an amount equal to the
initial public offering price of the Securities sold by each Selling
Stockholder to the Underwriters. The Company and each Selling
Stockholder may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to the respective
amounts of such liability for which each shall be responsible.
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; PROVIDED, HOWEVER, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on either of such Exchange or the Nasdaq National Market, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Stockholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and
24
payment for the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancelation of this Agreement.
12. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Xxxxxxx Xxxxx Xxxxxx Inc. General Counsel
(fax no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx
Barney Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel; or, if sent to the Company, will be mailed, delivered or
telefaxed to Xxxxxxx Xxxxxxxx, Senior Vice President and General Counsel, and
confirmed to it at 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, attention of
the Legal Department; or if sent to any Selling Stockholder, will be mailed,
delivered or telefaxed and confirmed to it at the address set forth in Schedule
II hereto.
13. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
25
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
26
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
JUNO ONLINE SERVICES, INC.
By:
------------------------------------
Name:
Title:
, as Attorney-in-Fact
for the Selling Stockholders named on
Schedule II hereto
By:
------------------------------------
Name:
Title: Attorney-in-Fact
27
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Barney Inc.
Bear, Xxxxxxx & Co. Inc.
PaineWebber Incorporated
By: Xxxxxxx Xxxxx Barney Inc.
By:
------------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
28
SCHEDULE I
NUMBER OF UNDERWRITTEN
SECURITIES TO BE
UNDERWRITERS PURCHASED
----------------------
Xxxxxxx Xxxxx Xxxxxx Inc.
PaineWebber Incorporated
Xxxxxxxxx & Xxxxx LLC
Xxxxxxxxx & Company, Inc.
----------------------
Total 5,000,000
29
SCHEDULE II
MAXIMUM
NUMBER OF NUMBER OF
UNDERWRITTEN OPTION
SECURITIES TO SECURITIES TO BE
SELLING STOCKHOLDER: BE SOLD SOLD
------------------- ------------- ----------------
Xxxxxxx X. Xxxxx 88,118 13,217
Xxxxx X. Xxxxxxx 1999 Grantor Retained
Annuity Trust 15,900 2,385
Xxxx X. Xxxxxx 35,007 5,251
Xxxxxxx X. Xxxxx 29,168 4,375
Xxxxxx X. Xxxxxxx 27,707 4,156
Xxxx Family Trust IV 745,050 111,757
X. X. Xxxx & Co., L.P. 529,500 79,425
D. E. Shaw Investment Group, L.P. 73,950 11,092
Prospect Street NYC Discovery Fund, L.P. 66,900 10,035
Winfield Capital Corp. 24,900 3,735
Xxxx Juno Trust 22,200 3,330
Xx. Xxx Xxx & Xxxxxx X. Xxx 9,900 1,485
Prospect Street NYC Co-Investment Fund,
L.P. 7,500 1,125
Faith Holdings, Int'l Ltd. 3,300 495
Xxxxxx Xxxxxxx 450 68
Xxxxxx Xxxxxx 150 23
Xxxxxx Xxxxxxx 150 23
Xxxxx Xxxxxxxx 150 23
Total 1,680,000 252,000
========= =======
30
SCHEDULE III
SELLING STOCKHOLDERS TO ENTER INTO LOCK-UP AGREEMENTS
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxx 1999 Grantor Retained Annuity Trust
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Xxxx Family Trust IV
X. X. Xxxx & Co., L.P.
D. E. Xxxx Investment Group, L.P.
Prospect Street NYC Discovery Fund, X.X.
Xxxxxxxx Capital Corp.
Xxxx Juno Trust
Prospect Street NYC Co-Investment Fund, L.P.
Faith Holdings, Int'l. Ltd.
31
SCHEDULE IV
MANAGEMENT SELLING STOCKHOLDERS
Xxxxxxx X. Xxxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxxxx
EXHIBIT A
JUNO ONLINE SERVICES, INC.
PUBLIC OFFERING OF COMMON STOCK
January , 2000
Xxxxxxx Xxxxx Barney Inc.
PaineWebber Incorporated
Chase H&Q, Inc.
Xxxxxxxxx & Company, Incorporated
As Representatives of the several Underwriters,
in care of:
Xxxxxxx Xxxxx Barney Inc. PaineWebber Incorporated
000 Xxxxxxxxx Xxxxxx 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between Juno
Online Services, Inc., a Delaware corporation (the "Company"), and each of you
as representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Stock, $0.01 par value (the "Common
Stock"), of the Company.
In order to induce you and the other Underwriters to enter into
the Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge or
otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing of (or participation in the filing of) a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of the Underwriting Agreement.
Notwithstanding the foregoing, the undersigned may transfer the
Common Stock (i) as a BONA FIDE gift or gifts, provided that the donee or donees
thereof agree to be bound by the restrictions set forth herein, (ii) as a
distribution to partners, members or stockholders of the undersigned, provided
that such distributees agree in writing to be bound by the restrictions set
forth herein, or (iii) to any trust for the direct or indirect benefit of the
2
undersigned or the immediate familly of the undersigned, provided that the
trustee of the trust agrees to be bound by the restrictions set forth herein.
For purposes herein, "immediate family" shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin.
Notwithstanding the foregoing, this letter shall not include
any shares of capital stock acquired by the undersigned in the public markets
after the date of the Underwriting Agreement.
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
Yours very truly,
