EXHIBIT 1.1
CYBEAR, INC.
_____________ SHARES
COMMON STOCK
$0.001 PAR VALUE
UNDERWRITING AGREEMENT
______________, 1999
UNDERWRITING AGREEMENT
__________, 0000
XXXXXXX DILLON READ LLC
CIBC World Markets Corp.
Gruntal & Co., L.L.C.
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Cybear, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to the underwriters named in Schedule A annexed hereto (the
"Underwriters") an aggregate of _________ shares (the "Firm Shares") of Common
Stock, $0.001 par value (the "Common Stock"), of the Company. In addition,
solely for the purpose of covering over-allotments, the Company proposes to
grant to the Underwriters the option to purchase from the Company up to an
additional _________ shares of Common Stock (the "Additional Shares"). The Firm
Shares and the Additional Shares are hereinafter collectively sometimes referred
to as the "Shares." The Shares are described in the Prospectus which is referred
to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (File No. 333-76579),
including a prospectus, relating to the Shares, which incorporates by reference
documents that the Company has filed in accordance with the provisions of the
Act and the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively called the "Exchange Act"). The Company has
furnished to you, for use by the Underwriters and by dealers, copies of one or
more preliminary prospectuses (each thereof being herein called a "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, the registration statement, as amended when it becomes effective,
including all documents filed as a part thereof or incorporated by reference
therein, and including any information contained in a prospectus subsequently
filed with the Commission pursuant to Rule 424(b) under the Act and deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430(A) under the Act and also including any registration statement filed
pursuant to Rule 462(b) under the Act, is herein called the Registration
Statement, and the prospectus, in the form filed by the Company with the
Commission pursuant to Rule 424(b) under the Act on or before the second
business day after the date hereof (or such earlier time as may be required
under the Act) or, if no such filing is required, the form of final prospectus
included in the Registration Statement at the time it became effective, is
herein called the Prospectus.
The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Company agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
respective number of Firm Shares set forth opposite the name of such Underwriter
in Schedule A annexed hereto, in each case at a purchase price of $_____________
per Share. The Company is advised by you that the Underwriters intend (i) to
make a public offering of their respective portions of the Firm Shares as soon
after the effective date of the Registration Statement as in your judgment is
advisable and (ii) initially to offer the Firm Shares upon the terms set forth
in the Prospectus. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company ratably
in accordance with the number of Firm Shares to be purchased by each of them
(subject to such adjustment as you shall determine to avoid fractional shares),
all or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company for
the Firm Shares. This option may be exercised by you on behalf of the several
Underwriters at any time (but not more than once) on or before the thirtieth day
following the date hereof, by written notice to the Company. Such notice shall
set forth the aggregate number of Additional Shares as to which the option is
being exercised, and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the additional time of
purchase); PROVIDED, HOWEVER, that the additional time of purchase shall not be
earlier than the time of purchase (as defined below) nor earlier than the second
business day1 after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares).
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm
Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00
----------
(1) As used herein "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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A.M., New York City time, on _____________, 1999 (unless another time shall be
agreed to by you and the Company or unless postponed in accordance with the
provisions of Section 8 hereof). The time at which such payment and delivery are
actually made is hereinafter sometimes called the time of purchase, and the date
of such event is referred to as the "Closing Date." Certificates for the Firm
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify no later than the second business day
preceding the time of purchase. For the purpose of expediting the checking of
the certificates for the Firm Shares by you, the Company agrees to make such
certificates available to you for such purpose at least one full business day
preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify no later than the second business day preceding the additional
time of purchase. For the purpose of expediting the checking of the certificates
for the Additional Shares by you, the Company agrees to make such certificates
available to you for such purpose at least one full business day preceding the
additional time of purchase. The date on which payment for and delivery of the
Additional Shares is made is referred to herein as the "Option Closing Date."
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each of the Underwriters that:
(a) the Company has not received, and has no notice of, any order of
the Commission preventing or suspending the use of any Preliminary Prospectus,
or instituting proceedings for that purpose, and each Preliminary Prospectus, at
the time of filing thereof, conformed in all material respects to the
requirements of the Act, and when the Registration Statement becomes effective,
the Registration Statement and the Prospectus will fully comply in all material
respects with the provisions of the Act, and the Registration Statement will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and the Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Company makes
no warranty or representation with respect to any statement contained in the
Registration Statement or the Prospectus in reliance upon and in conformity with
information concerning the Underwriters and furnished in writing by or on behalf
of any Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus; the documents incorporated by
reference in the Registration Statement, at the time they were filed with the
Commission, complied in all material respects with the requirements of the Act
and the Exchange Act, and do not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and the Company has not distributed any offering material
in connection
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with the offering or sale of the Shares other than the Registration Statement,
the Preliminary Prospectus, the Prospectus or any other materials, if any,
permitted by the Act;
(b) as of the date of this Agreement, the Company has an authorized
capitalization as set forth under the heading entitled "Actual" in the section
of the Registration Statement and the Prospectus entitled "Capitalization" and,
as of the time of purchase the Company shall have an authorized capitalization
as set forth under the heading entitled "As Adjusted" in the section of the
Registration Statement and the Prospectus entitled "Capitalization"; all of the
issued and outstanding shares of capital stock including Common Stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right;
(c) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with full
power and authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement;
(d) the Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or leasing
of its properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on the business, properties, financial condition or results of operation of the
Company (a "Material Adverse Effect"); and the Company is in compliance in all
material respects with the laws, orders, rules, regulations and directives
issued or administered by such jurisdictions. The Company has no subsidiaries
(as defined in the Rules and Regulations); except as set forth in the
Registration Statement, the Company does not own, directly or indirectly, any
shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint venture,
association or other entity; complete and correct copies of the certificates of
incorporation and of the bylaws of the Company and all amendments thereto have
been delivered to you, and except as set forth in the exhibits to the
Registration Statement no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing Date;
(e) [reserved];
(f) the Company is not in breach of, or in default under (nor has any
event occurred which with notice, lapse of time, or both would result in any
breach of, or constitute a default under), its charter or by-laws or in the
performance or observance of any obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, and the execution, delivery and performance of this
Agreement, the issuance and sale of the Shares and the consummation of the
transactions contemplated hereby will not conflict with, or result in any breach
of or constitute a default under (nor constitute any event which with notice,
lapse of time,
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or both would result in any breach of, or constitute a default under), any
provisions of the charter or by-laws of the Company or under any provision of
any license, indenture, mortgage, deed of trust, bank loan or credit agreement
or other evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company is a party or by which it or its properties may
be bound or affected, or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the Company;
(g) this Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency or other similar rights affecting the enforcement of creditors'
rights in general;
(h) the capital stock of the Company, including the Shares, conforms in
all material respects to the description thereof contained in the Registration
Statement and Prospectus and the certificates for the Shares are in due and
proper form and the holders of the Shares will not be subject to personal
liability solely by reason of being such holders;
(i) the Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable;
(j) no approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and sale of the
Shares or the consummation by the Company of the transaction as contemplated
hereby other than registration of the Shares under the Act and any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters or under the rules and
regulations of the National Association of Securities Dealers, Inc. (the
"NASD");
(k) no person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any shares of capital
stock of the Company upon the issue and sale of the Shares to the Underwriters
hereunder, nor does any person have preemptive rights, co-sale rights, rights of
first refusal or other rights to purchase any of the Shares other than those
that have been expressly waived prior to the dates hereof;
(l) Xxxxxx Xxxxxxxx LLP, whose report on the consolidated financial
statements of the Company and its subsidiary is filed with the Commission as
part of the Registration Statement and Prospectus, are independent public
accountants as required by the Act;
(m) the Company has all necessary licenses, authorizations, consents
and approvals and has made all necessary filings required under any federal,
state, local or foreign law, regulation or rule, and has obtained all necessary
authorizations, consents and approvals from other persons, in order to conduct
its respective business; the Company is not in violation of, or in default
under, any such license, authorization, consent or approval or any federal,
state, local
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or foreign law, regulation or rule or any decree, order or judgment applicable
to the Company, the effect of which could be a Material Adverse Effect;
(n) all statutes, regulations, legal or governmental proceedings,
contracts, leases or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(o) there are no actions, suits, claims, investigations or proceedings
pending or threatened to which the Company or any of its officers is a party or
of which any of its properties is subject at law or in equity, or before or by
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency which could result in a judgment, decree or
order having a Material Adverse Effect or jeopardize consummation of the
transaction contemplated hereby;
(p) the audited financial statements included in the Registration
Statement and the Prospectus present fairly the consolidated financial position
of the Company and its subsidiary as of the dates indicated and the consolidated
results of operations and cash flows of the Company and its subsidiary for the
periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
during the periods involved;
(q) subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been (i) any
material adverse change or any development which, in the Company's reasonable
judgment, is likely to cause a Material Adverse Effect, (ii) any transaction
which is material to the Company, except transactions in the ordinary course of
business, (iii) any obligation, direct or contingent, which is material to the
Company incurred by the Company, except obligations incurred in the ordinary
course of business, (iv) any change in the capital stock or outstanding
indebtedness of the Company or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company. The Company does not
have any material contingent obligation which is not disclosed in the
Registration Statement;
(r) the Company has obtained the agreement of each of its directors and
officers and certain of its other stockholders not to sell, offer to sell,
contract to sell, hypothecate, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or securities convertible
into or exchangeable for Common Stock or warrants or other rights to purchase
Common Stock for a period of 180 days after the date of the Prospectus;
(s) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
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(t) 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 all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business, and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, license or approvals would not, singly
or in the aggregate, have a Material Adverse Effect;
(u) there are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect;
(v) the Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which it is engaged; the Company has not been
refused any insurance coverage sought or applied for; 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;
(w) the Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or with
any person or affiliate located in Cuba;
(x) except as disclosed in the Prospectus, (i) the Company owns or
possesses the requisite licenses, registrations or other evidences of adequate
rights to make, use or sell, as the case may be, any inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks, trade names, technology and know-how currently employed by it to
conduct its business in the manner described in the Prospectus, (ii) the Company
has not received any notice of infringement of or conflict with (and the Company
does not know of any infringement or conflicts with) asserted rights of others
with respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect, and (iii) the Company has not knowingly infringed upon any
intellectual property right or patent of any third party, or any discovery,
invention, product or process, the result of which could be a Material Adverse
Effect;
(y) 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
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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;
(z) no material labor dispute with the employees of the Company exists
or, to the knowledge of the Company, is imminent, and the Company is not aware
of any existing, threatened or imminent labor disturbance by the employees of
any of its principal suppliers, manufacturers or contractors that could have a
Material Adverse Effect;
(aa) as of the date the Registration Statement became effective, the
Common Stock was authorized for listing on the Nasdaq National Market upon
official notice of issuance;
(bb) the Company has not at any time since the Company's inception (i)
made any unlawful contribution to any candidate for foreign office or failed to
disclose fully any contribution in violation of law, or (ii) made any payment to
any federal or state governmental officer or official, or other person charged
with similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof; and
(cc) the Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as you may designate and to maintain such
qualifications in effect so long as required for the distribution of the Shares;
PROVIDED that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;
(b) to make available to the Underwriters in New York City, as soon as
practicable after the Registration Statement becomes effective, and thereafter
from time to time to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company shall
have made any amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriters may reasonably request for the
purposes contemplated by the Act; in case any Underwriter is required to deliver
a prospectus within the nine-month period referred to in Section 10(a)(3) of the
Act in connection with the sale of the Shares, the Company will prepare promptly
upon request, but at the expense of such
8
Underwriter, such amendment or amendments to the Registration Statement and such
prospectuses as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to confirm such
advice in writing, (i) when the Registration Statement has become effective and
when any post-effective amendment thereto becomes effective and (ii) if Rule
430A under the Act is used, when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Act (which the Company agrees to file in a
timely manner under such Rules);
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or Prospectus or for additional information with respect thereto, or
of notice of institution of proceedings for, or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the lifting or
removal of such order as soon as possible; to advise you promptly of any
proposal to amend or supplement the Registration Statement or Prospectus
(including by filing any documents that would be incorporated therein by
reference) and to file no such amendment or supplement to which you shall
reasonably object in writing;
(e) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the Commission in
order to comply with the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in connection with
the offering or sale of the Shares, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
(g) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement (i)
copies of any reports or other communications which the Company shall send to
its stockholders or shall from time to time publish or publicly disseminate,
(ii) copies of all annual, quarterly and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar form as may be
designated by the Commission, (iii) copies of documents or reports filed with
any national securities exchange on which any class of securities of the Company
is listed, and (iv) such other information as you may reasonably request
regarding the Company, in each case as soon as such reports, communications,
documents or information become available;
(h) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to the
Shares is required to be delivered under the Act which, in the judgment of the
Company, would require the making of any change in the Prospectus then being
used so that the Prospectus would not include an untrue
9
statement of material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they are
made, not misleading, and, during such time, to prepare and furnish, at the
Company's expense, to the Underwriters promptly such amendments or supplements
to such Prospectus as may be necessary to reflect any such change and to furnish
you a copy of such proposed amendment or supplement before filing any such
amendment or supplement with the Commission;
(i) to make generally available to its security holders, and to deliver
to you, an earnings statement of the Company (which will satisfy the provisions
of Section 11(a) of the Act) covering a period of twelve months beginning after
the effective date of the Registration Statement (as defined in Rule 158(c) of
the Act) as soon as is reasonably practicable after the termination of such
twelve-month period but not later than _________, 2000;
(j) to furnish to its stockholders as soon as practicable after the end
of each fiscal year an annual report (including a balance sheet and statements
of income, stockholders' equity and cash flow of the Company for such fiscal
year, accompanied by a copy of the certificate or report thereon of nationally
recognized independent certified public accountants;
(k) to furnish to you four signed copies of the Registration Statement,
as initially filed with the Commission, and of all amendments thereto (including
all exhibits thereto and documents incorporated by reference therein) and
sufficient conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters;
(l) [reserved];
(m) to apply the net proceeds from the sale of the Shares in the manner
set forth under the caption "Use of Proceeds" in the Prospectus;
(n) [reserved];
(o) subject to certain exceptions, not to sell, offer or agree to sell,
contract to sell, grant any option to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock or warrants or other rights to
purchase Common Stock or any other securities of the Company that are
substantially similar to Common Stock or permit the registration under the Act
of any shares of Common Stock, except for the registration of the Shares and the
sales to the Underwriters pursuant to this Agreement and except for issuances of
Common Stock upon the exercise of outstanding options and warrants, for a period
of 180 days after the date hereof, without the prior written consent of Warburg
Dillon Read LLC;
(p) to use its best efforts to cause the Common Stock to be listed for
quotation on the National Association of Securities Dealers Automated Quotation
National Market System ("NASDAQ"); and
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(q) to pay all expenses, fees and taxes (other than any transfer taxes
and fees and disbursements of counsel for the Underwriters except as set forth
under Section 5 hereof or (iii) or (iv) below) in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the issuance, sale and
delivery of the Shares by the Company, (iii) the word processing and/or printing
of this Agreement, any Agreement Among Underwriters, any dealer agreements, any
Statements of Information and the reproduction and/or printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including costs of
mailing and shipment), (iv) the qualification of the Shares for offering and
sale under state laws and the determination of their eligibility for investment
under state law as aforesaid (including the reasonable legal fees and filing
fees and other disbursements of counsel to the Underwriters) and the printing
and furnishing of copies of any blue sky surveys or legal investment surveys to
the Underwriters and to dealers, (v) any listing of the Shares on any securities
exchange or qualification of the Shares for quotation on NASDAQ and any
registration thereof under the Exchange Act, (vi) the filing for review of the
public offering of the Shares by the National Association of Securities Dealers,
Inc. (the "NASD"), and (vii) the performance of the Company's other obligations
hereunder.
5. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the second paragraph of Section 7 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 4(q) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the fees and disbursements of their counsel.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase (unless
previously waived) and at the additional time of purchase, as the case may be),
the performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Broad and Xxxxxx,
counsel for the Company, addressed to the Underwriters, and dated the time of
purchase or the additional time of purchase, as the case may be, with reproduced
copies for each of the other Underwriters and in form satisfactory to Xxxxxxxxx
Traurig, P.A., counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with full
corporate power and authority
11
to own, lease and operate its properties and conduct its business as described
in the Registration Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as herein contemplated;
(ii) [reserved];
(iii) the Company is duly qualified or licensed by each jurisdiction in
which it conducts its business and in which the failure, individually or in the
aggregate, to be so licensed or qualified could have a Material Adverse Effect,
and the Company is duly qualified, and is in good standing, in each jurisdiction
in which it owns or leases real property or maintains an office and in which
such qualification is necessary;
(iv) this Agreement has been duly authorized, executed and delivered by
the Company;
(v) the Shares have been duly authorized and, when issued and delivered
to and paid for by the Underwriters, will be duly and validly issued and will be
fully paid and non-assessable;
(vi) the Company has an authorized capitalization as set forth in the
Registration Statement and the Prospectus; the outstanding shares of capital
stock of the Company have been duly and validly authorized and issued, and are
fully paid, nonassessable and free of statutory and contractual preemptive
rights; the Shares when issued will be free of statutory and contractual
preemptive rights, resale rights, rights of first refusal and similar rights;
the certificates for the Shares are in due and proper form and the holders of
the Shares will not be subject to personal liability by reason of being such
holders;
(vii) other than as set forth in the Registration Statement, the
Company does not own or control, directly or indirectly, any corporation,
association or other entity;
(viii) the capital stock of the Company, including the Shares, conforms
to the description thereof contained in the Registration Statement and
Prospectus;
(ix) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act;
(x) the Registration Statement has become effective under the Act and,
to the best of such counsel's knowledge, no stop order proceedings with respect
thereto are pending or threatened under the Act and any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424 under the Act has
been made in the manner and within the time period required by such Rule 424;
12
(xi) no approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and sale of the
Shares and consummation by the Company of the transaction as contemplated hereby
other than registration of the Shares under the Act (except such counsel need
express no opinion as to any necessary qualification under the state securities
or blue sky laws of the various jurisdictions in which the Shares are being
offered by the Underwriters);
(xii) the execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby do not and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with notice, lapse of
time, or both, would result in any breach of or constitute a default under), any
provisions of the certificate of incorporation or by-laws of the Company or
under any provision of any material license, indenture, mortgage, deed of trust,
bank loan, credit agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument known to us to which the Company is a
party or by which it or its properties may be bound or affected, or under any
federal, state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company, the violation of which could have been a
Material Adverse Effect;
(xiii) to the best of such counsel's knowledge, the Company is not in
violation of its charter or by-laws or is in breach of, or in default under (nor
has any event occurred which with notice, lapse of time, or both would result in
any breach of, or constitute a default under), any material license, indenture,
mortgage, deed of trust, bank loan or any other agreement or instrument known to
us to which the Company is a party or by which it or its properties may be bound
or affected or under any federal, state, local or foreign law, regulation or
rule or any decree, judgment or order applicable to the Company, except where
such breach, default or violation could not have a Material Adverse Effect;
(xiv) to the best of such counsel's knowledge, there are no contracts,
licenses, agreements, leases or documents of a character which are required to
be filed as exhibits to the Registration Statement or to be summarized or
described in the Prospectus which have not been so filed, summarized or
described;
(xv) to the best of such counsel's knowledge, there are no actions,
suits, claims, investigations or proceedings pending, threatened or contemplated
to which the Company is subject or of which any of its properties is subject at
law or in equity or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency which
are required to be described in the Prospectus but are not so described;
(xvi) [reserved];
13
(xvii) the Company will not, upon consummation of the transactions
contemplated by this Agreement, be an "investment company," or a "promoter" or
"principal underwriter" for, a "registered investment company," as such terms
are defined in the Investment Company Act;
(xviii) such counsel have read the description of the Company's
business in the Prospectus and the statements (a) in the Prospectus under the
captions "Risk Factors -- We Could Be Subject to Sales or Other Taxes," "Risk
Factors -- Government Regulation of Internet Communications May Impact our
Business," "Risk Factors --Government Regulation of Healthcare," "Business --
Government Regulation and Healthcare Reform," "Certain Transactions,"
"Description of Capital Stock," "Shares Eligible for Future Sale" and, insofar
as such statements relate to the terms of the Underwriting Agreement,
"Underwriters" and (b) in the Registration Statement in Items 14 and 15, in each
case insofar as such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(xix) such counsel have participated in conferences with officers and
other representatives of the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which the
contents of the Registration Statement and Prospectus were discussed and,
although such counsel is not passing upon and does not assume responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus (except as and to the extent stated in
subparagraphs (vi), (viii) and (xviii) above), on the basis of the foregoing
(relying as to materiality upon the opinions of officers and other
representatives of the Company) nothing has come to the attention of such
counsel that causes them to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or amendment became
effective contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus or any supplement thereto at the
date of such Prospectus or such supplement, and at all times up to and including
the time of purchase or additional time of purchase, as the case may be,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no opinion with respect to the
financial statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus).
(b) You shall have received from Xxxxxx Xxxxxxxx LLP, letters dated,
respectively, the date of this Agreement and the time of purchase and additional
time of purchase, as the case may be, and addressed to the Underwriters (with
reproduced copies for each of the Underwriters) in the forms heretofore approved
by Warburg Dillon Read LLC.
(c) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion of
Xxxxxxxxx Xxxxxxx, P.A., counsel for the
14
Underwriters, dated the time of purchase or the additional time of purchase, as
the case may be, as to the matters referred to in subparagraphs (iv), (v),
(viii) (with respect to the Shares only), (ix) and (x) of paragraph (a) of this
Section 6.
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which the
contents of the Registration Statement and Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus (except as to matters
referred to with respect to the Shares under subparagraph (viii) of paragraph
(a) of this Section 6), on the basis of the foregoing (relying as to materiality
to a large extent upon the opinions of officers and other representatives of the
Company), no facts have come to the attention of such counsel which lead them to
believe that the Registration Statement or any amendment thereto at the time
such Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus as of its date or any supplement thereto as of its date
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no comment with respect to the
financial statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus).
(d) No amendment or supplement to the Registration Statement or
Prospectus, including documents deemed to be incorporated by reference therein,
shall be filed prior to the time the Registration Statement becomes effective to
which you object in writing.
(e) The Registration Statement shall become effective, or if Rule 430A
under the Act is used, the Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act, at or before 5:00 P.M., New York City
time, on the date of this Agreement, unless a later time (but not later than
5:00 P.M., New York City time, on the second full business day after the date of
this Agreement) shall be agreed to by the Company and you in writing or by
telephone, confirmed in writing; PROVIDED, HOWEVER, that the Company and you and
any group of Underwriters, including you, who have agreed hereunder to purchase
in the aggregate at least 50% of the Firm Shares may from time to time agree on
a later date.
(f) Prior to the time of purchase or the additional time of purchase,
as the case may be, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration Statement
and all amendments thereto, or modifications thereof, if any, shall not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and (iii) the Prospectus and
15
all amendments or supplements thereto, or modifications thereof, if any, shall
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they are made, not misleading.
(g) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no change,
financial or otherwise (other than as referred to in the Registration Statement
and Prospectus), in the business, condition or prospects of the Company shall
occur or become known and (ii) no transaction shall have been entered into by
the Company which, in either case, could have a Material Adverse Effect.
(h) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate of two of its
executive officers to the effect that the representations and warranties of the
Company as set forth in this Agreement are true and correct as of each such
date, that the Company shall perform such of its obligations under this
Agreement as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be and the conditions
set forth in paragraphs (f) and (g) of this Section 6 have been met.
(i) You shall have received signed letters, dated the date of this
Agreement, from each of the directors and officers of the Company and certain of
its other stockholders to the effect that such persons shall not sell, offer or
agree to sell, contract to sell, grant any option to sell or otherwise dispose
of, directly or indirectly, any shares of Common Stock of the Company or
securities convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or any other securities of the
Company that are substantially similar to the Common Stock for a period of 180
days after the date of the Prospectus without Warburg Dillon Read LLC's prior
written consent.
(j) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you may reasonably request.
(k) The Shares shall have been approved for quotation on the Nasdaq
National Market, subject only to notice of issuance at or prior to the time of
purchase or the additional time of purchase, as the case may be.
(l) [reserved].
7. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
16
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statement
and Prospectus, there has been any material adverse and unfavorable change,
financial or otherwise (other than as referred to in the Registration Statement
and Prospectus), in the operations, business, condition or prospects of the
Company, which would, in your judgment or in the judgment of such group of
Underwriters, make it impracticable to market the Shares, or, if, at any time
prior to the time of purchase or, with respect to the purchase of any Additional
Shares, the additional time of purchase, as the case may be, trading in
securities on the New York Stock Exchange, the American Stock Exchange or the
NASDAQ National Market shall have been suspended or limitations or minimum
prices shall have been established on the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market or if a banking moratorium shall
have been declared either by the United States or New York State authorities, or
if the United States shall have declared war in accordance with its
constitutional processes or there shall have occurred any material outbreak or
escalation of hostilities or other national or international calamity or crisis
of such magnitude in its effect on the financial markets of the United States
as, in your judgment or in the judgment of such group of Underwriters, to make
it impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 7, the Company and each other Underwriter shall be
notified promptly by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(q), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof).
8. INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to Sections 6 and 7,
if any Underwriter shall default in its obligation to take up and pay for the
Firm Shares to be purchased by it hereunder (otherwise than for reasons
sufficient to justify the termination of this Agreement under the provisions of
Section 7 hereof) and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken
17
up and paid for by all non-defaulting Underwriters pro rata in proportion to the
aggregate number of Firm Shares set opposite the names of such non-defaulting
Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that they
will not sell any Firm Shares hereunder unless all of the Firm Shares are
purchased by the Underwriters (or by substituted Underwriters selected by you
with the approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the five business
day period stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
be terminated without further act or deed and without any liability on the part
of the Company to any non-defaulting Underwriter and without any liability on
the part of any non-defaulting Underwriter to the Company. Nothing in this
paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this Section
9 being deemed to include any Preliminary Prospectus, the Prospectus and the
Prospectus as amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged
18
omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements made
therein not misleading, except insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of any Underwriter through you
to the Company expressly for use with reference to such Underwriter in such
Registration Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated in either such Registration Statement or
Prospectus or necessary to make such information not misleading; and provided,
further, that the Company will not be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Shares from such Underwriter but was not
sent or given a copy of the Prospectus (as amended or supplemented) at or prior
to the written confirmation of the sale of such Shares to such person in any
case where such delivery of the Prospectus (as amended or supplemented) is
required by the Act, unless the failure is the result of non-compliance by the
Company with paragraph (h) of Section 4 hereof.
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such Underwriter
or such person shall promptly notify the Company in writing of the institution
of such Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; PROVIDED, HOWEVER, that the omission
to so notify the Company shall not relieve the Company from any liability which
the Company may have to any Underwriter or any such person or otherwise, except
to the extent that the Company is prejudiced as a proximate result of such
failure. Such Underwriter or such controlling person shall have the right to
employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or of such person
unless the employment of such counsel shall have been authorized in writing by
the Company in connection with the defense of such Proceeding or the Company
shall not have, within a reasonable period of time in light of the circumstances
employed counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from, additional to or in
conflict with those available to the Company (in which case the Company shall
not have the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Company and paid as incurred (it being understood,
however, that the Company shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company shall not
be liable for any settlement of any such Proceeding effected without its written
consent but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Underwriter and any such
19
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested in writing an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior written notice
of its intention to settle. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened Proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who controls
the Company within the meaning of Section 15 of the Act, or Section 20 of the
Exchange Act from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
the Company or any such person may incur under the Act, the Exchange Act, or
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
furnished in writing by or on behalf of such Underwriter through you to the
Company expressly for use with reference to such Underwriter in the Registration
Statement (or in the Registration Statement as amended by or on behalf of any
post-effective amendment thereof by the Company) or in a Prospectus, or arises
out of or is based upon any omission or alleged omission to state a material
fact in connection with such information required to be stated in such
Registration Statement or Prospectus or necessary to make such information not
misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses, PROVIDED, HOWEVER, that the omission to so
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or otherwise.
The Company or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the defense of such
Proceeding or
20
such Underwriter shall not have employed counsel to have charge of the defense
of such Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to or in conflict with those available to such Underwriter
(in which case such Underwriter shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties, but such
Underwriter may employ counsel and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such Underwriter),
in any of which events such fees and expenses shall be borne by such Underwriter
and paid as incurred (it being understood, however, that such Underwriter shall
not be liable for the expenses of more than one separate counsel (in addition to
any local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). No Underwriter shall be liable for any settlement of any such
Proceeding effected without the written consent of such Underwriter but if
settled with the written consent of such Underwriter, such Underwriter agrees to
indemnify and hold harmless the Company and any such person from and against any
loss or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damage, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportion as the total
proceeds from the offering (net of underwriting
21
discounts and commissions but before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Underwriters, bear to the aggregate public offering price is the shares. The
relative fault of the Company on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating, preparing to defend or defending any claim or
Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by such Underwriter and distributed to the public were offered to
the public exceeds the amount of any damage which such Underwriter has otherwise
been required to pay by reason of such untrue statement or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 9(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
(e) The indemnity and contribution agreements contained in this Section
9 and the covenants, warranties and representations of the Company contained in
this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, its directors and
officers or any person (including each partner, officer or director of such
person) who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors or officers or any person who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and shall survive
any termination of this Agreement or the issuance and delivery of the Shares.
The Company and each Underwriter agree promptly to notify each other
commencement of any Proceeding against it and, in the case of the Company,
against any of the Company's officers or directors in connection with the
issuance and sale of the Shares, or in connection with the Registration
Statement or Prospectus.
10. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Warburg Dillon Read LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Syndicate Department, if to the Company, shall be sufficient in all
22
respects if delivered or sent to the Company at the offices of the Company at
0000 Xxxx Xxxx Xxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000, Attention:
President.
11. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
12. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may
be commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against Warburg Dillon Read LLC or any
indemnified party. Each of Warburg Dillon Read LLC and the Company (on its
behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement. The Company agrees that a
final judgment in any such action, proceeding or counterclaim brought in any
such court shall be conclusive and binding upon the Company and may be enforced
in any other courts in the jurisdiction of which the Company is or may be
subject, by suit upon such judgment.
13. PARTIES AT INTEREST. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company and to the extent
provided in Section 9 hereof the controlling persons, directors and officers
referred to in such Section, and their respective successors, assigns, heirs,
pursuant representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. COUNTERPARTS. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
23
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
CYBEAR, INC.
By: ____________________________
Title:
Accepted and agreed to as of the date first
above written, on behalf of themselves and
the other several Underwriters named in
Schedule A
WARBURG DILLON READ LLC
CIBC WORLD MARKETS CORP.
GRUNTAL & CO., L.L.C.
By: WARBURG DILLON READ LLC
By: ___________________________
Title:
By: ___________________________
Title:
24
SCHEDULE A
NUMBER OF
UNDERWRITER FIRM SHARES
WARBURG DILLON READ LLC
CIBC WORLD MARKETS CORP.
GRUNTAL & CO., L.L.C.
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Total............................................................
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