Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Pre-Effective Amendment to Registration Statement 117 513K
(General Form)
2: EX-1.1 Underwriting Agreement 32 121K
3: EX-4.1 Instrument Defining the Rights of Security Holders 3 10K
4: EX-5.1 Opinion re: Legality 2 9K
5: EX-10.6 Material Contract 32 95K
6: EX-10.7 Material Contract 12 41K
7: EX-23.1 Consent of Experts or Counsel 1 5K
EX-1.1 — Underwriting Agreement
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Exhibit 1.1
LIVEPERSON, INC.
4,000,000 SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
__________ __, 2000
CHASE SECURITIES INC.
THOMAS WEISEL PARTNERS LLC
PAINEWEBBER INCORPORATED
c/o Chase Securities Inc.
One Bush Street
San Francisco, CA 94104
Ladies and Gentlemen:
LivePerson, Inc., a Delaware corporation (herein called the COMPANY),
proposes to issue and sell 4,000,000 shares of its authorized but unissued
Common Stock, $0.001 par value per share (herein called the COMMON STOCK) (said
4,000,000 shares of Common Stock being herein called the UNDERWRITTEN STOCK).
The Company proposes to grant to the Underwriters (as hereinafter defined) an
option to purchase up to 600,000 additional shares of Common Stock (herein
called the OPTION STOCK and, together with the Underwritten Stock, herein
collectively called the STOCK). The Common Stock is more fully described in the
Registration Statement and the Prospectus hereinafter mentioned. Chase
Securities Inc. (herein called CHASE) has agreed to reserve a portion of the
Underwritten Stock to be purchased by it under this Agreement for sale to the
Company's directors, officers, employees, business associates and their family
members (herein collectively called PARTICIPANTS), as set forth in the
Prospectus under the caption "Underwriting" (such program herein called the
DIRECTED SHARE PROGRAM). The Stock to be sold by Chase pursuant to the Directed
Share Program are referred to hereinafter as the DIRECTED SHARES. Any Directed
Shares not orally confirmed for purchase by any
--------
(1) Plus an option to purchase from the Company up to 600,000 additional
shares to cover over-allotments.
Participants by the end of the business day on which this Agreement is executed
will be offered to the public by the Underwriters as set forth in the
Prospectus.
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters, for whom you are acting,
named in Schedule I hereto (herein collectively called the UNDERWRITERS, which
term shall also include any underwriter purchasing Stock pursuant to Section
3(b) hereof). You represent and warrant that you have been authorized by each of
the other Underwriters to enter into this Agreement on its behalf and to act for
it in the manner herein provided.
1. REGISTRATION STATEMENT. The Company has filed with the Securities and
Exchange Commission (herein called the COMMISSION) a registration statement on
Form S-1 (No. 333-95689), including the related preliminary prospectus, for the
registration under the Securities Act of 1933, as amended (herein called the
SECURITIES ACT) of the Stock. Copies of such registration statement and of each
amendment thereto, if any, including the related preliminary prospectus (meeting
the requirements of Rule 430A of the rules and regulations of the Commission)
heretofore filed by the Company with the Commission have been delivered to you.
The term REGISTRATION STATEMENT as used in this Agreement shall mean such
registration statement, including all exhibits and financial statements (and the
related notes), all information omitted therefrom in reliance upon Rule 430A and
contained in the Prospectus referred to below, in the form in which it became
effective, and any registration statement filed pursuant to Rule 462(b) of the
rules and regulations of the Commission with respect to the Stock (herein called
a RULE 462(B) REGISTRATION STATEMENT), and, in the event of any amendment
thereto after the effective date of such registration statement (herein called
the EFFECTIVE DATE), shall also mean (from and after the effectiveness of such
amendment) such registration statement as so amended (including any Rule 462(b)
registration statement). The term PROSPECTUS as used in this Agreement shall
mean the prospectus relating to the Stock first filed with the Commission
pursuant to Rule 424(b) and Rule 430A (or if no such filing is required, as
included in the Registration Statement) and, in the event of any supplement or
amendment to such prospectus after the Effective Date, shall also mean (from and
after the date of filing with the Commission of such supplement or the
effectiveness of such amendment) such prospectus as so supplemented or amended.
The term PRELIMINARY PROSPECTUS as used in this Agreement shall mean each
preliminary prospectus included in such registration statement prior to the time
it becomes effective.
The Registration Statement has been declared effective under the Securities
Act, and no post-effective amendment to the Registration Statement has been
filed as of the date of this Agreement. The Company has caused to be delivered
to you copies of each
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Preliminary Prospectus and has consented to the use of such copies for the
purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company hereby represents and warrants as follows:
(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, has
full corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement and the
Prospectus and as being conducted, and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which the
character of the property owned or leased or the nature of the business
transacted by it makes qualification necessary (except where the failure to
be so qualified would not result in a Material Adverse Change (as
hereinafter defined)).
(ii) The Company has no subsidiaries and does not otherwise own or
control, directly or indirectly, any corporation, association or other
entity.
(iii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been a
Material Adverse Change (as hereinafter defined), other than as set forth
in the Registration Statement and the Prospectus, and since such dates,
except in the ordinary course of business, the Company has not entered into
any material transaction not referred to in the Registration Statement and
the Prospectus. As used herein, MATERIAL ADVERSE CHANGE shall mean a
materially adverse change in the business, properties, financial condition
or results of operations of the Company, whether or not arising from
transactions in the ordinary course of business.
(iv) The Registration Statement and the Prospectus comply, and on the
Closing Date (as hereinafter defined) and any later date on which Option
Stock is to be purchased, the Prospectus will comply, in all material
respects, with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder; on the Effective Date, the
Registration Statement did not contain any untrue statement of a material
fact and did not omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date the Prospectus did not and, on the
Closing Date and any later date on which Option Stock is to be purchased,
will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances
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under which they were made, not misleading; PROVIDED, HOWEVER, that none of
the representations and warranties in this subparagraph (iv) shall apply to
statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon and in conformity with information herein
or otherwise furnished in writing to the Company by or on behalf of the
Underwriters for use in the Registration Statement or the Prospectus.
(v) Each of the Registration Statement and any Rule 462(b)
registration statement has become effective under the Securities Act and no
stop order suspending the effectiveness of the Registration Statement or
any Rule 462(b) registration statement has been issued under the Securities
Act and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional information
has been complied with.
(vi) The shares of Common Stock outstanding prior to the issuance of
the Stock have been duly authorized and are validly issued, fully paid and
non-assessable.
(vii) The shares of Common Stock to be issued upon the conversion of
the Series A Convertible Preferred Stock, par value $0.001 per share, the
Series B Convertible Preferred Stock, par value $0.001 per share, the
Series C Convertible Preferred Stock, par value $0.001 per share, and the
Series D Convertible Preferred Stock, par value $0.001 per share
(collectively, herein called the CONVERTIBLE PREFERRED STOCK), have been
duly authorized and, when issued and delivered pursuant to the terms of the
applicable certificates of designation, will be validly issued, fully paid
and non-assessable. No additional approval or authority of the shareholders
or the Board of Directors of the Company subsequent to the date hereof will
be required for such conversion or the issuance of such shares of common
stock upon such conversion.
(viii) The Stock, when issued and sold to the Underwriters as provided
herein, will be duly and validly issued, fully paid and non-assessable and
conforms to the description thereof in the Prospectus, and the issuance of
the Stock will not be subject to any preemptive or similar rights which
have not been waived. No additional approval or authority of the
shareholders or the Board of Directors of the Company subsequent to the
date hereof will be required for the issuance and sale of the Stock as
contemplated herein.
4
(ix) Prior to the Closing Date, the Stock to be issued and sold by the
Company will be approved for quotation on the Nasdaq National Market upon
official notice of issuance.
(x) KPMG LLP, the accountants who certified the financial statements
and supporting schedules included in the Registration Statement, are
independent public or certified public accountants as required by the
Securities Act and the rules and regulations promulgated thereunder.
(xi) The financial statements included in the Registration Statement
and the Prospectus, together with the related schedules and notes thereto,
present fairly the financial position of the Company as of and at the dates
indicated and the statement of operations, stockholders' equity and cash
flows of the Company for the periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting
principles (herein called GAAP) applied on a consistent basis throughout
the periods involved, except as may be indicated in the notes related
thereto. The supporting schedules included in the Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein. The selected financial data and the summary financial data
included in the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(xii) The information set forth under the caption "Capitalization" in
the Prospectus is true and correct in all material respects. All of the
Stock conforms in all material respects to the description thereof
contained in the Registration Statement. The form of certificates for the
Stock conforms to the legal requirements of the State of Delaware.
(xiii) This Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except insofar as rights to
indemnification and contribution hereunder may be limited by applicable law
or equitable principles and except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or affecting creditors' rights generally or by general equitable
principles.
(xiv) The Company is not in violation of its Certificate of
Incorporation or By-laws (each as in effect as of the date hereof) or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit
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agreement, note, lease or other agreement or instrument to which the
Company is a party or by which it may be bound, or to which any of the
property or assets of the Company is subject, except for such defaults that
would not result in a Material Adverse Change; and the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated in this Agreement and in the Registration Statement (including
the issuance and sale of the Stock and the use of the proceeds from the
sale of the Stock as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations under this
Agreement have been duly authorized by all necessary corporate action and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company pursuant to, any
agreement or other instrument binding upon the Company that is material to
the Company, nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its assets, properties or
operations.
(xv) 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 or imminent labor disturbance by the employees of
any of its principal suppliers, manufacturers, customers or contractors,
that, in either case, would result in a Material Adverse Change.
(xvi) There is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic or
foreign, now pending or, to the knowledge of the Company, threatened,
against or affecting the Company, that is required to be disclosed in the
Registration Statement (other than as disclosed therein), or that might
reasonably be expected to result in a Material Adverse Change, or that
might reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder.
(xvii) There are no contracts or documents which are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits thereto which have not been so described and filed as required.
(xviii) Except where the failure to do so would not result in a
Material Adverse Change, and except as described in the Registration
Statement or the
6
Prospectus, the Company owns and possesses all right, title and interest in
and to, or has duly licensed from third parties a valid, enforceable right
to use, all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (herein called PATENT AND
PROPRIETARY RIGHTS) currently or proposed to be employed by it in
connection with its business. Except as described in the Registration
Statement or the Prospectus, the Company has not received any notice of or
has any knowledge of any infringement or misappropriation of or conflict
with asserted rights of others with respect to any Patent and Proprietary
Rights, or of any facts which would render any Patent and Proprietary
Rights invalid or inadequate to protect the interest of the Company
therein, and which infringement, misappropriation or conflict or invalidity
or inadequacy, individually or in the aggregate, would result in a Material
Adverse Change.
(xix) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the
Company of its obligations under this Agreement, in connection with the
offering, issuance or sale of the Stock hereunder or the consummation of
the transactions contemplated by this Agreement, except such as have been
already obtained or as may be required (A) under the Securities Act or the
rules and regulations promulgated thereunder, (B) under the Blue Sky
securities laws of any jurisdiction, (C) by the National Association of
Securities Dealers, Inc. (herein called the NASD) and (D) by the federal
and provincial laws of Canada.
(xx) The Company possesses all material permits, licenses, approvals,
consents and other authorizations (herein called GOVERNMENTAL LICENSES)
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by it;
the Company is in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, result in Material Adverse Change; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not, singly or
in the aggregate, result in a Material Adverse Change; and the Company has
not received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Change.
7
(xxi) The Company does not own any real property. The Company has good
and marketable title to all other properties and assets owned by it and
reflected in the financial statements, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except the irrevocable stand-by letter of credit
No. T-298456 given by the Company in favor of Vornado 330 West 34th Street
LLC, entered into in March 2000, and the irrevocable stand-by letter of
credit No. T-298205, given by the Company in favor of SLK Associates,
entered into in March 2000, and such as (a) are described in the
Prospectus, (b) are reflected in the financial statements included in the
Prospectus or (c) do not, singly or in the aggregate, materially and
adversely affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company; and all
of the leases and subleases material to the business of the Company, and
under which the Company holds properties described in the Prospectus, are
in full force and effect, and the Company does not have any notice of any
claim, the adverse determination of which would result in a Material
Adverse Change, that has been asserted by anyone adverse to the rights of
the Company under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xxii) There are no persons with registration rights or other similar
rights to have any securities registered pursuant to the Registration
Statement, except such rights as have been duly waived, or, except as
disclosed in the Prospectus, otherwise registered by the Company under the
Securities Act.
(xxiii) The Company has filed all necessary federal, state, local and
foreign income, payroll, franchise and other tax returns (after giving
effect to extensions) and has paid all taxes shown as due thereon or with
respect to any of its properties, and there is no tax deficiency that has
been, or to the knowledge of the Company is likely to be, asserted against
the Company or any of its properties or assets that would result in a
Material Adverse Change.
(xxiv) 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 they are 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 result in a Material Adverse
Change, except as described in the Prospectus.
8
(xxv) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific authorization;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access to assets
is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xxvi) To the best of the Company's knowledge, neither the Company nor
any employee or agent of the Company has made any payment of funds of the
Company or received or retained any funds in violation of any law, rule or
regulation, including, without limitation, the Foreign Corrupt Practices
Act.
(xxvii) The Company and each member of its Control Group (as defined
below) is in compliance in all material respects with all presently
applicable provisions of the U.S. Employee Retirement Income Security Act
of 1974, as amended (herein called ERISA), and the regulations and
published interpretations thereunder; no "reportable event" (as defined in
ERISA and the regulations and published interpretations thereunder) has
occurred with respect to any material "pension plan" (as defined in ERISA
and the regulations and published interpretations thereunder) established
or maintained by the Company or any member of its Control Group; neither
the Company nor any member of its Control Group has incurred nor expects to
incur any material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Section 412
or 4971 of the U.S. Internal Revenue Code of 1986, as amended (hereinafter
called the CODE); and each material "pension plan" established or
maintained by the Company that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and has
received a favorable determination letter as to its qualification and
nothing has occurred, whether by action or failure to act, which would
cause the loss of such qualification. For purposes of this subsection,
"Control Group" is defined to include any entity which is part of a group
which includes the Company and is treated as a single employer under
Section 414 of the Code.
(xxviii) The Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions contemplated
hereby.
9
(xxix) The Registration Statement, the Prospectus and any Preliminary
Prospectus comply, and any amendments or supplements thereto will comply,
with any applicable laws or regulations of foreign jurisdictions in which
the Prospectus or any Preliminary Prospectus, as amended or supplemented,
if applicable, is distributed in connection with the Directed Share
Program.
(xxx) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency, other than those
already obtained, is required in connection with the offering of the
Directed Shares in any jurisdiction where the Directed Shares are being
offered.
(xxxi) The Company has not offered, or caused Chase to offer, Stock to
any person pursuant to the Directed Share Program with the intent to
unlawfully influence (i) a customer or supplier of the Company to alter the
customer's or supplier's level or type of business with the Company or (ii)
a trade journalist or publication to write or publish favorable information
about the Company or its products.
(xxxii) None of the options issued or to be issued pursuant to any of
the Company's stock option plans are exercisable until 180 days after the
offering, except for options issued to those persons who have signed
lock-up agreements substantially in the forms attached as Annexes B-1, B-2
or B-3 hereto, as applicable.
(xxxiii) Except as described or referred to in the Registration
Statement (exclusive of any amendments or supplements thereto subsequent to
the date of this Agreement), the Company has not sold, issued or
distributed any shares of Common Stock during the six-month period
preceding the date hereof, including any sales pursuant to Rule 144A under,
or Regulations D or S of, the Securities Act, other than shares issued
pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans or pursuant to outstanding options, rights or
warrants.
(xxxiv) Except as described or referred to in the Registration
Statement, there are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any shares of Common Stock.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Company agrees to issue and sell
4,000,000 shares
10
of the Underwritten Stock to the several Underwriters and each of the
Underwriters agrees to purchase from the Company the respective number of shares
of Underwritten Stock set forth opposite its name in Schedule I. The price at
which such shares of Underwritten Stock shall be sold by the Company and
purchased by the several Underwriters shall be $___ per share. In making this
Agreement, each Underwriter is contracting severally and not jointly; except as
provided in paragraphs (b) and (c) of this Section 3, the agreement of each
Underwriter is to purchase only the respective number of shares of the
Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or refuse
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 8 or 9 hereof) to purchase and pay for
the number of shares of the Stock agreed to be purchased by such Underwriter or
Underwriters, the Company shall immediately give notice thereof to you, and the
non-defaulting Underwriters shall have the right within 24 hours after the
receipt by you of such notice to purchase, or procure one or more other
Underwriters to purchase, in such proportions as may be agreed upon between you
and such purchasing Underwriter or Underwriters and upon the terms herein set
forth, all or any part of the shares of the Stock which such defaulting
Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such shares
and portion, the number of shares of the Stock which each non-defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
PROVIDED, HOWEVER, that the non-defaulting Underwriters shall not be obligated
to purchase the shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such shares of the
Stock exceeds 10% of the total number of shares of the Stock which all
Underwriters agreed to purchase hereunder. If the total number of shares of the
Stock which the defaulting Underwriter or Underwriters agreed to purchase shall
not be purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such shares and portion on the terms herein
set forth. In any such case, either you or the Company shall have the right to
postpone the Closing Date determined as provided in Section 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. If neither the non-defaulting Underwriters nor the Company shall
make arrangements within the 24-hour periods stated above for the purchase of
all the shares of the Stock 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
11
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph (b), and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to 600,000 shares in the aggregate of the Option Stock from the
Company at the same price per share as the Underwriters shall pay for the
Underwritten Stock. Said option may be exercised only to cover over-allotments
in the sale of the Underwritten Stock by the Underwriters and may be exercised
in whole or in part at any time (but not more than once) on or before the
thirtieth day after the date of this Agreement, upon written or facsimile notice
by you to the Company setting forth the aggregate number of shares of the Option
Stock as to which the several Underwriters are exercising the option. Delivery
of certificates for the shares of Option Stock, and payment therefor, shall be
made as provided in Section 5 hereof. The number of shares of the Option Stock
to be purchased by each Underwriter shall be the same percentage of the total
number of shares of the Option Stock to be purchased by the several Underwriters
as such Underwriter is purchasing of the Underwritten Stock, as adjusted by you
in such manner as you deem advisable to avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of the
Stock to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the front cover page
and under "Underwriting" in the Registration Statement, any Preliminary
Prospectus and the Prospectus relating to the Stock filed by the Company
(insofar as such information relates to the Underwriters) constitutes the only
information furnished by the Underwriters to the Company for inclusion in the
Registration Statement, any Preliminary Prospectus, and the Prospectus, and you
on behalf of the respective Underwriters represent and warrant to the Company
that the statements made therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten Stock and
the Option Stock (if the option granted by Section 3(c) hereof shall have been
exercised not
12
later than 7:00 a.m., San Francisco time, on the date two business days
preceding the Closing Date), and payment therefor, shall be made at the office
of Brobeck, Phleger & Harrison LLP, 1633 Broadway, 47th Floor, New York, New
York 10019, at 7:00 a.m., San Francisco time, on the third business day after
the date of this Agreement (the fourth business day after the day of this
Agreement if this Agreement is executed and delivered after 1.30 p.m., San
Francisco time), or at such time on such other day, not later than seven full
business days after such third (or fourth, as the case may be) business day, as
shall be agreed upon in writing by the Company and you. The date and hour of
such delivery and payment (which may be postponed as provided in Section 3(b)
hereof) are herein called the CLOSING DATE.
(b) If the option granted by Section 3(c) hereof shall be exercised after
7:00 a.m., San Francisco time, on the date two business days preceding the
Closing Date, delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made at the office of Brobeck, Phleger & Harrison
LLP, 1633 Broadway, 47th Floor, New York, New York 10019, at 7:00 a.m., San
Francisco time, on the third business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made to the
Company or its order, at the Company's option, by wire transfer of immediately
available funds to an account or accounts designated by the Company or by one or
more certified or official bank check or checks in same day funds. Such payment
shall be made upon delivery of certificates for the Stock to you for the
respective accounts of the several Underwriters against receipt therefor signed
by you. Certificates for the Stock to be delivered to you shall be registered in
such name or names and shall be in such denominations as you may request at
least one business day before the Closing Date, in the case of Underwritten
Stock, and at least one business day prior to the purchase thereof, in the case
of the Option Stock. Such certificates will be made available to the
Underwriters for inspection, checking and packaging at the offices of Lewco
Securities Corporation, 2 Broadway, New York, New York 10004 on the business day
prior to the Closing Date or, in the case of the Option Stock, by 3:00 p.m., New
York time, on the business day preceding the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose wire transfer or check shall
not have been received by you on the Closing Date or any later date on which
Option Stock is purchased for the account of such Underwriter. Any such payment
by you shall not relieve such Underwriter from any of its obligations hereunder.
13
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees as
follows:
(a) The Company will (i) prepare and timely file with the Commission under
Rule 424(b) a Prospectus containing information previously omitted at the time
of effectiveness of the Registration Statement in reliance on Rule 430A and (ii)
not file any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and furnished
with a copy or to which you shall have reasonably objected in writing or which
is not in compliance with the Securities Act or the rules and regulations of the
Commission thereunder.
(b) The Company will promptly notify each Underwriter in the event of (i)
the request by the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceeding for that purpose, (iv) the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction, or (v) the receipt by it of notice of the
initiation or threatening of any proceeding for such purpose. The Company will
make every reasonable effort to prevent the issuance of such a stop order and,
if such an order shall at any time be issued, to obtain the withdrawal thereof
at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you a
signed copy of the Registration Statement as originally filed and of each
amendment thereto filed prior to the time the Registration Statement becomes
effective and, promptly upon the filing thereof, a signed copy of each
post-effective amendment, if any, to the Registration Statement (together with,
in each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters, at
such office or offices as you may designate, as many copies of the Prospectus as
you may reasonably request and (iii) thereafter from time to time during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, likewise send to the Underwriters as many additional
copies of the Prospectus and as many copies of any supplement to the Prospectus
and of any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing by
you, shall occur as a result of which
14
it is necessary, in the opinion of counsel for the Company or of counsel for the
Underwriters, to supplement or amend the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser of the Stock, the Company will forthwith prepare
and file with the Commission a supplement to the Prospectus or an amended
prospectus so that the Prospectus as so supplemented or amended will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time such Prospectus is delivered to such
purchaser, not misleading. If, after the initial public offering of the Stock by
the Underwriters and during such period, the Underwriters shall propose to vary
the terms of offering thereof by reason of changes in general market conditions
or otherwise, you will advise the Company in writing of the proposed variation,
and, if in the opinion either of counsel for the Company or of counsel for the
Underwriters such proposed variation requires that the Prospectus be
supplemented or amended, the Company will forthwith prepare and file with the
Commission a supplement to the Prospectus or an amended prospectus setting forth
such variation. The Company authorizes the Underwriters and all dealers to whom
any of the Stock may be sold by the several Underwriters to use the Prospectus,
as from time to time amended or supplemented, in connection with the sale of the
Stock in accordance with the applicable provisions of the Securities Act and the
applicable rules and regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment to
the Registration Statement and any supplement to the Prospectus or any amended
prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or Blue Sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or Blue Sky
laws; PROVIDED, HOWEVER, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. The Company will, from time to
time, prepare and file such statements, reports, and other documents as are or
may be required to continue such qualifications in effect for so long a period
as you may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, the
Company will furnish or make available to you, and to each Underwriter who may
so request in writing, copies of all reports furnished to shareholders of the
Company and of all information, documents and reports filed with the Commission.
15
2
(h) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the Effective Date, the Company
will make generally available to its security holders an earnings statement in
accordance with Section 11(a) of the Securities Act and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including all costs and
expenses incident to (i) the preparation, printing and filing with the
Commission and the National Association of Securities Dealers, Inc. of the
Registration Statement, any Preliminary Prospectus and the Prospectus, (ii) the
furnishing to the Underwriters of copies of any Preliminary Prospectus and of
the several documents required by paragraph (c) of this Section 6 to be so
furnished, (iii) the printing of this Agreement and related documents delivered
to the Underwriters, (iv) the preparation, printing and filing of all
supplements and amendments to the Prospectus referred to in paragraph (d) of
this Section 6, (v) the furnishing to you and the Underwriters of the reports
and information referred to in paragraph (g) of this Section 6 and (vi) the
printing and issuance of stock certificates, including the transfer agent's
fees.
(j) The Company agrees to reimburse you, for the account of the several
Underwriters, for Blue Sky fees and related disbursements (including counsel
fees and disbursements and cost of printing memoranda for the Underwriters) paid
by or for the account of the Underwriters or their counsel in qualifying the
Stock under state securities or blue sky laws and in the review of the offering
by the NASD.
(k) The Company agrees to pay all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program and
stamp duties, similar taxes or duties and other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program.
(l) The Company hereby agrees that, without the prior written consent of
Chase on behalf of the Underwriters, the Company will not, for a period of 180
days following the commencement of the public offering of the Stock by the
Underwriters, directly or indirectly, (i) sell, offer, contract to sell, make
any short sale, pledge, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any shares of Common Stock or any securities
convertible into or exchangeable or exercisable for or any rights to purchase or
acquire Common Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences or ownership of
Common Stock, whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing
16
sentence shall not apply to (A) the sale of the Stock to the Underwriters
pursuant to this Agreement, (B) the issuance of shares of Common Stock by the
Company upon the exercise of options granted under the 2000 Stock Incentive Plan
or under the Employee Stock Purchase Plan of the Company or upon the exercise of
warrants outstanding as of the date hereof, all as described under the caption
"Capitalization" in the Preliminary Prospectus, and (C) the grant of options to
purchase Common Stock under the 2000 Stock Incentive Plan.
(m) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
consult with its legal counsel and should the Company, in its reasonable
discretion, determine that a response to such rumor, publication or event is
appropriate, the Company will prepare, consult with you concerning the substance
of, and disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor, publication or
event.
(n) The Company is familiar with the Investment Company Act of 1940, as
amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not and
will not be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(o) The Company will place stop transfer orders on any Directed Shares that
have been sold to Participants that are subject to the three-month restriction
on sale, transfer, assignment, pledge or hypothecation imposed by the NASD under
its Interpretative Material 2110-1 on free-riding and withholding to the extent
necessary to ensure compliance with the three-month restrictions.
(p) The Company will comply with all applicable securities and other
applicable laws, rules and regulations in each jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program.
17
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person (including each partner or officer thereof) who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Securities Exchange Act of 1934 (herein called the EXCHANGE ACT) from and
against any and all losses, claims, damages or liabilities, joint or several, to
which such indemnified parties or any of them may become subject under the
Securities Act, the Exchange Act, or the common law or otherwise, and the
Company agrees to reimburse each such Underwriter and controlling person for any
legal or other expenses (including, except as otherwise hereinafter provided,
reasonable fees and disbursements of counsel) incurred by the respective
indemnified parties in connection with defending against any such losses,
claims, damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement), or 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, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or the omission or alleged omission to state therein 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 (i) the indemnity agreements of the Company contained in this paragraph (a)
shall not apply to any such losses, claims, damages, liabilities or expenses if
such statement or omission was made in reliance upon and in conformity with
information furnished as herein stated or otherwise furnished in writing to the
Company by such Underwriter through you expressly for use in any Preliminary
Prospectus or the Registration Statement or the Prospectus or any such amendment
thereof or supplement thereto and (2) the indemnity agreement contained in this
paragraph (a) with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages, liabilities or expenses purchased the Stock which is the
subject thereof (or to the benefit of any person controlling such Underwriter)
if at or prior to the written confirmation of the sale of such Stock a copy of
the Prospectus (or the Prospectus as amended or supplemented) was not sent or
delivered to such person and the untrue statement or omission of a material fact
contained in such Preliminary Prospectus was corrected in the Prospectus (or as
the Prospectus as amended or supplemented) unless the failure is the result of
noncompliance by the Company with paragraph (c) of Section 6 hereof. The
indemnity agreements of the Company contained in this paragraph (a) and the
representations and warranties of the
18
Company contained in Section 2 hereof shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its officers who signs the Registration Statement on his own
behalf or pursuant to a power of attorney, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, or the common law or otherwise and to reimburse each of them
for any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement), or 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 or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished as herein stated or otherwise
furnished in writing to the Company by such indemnifying Underwriter through you
expressly for use in the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto. The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and (b) of
this Section 7 agrees that, upon the service of a summons or other initial legal
process upon it in any action or suit instituted against it or upon its receipt
of written notification of the commencement of any investigation or inquiry of,
or proceeding against, it in respect of which indemnity may be sought on account
of any indemnity agreement contained in such paragraphs, it will promptly give
written notice (herein called the NOTICE) of such service
19
or notification to the party or parties from whom indemnification may be sought
hereunder. No indemnification provided for in such paragraphs shall be available
to any party who shall fail so to give the Notice if the party to whom such
Notice was not given was unaware of the action, suit, investigation, inquiry or
proceeding to which the Notice would have related and was prejudiced by the
failure to give the Notice, but the omission so to notify such indemnifying
party or parties of any such service or notification shall not relieve such
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of such
indemnity agreement. Any indemnifying party shall be entitled at its own expense
to participate in the defense of any action, suit or proceeding against, or
investigation or inquiry of, an indemnified party. Any indemnifying party shall
be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the NOTICE OF DEFENSE) to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; PROVIDED, HOWEVER, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or parties
shall be entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified party
or parties and (ii) in any event, the indemnified party or parties shall be
entitled to have counsel chosen by such indemnified party or parties participate
in, but not conduct, the defense. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Chase, in the case of parties indemnified pursuant to
paragraph (a) of this Section 7, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) of this Section 7. If, within a reasonable
time after receipt of the Notice, an indemnifying party gives a Notice of
Defense and the counsel chosen by the indemnifying party or parties is
reasonably satisfactory to the indemnified party or parties, the indemnifying
party or parties will not be liable under paragraphs (a) through (c) of this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party or parties in connection with the defense of the action, suit,
investigation, inquiry or proceeding, except that (A) the indemnifying party or
parties shall bear the legal and other expenses incurred in connection with the
conduct of the defense as referred to in clause (i) of the proviso to the
preceding sentence
20
and (B) the indemnifying party or parties shall bear such other expenses as it
or they have authorized to be incurred by the indemnified party or parties. If,
within a reasonable time after receipt of the Notice, no Notice of Defense has
been given, the indemnifying party or parties shall be responsible for any legal
or other expenses incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under paragraph (a) or (b) of
this Section 7, then each 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 the losses, claims, damages or liabilities
referred to in paragraph (a) or (b) of this Section 7, (i) in such proportion as
is appropriate to reflect the relative benefits received by each indemnifying
party from the offering of the Stock 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 each indemnifying party in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Stock received by the Company and
the total underwriting discount received by the Underwriters, as set forth in
the table on the cover page of the Prospectus, bear to the aggregate public
offering price of the Stock. Relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by each indemnifying party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities, or actions in respect thereof, referred to in the first sentence
of this paragraph (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigation,
preparing to defend or defending against any action or claim which is the
subject of this paragraph (d). Notwithstanding the provisions of this paragraph
(d), no Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Stock purchased by such Underwriter. No
person guilty of fraudulent misrepresentation (within
21
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) The Company will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Underwriter or any
person who controls such Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act is a party to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of such Underwriter and each such controlling
person from all liability arising out of such claim, action, suit or proceeding.
8. DIRECTED SHARE PROGRAM INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless Chase and each
person, if any, who controls Chase within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act (herein called the CHASE
ENTITIES), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) (i)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the consent of the Company for
distribution to Participants in connection with the Directed Share Program, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of Directed Shares that the Participant has agreed to purchase; or
(iii) related to, arising out of, or in connection with the Directed Share
Program, including those arising out of any violation or alleged violation of
the Act or out of any rescission right of any person in respect thereof, other
than losses, claims, damages or liabilities (or expenses relating thereto) that
are finally judicially determined to have resulted from the bad faith or gross
negligence of Chase Entities.
22
(b) Upon the service of a summons or other initial legal process upon any
Chase Entity in any action or suit instituted against it or upon its receipt of
written notification of the commencement of any investigation or inquiry of, or
proceeding against, it in respect of which indemnity may be sought pursuant to
Section 8(a), the Chase Entity seeking indemnity will promptly give Notice of
such service or notification to the Company. No indemnification provided for in
Section 8(a) shall be available to any Chase Entity who shall fail so to give
the Notice to the Company if the Company was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
the Company of any such service or notification shall not relieve the Company
from any liability which it may have to any such Chase Entity for contribution
or otherwise than on account of such indemnity agreement in Section 8(a). Any
Chase Entity shall be entitled at its own expense to participate in the defense
of any action, suit or proceeding against, or investigation or inquiry of, such
Chase Entity. The Company shall be entitled, if it so elects within a reasonable
time after receipt of the Notice by giving a Notice of Defense to any such Chase
Entity, to assume the entire defense of such action, suit, investigation,
inquiry or proceeding, in which event such defense shall be conducted, at the
expense of the Company, by counsel chosen by the Company and reasonably
satisfactory to such Chase Entity; PROVIDED, HOWEVER, that (i) if any such Chase
Entity reasonably determines that there may be a conflict between the positions
of the Company and of any such Chase Entity in conducting the defense of such
action, suit, investigation, inquiry or proceeding or that there may be legal
defenses available to such Chase Entity different from or in addition to those
available to the Company, then counsel for such Chase Entity shall be entitled
to conduct the defense to the extent reasonably determined by such counsel to be
necessary to protect the interests of such Chase Entity and (ii) in any event,
the Chase Entity shall be entitled to have counsel chosen by such Chase Entity
participate in, but not conduct, the defense. It is understood that the Company
shall not, in respect of the legal expenses of any such Chase Entity in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such Chase Entities and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by Chase. If, within a reasonable time after receipt of the Notice,
the Company gives a Notice of Defense in connection with this Section 8 and the
counsel chosen by the Company is reasonably satisfactory to the Chase Entity,
the Company will not be liable under Section 8(a) for any legal or other
expenses subsequently incurred by any such Chase Entity in connection with the
defense of the action, suit, investigation, inquiry or proceeding, except that
(A) the Company shall bear the legal and other expenses incurred in connection
with the conduct of the defense as referred to in clause (i) of the proviso to
the preceding sentence and (B) the Company shall bear such other expenses as it
or they have authorized to be incurred by any such Chase Entity. If, within a
reasonable time after
23
receipt of the Notice, no Notice of Defense has been given, the Company shall be
responsible for any legal or other expenses incurred by any such Chase Entity in
connection with the defense of the action, suit, investigation, inquiry or
proceeding.
(c) If the indemnification provided for in Section 8(a) is unavailable or
insufficient to hold harmless a Chase Entity under Section 8(a), then the
Company, in lieu of indemnifying the Chase Entity, shall contribute to the
amount paid or payable by the Chase Entity as a result of the losses, claims,
damages or liabilities referred to in Section 8(a), (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Chase Entities on the other hand from the offering of the Directed
Shares or (ii) if the allocation provided by clause 8(c)(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 8(c)(i) above but also the
relative fault of the Company on the one hand and of the Chase Entities on the
other hand in connection with the statements, acts or omissions that resulted in
such losses, claims, damages or liabilities, or actions in respect thereof, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Chase Entities on the other hand
in connection with the offering of the Directed Shares shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Directed Shares (before deducting expenses) and the total underwriting
discounts and commissions received by the Chase Entities for the Directed
Shares, bear to the aggregate public offering price of the Stock. Relative fault
of the Company on the one hand and the Chase Entities on the other hand shall be
determined by reference to, among other things, whether the statement, act or
omission that resulted in losses, claims, damages or liabilities relates to
statements, acts or omissions by the Company or by the Chase Entities and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statements, acts or omissions.
(d) The Company and the Chase Entities agree that it would not be just and
equitable if contributions pursuant to this Section 8 were to be determined by
PRO RATA allocation (even if the Chase Entities were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to in Section 8(c). The amount
paid by the Chase Entities as a result of the losses, claims, damages or
liabilities, or actions in respect thereof, referred to in the immediately
preceding paragraph shall be deemed to include any legal or other expenses
reasonably incurred by the Chase Entities in connection with investigation,
preparing to defend or defending against any action or claim which is the
subject of Section 8(c). Notwithstanding the provisions of this Section 8, no
Chase Entity shall be required to contribute any amount in excess of the
underwriting discount applicable to the Directed Shares distributed to the
public by such Chase Entity. No person guilty of fraudulent misrepresentation
(within the
24
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in Section 8(b)).
9. TERMINATION. This Agreement may be terminated by you at any time prior
to the Closing Date by giving written notice to the Company if after the date of
this Agreement trading in the Common Stock shall have been suspended, or if
there shall have occurred (i) the engagement in hostilities or an escalation of
major hostilities by the United States or the declaration of war or a national
emergency by the United States on or after the date hereof, (ii) any outbreak of
hostilities or other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak, calamity,
crisis or change in economic or political conditions in the financial markets of
the United States would, in the Underwriters' reasonable judgment, make the
offering or delivery of the Stock impracticable, (iii) suspension of trading in
securities generally or a material adverse change in value of securities
generally on the New York Stock Exchange, the American Stock Exchange, The
Nasdaq Stock Market, or limitations on prices (other than limitations on hours
or numbers of days of trading) for securities on either such exchange or system,
(iv) the enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of, or commencement of any proceeding
or investigation by, any court, legislative body, agency or other governmental
authority which in the Underwriters' reasonable opinion materially and adversely
affects or will materially or adversely affect the business or operations of the
Company, (v) declaration of a banking moratorium by either federal or New York
State authorities or (vi) the taking of any action by any federal, state or
local government or agency in respect of its monetary or fiscal affairs, which
in the Underwriters' reasonable opinion has a material adverse effect on the
securities markets in the United States. If this Agreement shall be terminated
pursuant to this Section 9, there shall be no liability of the Company to the
Underwriters (or their respective control persons) and no liability of the
Underwriters to the Company (or its control persons); PROVIDED, HOWEVER, that in
the event of any such termination the Company agrees to indemnify and hold
harmless the Underwriters from all costs or expenses incident to the performance
of the obligations of the Company under this Agreement, including all costs and
expenses referred to in paragraphs (i), (j) and (k) of Section 6 hereof.
25
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the several
Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company of all its obligations to be performed hereunder at
or prior to the Closing Date or any later date on which Option Stock is to be
purchased, as the case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective; and no
stop order suspending the effectiveness thereof shall have been issued and
no proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder
and the validity and form of the certificates representing the Stock, all
corporate proceedings and other legal matters incident to the foregoing,
and the form of the Registration Statement and of the Prospectus (except as
to the financial statements contained therein), shall have been presented,
in a reasonably satisfactory form, at or prior to the Closing Date, to
Davis Polk & Wardwell, counsel for the Underwriters.
(c) You shall have received from Brobeck, Phleger & Harrison LLP,
counsel for the Company, an opinion addressed to the Underwriters and dated
the Closing Date, covering the matters set forth in Annex A hereto, and if
Option Stock is purchased at any date after the Closing Date, additional
opinions from each such counsel, addressed to the Underwriters and dated
such later date, confirming that the statements expressed as of the Closing
Date in such opinions remain valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true
and correct and neither the Registration Statement nor the Prospectus
omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, respectively, not misleading,
(ii) since the Effective Date, no event has occurred which should have been
set forth in a supplement or amendment to the Prospectus which has not been
set forth in such a supplement or amendment, (iii) since the respective
dates as of which information is given in the Registration Statement in the
form in which it originally became effective and the Prospectus contained
therein, there has not been any Material Adverse Change or, to the
knowledge of the Company, any development involving a prospective Material
Adverse Change and, since such dates, except in the ordinary course of
business, the Company has not entered into any material transaction not
referred to in the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein,
26
(iv) the Company does not have any material contingent obligations which
are not disclosed in the Registration Statement and the Prospectus, (v)
there are not any pending or, to the knowledge of the Company, threatened,
legal proceedings to which the Company is a party or of which property of
the Company is the subject which are material and which are not disclosed
in the Registration Statement and the Prospectus, (vi) there are not any
franchises, contracts, leases or other documents which are required to be
filed as exhibits to the Registration Statement which have not been filed
as required, (vii) the representations and warranties of the Company herein
are true and correct in all material respects as of the Closing Date or any
later date on which Option Stock is to be purchased, as the case may be,
and (viii) there has not been any material change in the market for
securities in general or in political, financial or economic conditions
from those reasonably foreseeable as to render it impracticable in your
reasonable judgment to make a public offering of the Stock, or a material
adverse change in market levels for securities in general (or those of
companies in particular) or financial or economic conditions which render
it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later date
on which Option Stock is purchased a certificate, dated the Closing Date or
such later date, as the case may be, and signed by the President and the
Chief Financial Officer of the Company, stating that the respective signers
of said certificate have carefully examined the Registration Statement in
the form in which it originally became effective and the Prospectus
contained therein and any supplements or amendments thereto, and that the
statements included in clauses (i) through (vii) of paragraph (d) of this
Section 10 are true and correct.
(f) You shall have received from KPMG LLP, a letter or letters,
addressed to the Underwriters and dated the Closing Date and any later date
on which Option Stock is purchased, confirming that they are independent
public or certified public accountants with respect to the Company within
the meaning of the Securities Act and the rules of the Commission
thereunder and based upon the procedures described in their letter
delivered to you concurrently with the execution of this Agreement (herein
called the ORIGINAL LETTER), but carried out to a date not more than three
business days prior to the Closing Date or such later date on which Option
Stock is purchased (i) confirming, to the extent true, that the statements
and conclusions set forth in the Original Letter are accurate as of the
Closing Date or such later date, as the case may be, and (ii) setting forth
any revisions and additions to the statements and conclusions set forth in
the Original Letter which are necessary to reflect any changes in the facts
described in the Original Letter since the date of the Original Letter or
to reflect the availability of more recent financial statements, data or
information. The letters shall not disclose
27
any change, or any development involving a prospective change, in or
affecting the business or properties of the Company which, in your sole
judgment, makes it impractical or inadvisable to proceed with the public
offering of the Stock or the purchase of the Option Stock as contemplated
by the Prospectus.
(g) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several
jurisdictions, or other evidence satisfactory to you, of the qualification
referred to in paragraph (f) of Section 6 hereof.
(h) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly approved for quotation on the Nasdaq National
Market upon official notice of issuance.
(i) On or prior to the Closing Date, you shall have received from all
employees and directors of the Company, and beneficial holders of any
securities issued by the Company (other than Participants who (i) are not
employees of the Company and (ii) do not otherwise hold securities issued
by the Company) agreements, substantially in the forms attached hereto as
Annexes B-1, B-2 or B-3, as applicable, each of which shall be in full
force and effect on the Closing Date.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Davis Polk & Wardwell, counsel for the Underwriters,
shall be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 10 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters (or their respective control persons) and without liability of the
Underwriters to the Company (or its control persons); PROVIDED, HOWEVER, that
(i) in the event of such termination, the Company agrees to indemnify and hold
harmless the Underwriters from all costs or expenses incident to the performance
of the obligations of the Company under this Agreement, including all costs and
expenses referred to in paragraphs (i), (j) and (k) of Section 6 hereof, and
(ii) if this Agreement is terminated by you because of any refusal, inability or
failure on the part of the Company to perform any agreement herein, to fulfill
any of the conditions herein, or to comply with any provision hereof other than
by reason of a default by any of the Underwriters, the Company will reimburse
the Underwriters severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the transactions contemplated hereby.
28
11. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of the
Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 11 shall not be
fulfilled, this Agreement may be terminated by the Company by giving notice to
you. Any such termination shall be without liability of the Company to the
Underwriters (or their respective control persons) and without liability of the
Underwriters to the Company (or its control persons); PROVIDED, HOWEVER, that in
the event of any such termination the Company agrees to indemnify and hold
harmless the Underwriters from all costs or expenses incident to the performance
of the obligations of the Company under this Agreement, including all costs and
expenses referred to in paragraphs (i), (j) and (k) of Section 6 hereof.
12. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other obligations
under Sections 7 and 8 of this Agreement, the Company hereby agrees to reimburse
on a quarterly basis the Underwriters for all reasonable legal and other
expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Sections 7 and 8 of this Agreement, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
obligations under this Section 11 and the possibility that such payments might
later be held to be improper; PROVIDED, HOWEVER, that (i) to the extent any such
payment is ultimately held to be improper, the persons receiving such payments
shall promptly refund them and (ii) such persons shall provide to the Company,
upon request, reasonable assurances of their ability to effect any refund, when
and if due.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure to
the benefit of the Company and the several Underwriters and, with respect to the
provisions of Sections 7 and 8 hereof, the several parties (in addition to the
Company and the several Underwriters) indemnified under the provisions of said
Sections 7 and 8, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give to
any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The
term "successors and assigns" as herein used shall not include any purchaser, as
such purchaser, of any of the Stock from any of the several Underwriters.
29
14. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by facsimile and, if to the Underwriters, shall
be mailed, sent by facsimile or delivered to Chase Securities Inc., One Bush
Street, San Francisco, California 94104; and if to the Company, shall be mailed,
sent by facsimile or delivered to it at its office, 462 Seventh Avenue, 10th
Floor, New York, New York 10018-7606, Attention: President (facsimile number:
212-277-8960); with a copy to Brobeck, Phleger & Harrison LLP, 1633 Broadway,
47th Floor, New York, NY 10019, Attention: Brian B. Margolis, Esq. (facsimile
number: 212-586-7878). All notices given by facsimile shall be promptly
confirmed by letter.
15. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or their respective directors or officers or controlling persons,
and (c) delivery and payment for the Stock under this Agreement; PROVIDED,
HOWEVER, that if this Agreement is terminated prior to the Closing Date, the
provisions of paragraphs (l) and (m) of Section 6 hereof shall be of no further
force or effect.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
LIVEPERSON, INC.
By
------------------------------------
Name: Robert P. LoCascio
President and Chief Executive
Officer
30
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
CHASE SECURITIES INC.
THOMAS WEISEL PARTNERS LLC
PAINEWEBBER INCORPORATED
By Chase Securities Inc.
By
------------------------------------
Name: Mark Zanoli
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
31
SCHEDULE I
UNDERWRITERS
NUMBER OF
SHARES TO BE
PURCHASED
Chase Securities Inc. ...............................
THOMAS WEISEL PARTNERS LLC...........................
PAINEWEBBER INCORPORATED.............................
---------------
TOTAL.......................................
===============
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