3,000,000 Shares
White Pine Software, Inc.
Common Stock
UNDERWRITING AGREEMENT
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[ ], 1996
XXXXX & COMPANY
XXXXXXXXXXX & CO., INC.
XXXXX, XXXXX & COMPANY
As Representatives of the several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. White Pine Software, Inc., a Delaware corporation
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(the "Company"), proposes to sell, pursuant to the terms of this Agreement, to
the several underwriters named in Schedule A hereto (the "Underwriters" or,
each, an "Underwriter"), an aggregate of 3,000,000 shares of Common Stock, $.01
par value (the "Common Stock") of the Company. The aggregate of 3,000,000
shares so proposed to be sold is hereinafter referred to as the "Firm Stock."
The Company also proposes to sell to the Underwriters, upon the terms and
conditions set forth in Section 3 hereof, up to an additional 450,000 shares of
Common Stock (the "Optional Stock"). The Firm Stock and the Optional Stock are
hereinafter collectively referred to as the "Stock." The respective amounts of
the Firm Stock and the Optional Stock to be so purchased by the several
Underwriters are set forth opposite their names in Schedule A hereto. Xxxxx &
Company ("Cowen"), Xxxxxxxxxxx & Co., Inc. ("Xxxxxxxxxxx") and Xxxxx, Xxxxx &
Company ("Xxxxx") are acting as representatives of the several Underwriters and,
in such capacity, are hereinafter referred to as the "Representatives."
2. Representations and Warranties of the Company. The Company
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represents and warrants to, and agrees with, the several Underwriters as
follows:
(a) A registration statement on Form SB-2 (File No. 333-9525) in the
form in which it became or becomes effective, and also in such form as it
may be when any post-effective amendment thereto shall become effective
with respect to the Stock, including any pre-effective prospectuses
included as part of the registration statement as originally filed or as
part of any amendment or supplement thereto, or filed
pursuant to Rule 424 under the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, copies of which have heretofore been delivered to you, has been
carefully prepared by the Company in conformity with the requirements of
the Securities Act and has been filed with the Commission under the
Securities Act; one or more amendments to such registration statement,
including in each case an amended pre-effective prospectus, copies of which
amendments have heretofore been delivered to you, also have been so
prepared and filed. The term "Registration Statement," as used in this
Agreement, means the registration statement referenced in the first
sentence of this Section 2(a), subject to the following two sentences if it
is contemplated, at the time this Agreement is executed, that a post-
effective amendment to the registration statement will be filed and must be
declared effective before the offering of the Stock may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. The term
"Registration Statement," as used in this Agreement, shall also include any
registration statement relating to the Stock that is filed and declared
effective pursuant to Rule 462(b) under the Securities Act. The term
"Prospectus," as used in this Agreement, means the prospectus in the form
included in the Registration Statement subject to the following two
sentences. If the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Securities Act and such
information is included in a prospectus filed with the Commission pursuant
to Rule 424(b) under the Securities Act, the term "Prospectus," as used in
this Agreement, means the prospectus in the form included in the
Registration Statement as supplemented by the addition of the Rule 430A
information and other information contained in the prospectus filed with
the Commission pursuant to Rule 424(b). If prospectuses that meet the
requirements of Section 10(a) of the Securities Act are delivered pursuant
to Rule 434 under the Securities Act, then (i) the term "Prospectus" as
used in this Agreement means the "prospectus subject to completion" (as
such term is defined in Rule 434(g) under the Securities Act) as
supplemented by (a) the addition of Rule 430A information or other
information contained in the form of prospectus delivered pursuant to Rule
434(b)(2) under the Securities Act or (b) the information contained in the
term sheets described in Rule 434(b)(3) under the Securities Act, and (ii)
the date of such prospectuses shall be deemed to be the date of the term
sheets. The term "Pre-effective Prospectus" as used in this Agreement
means the prospectus subject to completion in the form included in the
registration statement referenced in the first sentence of this Section
2(a) at the time of the initial filing thereof and as such prospectus shall
have been amended from time to time prior to the date of the Prospectus.
(b) The Commission has not issued or threatened to issue any order
preventing or suspending the use of any Pre-effective Prospectus, and, at
its date of issue, each Pre-effective Prospectus conformed in all material
respects with the requirements of the Securities Act and did not include
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary
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to make the statements therein, in light of the circumstances under which
they were made, not misleading, other than any such nonconforming untrue
statement or omission in a Pre-effective Prospectus which has been
corrected in the Prospectus; and, when the Registration Statement became or
becomes effective and at all times subsequent thereto up to and including
the Closing Dates (as hereinafter defined), the Registration Statement and
the Prospectus and any amendments or supplements thereto contained and will
contain all material statements and information required to be included
therein by the Securities Act and conformed and will conform in all
material respects to the requirements of the Securities Act and neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, included or will include any untrue statement of a material fact
or omitted or will omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
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however, that the foregoing representations, warranties and agreements
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shall not apply to information contained in or omitted from any Pre-
effective Prospectus or the Registration Statement or the Prospectus or any
such amendment or supplement thereto in reliance upon, and in conformity
with, written information furnished to the Company by or on behalf of any
Underwriter, directly or through you, specifically for use in the
preparation thereof. There is no franchise, lease, contract, agreement or
document required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement which
is not described therein or filed as required, and all descriptions of any
such franchises, leases, contracts, agreements or documents contained in
the Registration Statement are accurate and complete descriptions of such
documents in all material respects.
(c) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, except as set forth or
contemplated in the Prospectus (including without limitation with respect
to the stock plans, warrant, and conversion of $5.83 Stock (as hereinafter
defined)), neither the Company nor its subsidiaries has incurred any
liabilities or obligations, direct or contingent, or entered into any
transactions not in the ordinary course of business, and there has not been
any material adverse change in the condition (financial or other),
properties, business, management, prospects, net worth or results of
operations of the Company and its subsidiaries considered as a whole, or
any change in the capital stock or long-term debt, or any material change
in the short-term debt, of the Company and its subsidiaries considered as a
whole.
(d) The financial statements, together with the related notes and
schedules, set forth in the Prospectus and elsewhere in the Registration
Statement fairly present, on the basis stated in the Registration
Statement, the financial position and the results of operations and changes
in financial position of the Company and its subsidiaries at the respective
dates and for the respective periods therein specified. Such statements
and related notes and schedules have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis.
The selected financial
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and statistical data set forth in the Prospectus under the caption
"Selected Financial Data" fairly present, on the basis stated in the
Registration Statement, the information set forth therein.
(e) Ernst & Young, LLP, who have expressed their opinion on the
audited financial statements and related schedules included in the
Registration Statement and the Prospectus, are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(f) The Company and each of its subsidiaries has been duly organized
and is validly existing and in good standing as corporations under the laws
of their respective jurisdictions of organization, with power and authority
(corporate and other) to own or lease their businesses as described in the
Prospectus; the Company and each of its subsidiaries is in possession of
and operating in compliance with all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates and orders required
for the conduct of their respective businesses, all of which are valid and
in full force and effect; and the Company and each of its subsidiaries is
duly qualified to do business and in good standing as foreign corporations
in all other jurisdictions where the failure to so qualify would have a
material adverse effect on the Company. The Company and each of its
subsidiaries has all requisite power and authority, and all necessary
consents, approvals, authorizations, orders, registrations, qualifications,
licenses and permits of and from all public regulatory or governmental
agencies and bodies to own, lease and operate their respective properties
and conduct their respective businesses as now being conducted and as
described in the Registration Statement and the Prospectus, and no such
consent, approval, authorization, order, registration, qualification,
license or permit contains a materially burdensome restriction not
adequately disclosed in the Registration Statement and the Prospectus. The
Company owns or controls, directly or indirectly, only the following
corporations: About Software Corporation S.A. and About Software
Corporation.
(g) The Company's authorized and outstanding capital stock is on the
date hereof, and will be on the Closing Dates (as hereinafter defined), as
set forth under the caption "Description of Capital Stock" in the
Prospectus; the outstanding shares of capital stock of the Company conform
to the description thereof in the Prospectus, have been duly authorized and
validly issued and are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws and were not issued
in violation of, and on the Closing Date will not be subject to, any
preemptive rights or similar rights to subscribe for or purchase
securities. The 394,511 shares of Common Stock to be issued upon the
conversion of all outstanding shares of common stock, par value $5.83 per
share (the "$5.83 Stock"), of the Company, to be effected immediately prior
to the First Closing (as hereinafter defined), have been duly and validly
authorized and, when issued, will be duly and validly issued, fully paid
and nonassessable and free of any preemptive or similar rights. Except as
disclosed in and or contemplated by the Prospectus (including without
limitation with respect to
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stock purchase and stock option plans) and the financial statements of the
Company and related notes thereto included in the Prospectus, the Company
does not have outstanding any options or warrants to purchase, or any
preemptive rights or other rights to subscribe for or to purchase any
securities or obligations convertible into, or any contracts or commitments
to issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's
stock option and other stock plans or arrangements, and the options or
other rights granted or exercised thereunder, as set forth in the
Prospectus, accurately and fairly presents the information required to be
shown with respect to such plans, arrangements, options and rights. All
outstanding shares of capital stock of the Company's subsidiaries have been
duly authorized and validly issued, and are fully paid and nonassessable
and (other than nominal share ownership as required by applicable law) are
owned directly by the Company free and clear of any liens, encumbrances,
equities or claims.
(h) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and nonassessable and free of any
preemptive or similar rights and will conform to the description thereof in
the Prospectus.
(i) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries or any affiliates is a party or of which any property of the
Company or any of its subsidiaries or any affiliate is subject, which, if
determined adversely to the Company or any of its subsidiaries or any such
affiliate, might individually or in the aggregate (i) prevent or adversely
affect the transactions contemplated by this Agreement, (ii) suspend the
effectiveness of the Registration Statement, (iii) prevent or suspend the
use of the Pre-effective Prospectus in any jurisdiction or (iv) result in a
material adverse change in the condition (financial or other), properties,
business, management, prospects, net worth or results of operations of the
Company and its subsidiaries considered as a whole, and, to the best of the
Company's knowledge, there is no valid basis for any such legal or
governmental proceeding; and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated against the Company or any
of its subsidiaries or any affiliate by governmental authorities or others.
The Company is neither a party nor subject to the provisions of any
material injunction, judgment, decree or order of any court, regulatory
body or other governmental agency or body. The description of the
Company's litigation under the caption "Legal Proceedings" in the
Prospectus is true and correct and complies with the Rules and Regulations.
(j) The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated (i) will not result in
any violation of the provisions of the Amended and Restated Certificate of
Incorporation, and Amended and Restated By-Laws or other organizational
documents of the Compa-
5
ny or any of its subsidiaries or any law, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties or assets, (ii) will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other material agreement or instrument to
which the Company or any of its subsidiaries is a party or to which the
Company, any of its subsidiaries or any of the property or assets of the
Company or any of its subsidiaries is subject and (iii) will not result in
the creation or imposition of a lien upon any property or assets of the
Company or any of its subsidiaries.
(k) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated by this Agreement, except such consents,
approvals, or authorizations which have been obtained, such as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") or under the Securities Act or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or securities or "Blue Sky" laws of any
jurisdiction in connection with the purchase and distribution of the Stock
by the Underwriters.
(l) The Company has the full corporate power and authority to enter
into this Agreement and to perform its obligations hereunder (including to
issue, sell and deliver the Stock), and this Agreement has been duly and
validly authorized, executed and delivered by the Company and is a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws or the public policy underlying such laws.
(m) The Company and its subsidiaries are in all material respects in
compliance with, and conduct their businesses in conformity with, all
applicable federal, state, local and foreign laws, rules and regulations
(including but not limited to the Foreign Corrupt Practices Act) and all
applicable judgments, decrees or orders of any court or governmental agency
or body; to the best of the Company's knowledge, otherwise than as set
forth in the Registration Statement and the Prospectus, no prospective
change in any of such laws, rules or regulations has been adopted which,
when made effective, would have a material adverse effect on the operations
of the Company and its subsidiaries.
(n) The Company and its subsidiaries have filed all necessary
federal, state, local and foreign income, payroll, franchise and other tax
returns and have paid all taxes shown as due thereon or with respect to any
of their properties, and there is no tax deficiency that has been, or to
the best of the Company's knowledge is likely to be, asserted against the
Company or any of its subsidiaries or any of their respective
6
properties or assets that would adversely affect the financial position,
business or operations of the Company and its subsidiaries.
(o) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of the
filing or effectiveness of the Registration Statement or otherwise, except
for persons and entities who have expressly waived such right or who have
been given proper notice and have failed to exercise such right within the
time or times required under the terms and conditions of such right.
(p) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any security
of the Company, or which caused or resulted in, or which might in the
future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(q) The Company has provided you with all financial statements since
inception to the date hereof that are available to the officers of the
Company, including financial statements for the six months ended June 30,
1996.
(r) The Company and its subsidiaries own or possess the right to use
all patents, trademarks, trademark registrations, service marks, service
xxxx registrations, trade names, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned by them or
any of them or necessary for the conduct of their respective businesses,
and the Company is not aware of any claim to the contrary or any challenge
by any other person to the rights of the Company and its subsidiaries with
respect to the foregoing. The Company's business as now conducted and as
proposed to be conducted does not and will not infringe or conflict with in
any material respect patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses or other intellectual property or
franchise right of any other person. Except as described in the
Prospectus, no claim has been made against the Company alleging the
infringement by the Company of any patent, trademark, service xxxx, trade
name, copyright, trade secret, license in or other intellectual property
right or franchise right of any person.
(s) The Company and its subsidiaries have performed all material
obligations required to be performed by them under all contracts required
to be filed as exhibits to the Registration Statement by Item 601(b)(10) of
Regulation S-B under the Securities Act, and neither the Company nor its
subsidiaries nor any other party to such contract is in default under or in
breach of any such obligations. Neither the Company nor its subsidiaries
has received any notice of such default or breach.
(t) The Company is not involved in any labor dispute nor is any such
dispute threatened. The Company is not aware that (i) any executive, key
employee
7
or significant group of employees of the Company or any of its subsidiaries
plans to terminate employment with the Company or any of its subsidiaries
or (ii) any such executive or key employee is subject to any noncompete,
nondisclosure, confidentiality, employment, consulting or similar agreement
that would be violated by the present or proposed business activities of
the Company and its subsidiaries. Neither the Company nor any of its
subsidiaries has or expects to have any liability for any prohibited
transaction or funding deficiency or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other plan which
is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which the Company or any of its subsidiaries makes or
ever has made a contribution and in which any employee of the Company or
any of its subsidiaries is or has ever been a participant. With respect to
such plans, the Company and its subsidiaries are in compliance in all
material respects with all applicable provisions of ERISA.
(u) The Company has obtained the written agreement described in
Section 8(j) of this Agreement from each of its officers, directors and
holders of Common Stock and or options exercisable for shares of Common
Stock listed on Schedule B hereto.
(v) The Company and its subsidiaries have, and the Company and its
subsidiaries as of the Closing Dates (as hereinafter defined) will have,
good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned or proposed to be owned by
them which is material to the business of the Company or of its
subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as would not
have a material adverse effect on the Company and its subsidiaries
considered as a whole; and any real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as would not have a
material adverse effect on the Company and its subsidiaries considered as a
whole, in each case except as described in or contemplated by the
Prospectus.
(w) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions described in
the Prospectus; and neither the Company nor any of its subsidiaries has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue their respective
businesses at a cost that would not materially and adversely affect the
condition (financial or other), or the earnings, business or operations of
the Company and its subsidiaries considered as a whole, except as described
in or contemplated by the Prospectus.
8
(x) Other than as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from the Company any
brokerage or finder's fee or other fee or commission as a result of any of
the transactions contemplated by this Agreement.
(y) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(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 existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(z) To the best of the Company's knowledge, neither the Company nor
any of its subsidiaries nor any employee or agent of the Company or any of
its subsidiaries has made any payment of funds of the Company or any of its
subsidiaries or received or retained any payment in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(aa) Neither the Company nor any of its subsidiaries is or, after
application of the net proceeds of this offering as described under the
caption "Use of Proceeds" in the Prospectus, will become 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.
(bb) Each certificate signed by an officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company as to the matters
covered thereby.
(cc) The stock records provided to the Representatives and their
counsel are correct in all material respects.
3. Purchase by, and Sale and Delivery to, Underwriters -- Closing
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Dates. The Company agrees to sell to the Underwriters the Firm Stock; and on
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the basis of the representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase the Firm Stock from
the Company, the number of shares of Firm Stock to be purchased by each
Underwriter being set opposite its name in Schedule A, subject to adjustment in
accordance with Section 12 hereof.
9
The purchase price per share to be paid by the Underwriters to the
Company will be $[ ] per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 12:00 Noon, New York Time, on the second full business day preceding the
First Closing Date (as defined below) or, if no such direction is received, in
the names of the respective Underwriters or in such other names as Cowen may
designate (solely for the purpose of administrative convenience) and in such
denominations as Cowen may determine, against payment of the aggregate Purchase
Price therefor by certified or official bank check or checks in Clearing House
funds (next day funds), payable to the order of the Company, all at the offices
of Xxxxx, Xxxx & Xxxxx LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
The time and date of the delivery and closing shall be at 10:00 A.M., New York
Time, on [ ], 1996, in accordance with Rule 15c6-1 of the Exchange
Act. The time and date of such payment and delivery are herein referred to as
the "First Closing Date". The First Closing Date and the location of, delivery
of, and the form of payment for, the Firm Stock may be varied by agreement
between the Company and Cowen. The First Closing Date may be postponed pursuant
to the provisions of Section 12.
The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters not later than
10:00 A.M., New York Time, on the business day preceding the First Closing Date
at the offices of Xxxxx & Company, Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
It is understood that Cowen or Oppenheimer or Xxxxx, individually and
not as Representatives of the several Underwriters, may (but shall not be
obligated to) make payment to the Company on behalf of any Underwriter or
Underwriters, for the Stock to be purchased by such Underwriter or Underwriters.
Any such payment by Cowen, Xxxxxxxxxxx or Xxxxx, shall not relieve such
Underwriter or Underwriters from any of its or their other obligations
hereunder.
The several Underwriters agree to make an initial public offering of
the Firm Stock at the initial public offering price as soon after the
effectiveness of the Registration Statement as in their judgment is advisable.
The Representatives shall promptly advise the Company of the making of the
initial public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Company hereby grants to the Underwriters an option to purchase, severally and
not jointly, some or all of the shares of Optional Stock. The price per share
to be paid for the Optional Stock shall be the Purchase Price. The option
granted hereby may be exercised as to all or any part of the Optional Stock at
any time, and from time to time, not more than thirty (30) days subsequent to
the effective date of this Agreement. No Optional Stock shall be sold and
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delivered unless the Firm Stock previously has been, or simultaneously is, sold
and delivered. The right to purchase the Optional Stock or any portion thereof
may be surrendered and terminated at any time upon notice by the Underwriters to
the Company.
The option granted hereby may be exercised by the Underwriters by
giving written notice from Cowen to the Company setting forth the number of
shares of the Optional Stock to be purchased by them and the date and time for
delivery of and payment for the Optional Stock. Each date and time for delivery
of and payment for the Optional Stock (which may be the First Closing Date, but
not earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than ten (10) business days after
written notice is given. (The Option Closing Date and the First Closing Date are
herein called the "Closing Dates.") All purchases of Optional Stock from the
Company shall be made on a pro rata basis. Optional Stock shall be purchased
for the account of each Underwriter in the same proportion as the number of
shares of Firm Stock set forth opposite such Underwriter's name in Schedule A
hereto bears to the total number of shares of Firm Stock (subject to adjustment
by the Underwriters to eliminate odd lots). Upon exercise of the option by the
Underwriters, the Company agrees to sell to the Underwriters the number of
shares of Optional Stock set forth in the written notice of exercise and the
Underwriters agree, severally and not jointly and subject to the terms and
conditions herein set forth, to purchase the number of such shares determined as
aforesaid.
The Company will deliver the Optional Stock to the Underwriters (in
the form of definitive certificates) issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York Time, on the second full
business day preceding the Option Closing Date or, if no such direction is
received, in the names of the respective Underwriters or in such other names as
Cowen may designate (solely for the purpose of administrative convenience) and
in such denominations as Cowen may determine, against payment of the aggregate
Purchase Price therefor by certified or official bank check or checks in
Clearing House funds (next day funds), payable to the order of the Company, all
at the offices of Xxxxx, Xxxx & Xxxxx LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000. The Option Closing Date and the location of delivery of,
and the form of payment for, the Option Stock may be varied by agreement between
the Company and Cowen. The Option Closing Date may be postponed pursuant to the
provisions of Section 12.
4. Covenants and Agreements of the Company. The Company covenants
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and agrees with the several Underwriters that:
(a) The Company will (i) use its best efforts to comply with the
provisions of and make all requisite filings with the Commission pursuant
to Rule 424 of the Rules and Regulations, (ii) if the Company and the
Representatives have determined not to proceed pursuant to Rule 430A of the
Rules and Regulations, use its best efforts to cause the Registration
Statement to become effective, (iii) if the Company and the Representatives
have determined to proceed pursuant to Rule 430A, use its
11
best efforts to comply with the provisions of and make all requisite
filings with the Commission pursuant to Rule 430A of the Rules and
Regulations and (iv) if the Company and the Representatives have determined
to deliver Prospectuses pursuant to Rule 434 of the Rules and Regulations,
to use its best efforts to comply with all the applicable provisions
thereof. The Company will advise the Representatives promptly as to the
time at which the Registration Statement becomes effective, will advise the
Representatives promptly of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the
institution of any proceedings for that purpose, and will use its best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible the lifting thereof, if issued. The Company will advise
the Representatives promptly of the receipt of any comments of the
Commission or any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for
additional information and will not at any time file any amendment to the
Registration Statement or supplement to the Prospectus which shall not
previously have been submitted to the Representatives a reasonable time
prior to the proposed filing thereof or to which the Representatives shall
reasonably object in writing or which is not in compliance with the
Securities Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon the request of the Representatives, any amendments or supplements to
the Registration Statement or the Prospectus which in the opinion of the
Representatives may be necessary to enable the several Underwriters to
continue the distribution of the Stock and will use its best efforts to
cause the same to become effective as promptly as possible.
(c) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Stock is required to be
delivered under the Securities Act any event relating to or affecting the
Company or any of its subsidiaries occurs as a result of which the
Prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus to comply with the Securities Act, the Company
will promptly notify the Representatives thereof and will prepare an
amended or supplemented prospectus which will correct such statement or
omission; and in case any Underwriter is required to deliver a prospectus
relating to the Stock nine (9) months or more after the effective date of
the Registration Statement, the Company upon the request of the
Representatives and at the expense of such Underwriter, will prepare
promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Securities Act.
(d) The Company will deliver to the Representatives, at or before the
First Closing, signed copies of the Registration Statement, as originally
filed with the
12
Commission, and all amendments thereto including all financial statements
and exhibits thereto, and will deliver to the Representatives such number
of copies of the Registration Statement, including such financial
statements, but without exhibits, and all amendments thereto, as the
Representatives may reasonably request. The Company will deliver or mail
to or upon the order of the Representatives, from time to time until the
effective date of the Registration Statement, as many copies of the Pre-
effective Prospectus as the Representatives may reasonably request. The
Company will deliver or mail to or upon the order of the Representatives on
the date of the initial public offering, and thereafter from time to time
during the period when delivery of a prospectus relating to the Stock is
required under the Securities Act, as many copies of the Prospectus, in
final form or as thereafter amended or supplemented, as the Representatives
may reasonably request; provided, however, that the expense of the
-------- -------
preparation and delivery of any prospectus required for use nine (9) months
or more after the effective date of the Registration Statement shall be
borne by the Underwriters required to deliver such prospectus.
(e) The Company will make generally available to its stockholders as
soon as practicable, but not later than fifteen (15) months after the
effective date of the Registration Statement, an earnings statement which
will be in reasonable detail (but which need not be audited) and which will
comply with Section 11(a) of the Securities Act, covering a period of at
least twelve (12) months beginning after the "effective date" (as defined
in Rule 158 under the Securities Act) of the Registration Statement.
(f) The Company will cooperate with the Representatives to enable the
Stock to be registered or qualified for offering and sale by the
Underwriters and by dealers under the securities laws of such jurisdictions
as the Representatives may designate and, at the request of the
Representatives, will make such applications and furnish such consents to
service of process or other documents as may be required of it as the
issuer of the Stock for that purpose; provided, however, that the Company
-------- -------
shall not be required to qualify to do business or to file a general
consent (other than that arising out of the offering or sale of the Stock)
to service of process in any such jurisdiction where it is not now so
subject. The Company will, from time to time, prepare and file such
statements and reports as are or may be required of it as the issuer of the
Stock to continue such qualifications in effect for so long a period as the
Representatives may reasonably request for the distribution of the Stock.
The Company will advise the Representatives promptly after the Company
becomes aware of the suspension of the qualifications or registration of
(or any such exception relating to) the Common Stock of the Company for
offering, sale or trading in any jurisdiction or of any initiation or
threat of any proceeding for any such purpose, and in the event of the
issuance of any orders suspending such qualifications, registration or
exception, the Company will, with the cooperation of the Representatives,
use its best efforts to obtain the withdrawal thereof.
13
(g) The Company will furnish to its stockholders annual reports
containing financial statements certified by independent public accountants
and with quarterly summary financial information in reasonable detail which
may be unaudited. During the period of five (5) years from the date
hereof, the Company will deliver to the Representatives and, upon request,
to each of the other Underwriters, as soon as they are available, copies of
each annual report of the Company and each other report furnished by the
Company to its stockholders and will deliver to the Representatives, (i) as
soon as they are available, copies of any other reports (financial or
other) which the Company shall publish or otherwise make available to any
of its stockholders as such, (ii) as soon as they are available, copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange and (iii) from time to time
such other information concerning the Company as you may request. So long
as the Company's subsidiaries are active, such financial statements will be
on a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally.
(h) The Company will use its best efforts to cause the Stock to be
accepted for quotation on the Nasdaq National Market concurrently with the
effectiveness of the Registration Statement.
(i) The Company will maintain a transfer agent and registrar for its
Common Stock.
(j) Prior to filing its quarterly statements on Form 10-Q, the
Company will have its independent auditors perform a limited quarterly
review of its quarterly results.
(k) The Company will not offer, sell, assign, transfer, encumber,
contract to sell, grant an option, right or warrant to purchase or
otherwise dispose (or announce any offer, assignment, sale, transfer,
encumbrance, contract to sell, grant of an option, right or warrant to
purchase or other disposition) of any shares of, Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock
(including, without limitation, Common Stock of the Company which may be
deemed to be beneficially owned by the undersigned in accordance with the
Rules and Regulations) for 180 days commencing on the date of the final
prospectus, other than (i) the Company's sale of Common Stock hereunder and
the Company's issuance of Common Stock upon the exercise of warrants and
stock options which are presently outstanding or described in the
Prospectus, (ii) the Company's grant of stock options pursuant to the 1996
Incentive and Nonqualified Stock Option Plan in accordance with the terms
and provisions of that plan described in the Prospectus and (iii) the
Company's issuance of common stock pursuant to the 1996 Employee Stock
Purchase Plan in accordance with the terms and provisions of that plan
described in the Prospectus.
14
(l) The Company will furnish to the Representatives a signed copy of
each report on Form SR as filed pursuant to Rule 463 of the Rules and
Regulations.
(m) The Company will apply the net proceeds from the sale of the
Stock as set forth in the description under "Use of Proceeds" in the
Prospectus, which description complies in all respects with the
requirements of Item 504 of Regulation S-B.
(n) The Company will supply you with copies of all correspondence to
and from, and all documents issued to and by, the Commission in connection
with the registration of the Stock under the Securities Act.
(o) Prior to the Closing Dates, the Company will furnish to you, as
soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company and any of its
subsidiaries for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the
Prospectus.
(p) Prior to the Closing Dates, the Company will issue no press
release or other communications directly or indirectly and hold no press
conference with respect to the Company or any of its subsidiaries, the
financial condition, results of operations, business, prospects, assets or
liabilities of any of them, or the offering of the Stock, without your
prior written consent. For a period of twelve (12) months following the
Closing Date, the Company will use its best efforts to provide to you
copies of each press release or other public communication with respect to
the financial condition, results of operations, business, prospects, assets
or liabilities of the Company at least twenty-four (24) hours prior to the
public issuance thereof or during such longer advance period as may
reasonably be practicable.
(q) During the period of five (5) years hereafter, the Company will
furnish to the Representatives, and upon request of the Representatives, to
each of the Underwriters: (i) as soon as practicable after the end of each
fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and
statements of income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public
accountants; (ii) as soon as practicable after the filing thereof, copies
of each proxy statement, Annual Report on Form 10-K, Quarterly Report on
Form 10-Q, Current Report on Form 8-K or other report filed by the Company
with the Commission, or the NASD or The Nasdaq Stock Market, Inc. or any
securities exchange; and (iii) as soon as available, copies of any report
or communication of the Company mailed generally to holders of the Common
Stock.
5. Payment of Expenses. (a) The Company will pay (directly or by
-------------------
reimbursement) all costs, fees and expenses incurred in connection with or
incident to the performance of its obligations under this Agreement and in
connection with the transactions
15
contemplated hereby, including but not limited to (i) all expenses and taxes
incident to the issuance and delivery of the Stock to the Representatives; (ii)
all expenses incident to the registration of the Stock under the Securities Act;
(iii) the costs of preparing stock certificates (including printing and
engraving costs); (iv) all fees and expenses of the registrar of and transfer
agent for the Stock; (v) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Stock to the Underwriters; (vi)
fees and expenses of the Company's counsel and the Company's independent
accountants; (vii) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement, each Pre-effective Prospectus and the Prospectus (including all
exhibits and financial statements) and all amendments and supplements provided
for herein, the "Agreement Among Underwriters" between the Representatives and
the Underwriters, the Master Selected Dealers' Agreement, the Underwriters'
Questionnaire and the Blue Sky memoranda and this Agreement; (viii) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with exemptions from the qualifying or registering (or obtaining
qualification or registration of) all or any part of the Stock for offer and
sale and determination of its eligibility for investment under the Blue Sky or
other securities laws of such jurisdictions as the Representatives may
designate; (ix) all fees and expenses paid or incurred in connection with
filings made with the NASD and The Nasdaq Stock Market, Inc.; and (x) all other
reasonable costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
(b) In addition to their other obligations under Section 6(a) hereof,
the Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
(i) any statement or omission or any alleged statement or omission described in
Section 6(a) or (ii) any breach or inaccuracy in its representations and
warranties, it will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse each Underwriter for
such expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Company together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by [ ], New York, New York (the "Prime Rate"). Any such interim
reimbursement payments which are not made to an Underwriter in a timely manner
as provided below shall bear interest at the Prime Rate from the due date for
such reimbursement. This expense reimbursement agreement will be in addition to
any other liability which the Company may otherwise have. The request for
reimbursement will be sent to the Company.
(c) In addition to its other obligations under Section 6(b) hereof,
each Underwriter severally agrees that, as an interim measure during the
pendency of any claim,
16
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
Section 6(b) hereof which relates to information furnished by the Underwriters
to the Company, it will reimburse the Company (and, to the extent applicable,
each officer, director, or controlling person) on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company (and, to
the extent applicable, each officer, director, or controlling person) for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Company
(and, to the extent applicable, each officer, director, or controlling person)
shall promptly return it to the Underwriters together with interest, compounded
daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company within thirty (30) days
of a request for reimbursement shall bear interest at the Prime Rate from the
date of such request. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(d) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in paragraph (b) or (c) of this
Section 5, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
under the provisions of and pursuant to the provisions of the Constitution and
Rules of the Board of Governors of the New York Stock Exchange, Inc. or pursuant
to the Code of Arbitration Procedure of the NASD. Any such arbitration must be
commenced by service of a written demand for arbitration or written notice of
intention to arbitrate, therein electing the arbitration tribunal. In the event
the party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Such an arbitration would be limited to the
operation of the interim reimbursement provisions contained in paragraph (b) or
(c) of this Section 5, as applicable, and would not resolve the ultimate
propriety or enforceability of the obligation to reimburse expenses which is
created by the provisions of Section 6.
6. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of the Securities Act and the
respective officers, directors, partners, employees, representatives and agents
of each of such Underwriter (collectively, the "Underwriter Indemnified Parties"
and, each, an "Underwriter Indemnified Party"), against any losses, claims,
damages, liabilities or expenses (including, unless the Company elects to assume
the defense as described in this Section 6(a), the reasonable cost of
investigating and defending against any claims therefor and counsel fees
incurred in connection therewith), joint or several, which may be based upon the
Securities Act, or any other statute or at common law, on the ground or alleged
ground that any Pre-effective Prospectus, the Registration Statement or the
Prospectus (or any Pre-effective Prospectus, the Registration
17
Statement or the Prospectus as from time to time amended or supplemented)
includes or allegedly includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in reliance
upon, and in conformity with, written information furnished to the Company by
any Underwriter, directly or through the Representatives, specifically for use
in the preparation thereof, provided, that with respect to any untrue statement
or omission or alleged untrue statement or omission made in any Pre-effective
Prospectus, the indemnity agreement contained in this subsection (a) shall not
inure to the benefit of any Underwriter Indemnified Party from whom the person
asserting any such losses, claims, damages or liabilities purchased the shares
of Stock concerned to the extent that any such loss, claim, damage or liability
of such Underwriter Indemnified Party results from the fact that a copy of the
Prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such shares of Stock to such person as required by
the Securities Act and if the untrue statement or omission concerned has been
corrected in the Prospectus. An Underwriter Indemnified Party shall give prompt
written notice to the Company in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Underwriter Indemnified Party; provided
that the failure of any Underwriter Indemnified Party to give notice shall not
relieve the Company of its obligations under this Section 6(a), except to the
extent that such failure has materially and adversely affected the rights of the
Company. The Company will be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense, of any suit brought to
enforce any such liability, but if the Company elects to assume the defense,
such defense shall be conducted by counsel chosen by it and reasonably
acceptable to the Underwriters. In the event the Company elects to assume the
defense of any such suit and retain such counsel, any Underwriter Indemnified
Parties, defendant or defendants in the suit, may retain additional counsel but
shall bear the fees and expenses of such counsel unless (i) the Company shall
have specifically authorized the retaining of such counsel or (ii) the parties
to such suit include any such Underwriter Indemnified Parties and the Company,
and such Underwriter Indemnified Parties at law or in equity have been advised
by counsel to the Underwriters that one or more legal defenses may be available
to it or them which may not be available to the Company, in which case the
Company shall not be entitled to assume the defense of such suit notwithstanding
its obligation to bear the fees and expenses of such counsel. The Company shall
not be liable to indemnify any person for any settlement of any such claim
effected without the Company's consent. This indemnity agreement is not
exclusive and will be in addition to any liability which the Company might
otherwise have and shall not limit any rights or remedies which may otherwise be
available at law or in equity to each Underwriter Indemnified Party.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively, the "Company
Indemnified Parties"), against any losses, claims, damages, liabilities or
expenses (including, unless the Underwriter elects to
18
assume the defense as described in this Section 6(b)) the reasonable cost of
investigating and defending against any claims therefor and counsel fees
incurred in connection therewith), joint or several, which arise out of or are
based in whole or in part upon the Securities Act, the Exchange Act or any other
federal, state, local or foreign statute or regulation, or at common law, on the
ground or alleged ground that any Pre-effective Prospectus, the Registration
Statement or the Prospectus (or any Pre-effective Prospectus, the Registration
Statement or the Prospectus, as from time to time amended and supplemented)
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances in which they were made, not misleading,
but only insofar as any such statement or omission was made in reliance upon,
and in conformity with, written information furnished to the Company by such
Underwriter, directly or through the Representatives, specifically for use in
the preparation thereof. A Company Indemnified Party shall give prompt
written notice to the Underwriter in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Company Indemnified Party; provided that
the failure of any Company Indemnified Party to give notice shall not relieve
the Underwriter of its obligations under this Section 6 (a), except to the
extent that such failure has materially and adversely affected the rights of the
Underwriter. Such Underwriter shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if such Underwriter elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
approved by the Company. In the event that any Underwriter elects to assume the
defense of any such suit and retain such counsel, the Company Indemnified
Parties and any other Underwriter or Underwriters or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them, respectively unless (i) the
Underwriter shall have specifically authorized the retaining of such counsel or
(ii) the parties to such suit include any such Company Indemnified Parties and
the Underwriters, and such Company Indemnified Parties at law or in equity have
been advised by counsel to the Company that one or more legal defenses may be
available to it or them which may not be available to the Underwriters, in which
case the Underwriters shall not be entitled to assume the defense of such suit
notwithstanding their obligation to bear the fees and expenses of such counsel.
The Underwriter against whom indemnity may be sought shall not be liable to
indemnify any person for any settlement of any such claim effected without such
Underwriter's consent. This indemnity agreement is not exclusive and will be in
addition to any liability which such Underwriter might otherwise have and shall
not limit any rights or remedies which may otherwise be available at law or in
equity to any Company Indemnified Party.
(c) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the
19
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Stock. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses (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 Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The 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 the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
defending, settling or compromising any such claim. Notwithstanding the
provisions of this subsection (c), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the shares of the Stock underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Underwriters' obligations to
contribute are several in proportion to their respective underwriting
obligations and not joint. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
7. Survival of Indemnities, Representations, Warranties, etc. The
---------------------------------------------------------
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company or any of its officers or directors or
any controlling person, and shall survive delivery of and payment for the Stock.
8. Conditions of Underwriters' Obligations. The respective
---------------------------------------
obligations of the several Underwriters hereunder shall be subject to the
accuracy, at and (except as
20
otherwise stated herein) as of the date hereof and at and as of the Closing
Dates, of the representations and warranties made herein by the Company, to
compliance at and as of the Closing Dates by the Company with its covenants and
agreements herein contained and other provisions hereof to be satisfied at or
prior to the Closing Dates, and to the following additional conditions:
(a) The Registration Statement shall have become effective and no
stop order suspending the effectiveness thereof shall have been issued and
no proceedings for that purpose shall have been initiated or, to the
knowledge of the Company or the Representatives, shall be threatened by the
Commission, and any request for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus
or otherwise) shall have been complied with to the reasonable satisfaction
of the Representatives. Any filings of the Prospectus, or any supplement
thereto, required pursuant to Rule 424(b) or Rule 434 of the Rules and
Regulations, shall have been made in the manner and within the time period
required by Rule 424(b) and Rule 434 of the Rules and Regulations, as the
case may be.
(b) The Representatives shall have been satisfied that there shall
not have occurred any change, on a consolidated basis, prior to the
respective Closing Dates in the condition (financial or other), properties,
business, management, prospects, net worth or results of operations of the
Company and its subsidiaries considered as a whole, or any change in the
capital stock, or long-term debt or any material change in the short-term
debt of the Company and any of its subsidiaries considered as a whole, such
that (i) the Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact which, in the
opinion of the Representatives, is material, or omits to state a fact
which, in the opinion of the Representatives, is required to be stated
therein or is necessary to make the statements therein not misleading or
(ii) it is impracticable in the reasonable judgment of the Representatives
to proceed with the public offering or purchase the Stock as contemplated
hereby.
(c) The Representatives shall be satisfied that no legal or
governmental action, suit or proceeding affecting the Company which is
material and adverse to the Company or which affects or may affect the
Company's ability to perform its obligations under this Agreement shall
have been instituted or threatened, and there shall have occurred no
material adverse development in any existing such action, suit or
proceeding.
(d) At the time of execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP, independent certified public
accountants, a letter, dated the date hereof, in form and substance
satisfactory to the Underwriters.
(e) The Representatives shall have received from Ernst & Young LLP,
independent certified public accountants, letters, dated the Closing Dates,
to the effect that such accountants reaffirm, as of the Closing Dates, and
as though made on the
21
Closing Dates, the statements made in the letter furnished by such
accountants pursuant to subsection (d) of this Section 8.
(f) The Representatives shall have received from Xxxxx, Xxxx & Xxxxx
LLP, counsel for the Company, their opinions, dated the Closing Dates, to
the effect set forth in Exhibit I hereto.
(g) The Representatives shall have received from Skadden, Arps,
Slate, Xxxxxxx & Xxxx, counsel for the Underwriters, their opinions, dated
the Closing Dates, with respect to the incorporation of the Company, the
validity of the Stock, the Registration Statement and the Prospectus and
such other related matters as it may reasonably request, and the Company
shall have furnished to such counsel such documents as they may request for
the purpose of enabling them to pass upon such matters.
(h) The Representatives shall have received a certificate, dated the
Closing Dates, of the Chief Executive Officer and the chief financial or
accounting officer of the Company to the effect that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued, and to the best of the
knowledge of the signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities Act;
(ii) Neither any Pre-effective Prospectus, as of its date, nor
the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, as of the time when the Registration Statement
became effective and at all times subsequent thereto up to the delivery
of such certificate, included any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(iii) The representations and warranties of the Company in this
Agreement are true and correct at and as of the Closing Dates, and the
Company has complied with all the agreements and performed or satisfied
all the conditions contained in this Agreement on its part to be
performed or satisfied at or prior to the Closing Dates; and
(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as
disclosed in or contemplated by the Prospectus (including, without
limitation with respect to the stock plans, the warrant and the
conversion of the $5.83 Stock), (A) there has not been any material
adverse
22
change or a development involving a material adverse change in the
condition (financial or other), properties, business, management,
prospects, net worth or results of operations of the Company and its
subsidiaries considered as a whole; (B) the business and operations
conducted by the Company and its subsidiaries have not sustained a loss
by strike, fire, flood, accident or other calamity (whether or not
insured) of such a character as to interfere materially with the
conduct of the business and operations of the Company and its
subsidiaries considered as a whole; (C) no legal or governmental
action, suit or proceeding has become pending or has been threatened
against the Company which is material to the Company, whether or not
arising from transactions in the ordinary course of business, or which
may materially and adversely affect the transactions contemplated by
this Agreement; (D) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct, contingent or
indirect, or entered into any material transactions, not in the
ordinary course of business; (E) there has not been any change in the
capital stock or long-term debt, or any material change in the short-
term debt, of the Company and its subsidiaries considered as a whole;
and (F) the Company has not declared or paid any dividend, or made any
other distribution, upon its outstanding capital stock payable to
stockholders of record on a date prior to the Closing Date and has not
repurchased or otherwise acquired any of its capital stock.
(i) The Company shall have furnished to the Representatives such
additional certificates as the Representatives may have reasonably
requested as to the accuracy, at and as of the Closing Dates, of the
representations and warranties made herein by it and as to compliance at
and as of the Closing Dates by it with its covenants and agreements herein
contained and other provisions hereof to be satisfied at or prior to the
Closing Dates, and as to satisfaction of the other conditions to the
obligations of the Underwriters hereunder.
(j) Cowen shall have received the written agreements of the officers,
directors and holders of Common Stock listed in Schedule B that each will
not, without the prior written consent of Cowen, on behalf of the
Representatives, offer, sell, assign, transfer, encumber, contract to sell,
grant an option, right or warrant to purchase or otherwise dispose of, any
shares of Common Stock or any security convertible into or exchangeable or
exercisable for shares of Common Stock (including, without limitation,
Common Stock of the Company which may be deemed to be beneficially owned by
the undersigned in accordance with the Rules and Regulations) for 180 days
commencing on the date of the final Prospectus.
(k) The Nasdaq National Market shall have approved the stock for
listing, subject only to official notice of issuance.
23
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters and
other documents as the Representatives shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Representatives by notifying the Company of such termination
in writing or by telegram at or prior to the Closing Dates, but Cowen, on behalf
of the Representatives, shall be entitled to waive any of such conditions.
9. Effective Date. This Agreement shall become effective
--------------
immediately as to Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to
all other provisions, at [ ] a.m. New York City time on the first full
business day following the effectiveness of the Registration Statement or at
such earlier time after the Registration Statement becomes effective as the
Representatives may determine on and by notice to the Company or by release of
any of the Stock for sale to the public. For the purposes of this Section 9,
the Stock shall be deemed to have been so released upon the release for
publication of any newspaper advertisement relating to the Stock or upon the
release by you of telegrams (a) advising Underwriters that the shares of Stock
are released for public offering or (b) offering the Stock for sale to
securities dealers, whichever may occur first.
10. Termination. This Agreement (except for the provisions of
-----------
Section 5) may be terminated by the Company at any time, prior to the time that
this Agreement shall become effective as to all of its provisions, by notice to
the Representatives, and may be terminated by the Representatives at any time,
prior to the time that this Agreement shall become effective as to all of its
provisions, by notice to the Company. In the event of any termination of this
Agreement under this or any other provision of this Agreement, there shall be no
liability of any party to this Agreement to any other party, other than as
provided in Sections 5, 6 and 11 and other than as provided in Section 12 as to
the liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (a) if at or prior to the First Closing
Date or the Option Closing Date trading in securities on any of the New York
Stock Exchange, American Stock Exchange or the Nasdaq National Market shall have
been suspended or minimum or maximum prices shall have been established on any
such exchange or market, or a banking moratorium shall have been declared by New
York or United States authorities; (b) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter market; (c)
if at or prior to the First Closing Date or the Option Closing Date there shall
have been (i) an outbreak or escalation of hostilities between the United States
and any foreign power or of any other insurrection or armed conflict involving
the United States or (ii) any change in financial markets or any calamity or
crisis which, in the judgment of the Representatives, makes it impractical or
inadvisable to offer or sell the Firm Stock or Optional Stock, as applicable, on
the terms contemplated by the Prospectus; (d) if there shall
24
have been any development or prospective development involving particularly the
business or properties or securities of the Company or its subsidiaries or the
transactions contemplated by this Agreement, which, in the judgment of the
Representatives, makes it impracticable or inadvisable to offer or deliver the
Firm Stock or the Optional Stock, as applicable, on the terms contemplated by
the Prospectus; (e) if there shall be any litigation or proceeding, pending or
threatened, which, in the judgment of the Representatives, makes it
impracticable or inadvisable to offer or deliver the Firm Stock or Optional
Stock, as applicable, on the terms contemplated by the Prospectus; or (f) if
there shall have occurred any of the events specified in the immediately
preceding clauses (a) - (e) together with any other such event that makes it, in
the judgment of the Representatives, impractical or inadvisable to offer or
deliver the Firm Stock or Optional Stock, as applicable, on the terms
contemplated by the Prospectus.
11. Reimbursement of Underwriters. Notwithstanding any other
-----------------------------
provisions hereof, if this Agreement shall not become effective by reason of any
election of the Company pursuant to the first paragraph of Section 10 or shall
be terminated by the Representatives under Section 8 or Section 10, the Company
will bear and pay the expenses specified in Section 5 hereof and, in addition to
its obligations pursuant to Section 6 hereof, the Company will reimburse the
reasonable out-of-pocket expenses of the several Underwriters (including
reasonable fees and disbursements of counsel for the Underwriters) incurred in
connection with this Agreement and the proposed purchase of the Stock, and
promptly upon demand the Company will pay such amounts to you as
Representatives.
12. Substitution of Underwriters. If any Underwriter or Underwriters
----------------------------
shall default in its or their obligations to purchase shares of Stock hereunder
and the aggregate number of shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed ten percent (10%) of
the total number of shares underwritten, the other Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the shares which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 12, (a) the Company
shall have the right to postpone the Closing Dates for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (b) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as
25
the basis of their underwriting obligation for all purposes of this Agreement.
Nothing herein contained shall relieve any defaulting Underwriter of its
liability to the Company or the other Underwriters for damages occasioned by its
default hereunder. Any termination of this Agreement pursuant to this Section
12 shall be without liability on the part of any non-defaulting Underwriter or
the Company, except for expenses to be paid or reimbursed pursuant to Section 5
and except for the provisions of Section 6.
13. Notices. All communications hereunder shall be in writing and,
-------
if sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed to you, as their Representatives, c/o Cowen & Company at Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, except that notices given to an Underwriter
pursuant to Section 6 hereof shall be sent to such Underwriter at the address
furnished by the Representatives or, if sent to the Company, shall be mailed,
delivered or telegraphed and confirmed to Chief Financial Officer at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx 00000 with a copy to Xxxx X. Xxxxxxx at Xxxxx,
Xxxx & Xxxxx LLP at Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000.
14. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the several Underwriters, the Company and their respective
successors and legal representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the person or persons, if any, who control any
Underwriter or Underwriters within the meaning of Section 15 of the Securities
Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the indemnities of the several Underwriters shall also be
for the benefit of each director of the Company, each of its officers who has
signed the Registration Statement and the person or persons, if any, who control
the Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act.
15. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of New York.
16. Authority of the Representatives. In connection with this
--------------------------------
Agreement, you will act for and on behalf of the several Underwriters, and any
action taken under this Agreement by Cowen, as Representative, will be binding
on all the Underwriters.
17. Partial Unenforceability. The invalidity or unenforceability of
------------------------
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable,
26
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
18. General. This Agreement constitutes the entire agreement of the
-------
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. In this Agreement, the masculine, feminine and
neuter genders and the single and plural include one another. The section
headings in this Agreement are for the convenience of the parties only and will
not affect the construction or interpretation of this Agreement. This Agreement
may be amended or modified, and the observance of any term of this Agreement may
be waived, only by a writing signed by the Company and the Representatives.
19. Counterparts. This Agreement may be signed in two (2) or more
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
27
Very truly yours,
WHITE PINE SOFTWARE, INC.
By:
----------------------------------------
Name:
Title:
Accepted and delivered in
New York, New York as of
the date first above written.
XXXXX & COMPANY
XXXXXXXXXXX & CO., INC.
XXXXX, XXXXX & COMPANY
Acting on their own behalf and as
Representatives of several Underwriters
referred to in the foregoing Agreement.
By: Xxxxx & Company
By: Cowen Incorporated,
its general partner
By:
------------------------------
Name:
Title:
28
SCHEDULE A
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
---- --------- ---------
Xxxxx & Company...........................
Xxxxxxxxxxx & Co., Inc....................
Xxxxx, Xxxxx & Company....................
--------- ---------
Total.....................................
========= =========
29
SCHEDULE B
Xxxx-Xxxxxxxx Abramatic
Adtel L.P.
ADVENTACT L.P.
Advent International Investors II L.P.
Advent Partners L.P.
Adwest L.P.
Xxxxxx X. Xxxxx
Xxxxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxx X. Xxxxx
Xxxxxx Xxxxx
Xxxxxxxx Xxxxxxx
Xxxxxx X. Xxxxxxxxx
Mallku Xxxxxxxxx
C.A.T. (Attn: Xxxxx Xxxxxxxxxx)
Pascal Crausaz
Xxxx X. Xxxxx
CV Sofinnova Ventures Partners III
Xxxxxxx X. Xxxxx
Xxxx-Xxxxxxxx Xxxxxxxx
Xxxxxxx Fast
Golden Gate Development and Investment L.P.
H&Q London Ventures
H&Q Taiwan Ventures C.V.
H&Q TV Management N.V.
H&Q Venture Partners
H&Q Ventures IV
H&Q Ventures International C.V.
Xxxxxxx Xxxxxxxxx
Xxxxxxxxx & Xxxxx
Xxxxxxxxx & Xxxxx Group
Xxxxxxxxx 1980 Revocable Trust
Hamquist
Innolion
X.X. Xxxx & Co., Inc.
Xxxx X. Xxxxxx
Land Free Investment
Xxxxx X. Xxxxxxxxxx
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxxxx X. Xxxxxx
Phoenix Venture (BVI), Ltd.
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx Xxxxx
Sofinnova Capital FCPR
Sofinnova X.X.
Xxxxxx-Xxxxxxx Xxxxxx
30
EXHIBIT 1
---------
FORM OF OPINION TO BE DELIVERED BY COUNSEL TO THE COMPANY
---------------------------------------------------------
1. The Company is a corporation validly existing and in corporate good
standing under the laws of the State of Delaware, with corporate power and
authority to own or lease its properties and conduct its business as described
in the Prospectus. The Company is duly qualified to do business as a foreign
corporation and is in corporate good standing in the Commonwealth of
Massachusetts and the State of California, New Hampshire and New Jersey. About
Software Corporation is a corporation validly existing and in corporate good
standing under the laws of the State of California.
2. As of October 10, 1996, the authorized capital stock of the Company
consisted of (a) 15,000,000 shares of common stock, par value $.01 per share, of
which shares were outstanding, and (b) 500,000 shares of common stock, par
value $5.83 per share, of which 394,511 shares were outstanding. Upon the filing
of the Amended and Restated Certificate of Incorporation of the Company to be
filed with the Secretary of State of the State of Delaware subsequent to the
time of delivery hereof, (a) the authorized capital stock of the Company will
consist of 30,000,000 shares of common stock, per value $.01 per share, and
5,000,000 shares of preferred stock, par value $.01 per share and (b) the
authorized capital stock of the Company will conform in all material respects to
the description thereof set forth in the Prospectus under the caption
"Description of Capital Stock." The outstanding shares of the capital stock of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable.
3. The Stock has been duly authorized and, when issued against payment of the
agreed consideration therefor in accordance with the Underwriting Agreement,
will be validly issued, fully paid and nonassessable, free and clear of any
preemptive or similar rights, and will conform to the description thereof in the
Prospectus in all material respects. The certificates representing the Stock are
in proper form under the Delaware General Corporation Law, assuming conformance
with the specimen certificate filed as an exhibit to the Registration Statement.
4. To our knowledge, except as disclosed in or specifically contemplated by
the Prospectus, there are no outstanding options, warrants or other rights
calling for the issuance of any shares of capital stock of the Company or any
security convertible into or exchangeable for capital stock of the Company.
5. The Registration Statement has become effective under the Securities Act.
The Prospectus has been filed with the Commission in the manner and time period
required under Rule 424(b) of the Rules and Registrations. To our knowledge, (a)
no stop order suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the Prospectus has been issued and (b) no
proceedings for that purpose have been instituted or are pending before or by
the Commission.
6. The Registration Statement and the Prospectus (except for the financial
statements, the notes thereto and the related schedules and other financial,
statistical and accounting data included in such documents, as to which we
express no opinion) comply as to form in all material respects with the
requirements of the Securities Act and with the Rules and Regulations.
7. To our knowledge, the Company has not received notice of any claim or
challenge regarding its ownership of or its other rights to or under any
patents, trademarks, service marks, trade names, licenses, inventions or any
other rights described in the Prospectus, except as specified in such opinion
(such exceptions to be acceptable to the Representatives). To our knowledge (i)
no claim has
been made against the Company alleging infringement by the Company of any
patent, trademark, service xxxx, trade name, trade secret, license in or other
intellectual property or franchise right of any person, (ii) no legal or
governmental proceedings are pending relating to the foregoing, other than
review of pending patent applications, and (iii) no such proceedings are
currently threatened by governmental authorities or others, except as specified
in such opinion (such exceptions to be acceptable to the Representatives).
8. The statements under the captions "Business--Government Regulation",
"Business--Proprietary Rights", "Management--Benefit Plans--Stock Option Plans",
"Management--Benefit Plans--Stock Purchase Plan", "Certain Transactions",
"Description of Capital Stock" and "Shares Eligible for Future Sale" in the
Prospectus, only to the extent that such statements constitute a summary of
documents referred to therein or matters or law, except for numerical data
contained in any such statements, are accurate summaries in all material
respects and fairly present the information called for by the Securities Act and
the Rules and Regulations with respect to such documents and matters. To our
knowledge, there are no laws, rules or regulations or legal or governmental
proceedings applicable to the business of the Company required to be described
in the Registration Statement or the Prospectus that are not so described.
9. To our knowledge, there exists no franchise, lease, contract, agreement
or document which is required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement which is
not described therein or filed as an exhibit thereto.
10. To our knowledge, there are no legal or governmental proceedings
pending or threatened against the Company of a character required to be
disclosed in the Registration Statement or the Prospectus by the Securities Act
or the Rules and Regulations.
11. The Company has the requisite corporate power and authority to enter
into the Underwriting Agreement and to perform its obligations thereunder,
including the issuance, sale and delivery of the Stock. The Underwriting
Agreement has been duly and validly authorized by all necessary corporate action
by the Company and has been duly and validly executed and delivered by and on
behalf of the Company.
12. The execution and performance of the Underwriting Agreement by the
Company and the issuance and sale of the Stock therein contemplated will not
conflict with, result in a breach of or constitute a default under any material
provision of any material contract or instrument to which the Company is a party
or by which the Company is bound, or violate any of the provisions of the
certificate of incorporation or the by-laws of the Company (each as in effect
as of the Closing), or any law of the United States or the Commonwealth of
Massachusetts or the Delaware General Corporation Law, or any rule or regulation
of any governmental authority or regulatory body of the United States or the
Commonwealth of Massachusetts or any judgment, order or decree known to us and
applicable to the Company or any of its properties of any court, governmental
authority or arbitrator or will result in the creation of a lien.
2
13. To our knowledge, no holders of securities of the Company have rights
which have not been waived to require the registration under the Registration
Statement of shares of Common Stock or other securities of the Company.
14. No consent, approval, authorization or order of, and no notice to or
filing with any court or governmental agency or body is required for the
execution and delivery of the Underwriting Agreement by the Company or the issue
and sale of the Stock pursuant to the Underwriting Agreement, except such as
have been obtained and are in full force and effect under the Securities Act and
except that we express no opinion with respect to qualification under, or
compliance with, any state securities or Blue Sky laws or the review of the
underwriting arrangements pursuant to the rules of the National Association of
Securities Dealers, Inc.
15. The Company is not, and upon consummation of the transactions
contemplated by the Underwriting Agreement and application of the net proceeds
of its sale of Stock as set forth under the caption "Use of Proceeds" in the
Prospectus will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.
Because the primary purpose of our professional engagement was not to
establish or confirm factual matters or financial, accounting or statistical
matters and because of the wholly or partially non-legal character of many of
the statements contained in the Registration Statement and the Prospectus, we
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (except to the extent expressly set forth in
paragraphs (6) and (8) above) and we make no representation that we have
independently verified the accuracy, completeness or fairness of such statements
(except as aforesaid). Without limiting the foregoing, we assume no
responsibility for, and have not independently verified, the accuracy,
completeness and fairness of the financial statements or notes thereto or the
other financial and statistical data included in the Registration Statement, and
we have not examined the accounting, financial or statistical records from which
such statements, notes and data are derived. We note that, although certain
portions of the Registration Statement (including financial statements) have
been included therein on the authority of "experts" within the meaning of the
Securities Act, we are not such experts with respect to any portion of the
Registration Statement.
However, in the course of our acting as counsel for the Company in
connection with the preparation of the Registration Statement and the
Prospectus, we participated in conferences and telephone conversations with your
representatives, representatives of the Company, representatives of Skadden,
Arps, Slate, Xxxxxxx & Xxxx, counsel for the Underwriters, and representatives
of Ernst & Young, independent accountants for the Company, during which
conferences and conversations the contents of the Registration Statement and the
Prospectus and related matters were discussed. In addition, we reviewed certain
corporate documents furnished to us by the Company or otherwise in our
possession, including the exhibits filed with the Registration Statement and the
minutes of meetings of the stockholders and Board of Directors of the Company.
3
Based on our participation in the above-mentioned conferences and
conversations, our review of the documents described above, our understanding of
applicable law and the experience we have gained in our practice thereunder, we
advise you that:
(a) No information has come to our attention that causes us to
believe that the Registration Statement (except for the financial
statements, the notes thereto, and the related schedules and other
financial, statistical and accounting data included or incorporated by
reference therein, as to which we express no view), at the time it 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.
(b) No information has come to our attention that causes us to
believe that the Prospectus (except for the financial statements, the notes
thereto, and the related schedules and other financial, statistical and
accounting data included or incorporated by reference therein, as to which
we express no view), as of its date or the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits 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.
4
