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EXHIBIT 1.1
DRAFT 4/05/99
_______________ SHARES
MARIMBA, INC.
COMMON STOCK ($0.0001 PAR VALUE)
UNDERWRITING AGREEMENT
__________, 1999
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_____________, 1999
Xxxxxx Xxxxxxx & Co. Incorporated
BT Alex. Xxxxx Incorporated
Credit Suisse First Boston Corporation
Xxxxxxxxx & Xxxxx LLC
c/o Morgan Xxxxxxx & Co., Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Marimba, Inc., a Delaware corporation (the "COMPANY"), proposes
to issue and sell to the several Underwriters named in Schedule II hereto (the
"UNDERWRITERS"), and certain stockholders of the Company named in Schedule I
hereto (the "SELLING STOCKHOLDERS") severally propose to sell to the several
Underwriters, an aggregate of 4,000,000 shares of the Company's Common Stock,
$0.0001 par value (the "FIRM SHARES"), of which 3,548,000 shares are to be
issued and sold by the Company and an aggregate of 452,000 shares are to be sold
by the Selling Stockholders, each Selling Stockholder selling the amount set
forth opposite such Selling Stockholder's name in Schedule I hereto.
The Company and certain of the Selling Stockholders also propose
to sell to the several Underwriters not more than an additional 600,000 shares
of its Common Stock, $0.0001 par value (the "ADDITIONAL SHARES"), of which
188,000 shares are to be issued and sold by the Company (the "COMPANY ADDITIONAL
SHARES") and 412,000 shares are to be sold by such Selling Stockholders, if and
to the extent that you, as Managers of the offering, shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such shares of
common stock granted to the Underwriters in Section 3 hereof. The Firm Shares
and the Additional Shares are hereinafter collectively referred to as the
"SHARES." The shares of Common Stock, $0.0001 par value of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "COMMON STOCK." The Company and the Selling Stockholders are
hereinafter sometimes collectively referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement, including a prospectus, relating to
the Shares. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement.
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1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in
California, Illinois and New York (which are the only jurisdictions in
which the conduct of its business or its ownership or leasing of
property require such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company).
(d) The Company has only one subsidiary, Marimba UK Ltd. (the
"SUBSIDIARY"). The Subsidiary has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business; all of the issued
shares of the Subsidiary have been duly and validly authorized and
issued, are fully paid and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims. As of March 31,
1999, the total assets of the Subsidiary did not exceed $ _______ and
the net sales of the Subsidiary for the twelve months ended March 31,
1999 did not exceed $ ______.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the
Prospectus.
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(g) The shares of Common Stock (including the Shares to be sold
by the Selling Stockholders) outstanding prior to the issuance of the
Shares have been duly authorized and are validly issued, fully paid and
non-assessable. Except as set forth in the Prospectus, and other than
options to purchase an aggregate of _____ shares of Common Stock granted
after March 31, 1999 pursuant to the Company's 1996 Stock Option Plan
(the "1996 PLAN"), the Company does not have outstanding any options 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. All
outstanding shares of capital stock and options and other rights to
acquire capital stock have been issued in compliance with the
registration and qualification provisions of all applicable securities
laws and were not issued in violation of any preemptive rights, rights
of first refusal and other similar rights.
(h) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms
of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to
any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or the Subsidiary that is material
to the Company, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or the
Subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or governmental agency is
required for the performance by the Company of its obligations under
this Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale of
the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and the Subsidiary, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (1) the Company
and the Subsidiary have not incurred any material liability or
obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (2) the Company has
not purchased any of its outstanding capital stock, nor declared, paid
or otherwise made any dividend or distribution of any kind on its
capital stock; and (3) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and the
Subsidiary, except in each case as described in the Prospectus.
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(l) The Company and the Subsidiary each have good and marketable
title to all real and personal property owned by it, in each case free
and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and the Subsidiary;
and any real property, buildings and equipment held under lease by the
Company and the Subsidiary are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property,
buildings and equipment by the Company and the Subsidiary, in each case
except as described in the Prospectus.
(m) The Company and the Subsidiary each own or possess adequate
licenses or other rights to use, all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
currently employed by them in connection with the business now operated
by them, or necessary to conduct their business in the manner described
in the Prospectus. Except as disclosed in the Prospectus, neither the
Company nor the Subsidiary has received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could have a material adverse
affect on the Company and the Subsidiary, taken as a whole. The
discoveries, inventions, products or processes of the Company and the
Subsidiary referred to in the Prospectus do not, to the knowledge of the
Company, infringe or conflict with any right or patent of any third
party or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the
Company which could have a material adverse effect on the Company.
(n) No material labor dispute with the employees of the Company
or the Subsidiary exists, except as described in the Prospectus, or, to
the knowledge of the Company, is imminent; and, without conducting any
independent investigation, the Company is not aware of any existing,
threatened or imminent labor disturbance by the employees of any of its
principal suppliers, manufacturers or contractors that could have a
material adverse effect on the Company and the Subsidiary, taken as a
whole.
(o) The Company is insured by the insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the
Company is engaged; neither the Company nor the Subsidiary has been
refused any insurance coverage sought or applied for; and neither the
Company nor the Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a
material adverse effect on the Company and the Subsidiary, taken as a
whole, except as described in the Prospectus.
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(p) The Company and the Subsidiary possess all consents,
approvals, orders, certificates, authorizations and permits issued by,
and have made all declarations and filings with all, appropriate
federal, state or foreign regulatory authorities and all courts and
other tribunals, necessary to conduct their respective business, except
to the extent that the failure to obtain or file would not have a
material adverse effect on the Company and the Subsidiary, taken as a
whole, and neither the Company nor the Subsidiary has received any
notice of proceedings relating to the revocation or modification of any
such consent, approval, order, certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
Company and the Subsidiary, taken as a whole, except as described the
Prospectus
(q) The Company and the Subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or
specific authorizations; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3)
access to assets is permitted only in accordance with management's
general or specific authorization; and (4) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(r) There are no legal or governmental proceedings pending or, to
the Company's knowledge, threatened to which the Company or the
Subsidiary is a party or to which any of the properties of the Company
or the Subsidiary is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described
or filed as required.
(s) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
(t) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(u) The Company and the Subsidiary (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and
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conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly
or in the aggregate, have a material adverse effect on the Company and
the Subsidiary, taken as a whole.
(v) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and the Subsidiary, taken
as a whole.
(w) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement, except in each case as described in the
Prospectus (and as to which any requirements to include any securities
in, or register any securities pursuant to, the Registration Statement
have been satisfied or duly waived).
(x) The section of the Prospectus entitled "Shares Eligible for
Future Sale" properly describes all agreements (collectively, the
"LOCK-UP AGREEMENTS") that restrict the holders thereof from selling,
making any short sale of, granting any option for the purchase of, or
otherwise transferring or disposing of, any of such shares of Common
Stock, or any such securities convertible into or exercisable or
exchangeable for Common Stock, for the respective periods of time
designated in such Lock-Up Agreements, without the prior written consent
of the Company or Xxxxxx Xxxxxxx & Co. Incorporated.
(y) The Nasdaq Stock Market, Inc. has approved the Shares to be
issued by the Company for listing on the Nasdaq National Market upon
official notice of issuance.
(z) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government
of Cuba or with any person or affiliate located in Cuba.
(aa) The Company has reviewed, and is continuing to review, its
operations and that of the Subsidiary to evaluate the extent to which
the business or operations of the Company or any of its subsidiaries
will be affected by the Year 2000 Problem (that is, any significant risk
that computer hardware or software applications used by the Company and
its subsidiaries will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1,
2000); as a result of such review, (i) the Company has no reason to
believe, and does not believe, that (A) there are any issues related to
the Company's preparedness to address the Year 2000 Problem that are of
a character required to be described or referred to in the Registration
Statement or Prospectus which have not been
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accurately described in the Registration Statement or Prospectus and (B)
the Year 2000 Problem will have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business or
operations of the Company and the Subsidiary, taken as a whole, or
result in any material loss or interference with the business or
operations of the Company and the Subsidiary, taken as a whole; and (ii)
to the Company's knowledge, the suppliers, vendors, customers or other
material third parties used or served by the Company and the Subsidiary
are addressing or will address the Year 2000 Problem in a timely manner,
except to the extent that a failure to address the Year 2000 Problem by
any supplier, vendor, customer or material third party would not have a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business or operations of the Company and its
subsidiaries, taken as a whole.
2. Representations and Warranties of the Selling Stockholders.
Each of the Selling Stockholders represents, warrants and covenants to and
agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder.
(b) The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations
under, this Agreement, the Selling Stockholder's Irrevocable Power of
Attorney appointing certain individuals as such Selling Stockholder's
attorneys-in-fact to the extent set forth therein relating to the
transactions contemplated hereby and by the Registration Statement (the
"POWER OF ATTORNEY"), and the letter of Transmittal and Custody
Agreement signed by such Selling Stockholder and
________________________, as Custodian, relating to the deposit of the
Shares to be sold by such Selling Stockholder (the "CUSTODY Agreement"),
will not contravene any provision of applicable law, or any agreement or
other instrument binding upon such Selling Stockholder or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such Selling Stockholder and no consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required for the performance by such Selling Stockholder of
its obligations under this Agreement, the Power of Attorney or the
Custody Agreement of such Selling Stockholder, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(c) Such Selling Stockholder has, and on the Closing Date will
have, valid title to the Shares to be sold by such Selling Stockholder
and the legal right and power, and all authorization and approval
required by law, to enter into this Agreement, the Power of Attorney or
the Custody Agreement and to sell, transfer and deliver the Shares to be
sold by such Selling Stockholder.
(d) The Shares to be sold by such Selling Stockholder pursuant to this
Agreement have been duly authorized and are validly issued, fully paid
and non-assessable.
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(e) The Custody Agreement and the Power of Attorney have been
duly authorized, executed and delivered by such Selling Stockholder and
each is a valid and binding agreement of such Selling Stockholder.
(f) Delivery of the Shares to be sold by such Selling Stockholder
pursuant to this Agreement will pass title to such Shares free and clear
of any security interests, claims, liens, equities and other
encumbrances.
(g) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein; provided that with
respect to each of the Selling Stockholders other than Xxx Xxxxxx and
Xxxxxx xxx Xxxx, the representation and warranty set forth in this
paragraph shall only relate to information in the Registration Statement
relating to such Selling Stockholder. Xxx X. Xxxxxx and Xxxxxx X. xxx
Xxxx are together referred to in this Agreement as the "Founders."
3. Agreements to Sell and Purchase. Each Seller, severally and
not jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Seller at $______ a share (the "PURCHASE
PRICE") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
number of Firm Shares to be sold by such Seller as the number of Firm Shares set
forth in Schedule II hereto opposite the name of such Underwriter bears to the
total number of Firm Shares.
On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Company agrees to
sell to the Underwriters the Company Additional Shares, and each Selling
Stockholder agrees to sell to the Underwriters the number of Additional Shares
set forth with respect to such Selling Stockholder on Schedule I hereto, and the
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to _______________ Additional Shares, at the Purchase Price. If you, on
behalf of the Underwriters, elect to exercise such option, you shall so notify
the Company in writing not later than 30 days after the date of this Agreement,
which notice shall specify the number of Additional Shares to be purchased by
the Underwriters and the date on which such shares are to be purchased. Such
date may be the same as the Closing Date (as defined below) but not earlier
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than the Closing Date nor later than ten business days after the date of such
notice. Additional Shares may be purchased as provided in Section 5 hereof
solely for the purpose of covering over-allotments made in connection with the
offering of the Firm Shares. If any Additional Shares are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) that bears the same proportion to the total number of
Additional Shares to be purchased as the number of Firm Shares set forth in
Schedule II hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
Each Seller hereby agrees that, without the prior written consent
of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 180 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing, (C) options issued under the 1996
Plan, the 1999 Omnibus Equity Incentive Plan, the 1999 Non-Employee Directors
Option Plan, and the shares issuable upon exercise thereof, (D) shares issued
under the 1999 Employee Stock Purchase Plan and the shares issuable upon
exercise thereof, and (E) warrants issued pursuant to debt financing
transactions. In addition, each Selling Stockholder agrees that, without the
prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the
Underwriters, it will not, during the period ending 90 days after the date of
the Prospectus, make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
4. Terms of Public Offering. The Sellers are advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at
$_____________ a share (the "PUBLIC OFFERING PRICE") and to certain dealers
selected by you at a price that represents a concession not in excess of $______
a share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares to be sold
by each Seller shall be made to such Seller in Federal or other funds
immediately available in New York City against delivery of such Firm Shares for
the respective accounts of the several Underwriter at 10:00 a.m., New York City
time, on ____________, 1999 [4 DAYS AFTER DATE OF AGREEMENT], or at such other
time on the same or such other date, not later than [5 DAYS AFTER DATE OF
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AGREEMENT], 1999, as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available against delivery of such Additional
Shares for the respective accounts of the several Underwriters at 10:00 a.m.,
New York City time, on the date specified in the notice described in Section 3
or at such other time on the same or on such other date, in any event not later
than _______, 1999, as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the "OPTION CLOSING DATE".
Certificates for the Firm Shares and Additional Shares shall be
in definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations
of the Sellers to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than 5:30 p.m. (New York City time) on the date
hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and the Subsidiary, taken as a whole,
from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the
Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in Section 6(a)(ii)
above and to the effect that the representations and warranties of
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the Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by the Selling
Stockholders (or by their attorney-in-fact on their behalf), to the
effect that the representations and warranties of the Selling
Stockholders contained in this Agreement are true and correct as of the
Closing Date and that each Selling Stockholder has complied with all of
the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx,
LLP., outside counsel for the Company, dated the Closing Date, to the
effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing as a foreign corporation in
California, Illinois and New York;
(ii) the Company has the authorized and outstanding
capital stock as set forth in the Prospectus; except as disclosed
in the Prospectus and other than options to purchase an aggregate
of ___ shares of Common Stock granted after March 31, 1999
pursuant to the Company's 1996 Plan, to such counsel's knowledge,
there is no outstanding option, warrant or other right calling
for the issuance of, and no commitment, plan or arrangement to
issue, any share of capital stock of the Company or any security
convertible into or exchangeable or exercisable for capital stock
of the Company;
(iii) the shares of Common Stock (including the Shares to
be sold by the Selling Shareholders) outstanding prior to the
issuance of the Shares to be sold by the Company have been duly
authorized and are validly issued and non-assessable and, to such
counsel's knowledge, fully paid;
(iv) the Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the
terms of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights pursuant to the
Company's certificate of incorporation or bylaws or applicable
federal or California law or Delaware corporate law or, to such
counsel's knowledge, any agreement,
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instrument, judgment, decree or order to which the Company is a
party or by which it is bound;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable federal
or California law or Delaware corporate law or the certificate of
incorporation or bylaws of the Company or any agreement or other
instrument binding upon the Company that is material to the
Company, or, to such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over the Company, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or governmental agency is required for the
performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer
and sale of the Shares (as to which such counsel need not opine);
(vii) the statements (A) in the Prospectus under the
captions "Management-Indemnification," "Management - Employee
Benefit Plans," "Management - Change of Control Arrangements,"
"Certain Transactions," "Description of Capital Stock," " Shares
Eligible for Future Sale" and "Underwriters" tot he extent of the
description of this Agreement and (B) in the Registration
Statement in Items 14 and 15, in each case insofar as such
statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(viii) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company is a party or to which any of the properties of the
Company is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described
or of any statutes, regulations, or, to such counsel's knowledge,
contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or
filed as required;
(ix) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds therefrom as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended;
(x) the Company has corporate power and authority to enter
into this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by the Company;
(xi) the Registration Statement has become effective under
the Securities Act; and, to such counsel's knowledge (based
solely upon oral advice from the
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Staff of the Commission), no stop order proceedings with respect
thereto have been instituted or are pending or threatened under
the Securities Act, and any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time
period required by such Rule 424(b); and
(xii) such counsel (A) shall state that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial data included therein as to which
such counsel need not express any opinion) comply as to form in
all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder, (B) has no
reason to believe that (except for financial statements and
schedules and other financial data as to which such counsel need
not express any belief) the Registration Statement and the
prospectus included therein at the time the Registration
Statement became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and (C) has no reason to believe that (except for
financial statements and schedules and other financial data as to
which such counsel need not express any belief) the Prospectus
contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(e) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx,
LLP., special counsel for the Selling Stockholders, dated the Closing
Date, to the effect that:
(i) This Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Stockholders;
(ii) The execution and delivery by each Selling Stockholder of,
and the performance by such Selling Stockholder of its
obligations under, this Agreement and the Custody Agreement and
Power of Attorney of such Selling Stockholder will not contravene
any provision of applicable federal, California or Delaware
corporate law, or, to such counsel's knowledge, any agreement or
other instrument binding upon such Selling Stockholder or, any
judgment, order or decree of any governmental body, agency or
court having jurisdiction over such Selling Stockholder, and no
consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the
performance by such Selling Stockholder of its obligations under
this Agreement, or the Power of Attorney or Custody Agreement of
such Selling Stockholder, except such as may be required by the
securities or Blue Sky laws of the various states in connection
with offer and sale of the Shares and except such consent,
approval, authorization, order or qualification which, if not
obtained, would not have a material adverse effect on such
Selling Stockholder and would not impair the performance by such
Selling Stockholder of its obligations under this Agreement or
the Power of Attorney or Custody Agreement or such Selling
Stockholder.
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(iii) to such counsels' knowledge, each of the Selling
Stockholders has valid title to the Shares to be sold by such
Selling Stockholder and the legal right and power, and all
authorization and approval required by law, to enter into this
Agreement and the Power of Attorney and Custody Agreement of such
Selling Stockholder and to sell, transfer and deliver the Shares
to be sold by such Selling Stockholder.
(iv) The Power of Attorney and the Custody Agreement of
each Selling Stockholder have been duly authorized, executed and
delivered by such Selling Stockholder and are valid and binding
agreements of such Selling Stockholders; and
(v) Upon payment for the Shares to be sold by each Selling
Stockholder as provided in this Agreement, delivery of such
Shares, as directed by the Underwriters, to Cede or such other
nominee as may be designated by DTC, registration of such Shares
in the name of Cede or such other nominee and the crediting of
such Shares on the books of DTC to "securities accounts" (as
defined in Section 8-501 of the UCC) of the Underwriters
(assuming that neither DTC nor any such Underwriter has notice of
any adverse claim (as such phrase is defined in Section 8-105 of
the UCC) to such Shares), (A) DTC shall be a "protected
purchaser" of such Shares within the meaning of Section 8-303 of
the UCC, (B) under Section 8-501 of the UCC, the Underwriters
will acquire a valid security entitlement in respect of such
Shares and (C) no action based on any adverse claim to such
Shares may be asserted against the Underwriters with respect to
such security entitlement; it being understood that for the
purpose of this opinion, such counsel may assume that when such
payment, delivery and crediting occur, (x) DTC will be registered
as a "clearing corporation" within the meaning of Section 8-102
of the UCC, and (y) appropriate entries to the securities
accounts of the several Underwriters on the records of DTC will
have been made pursuant to the UCC.
(f) The Representatives shall have received a legal
opinion from Weil, Gotschal & Xxxxxx LLP, special patent counsel for the
Company, dated the Closing date, to the effect that the statements set
forth under the headings "Risk Factors - Novadigm Has Claimed That We
Infringe Its Intellectual Property," and "Business Legal Proceedings" in
the Registration Statement and the Prospectus, insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, have been reviewed by such counsel and
fairly present the information called for with respect to such legal
matters, documents and proceedings and fairly summarize the matters
referred to therein, and such counsel has no reason to believe that such
information, (i) as of the effective date of the Registration Statement,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make such
information not misleading and (ii) as of the date of such opinion,
included or includes any untrue statement of material fact or omitted or
omits to state a material fact necessary in order to make such
information, in light of the circumstances in which they were made, not
misleading.
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(g) The Underwriters shall have received on the Closing Date an
opinion of Fenwick & West LLP, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 6(d)(iv),
(d)(v), 6(d)(vii) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriters") and 6(d)(xii) above.
With respect to Section 6(d)(xii) above, Xxxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx & Xxxxxxxxx, LLP, and Fenwick & West LLP may state
that their statements and belief are based upon their participation in
the preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification,
except as specified. With respect to Section 6(e) above, Xxxxxxxxx
Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, LLP may rely upon an
opinion or opinions of counsel for any Selling Stockholders and, with
respect to factual matters upon the representations of each Selling
Stockholder contained herein and in the Custody Agreement and Power of
Attorney of such Selling Stockholder and in other documents and
instruments; provided that (A) each such counsel for the Selling
Stockholders is satisfactory to your counsel, (B) a copy of each opinion
so relied upon is delivered to you and is in form and substance
satisfactory to your counsel, (C) copies of such Custody Agreements and
Powers of Attorney and of any such other documents and instruments shall
be delivered to you and shall be in form and substance satisfactory to
you counsel and (D) Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx &
Xxxxxxxxx, LLP shall state in their opinion that they are justified in
relying on each such other opinion.
The opinions of Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx &
Xxxxxxxxx, LLP, described in Sections 6(d) and (e) above, and the
opinion of Weil, Gotschal & Xxxxxx described in Section 6(f) above shall
be rendered to the Underwriters at the request of the Company and shall
so state therein.
(h) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Ernst & Young LLP, independent auditors,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier
than the date hereof.
(i) The "lock-up" agreements, each substantially in the
form of Exhibit A hereto, between you and certain stockholders, officers
and directors of the Company relating to sales and certain other
dispositions of shares of Common Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force
and effect on the Closing Date.
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(j) The Nasdaq National Market shall have approved the Common
Stock for listing, subject only to official notice of issuance.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
7. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, five signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City,
without charge, prior to 10:00 a.m. New York City time on the business
day next succeeding the date of this Agreement and during the period
mentioned in Section 7(c) below, as many copies of the Prospectus and
any supplements and amendments thereto or to the Registration Statement
as you may reasonably request.
(b) Before amending or supplementing the Registration Statement
or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the
Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such
Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with
sales by an Underwriter or dealer, any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with
applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers
(whose names and addresses you will furnish to the Company) to which
Shares may have been sold by you on behalf of the Underwriters and to
any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending [June
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30], 2000 that satisfies the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission
thereunder.
(f) that in connection with the reservation by the Underwriters
of a portion of the Shares for sale to the Company's directors,
officers, employees and business associates and other parties related to
the Company (collectively, "Participants"), as set forth in the
Prospectus under the heading "Underwriters," the Company will ensure
that such Shares will be restricted to the extent required by the
National Association of Securities Dealers, Inc. (the "NASD") or the
NASD rules from sale, transfer, assignment, pledge or hypothecation for
a period of three months following the date of the effectiveness of the
Registration Statement. BT Alex. Xxxxx Incorporated will notify the
Company as to which Participants will need to be so restricted. The
Company will direct the transfer agent to place stop transfer
restrictions upon such securities for such period of time.
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Sellers agree to
pay or cause to be paid all expenses incident to the performance of their
respective obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel, the Company's accountants
and counsel for the Selling Stockholders in connection with the registration and
delivery of the Shares under the Securities Act and all other fees or expenses
in connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky memorandum in connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the qualification of the
Shares for offer and sale under state securities laws as provided in Section
7(d) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky memorandum, (iv) all filing fees and the reasonable
fees and disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Shares by the National
Association of Securities Dealers, Inc., (v) all fees and expenses in connection
with the preparation and filing of the registration statement on Form 8-A
relating to the Common Stock and all costs and expenses incident to listing the
Shares on the Nasdaq National Market, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer agent,
registrar or depositary, (viii) the costs and expenses of the Company relating
to investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered (with the written approval
of the Company) in connection with the road show, and (ix) all other costs and
expenses incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 9 entitled
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"Indemnity and Contribution", and the last paragraph of Section 11 below, the
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel, stock transfer taxes payable on resale of any of
the Shares by them and any advertising expenses connected with any offers they
may make.
The provisions of the preceding paragraph shall not supersede or
otherwise affect any agreement that the Sellers may otherwise have for the
allocation of such expenses among themselves.
9. Indemnity and Contribution. (a) The Company and each Founder,
jointly and severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein; provided, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter, or any person controlling such Underwriter, from whom the person
asserting any such losses, claims, damages or liabilities purchased Shares, if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage or
liability.
(b) Each Selling Stockholder agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder expressly for
use in the Registration Statement, any preliminary prospectus,
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the Prospectus or any amendments or supplements thereto, except insofar as such
losses, claims, damages, or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein; provided, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability, unless such failure is the result of
noncompliance by the Company with Section 6(a) hereof.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Sellers, the Company's directors, its officers
who sign the Registration Statement and each person, if any, who controls the
Company or any Selling Stockholder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 9(a), 9(b) or 9(c), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses
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of more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, (ii) the fees and expenses of more than one separate firm (in addition to
any local counsel) for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section and (iii) the fees and expenses of more than
one separate firm (in addition to any local counsel) for all Selling
Stockholders and all persons if any, who control any Selling Stockholder within
the meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Underwriters and such control persons of any Underwriters, such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated. In the case of any
such separate firm for the Company, and such directors, officers and control
persons of the Company, such firm shall be designated in writing by the Company.
In the case of any such separate firm for the Selling Stockholders and such
control persons of any Selling Stockholders, such firm shall be designated in
writing by the persons named as attorneys-in-fact for the Selling Stockholders
under the Powers of Attorney. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(e) To the extent the indemnification provided for in Section
9(a), 9(b) or 9(c) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Sellers on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause 9(e)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
9(e)(i) above but also the relative fault of the Sellers on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Sellers on the one hand and the Underwriters on the other hand in
connection with the
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offering of the Shares shall be deemed to be in the same respective proportions
as the net proceeds from the offering of the Shares (before deducting expenses)
received by each Seller and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Sellers on the one hand and the Underwriters
on the other hand 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 any Seller on the one hand, or by the Underwriters, on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 9 are several in
proportion to the respective number of Shares they have purchased hereunder, and
not joint.
(f) The Sellers and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 9(e). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. 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. The remedies provided for in this Section 9 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this
Section 9 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Company, its officers or directors or
any person controlling the Company and (iii) acceptance of and payment for any
of the Shares. The aggregate liability of each Selling Stockholder under the
indemnity and contribution agreements contained in this Section 9 and under the
representations and warrants contained in Section 2(g) hereof shall be limited
to an amount equal to the net proceeds received by such Selling Stockholder
(before deducting expenses) from the offering of the Shares sold by such Selling
Stockholder. In addition, notwithstanding the foregoing provisions of this
Section 9, the Company and each of the Underwriters agrees with each of the
Founders that any claim of such Underwriter against such Founder for
indemnification, reimbursement or advancement of expenses pursuant to this
Section 9(a) or for breach of any representation or warranty in Section 2(g)
hereof shall first be sought by such Underwriter to be satisfied in full by the
Company and,
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subject to the limitation on the aggregate liability of the Selling Stockholders
set forth above, shall be satisfied by the Founders only to the extent that such
claim has not been satisfied in full by the Company within the 60-day period
following the date on which payment therefor shall have been requested from the
Company.
10. Termination. This Agreement shall be subject to termination
by notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 10(a)(i) through 10(a)(iv), such event, singly
or together with any other such event, makes it, in your judgment, impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
Shares that it has or they have agreed to purchase hereunder on such date, and
the aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 11 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Sellers. In any such case either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than
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one-tenth of the aggregate number of Additional Shares to be purchased, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase Additional Shares or (ii) purchase not less
than the number of Additional Shares that such non-defaulting Underwriters would
have been obligated to purchase in the absence of such default. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two 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.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
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14. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Very truly yours,
MARIMBA, INC.
By:____________________________
Name:
Title:
SELLING STOCKHOLDERS
By:____________________________
Name: Xxx X. Xxxxxx
Title: Attorney-in-Fact
By:____________________________
Name: Xxxxxx X. xxx Xxxx
Title: Attorney-in-Fact
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
BT Alex. Xxxxx Incorporated
Credit Suisse First Boston Corporation
Xxxxxxxxx & Xxxxx LLC
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:__________________________
Name:
Title:
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SCHEDULE I
NUMBER OF
NUMBER OF ADDITIONAL
FIRM SHARES SHARES
SELLING STOCKHOLDER TO BE SOLD TO BE SOLD
------------------- ---------- ----------
Xxxxxxxx Xxxxx 123,700 123,700
Xxx X. Xxxxxx 124,300 124,300
Xxxx Xxxxx 80,000 40,000
Xxxxxx X. xxx Xxxx 124,000 124,000
------- -------
TOTAL 452,000 412,000
======= =======
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SCHEDULE II
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated
BT Alex. Xxxxx Incorporated
Credit Suisse First Boston Corporation
Xxxxxxxxx & Xxxxx LLC
--------------
TOTAL
==============
