EXHIBIT 1.1
2,500,000
TUT SYSTEMS, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
March____, 2000
Xxxxxx Brothers Inc.
Xxxx Xxxxxxxx INCORPORATED
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Tut Systems, Inc., a Delaware corporation (the "Company"), proposes to
sell an aggregate of 2,500,000 shares (the "Firm Stock") of the Company's Common
Stock, par value $0.001 per share (the "Common Stock"). In addition, the
Company and certain stockholders of the Company named in Schedule 2 hereto,
individually, (a "Selling Stockholder"), collectively, (the "Selling
Stockholders") propose to grant to the Underwriters named in Schedule 1 hereto
(the "Underwriters") an option to purchase up to an additional 375,000 shares of
the Common Stock on the terms and for the purposes set forth in Section 3 (the
"Option Stock"). Additionally, the Selling Stockholders who are also officers
of the Company may also be referred to as the "Principal Stockholders." The
Firm Stock and the Option Stock, if purchased, are hereinafter collectively
called the "Stock." This is to confirm the agreement concerning the purchase of
the Stock from the Company and the Selling Stockholders by the Underwriters
named in Schedule 1 hereto (the "Underwriters").
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and an
amendment thereto, with respect to the Stock has (i) been prepared by
the Company in conformity with the requirements of the United States
Securities Act of 1933 (the "Securities Act") and the rules and
regulations (the "Rule and Regulations") of the United States
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act. Copies of such registration
statement have been delivered by the Company to you as the
representatives (the "Representatives") of the Underwriters. As used
in this Agreement, "Effective Time" means the date and the time as of
which such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by
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the Commission; "Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations; "Registration
Statement" means such registration statement, as amended at the
Effective Time, including any documents incorporated by reference
therein at such time and all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations in accordance with Section 6 hereof and deemed
to be a part of the registration statement as of the Effective Time
pursuant to paragraph (b) of Rule 430A of the Rules and Regulations;
and "Prospectus" means such final prospectus, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Rules and Regulations. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they become
effective or are filed with the Commission, as the case may be,
conform in all respects to the requirements of the Securities Act and
the Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as defined
in Section 17) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the conduct
of their respective businesses requires such qualification, and have
all power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged;
and none of the subsidiaries of the Company is a "significant
subsidiary," as such term is defined in Rule 405 of the Rules and
Regulations.
(d) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof contained in
the Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly
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and validly authorized and issued and are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims.
(e) The unissued shares of the Stock to be issued and
sold by the Company to the Underwriters hereunder have 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 non-
assessable and the Stock will conform to the descriptions thereof contained
in the Prospectus.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution, delivery and performance of this
Agreement 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 agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the provisions of
the charter or by-laws of the Company or any of its subsidiaries or any
statute or any 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; and except for the
registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such 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.
(h) There are no contracts, agreements or understandings
between the Company and any person granting such person the right (other
than rights which have been waived or satisfied) to require the Company to
file a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act.
(i) Except as described in the Prospectus, the Company
has not sold or issued any shares of Common Stock during the six-month
period preceding the date of the Prospectus, including any sales pursuant
to Rule 144A under, or Regulations D or S of, the Securities Act other than
shares issued pursuant to employee benefit plans, qualified stock options
plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
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(j) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated
in the Prospectus.
(k) The financial statements (including the related notes
and supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved.
(l) PricewaterhouseCoopers LLP, who have certified
certain financial statements of the Company, whose report appears in the
Prospectus and who have delivered the initial letter referred to in Section
9(h) hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(m) The Company and each of its subsidiaries have good
and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, 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 materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries;
and all 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 are not material and do not interfere with
the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries.
(n) The Company and each of its subsidiaries carry, or
are covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies engaged in
similar businesses in similar industries.
(o) The Company and each of its subsidiaries own or
possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service
xxxx registrations, copyrights and licenses (the "Intellectual Property")
necessary for the conduct of their respective
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businesses except where the failure to so own or possess such Intellectual
Property would not, singularly or in the aggregate, have a material adverse
effect on the business, financial condition or results of operations of the
Company and each of its subsidiaries, and have no reason to believe that
the conduct of their respective businesses will conflict with the
Intellectual Property rights of others, and have not received any notice of
any claim of conflict with, any such Intellectual Property rights of
others.
(p) There are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property or assets of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, might have a material adverse effect on the consolidated
financial position or results of operations of the Company and its
subsidiaries; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(q) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by reference
as permitted by the Rules and Regulations.
(r) No relationship, direct or indirect, exists between
or among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(s) No labor disturbance by the employees of the Company
exists or, to the knowledge of the Company, is imminent which might be
expected to have a material adverse effect on the business financial
position or results of operations of the Company and its subsidiaries.
(t) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
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(u) The Company has filed all federal, state and local
income and franchise tax returns required to be filed through the date
hereof and has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries which has
had, nor does the Company have any knowledge of any tax deficiency which,
if determined adversely to the Company or any of its subsidiaries, might
have a material adverse effect on the business financial position or
results of operations of the Company and its subsidiaries.
(v) Since the date as of which information is given in
the Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted any
securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in
the ordinary course of business, (iii) entered into any transaction not in
the ordinary course of business or (iv) declared or paid any dividend on
its capital stock.
(w) The Company (i) makes and keeps accurate books and
records and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only
in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(x) Neither the Company nor any of its subsidiaries (i)
is in violation of its charter or by-laws, (ii) is in default in any
material respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation in any material
respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject or has failed
to obtain any license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to
the conduct of its business.
(y) Neither the Company nor any of its subsidiaries, nor
any director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
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(z) To the Company's knowledge, there has been no
storage, disposal, generation, manufacture, refinement, transportation,
handling or treatment of toxic wastes, medical wastes, hazardous wastes or
hazardous substances by the Company or any of its subsidiaries (or, to the
knowledge of the Company, any of their predecessors in interest) at, upon
or from any of the property now or previously owned or leased by the
Company or its subsidiaries in violation of any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial
actions, a material adverse effect on the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries; there has been no material spill, discharge,
leak, emission, injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property of any toxic
wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of its subsidiaries or
with respect to which the Company or any of its subsidiaries have
knowledge, except for any such spill, discharge, leak, emission, injection,
escape, dumping or release which would not have or would not be reasonably
likely to have, singularly or in the aggregate with all such spills,
discharges, leaks, emissions, injections, escapes, dumpings and releases, a
material adverse effect on the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries; and the terms "hazardous wastes", "toxic wastes",
"hazardous substances" and "medical wastes" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(aa) Neither the Company nor any subsidiary is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940 and the rules and regulations of the Commission
thereunder.
(bb) The execution and delivery of the Agreement and Plan
of Reorganization dated as of June 7, 1999 (the "PublicPort Agreement")
between the Company and PublicPort, Inc. ("PublicPort"), effecting the
merger of PublicPort with and into a wholly owned subsidiary of the
Company, was duly authorized by all necessary corporate action on the part
of each of the Company and PublicPort. Each of the Company and PublicPort
had all corporate power and authority to execute and deliver the PublicPort
Agreement and the Certificate of Merger between the Company and PublicPort
complying with all applicable laws and referencing the PublicPort Agreement
(the "PublicPort Certificate of Merger"), to file the PublicPort
Certificate of Merger with the Secretary of State of Delaware and to
consummate the merger contemplated by the PublicPort Agreement, and the
PublicPort Agreement at the time of execution and filing constituted a
valid and binding obligation of each of the Company and PublicPort,
enforceable in accordance with its terms. The execution and delivery of the
Agreement and Plan of Reorganization dated as of November 12, 1999 (the
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"Vintel Agreement") between the Company and Vintel Communications, Inc.
("Vintel"), effecting the merger of Vintel with and into a wholly owned
subsidiary of the Company, was duly authorized by all necessary corporate
action on the part of each of the Company and Vintel. Each of the Company
and Vintel had all corporate power and authority to execute and deliver the
Vintel Agreement and the Certificate of Merger between the Company and
Vintel complying with all applicable laws and referencing the Vintel
Agreement (the "Vintel Certificate of Merger"), to file the Vintel
Certificate of Merger with the Secretary of State of California and to
consummate the merger contemplated by the Vintel Agreement, and the Vintel
Agreement at the time of execution and filing constituted a valid and
binding obligation of each of the Company and Vintel, enforceable in
accordance with its terms. The execution and delivery of the Agreement and
Plan of Reorganization dated as of November 16, 1999 (the "Freegate
Agreement") between the Company and Freegate Corporation ("Freegate"),
effecting the merger of Freegate with and into a wholly owned subsidiary of
the Company, was duly authorized by all necessary corporate action on the
part of each of the Company and Freegate. Each of the Company and Freegate
had all corporate power and authority to execute and deliver the Freegate
Agreement and the Certificate of Merger between the Company and Freegate
complying with all applicable laws and referencing the Freegate Agreement
(the "Freegate Certificate of Merger"), to file the Freegate Certificate of
Merger with the Secretary of State of Delaware and to consummate the merger
contemplated by the Freegate Agreement, and the Freegate Agreement at the
time of execution and filing constituted a valid and binding obligation of
each of the Company and Freegate, enforceable in accordance with its terms.
The execution and delivery of the Asset Purchase Agreement dated as of
February 3, 2000 (the "Oneworld Agreement") between the Company and
Oneworld Systems, Inc. ("Oneworld"), effecting the purchase of certain of
the assets of Oneworld by the Company, was duly authorized by all necessary
corporate action on the part of each of the Company and Oneworld. Each of
the Company and Oneworld had all corporate power and authority to execute
and deliver the Oneworld Agreement and the Oneworld Agreement complied with
all applicable laws, and the Oneworld Agreement at the time of execution
constituted a valid and binding obligation of each of the Company and
Oneworld, enforceable in accordance with its terms.
(cc) The pro forma consolidated condensed financial
statements of the Company and its subsidiaries and the related notes
thereto included under the captions "Prospectus Summary-Summary
Consolidated Financial Data," "Capitalization," "Selected Consolidated
Financial Data" and "Unaudited Pro Forma Combined Financial Information"
and elsewhere in the Prospectus and the Registration Statement, present
fairly the information contained therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly presented on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein
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2. Representations, Warranties and Agreements of the Selling
Stockholders Each Selling Stockholder severally represents, warrants and agrees
that:
(a) The Selling Stockholder has, and immediately prior to
the First Delivery Date (as defined in Section 5 hereof) the Selling
Stockholder will have good and valid title to the shares of Stock to
be sold by the Selling Stockholder hereunder on such date, free and
clear of all liens, encumbrances, equities or claims; and upon
delivery of such shares and payment therefor pursuant hereto, good and
valid title to such shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters.
(b) The Selling Stockholder has placed in custody under a
custody agreement (the "Custody Agreement" and, together with all
other similar agreements executed by the other Selling Stockholders,
the "Custody Agreements") with [insert name of custodian], as
custodian (the "Custodian"), for delivery under this Agreement,
certificates in negotiable form (with signature guaranteed by a
commercial bank or trust company having an office or correspondent in
the United States or a member firm of the New York or American Stock
Exchanges) representing the shares of Stock to be sold by the Selling
Stockholder hereunder.
(c) The Selling Stockholder has duly and irrevocably
executed and delivered a power of attorney (the "Power of Attorney"
and, together with all other similar agreements executed by the other
Selling Stockholders, the "Powers of Attorney") appointing the
Custodian and one or more other persons, as attorneys-in-fact, with
full power of substitution, and with full authority (exercisable by
any one or more of them) to execute and deliver this Agreement and to
take such other action as may be necessary or desirable to carry out
the provisions hereof on behalf of the Selling Stockholder.
(d) The Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement; the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by the
Selling Stockholder and the consummation by the Selling Stockholder of
the transactions contemplated hereby 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 agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or
to which any of the property or assets of the Selling Stockholder is
subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Selling Stockholder, the
articles of partnership of the Selling Stockholder or the deed of
trust of the Selling Stockholder, as applicable, or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Selling Stockholder or the property or
assets of the Selling Stockholder; and, except for the registration of
the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under
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the Exchange Act and applicable state securities laws in connection
with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement, the Power of Attorney or the Custody Agreement by the
Selling Stockholder and the consummation by the Selling Stockholder of
the transactions contemplated hereby and thereby.
(e) All information furnished by or on behalf of such
Selling Stockholder in writing expressly for use in the Registration
Statement and Prospectus, including, without limitation, information
concerning the shares of Common Stock of the Company held by the
Selling Stockholder, as set forth in the Prospectus under the caption
"Principal and Selling Stockholders," is true and correct in all
material respects and does not contain any untrue statement of
material fact or omit to state any material fact necessary to make
such information not misleading. Such Selling Stockholder (other than
a Management Selling Stockholder (as defined below)) has no reason to
believe that the Registration Statement and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, do not and will not, as of the
applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for inclusion therein.
(f) The Selling Stockholder, if an officer of the Company
(a "Management Selling Stockholder"), has no reason to believe that
the representations and warranties of the Company contained in Section
1 hereof are not materially true and correct, is familiar with the
Registration Statement and the Prospectus (as amended or supplemented)
and has no knowledge of any material fact, condition or information
not disclosed in the Registration Statement, as of the effective date,
or the Prospectus (or any amendment or supplement thereto), as of the
applicable filing date, which has adversely affected or may adversely
affect the business of the Company. The Selling Stockholder is not
prompted to sell shares of Common Stock by any information concerning
the Company which is not set forth in the Registration Statement and
the Prospectus.
(g) The Selling Stockholder has not taken and will not
take, directly or indirectly, any action which is designed to or which
has constituted or which might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the shares
of the Stock.
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3. Purchase of the Stock by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 2,500,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. Each
Underwriter shall be obligated to purchase from the Company, that number of
shares of the Firm Stock which represents the same proportion of the number of
shares of the Firm Stock to be sold by the Company, as the number of shares of
the Firm Stock set forth opposite the name of such Underwriter in Schedule 1
represents of the total number of shares of the Firm Stock to be purchased by
all of the Underwriters pursuant to this Agreement. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Company and the Selling Stockholders grant to the
Underwriters an option to purchase up to 375,000 shares of Option Stock. Of the
375,000 shares of Option Stock, each Selling Stockholder individually grants an
option to purchase the number of shares of the Option Stock set forth opposite
his name in Schedule 2 hereto. If any of the Selling Stockholders refuses to
sell to the Underwriters the Option Stock, the Company agrees to sell all of the
Option Stock to be sold by such Selling Stockholder to the Underwriters. Such
options are granted for the purpose of covering over-allotments in the sale of
Firm Stock and is exercisable as provided in Section 5 hereof. Shares of Option
Stock shall be purchased severally for the account of the Underwriters in
proportion to the number of shares of Firm Stock set opposite the name of such
Underwriters in Schedule 1 hereto. The respective purchase obligations of each
Underwriter with respect to the Option Stock shall be adjusted by the
Representatives so that no Underwriter shall be obligated to purchase Option
Stock other than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be
$[_____] per share.
The Company and the Selling Stockholders shall not be obligated to
deliver any of the Stock to be delivered on any Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
4. Offering of Stock by the Underwriters. Upon authorization by
the Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the office of Wilson, Sonsini,
Xxxxxxxx & Xxxxxx, at 10:00 A.M., New York City time, on the fourth full
business day following the date of this Agreement or at such other date or place
as shall be determined by agreement between the Representatives and the Company.
This date and time are sometimes referred to as the "First Delivery Date." On
the First Delivery Date, the Company and the Selling Stockholders shall deliver
or cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company and the Selling Stockholders of the purchase price by
wire transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
11
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Stock shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Stock, the Company and the Selling
Stockholders shall make the certificates representing the Firm Stock available
for inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Custodian (on behalf of the Selling
Stockholders) and the Company by the Representatives. Such notice shall set
forth the aggregate number of shares of Option Stock as to which the option is
being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date".
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 5
(or at such other place as shall be determined by agreement between the
Representatives and the Custodian (on behalf of the Selling Stockholders) or the
Representatives and the Company, as the case may be) at 10:00 A.M., New York
City time, on such Second Delivery Date. On such Second Delivery Date, each
Selling Stockholder or the Company, as the case may be, shall deliver or cause
to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of such Selling Stockholder or Company, as the case may be, of the
purchase price by wire transfer in immediately available funds. Time shall be
of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names
and in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, each Selling Stockholder or the Company, as
the case may be, shall make the certificates representing the Option Stock
available for inspection by the Representatives in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to such Second
Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than Commission's close of business
on the second business day following the execution and delivery of
this Agreement or, if applicable, such earlier time as may be required
by Rule 430A(a)(3) under the
12
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted
herein; to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof; to advise the Representatives,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Stock for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement and the
computation of per share earnings) and, (ii) each Preliminary
Prospectus, the Prospectus and any amended or supplemented Prospectus
and, if the delivery of a prospectus is required at any time after the
Effective Time in connection with the offering or sale of the Stock or
any other securities relating thereto and if at such time any events
shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary to amend
or supplement the Prospectus in order to comply with the Securities
Act, to notify the Representatives and, upon their request, to file
such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
or supplemented Prospectus which will correct such statement or
omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
13
(e) Prior to filing with the Commission any amendment to
the Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish a
copy thereof to the Representatives and counsel for the Underwriters and
obtain the consent of the Representatives to the filing;
(f) As soon as practicable after the Effective Date to
make generally available to the Company's security holders and to deliver
to the Representatives an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the Rules and Regulations (including, at the option
of the Company, Rule 158);
(g) For a period of five years following the Effective
Date, to furnish to the Representatives copies of all materials furnished
by the Company to its shareholders and all public reports and all reports
and financial statements furnished by the Company to the principal national
securities exchange upon which the Common Stock may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Stock;
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(i) For a period of 90 days from the date of the
Prospectus, not to, directly or indirectly, (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other than
the Stock and shares issued pursuant to employee benefit plans, qualified
stock option plans or other employee compensation plans existing on the
date hereof or pursuant to currently outstanding options, warrants or
rights), or sell or grant options, rights or warrants with respect to any
shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans
existing on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any
of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx
Brothers Inc.
14
(j) Prior to the Effective Date, to apply for the listing
of the Stock on the National Market System and to use its best efforts to
complete that listing, subject only to official notice of issuance, prior
to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock
being sold by the Company as set forth in the Prospectus; and
(l) To take such steps as shall be necessary to ensure
that neither the Company nor any subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company Act
of 1940 and the rules and regulations of the Commission thereunder.
7. Further Agreements of the Selling Stockholders. Each
Selling Stockholder agrees:
(a) For a period of 90 days from the date of the
Prospectus, not to, directly or indirectly, (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other than
the Option Stock) or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx
Brothers Inc.
(b) That the Option Stock to be sold by the Selling
Stockholder hereunder, which is represented by the certificates held in
custody for the Selling Stockholder, is subject to the interest of the
Underwriters and the other Selling Stockholders thereunder, that the
arrangements made by the Selling Stockholder for such custody are to that
extent irrevocable, and that the obligations of the Selling Stockholder
hereunder shall not be terminated by any act of the Selling Stockholder, by
operation of law, by the death or incapacity of any individual Selling
Stockholder or, in the case of a trust, by the death or incapacity of any
executor or trustee or the termination of such trust, or the occurrence of
any other event.
(c) To deliver to the Representatives prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-8 (if the Selling Stockholder is a non-United States
person) or Form W-9 (if the Selling Stockholder is a United States person.)
8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the
15
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, all as provided in this Agreement; (d) the costs of producing and
distributing this Agreement and any other related documents in connection with
the offering, purchase, sale and delivery of the stock; (e) the costs of
delivering and distributing the Custody Agreements and the Powers of Attorney;
(f) the filing fees incident to, and the reasonable fees and expenses of counsel
for the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of sale of the
Stock; (g) any applicable listing or other fees; (h) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 6(h) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters);
and (i) all other costs and expenses incident to the performance of the
obligations of the Company and the Selling Stockholders under this Agreement;
provided that, except as provided in this Section 8 and in Section 13 the
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Stock which they may sell
and the expenses of advertising any offering of the Stock made by the
Underwriters.
9. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the performance by the Company
and the Selling Stockholders of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied
with.
(b) No Underwriter shall have discovered and disclosed to
the Company on or prior to such Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of
Pillsbury Madison & Sutro LLP, counsel for the Underwriters, is
material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement,
the Custody Agreements, the Powers of Attorney, the Stock, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel
for the Underwriters, and the Company and the Selling Stockholders
shall
16
have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such
matters.
(d) Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx shall have furnished
to the Representatives its written opinion, as counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form
and substance reasonably satisfactory to the Representatives, to the
effect that:
(i) The Company and each of its subsidiaries have
been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification and have all power
and authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged;
(ii) The Company has an authorized capitalization
as set forth in the Prospectus, and all of the issued shares of
capital stock of the Company (including the shares of Stock being
delivered on such Delivery Date) have been duly and validly authorized
and issued, are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus;
(iii) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any shares of the Stock pursuant to the Company's
Certificate of Incorporation, by-laws, any agreement material to the
Company's business as described in the Registration Statement and
Prospectus, or, to such counsel's knowledge, any other instrument;
(iv) There are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party of
which any property or assets of the Company or any of its subsidiaries
is a party or of which any property or assets of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, might have a material adverse
effect on the business, financial position, and results of operations
of the Company and its subsidiaries; and, to such counsel's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(v) The Registration Statement was declared
effective under the Securities Act as of the date and time specified
in such opinion, the Prospectus was filed with the Commission pursuant
to the subparagraph of Rule 424(b) of the Rules and Regulations
specified in such opinion on the
17
date specified therein and no stop order suspending the effectiveness
of the Registration Statement has been issued and, to the knowledge of
such counsel, no proceeding for that purpose is pending or threatened
by the Commission;
(vi) The Registration Statement and the Prospectus
and any further amendments or supplements thereto made by the Company
prior to such Delivery Date (other than the financial statements,
financial data and related schedules therein, as to which such counsel
need express no opinion) comply as to form in all material respects
with the requirements of the Securities Act and the Rules and
Regulations and any further amendment or supplement to any such
incorporated document made by the Company prior to such Delivery Date
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the with the
requirements of the Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder;
(vii) The statements in the Registration Statement
and Prospectus under the captions "Certain Transactions," "Description
of Capital Stock" and "Shares Eligible for Future Sale" and in the
Registration Statement in Items 14 and 15, insofar as they are
descriptions of contracts, agreements or other legal documents, or
refer to statements of law or legal conclusion, are accurate and
present fairly the information required to be shown;
(viii) To such counsel's knowledge, after due
inquiry, there are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described or filed as exhibits to the
Registration Statement or incorporated therein by reference as
permitted by the Rules and Regulations;
(ix) This Agreement has been duly authorized,
executed and delivered by the Company;
(x) The issue and sale of the shares of Stock
being delivered on such Delivery Date by the Company and the
compliance by the Company with all of the provisions of this Agreement
and the consummation of the transactions contemplated hereby 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 agreement material
to the Company's business as described in the Registration Statement
and Prospectus, or other instrument known to such counsel to which the
Company is a party or by which the Company is
18
bound or to which any of the property or assets of the Company is
subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any statute or
any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of its properties or assets; and, except for the registration of
the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such 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 hereby; and
(xi) To such counsel's knowledge, after due
inquiry, there are no contracts, agreements or understandings between
the Company and any person granting such person the right (other than
rights which have been waived or satisfied) to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement. To such counsel's knowledge, after due
inquiry, except as described in the Prospectus there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to register or
include such securities pursuant to any other registration statement
filed by the Company under the Securities Act.
In rendering such opinion, such counsel may state that its opinion is limited to
matters governed by the Federal laws of the United States of America, the laws
of the state of California and the General Corporation Law of the State of
Delaware. Such counsel shall also have furnished to the Representatives a
written statement, addressed to the Underwriters and dated such Delivery Date,
in form and substance satisfactory to the Representatives, to the effect that
(i) such counsel has acted as counsel to the Company on a regular basis, has
acted as counsel to the Company in connection with previous financing
transactions and has acted as counsel to the Company in connection with the
preparation of the Registration Statement, and (ii) although such counsel has
not verified the accuracy, completeness or fairness of the statements contained
in the Registration Statement or Prospectus (except for those matters referred
to in subsections (vi), (vii) and (xi) of this Section 9(d)), based on the
foregoing, no facts have come to the attention of such counsel which lead it to
believe that the Registration Statement (other than the financial statements,
financial data and related schedules therein, as to which such counsel need
express no opinion), as of the Effective Date, contained any untrue statement of
a material fact or omitted 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, or that the Prospectus
(other than the financial statements, financial data and related schedules
therein, as to which such counsel need express no opinion), as of the
19
Delivery Date, contains any 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.
(e) Blakely, Sokoloff, Xxxxxx & Zafman LLP shall have
furnished to the Representatives its written opinion as patent counsel
to the Company addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
Such counsel is familiar with the technology used by
the Company in its business and the manner of its use thereof and has
read the Registration Statement and the Prospectus, including
particularly the portions of the Registration Statement and the
Prospectus referring to patents, trade secrets, trademarks, service
marks or other proprietary information or materials and:
(i) The statements in the Registration Statement
and the Prospectus under the captions "Risk Factors -- We may be
subject to intellectual property infringement claims that are costly
to defend and may harm our business and ability to compete; If we fail
to protect our intellectual property, or if others use our proprietary
technology without authorization, our competitive position may suffer"
and "Business -- Proprietary Rights" and under the caption "Business"
generally to the extent such statements relate solely to patent
matters (the "Intellectual Property Portion") to the best of such
counsel's knowledge and belief, are accurate statements or summaries
of the matters therein set forth and nothing has come to such
counsel's attention that causes such counsel to believe that the
Intellectual Property Portion of the Registration Statement, as of the
Effective Date, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, or
that the Intellectual Property Portion of the Prospectus, as of the
Delivery Date, contains any 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;
(ii) There are no legal or governmental proceedings
pending relating to patent rights, trade secrets, trademarks, service
marks or other proprietary information or materials of the Company
which, if determined adversely to the Company, might have a material
adverse effect on the business financial position or results of the
operations of the Company and to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or others;
20
(iii) To such counsel's knowledge, after due
inquiry, there are no contracts or other documents, relating to the
Company's patents, trade secrets, trademarks, service marks or other
proprietary information or materials of a character required to be
filed as an exhibit to or incorporated by reference in the
Registration Statement or required to be described in the Registration
Statement or the Prospectus that are not filed, incorporated by
reference or described as required;
(iv) To such counsel's knowledge, the Company is
not infringing or otherwise violating any patents, trade secrets,
trademarks, service marks or other proprietary information or
materials, of others; and
(v) To such counsel's knowledge, the Company owns
or possesses sufficient licenses or other rights to use all patents,
trade secrets, trademarks, service marks or other proprietary
information or materials necessary to conduct the business now being
or proposed to be conducted by the Company as described in the
Prospectus.
(f) The counsel for the Selling Stockholders shall have
furnished to the Representatives its written opinion, as counsel to
the Selling Stockholders for whom it is acting as counsel, addressed
to the Underwriters and dated the First Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the
effect that:
(i) Each Selling Stockholder has full right, power
and authority to enter into this Agreement, the Power of Attorney and
the Custody Agreement; the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by each
Selling Stockholder and the consummation by each Selling Stockholder
of the transactions contemplated hereby and thereby 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 statute, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which any Selling Stockholder
is a party or by which any Selling Stockholder is bound or to which
any of the property or assets of any Selling Stockholder is subject,
nor will such actions result in any violation of the provisions of the
charter or by-laws of any Selling Stockholder, the articles of
partnership of any Selling Stockholder or the deed of trust of any
Selling Stockholder, as applicable, or any statute or any order, rule
or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over any Selling Stockholder or the
property or assets of any Selling Stockholder; and, except for the
registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws
in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or
21
registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement, the Power of Attorney or the Custody Agreement by any
Selling Stockholder and the consummation by any Selling Stockholder of
the transactions contemplated hereby;
(ii) This Agreement has been duly authorized,
executed and delivered by or on behalf of each Selling Stockholder;
(iii) A Power-of-Attorney and a Custody Agreement
have been duly authorized, executed and delivered by each Selling
Stockholder and constitute valid and binding agreements of each
Selling Stockholder, enforceable in accordance with their respective
terms;
(iv) Immediately prior to the First Delivery Date,
each Selling Stockholder had good and valid title to the shares of
Stock to be sold by such Selling Stockholder under this Agreement,
free and clear of all liens, encumbrances, equities or claims, and
full right, power and authority to sell, assign, transfer and deliver
such shares to be sold by such Selling Stockholder hereunder; and
(v) Good and valid title to the shares of Stock to
be sold by each Selling Stockholder under this Agreement, free and
clear of all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the State of California and the General Corporation Law of
the State of Delaware and that such counsel is not admitted in the State of
Delaware and (ii) in rendering the opinion in Section 9(f)(iv) above, rely upon
a certificate of each Selling Stockholder in respect of matters of fact as to
ownership of and liens, encumbrances, equities or claims on the shares of Stock
sold by such Selling Stockholder, provided that such counsel shall furnish
copies thereof to the Representatives and state that it believes that both the
Underwriters and it are justified in relying upon such certificate. Such
counsel shall also have furnished to the Representatives a written statement,
addressed to the Underwriters and dated the First Delivery Date, in form and
substance satisfactory to the Representatives, to the effect that (x) such
counsel has acted as counsel to each Selling Stockholder in connection with the
preparation of the Registration Statement, and (y) based on the foregoing, no
facts have come to the attention of such counsel which lead it to believe that
the Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact relating to any Selling Stockholder or omitted to
state such a material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or that the Prospectus contains
any untrue statement of a material fact relating to any Selling Stockholder or
omits to state such 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. The foregoing opinion and statement may
be qualified by a statement to the effect that such
22
counsel does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus.
(g) The Representatives shall have received from
Pillsbury Madison & Sutro LLP, counsel for the Underwriters, such
opinion or opinions, dated such Delivery Date, with respect to the
issuance and sale of the Stock, the Registration Statement, the
Prospectus and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(h) At the time of execution of this Agreement, the
Representatives shall have received from PricewaterhouseCoopers LLP a
letter, in form and substance satisfactory to the Representatives,
addressed to the Underwriters and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(i) With respect to the letter of PricewaterhouseCoopers
LLP referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement (the
"initial letter"), the Company shall have furnished to the
Representatives a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery
Date (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates
as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of
the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the
initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(j) The Company shall have furnished to the
Representatives a certificate, dated such Delivery Date, of its
Chairman of the Board, its President or a Vice President and its chief
financial officer stating that:
(i) The representations, warranties and agreements
of the Company in Section 1 are true and correct as of such
Delivery Date; the
23
Company has complied with all its agreements contained
herein; and the conditions set forth in Sections 9(a) and
9(l) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of
the Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or
amendment to the Registration Statement or the Prospectus.
(k) Each Selling Stockholder (or the Custodian or one or
more attorneys-in-fact on behalf of the Selling Stockholders) shall
have furnished to the Representatives on the First Delivery Date a
certificate, dated the First Delivery Date, signed by, or on behalf
of, the Selling Stockholder (or the Custodian or one or more
attorneys-in-fact) stating that the representations, warranties and
agreements of the Selling Stockholder contained herein are true and
correct as of the First Delivery Date and that the Selling Stockholder
has complied with all agreements contained herein to be performed by
the Selling Stockholder at or prior to the First Delivery Date.
(l) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of
the Stock being delivered on such Delivery Date on the terms and in
the manner contemplated in the Prospectus.
(m) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization" as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Rules and Regulations
and (ii) no such organization shall have publicly announced that it
has under surveillance or review, with possible negative implications,
its rating of any of the Company's debt securities.
24
(n) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange or the
American Stock Exchange or in the over-the-counter market, or trading
in any securities of the Company on any exchange or in the over-the-
counter market, shall have been suspended or minimum prices shall have
been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) as to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(o) The National Market System shall have approved the
Stock for listing subject only to official notice of issuance.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who
controls any Underwriter within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases
and sales of Stock), to which that Underwriter, officer, employee or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in (A) any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (B) in any materials or
information provided to investors by, or with the approval of, the
Company in connection with the marketing of the offering of the Stock
("Marketing Materials"), including any roadshow or investor
presentations made to investors by the Company (whether in person or
electronically), (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus,
or in any amendment or supplement thereto, or in any Marketing
Materials any material fact required to be stated therein or necessary
to make the statements therein not misleading or (iii) any act or
failure to act or any alleged
25
act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Stock or the offering contemplated
hereby, and which is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company
shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly
from any such acts or failures to act undertaken or omitted to be
taken by such Underwriter through its gross negligence or willful
misconduct), and shall reimburse each Underwriter and each such
officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, in reliance upon
and in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein which
information consists solely of the information specified in Section
9(g). The foregoing indemnity agreement is in addition to any
liability which the Company or the Principal Stockholders may
otherwise have to any Underwriter or to any officer, employee or
controlling person of that Underwriter.
(b) The Selling Stockholders, severally in proportion to
the number of shares of stock to be sold by each of them hereunder,
shall indemnify and hold harmless each Underwriter, its officers and
employees, and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of the Option
Stock), to which that Underwriter, officer, employee or controlling
person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state
in any Preliminary Prospectus, Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse each Underwriter, its
officers and employees and each such controlling person for any legal
or other expenses reasonably incurred by that Underwriter, its
officers and employees or controlling person in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that such Selling Stockholders
26
shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any such amendment or supplement in
reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein
which information consists solely of the information specified in
Section 9(g); and provided, further, that each Selling Stockholder
other than the Management Selling Stockholders shall only be liable
under this Section 9(b) with respect to (A) information pertaining to
such Selling Stockholder furnished by or on behalf of such Selling
Stockholder expressly for use in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or
supplement thereto or (B) facts that would constitute a breach of any
representation or warranty of such Selling Stockholder set forth in
Section 2 hereof. The foregoing indemnity agreement is in addition to
any liability which such Selling Stockholders may otherwise have to
any Underwriter or any officer, employee or controlling person of that
Underwriter.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees,
each of its directors, and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company or any such director, officer or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (B) in any Blue Sky Application or
(ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of that
Underwriter specifically for inclusion therein, and shall reimburse
the Company and any such director, officer or controlling person for
any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company or
any such director, officer, employee or controlling person.
27
(d) Promptly after receipt by an indemnified party under
this Section 10 of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under this Section 10,
notify the indemnifying party in writing of the claim or the
commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that
the failure to notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than
under this Section 10. If any such claim or action shall be brought
against an indemnified party, and it shall notify the indemnifying
party thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under
this Section 10 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that the
Representatives shall have the right to employ counsel to represent
jointly the Representatives and those other Underwriters and their
respective officers, employees and controlling persons who may be
subject to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriters against the Company or any
Selling Stockholder under this Section 10 if, in the reasonable
judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees and
controlling persons to be jointly represented by separate counsel, and
in that event the fees and expenses of such separate counsel shall be
paid by the Company or Selling Stockholders. No indemnifying party
shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or
(ii) be liable for any settlement of any such action effected without
its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party
or if there be a final judgment of the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(e) If the indemnification provided for in this Section
10 shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section10(a), 10(b) or 10(c) in
respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to therein, then each
28
indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action
in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other from
the offering of the Stock or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other
with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as
well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholders, on the one hand, and the total underwriting discounts
and commissions received by the Underwriters with respect to the
shares of the Stock purchased under this Agreement, on the other hand,
bear to the total gross proceeds from the offering of the shares of
the Stock under this Agreement, 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 whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state
a material fact relates to information supplied by the Company, the
Principal Subsidiary, the Selling Stockholders or the Underwriters,
the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contributions
pursuant to this Section 10 were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 10 shall be deemed to include, for
purposes of this Section 10(e), 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 10(e), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Stock underwritten by it and distributed to the public was offered to
the public exceeds the amount of any damages which such Underwriter
has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
10(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to
29
contribute as provided in this Section 10(e) are several in proportion
to their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering
of the Stock by the Underwriters set forth on the cover page of, the
legend concerning over-allotments on the inside front cover page of
and the concession and reallowance figures appearing under the caption
"Underwriting" in, the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the
Company by or on behalf of the Underwriters specifically for inclusion
in the Registration Statement and the Prospectus.
(g) The liability of each Selling Stockholder under such
Selling Stockholder's indemnity, contribution and reimbursement
agreements contained in the provisions of this Section 9 shall be
limited to an amount equal to the product of the price of the Stock
sold by such Selling Stockholder to the Underwriters set forth in
Section 3 hereof, multiplied by the number of shares of Stock sold by
such Selling Stockholder hereunder.
30
11. Defaulting Underwriters. If, on either Delivery Date,
any Underwriter defaults in the performance of its obligations under this
Agreement, the remaining non-defaulting Underwriters shall be obligated to
purchase the Stock which the defaulting Underwriter agreed but failed to
purchase on such Delivery Date in the respective proportions which the number of
shares of the Firm Stock set opposite the name of each remaining non-defaulting
Underwriter in Schedule 1 hereto bears to the total number of shares of the Firm
Stock set opposite the names of all the remaining non-defaulting Underwriters in
Schedule 1 hereto; provided, however, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Stock on such
Delivery Date if the total number of shares of the Stock which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such date exceeds
9.09% of the total number of shares of the Stock to be purchased on such
Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 3.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Selling Stockholders or
Company, as the case may be, to sell, the Option Stock) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company or the
Selling Stockholders except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 8 and 13. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 11, purchases Firm Stock which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholders for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 9(l), 9(m) or 9(n)shall have
occurred or if the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the Company
or any Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholders to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholders
31
Stockholders is not fulfilled, the Company or the Selling Stockholders will
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
fees and disbursements of counsel) incurred by the Underwriters in connection
with this Agreement and the proposed purchase of the Stock, and upon demand the
Company or the Selling Stockholders shall pay the full amount thereof to the
Representative(s). If this Agreement is terminated pursuant to Section 11 by
reason of the default of one or more Underwriters, neither the Company nor any
Selling Stockholder shall be obligated to reimburse any defaulting Underwriter
on account of those expenses.
14. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000), with a copy, in the case of any notice
pursuant to Section 11(d), to the Director of Litigation, Office of
the General Counsel, Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: Xxxxxx Xxxxxxxx (Fax:
(000) 000-0000);
(c) if to any Selling Stockholders, shall be delivered or
sent by mail, telex or facsimile transmission to such Selling
Stockholder at the address set forth on Schedule 2 hereto;
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and
the Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Xxxxxx Brothers Inc. on behalf of the Representatives and the Company and the
Underwriters shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Selling Stockholders by the
Custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
the Selling Stockholders and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Selling Stockholders contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 10(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the
32
Company within the meaning of Section 13 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 15, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholders and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
Each party irrevocably agrees that any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the federal
courts of the United States of America located in the City of New York or the
courts of the State of New York in each case located in the Borough of Manhattan
in the City of New York (collectively, the "Specified Courts"), and irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. The parties further agree that service of
any process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any lawsuit, action or
other proceeding brought in any such court. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any lawsuit,
action or other proceeding in the Specified Courts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such lawsuit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
19. Waiver of Immunity. With respect to any Related Proceeding,
each party irrevocably waives, to the fullest extent permitted by applicable
law, all immunity (whether on the basis of sovereignty or otherwise) from
jurisdiction, service of process, attachment (both before and after judgment)
and execution to which it might otherwise be entitled in the Specified Courts,
and with respect to any Related Judgment, each party waives any such immunity in
the Specified Courts or any other court of competent jurisdiction, and will not
raise or claim or cause to be pleaded any such immunity at or in respect of any
such Related Proceeding or Related Judgment, including, without limitation, any
immunity pursuant to the United States Foreign Sovereign Immunities Act of 1976,
as amended.
33
20. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
21. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[The remainder of this page intentionally left blank]
34
If the foregoing correctly sets forth the agreement among the Company,
the Selling Stockholders and the Underwriters, please indicate your acceptance
in the space provided for that purpose below.
Very truly yours,
TUT SYSTEMS, INC.
By
-----------------------------------
Xxxxxx Xxxxxxxx
The Selling Stockholders named in Schedule 2 to
this Agreement
By
-----------------------------------
Xxxxxx Xxxxxxxx
Attorney-in-Fact
Accepted:
Xxxxxx Brothers Inc.
Xxxx Xxxxxxxx Incorporated
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
BY
-------------------------
Authorized Representative
35
SCHEDULE 1
Underwriters Number of Shares
------------ ----------------
Xxxxxx Brothers Inc........................... 1,175,000
Xxxx Xxxxxxxx Incorporated 646,250
FleetBoston Xxxxxxxxx Xxxxxxxx Inc............ 528,750
Fidelity Capital Markets, a division of 50,000
National Services Finance Corporation
Gruntal & Co., LLC 50,000
Xxxxxxx Bros., L.P. 50,000
Total.................................... 2,500,000
=========
36
SCHEDULE 2
Name and Address of Selling Stockholders Number of Shares of Option Stock
---------------------------------------- --------------------------------
Xxxxxxxxx X'Xxxxx............................. 50,000
0000 Xxxxxx Xxx
Xxxxxxxx Xxxx, XX 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000 50,000
Xxxxxxx Xxxxxx................................
0000 Xxxxxx Xxx
Xxxxxxxx Xxxx, XX 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Xxxxxx Xxxxxxxx............................... 15,000
0000 Xxxxxx Xxx
Xxxxxxxx Xxxx, XX 00000
Tel.: (000) 000-0000
Fax: (000) 000-0000
Total.................................... 115,000
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