NEWGEN RESULTS CORPORATION
SHARES (1)
COMMON STOCK
UNDERWRITING AGREEMENT
_____ __, 0000
XXXXXXXXX & XXXXX LLC
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
XXXX XXXXXXXX XXXXXXX
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Newgen Results Corporation, a Delaware corporation (herein called the
"COMPANY"), proposes to issue and sell _______ shares of its authorized but
unissued Common Stock, $____ par value (herein called the "COMMON STOCK"),
and the shareholders of the Company named in Schedule II hereto (herein
collectively called the "SELLING SECURITYHOLDERS") propose to sell an
aggregate of _________ shares of Common Stock of the Company (said _________
shares of Common Stock being herein called the "UNDERWRITTEN STOCK"). The
Company proposes to grant to the Underwriters (as hereinafter defined) an
option to purchase up to ________ additional shares of Common Stock (herein
called the "OPTION STOCK" and with the Underwritten Stock herein collectively
called the "STOCK"). The Common Stock is more fully described in the
Registration Statement and the Prospectus hereinafter mentioned.
The Company and the Selling Securityholders severally hereby confirm
the agreements made with respect to the purchase of the Stock by the several
underwriters, for whom you are acting, named in Schedule I hereto (herein
collectively called the "UNDERWRITERS", which term shall also include any
underwriter purchasing Stock pursuant to Section 3(b) hereof). You represent
and warrant that you have
------------------------
(1) Plus an option to purchase from the Company and the Selling
Securityholders up to _____ additional shares to cover overallotments.
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been authorized by each of the other Underwriters to enter into this Agreement
on its behalf and to act for it in the manner herein provided.
1. REGISTRATION STATEMENT. The Company has filed with the
Securities and Exchange Commission (herein called the "COMMISSION") a
registration statement on Form S-1 (No. 333-_____), including the related
preliminary prospectus, for the registration under the Securities Act of
1933, as amended (herein called the "SECURITIES ACT"), of the Stock, such
amendments to such registration statement, such amended prospectuses subject
to completion and such abbreviated registration statements pursuant to Rule
462(b) of the applicable rules and regulations of the Commission (herein
called the "RULES AND REGULATIONS") as may have been required prior to the
date hereof; and the Company will file such additional amendments to such
registration statement, such amended prospectuses subject to completion and
such abbreviated registration statements as may hereafter be required.
Copies of such registration statement and of each amendment thereto, if any,
including the related preliminary prospectus (meeting the requirements of
Rule 430A of the Rules and Regulations), heretofore filed by the Company
with the Commission have been delivered to you.
The term "REGISTRATION STATEMENT" as used in this Agreement shall mean
such registration statement, including all exhibits and financial statements,
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, in the form in which it became effective, and
any registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations with respect to the Stock (herein called a "RULE 462(b) REGISTRATION
STATEMENT"), and, in the event of any amendment thereto after the effective date
of such registration statement (herein called the "EFFECTIVE DATE"), shall also
mean (from and after the effectiveness of such amendment) such registration
statement as so amended (including any Rule 462(b) registration statement). The
term "PROSPECTUS" as used in this Agreement shall mean the prospectus relating
to the Stock first filed with the Commission pursuant to Rule 424(b) and Rule
430A (or if no such filing is required, as included in the Registration
Statement) and, in the event of any supplement or amendment to such prospectus
after the Effective Date, shall also mean (from and after the filing with the
Commission of such supplement or the effectiveness of such amendment) such
prospectus as so supplemented or amended. The term "PRELIMINARY PROSPECTUS" as
used in this Agreement shall mean each preliminary prospectus included in such
registration statement prior to the time it becomes effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Commission has not issued
any order preventing or suspending the use of any Preliminary Prospectus or
instituted proceedings for that purpose. The Company has caused to be delivered
to you copies of each Preliminary Prospectus and has consented to the use of
such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SECURITYHOLDERS.
(a) The Company and each Selling Securityholder hereby represents and
warrants as follows:
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(i) Each of the Company and its subsidiary has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and authority to own
or lease its properties and conduct its business as described in the
Registration Statement and the Prospectus and as being conducted, and is duly
qualified as a foreign corporation and in good standing in all jurisdictions in
which the character of the property owned or leased or the nature of the
business transacted by it makes qualification necessary (except where the
failure to be so qualified would not have a material adverse effect on the
business, properties, financial condition or results of operations of the
Company and its subsidiary, taken as a whole).
(ii) Except as set forth in the Registration Statement and Prospectus,
(i) each of the Company and its subsidiary has good and marketable title to all
properties and assets described in the Registration Statement and the Prospectus
as owned by it, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest, other than such as would not have a
material adverse effect on the business, properties, financial condition or
results of operations of the Company and its subsidiary, taken as a whole,
(ii) the agreements to which the Company or its subsidiary is a party described
in the Registration Statement and the Prospectus are valid agreements,
enforceable by the Company and its subsidiary (as applicable), except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles and, to the best
of the Company's and each Selling Securityholder's knowledge, the other
contracting party or parties thereto are not in material breach or material
default under any of such agreements, and (iii) each of the Company and its
subsidiary has valid and enforceable leases for all properties described in the
Registration Statement and the Prospectus as leased by it, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles. Except as set
forth in the Registration Statement and the Prospectus, the Company owns or
leases all such properties as are necessary to its operations as now conducted
or as described in the Registration Statement and the Prospectus.
(iii) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any materially
adverse change in the business, properties, financial condition or results of
operations of the Company and its subsidiary, taken as a whole, whether or not
arising from transactions in the ordinary course of business, other than as set
forth in the Registration Statement and the Prospectus, and since such dates,
except in the ordinary course of business, neither the Company nor its
subsidiary has entered into any material transaction not referred to in the
Registration Statement and the Prospectus.
(iv) The Registration Statement and the Prospectus comply, and on
the Closing Date (as hereinafter defined) and any later date on which Option
Stock is to be purchased, the Prospectus will comply, in all material
respects, with the provisions of the Securities Act and the Rules and
Regulations; on the Effective Date, the Registration Statement did not
contain any untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date the Prospectus
did not and, on the Closing Date and any later date on which Option Stock is
to be purchased, will not contain any untrue statement
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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, not misleading; PROVIDED, HOWEVER, that none of the
representations and warranties in this subparagraph (iv) shall apply to
statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon and in conformity with information herein or
otherwise furnished in writing to the Company by or on behalf of the
Underwriters for use in the Registration Statement or the Prospectus.
(v) The authorized capital stock of the Company consists of
________ shares of Series A Preferred Stock, of which there are outstanding
________ shares, _________ shares of Series B Preferred Stock, of
which there are outstanding _________ shares, and ________ shares
of Common Stock, $________ par value, of which there are outstanding
__________ shares (including the Underwritten Stock plus the number of
shares of Option Stock issued on the date hereof); proper corporate
proceedings have been taken validly to authorize such authorized capital
stock; all of the shares of such capital stock outstanding prior to the
issuance of the Stock (including the shares to be purchased by the
Underwriters from the Selling Securityholders) have been duly and validly
issued and are fully paid and nonassessable; all outstanding shares of
capital stock (including the shares to be purchased by the Underwriters from
the Selling Securityholders) and options and other rights to acquire capital
stock have been issued in compliance with the registration and qualification
provisions of all applicable securities laws and were not issued in violation
of any preemptive rights, rights of first refusal or other similar rights;
and no preemptive right, co-sale right, registration right, right of first
refusal or other similar right of stockholders exists with respect to any of
the Stock or the issuance and sale thereof other than those that have been
expressly waived prior to the date hereof and those that will automatically
expire upon and will not apply to the consummation of the transactions
contemplated on or before the Closing Date.
(vi) All issued and outstanding shares of capital stock of the
subsidiary of the Company have been duly authorized and validly issued and are
fully paid and nonassessable, are owned directly by the Company, have been
issued in compliance with all applicable securities laws, were not issued in
violation of or subject to any preemptive rights or other rights to subscribe
for or purchase shares and are owned by the Company free and clear of any lien,
encumbrance, equity, security interest or claim.
(vii) The Stock is duly and validly authorized, is (or, in the case of
shares of the Stock to be sold by the Company, will be, when issued and sold to
the Underwriters as provided herein) duly and validly issued, fully paid and
nonassessable, will be sold free and clear of any lien, encumbrance, equity,
security interest or claim and conforms to the description thereof in the
Prospectus. No further approval or authority of the shareholders or the Board
of Directors of the Company will be required for the transfer and sale of the
Stock to be sold by the Selling Securityholders or the issuance and sale of the
Stock as contemplated herein.
(viii) Except as disclosed or contemplated in the Prospectus and the
financial statements of the Company, and the related notes thereto, included in
the Prospectus, neither the Company nor its subsidiary has outstanding any
options to purchase, or any preemptive rights or other rights to subscribe for
or to purchase, any securities or obligations convertible into, or any contracts
or commitments to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations.
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The description of the Company's stock option, stock bonus and other stock
plans or arrangements, and the options or other rights granted and exercised
thereunder, set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.
(ix) The Stock has been approved for quotation on The Nasdaq National
Market, subject to official notice of issuance.
(x) The Company and its subsidiary own or possess adequate licenses or
other rights to use all patents, patent rights, inventions, trade secrets,
copyrights, trademarks, service marks, trade names, technology and know-how
("Intellectual Property") currently employed or proposed to be employed by them
in connection with their business as described in the Prospectus. The Company
is not obligated to pay a royalty, grant a license, or provide other
consideration, and has not granted any exclusive license, to any third party in
connection with its Intellectual Property other than as disclosed in the
Prospectus. Except as disclosed in the Prospectus, neither the Company nor its
subsidiary has received any notice of infringement or conflict with (and neither
the Company nor its subsidiary, or any of the Selling Securityholders, knows of
any infringement or conflict with) asserted rights of others with respect to any
Intellectual Property that could result in any material adverse effect upon the
Company and its subsidiary, taken as a whole. The discoveries, inventions,
products or processes of the Company and its subsidiary referred to in the
Prospectus do not infringe or conflict with any right or patent of any third
party, or any discovery, invention, product or process that is the subject of a
patent application filed by any third party, that could have a material adverse
effect on the Company and its subsidiary, taken as a whole.
(xi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated herein, except such as have been obtained under the Securities Act
and such as may be required under state securities or blue sky laws in
connection with the purchase and distribution of the Stock by the Underwriters.
(xii) The Company owns no capital stock or other equity or ownership or
proprietary interest in any corporation, partnership, association, trust or
other entity other than Newgen Dealer Pricing, Inc. The Company owns all of the
outstanding capital stock of its subsidiary free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest.
(xiii) All outstanding shares of Common Stock, and all securities
convertible into or exercisable or exchangeable for Common Stock, are subject to
valid, binding and enforceable agreements (herein called the "LOCK-UP
AGREEMENTS") that restrict the holders thereof from selling, making any short
sale of, granting any option for the purchase of, or otherwise transferring or
disposing of, any of such shares of Common Stock, or any such securities
convertible into or exercisable or exchangeable for Common Stock, for a period
of 180 days after the date of the Prospectus without the prior written consent
of the Company or Xxxxxxxxx & Xxxxx LLC.
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(xiv) Except as to defaults which individually or in the aggregate would
not have a material adverse effect on the business, financial condition or
results of operations of the Company and its subsidiary, taken as a whole,
neither the Company nor its subsidiary is in violation of any provision of its
respective charter or bylaws or other organizational documents, or is in breach
of or default with respect to any provision of any agreement, judgment, decree,
order, mortgage, deed of trust, lease, franchise, license, indenture, permit or
other instrument to which it is a party or by which it or any of its properties
are bound; and there does not exist any state of facts which constitutes an
event of default on the part of the Company or its subsidiary as defined in such
documents or which, with notice or lapse of time or both, would constitute such
an event of default.
(xv) There are no franchises, contracts, leases, documents or legal
proceedings, pending or threatened, which are of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement, which are not described and filed as
required; the franchises, contracts, leases and documents so described in the
Prospectus are in full force and effect on the date hereof; and neither the
Company nor its subsidiary, nor to the best of the Company's and each Selling
Securityholder's knowledge, any other party is in breach of or default under any
of such franchises, contracts, leases and documents.
(xvi) The Company and the Selling Securityholders have full legal right,
power and authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and the Selling Securityholders and is a valid and
binding agreement on the part of the Company and the Selling Securityholders,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally or by
general equitable principles. The execution and delivery by the Company and the
Selling Stockholders of, and the performance by the Company and the Selling
Stockholders of its obligations pursuant to, this Agreement, and the transfer
and sale of the Stock to be sold by the Selling Stockholders and the issue and
sale by the Company of the shares of Stock pursuant to this Agreement will not
conflict with, or result in a violation of, the respective charter or bylaws of
the Company or its subsidiary or result in any breach of, or constitute an event
of default under, any agreement or instrument to which the Company or its
subsidiary is a party or violate any applicable law, regulation, order, writ,
injunction or decree of any jurisdiction, court or governmental instrumentality;
(xvii) There is not any pending or, to the best of the Company's and each
Selling Securityholder's knowledge, threatened any action, suit, claim or
proceeding against the Company, its subsidiary or any of their respective
officers or any of their respective properties, assets or rights before any
court, government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or its subsidiary or over their respective
officers or properties or otherwise which (i) might result in any material
adverse effect on the business, properties, financial condition or results of
operations of the Company and its subsidiary, taken as a whole, or might
materially and adversely affect their properties, assets or rights, (ii) might
prevent consummation of the transactions contemplated
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hereby or (iii) is required to be disclosed in the Registration Statement or
the Prospectus and is not so disclosed.
(xviii) Xxxxxx Xxxxxxxx LLP, which has examined the consolidated
financial statements of the Company, together with the related schedules and
notes, as of _________________, 199__ and 199__ and for each of the years in
the three (3) years ended ________________, 199__ filed with the Commission
as a part of the Registration Statement, which are included in the
Prospectus, are independent accountants within the meaning of the Securities
Act and the Rules and Regulations; the audited consolidated financial
statements of the Company, together with the related schedules and notes, and
the unaudited consolidated financial information, forming part of the
Registration Statement and the Prospectus, fairly present the financial
position and the results of operations of the Company and its subsidiary at
the respective dates and for the respective periods to which they apply; and
all audited consolidated financial statements of the Company, together with
the related schedules and notes, and the unaudited consolidated financial
information, filed with the Commission as part of the Registration Statement,
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved except as may
be otherwise stated therein. The selected and summary financial and
statistical data included in the Registration Statement present fairly the
information shown therein and have been compiled on a basis consistent with
the audited financial statements presented therein. No other financial
statements or schedules are required to be included in the Registration
Statement.
(xix) The Company and its subsidiary have timely filed all necessary
federal, state and foreign income and franchise tax returns or have properly
requested extensions thereof and have paid all taxes shown thereon as due, and
there is no tax deficiency that has been or, to the best of the Company's and
each Selling Securityholder's knowledge, might be asserted against the Company
or its subsidiary that might have a material adverse effect on the business,
properties, financial condition or results of operations of the Company and its
subsidiary, taken as a whole; and the Company has made adequate charges,
accruals and reserves for all periods as to which tax liabilities of the Company
and its subsidiary have not been finally determined.
(xx) The Company and its subsidiary maintain insurance with insurers of
recognized financial responsibility of the types and in the amounts generally
deemed adequate for their respective businesses and consistent with insurance
coverage maintained by similar companies in similar businesses, including, but
not limited to, insurance covering real and personal property owned or leased by
the Company or its subsidiary against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect; neither the Company nor its subsidiary
has been refused any insurance coverage sought or applied for; and neither the
Company nor its subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not be expected to result in a material
adverse effect on the business, properties, financial condition or results of
operations of the Company and its subsidiary, taken as a whole.
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(xxi) To the best of Company's and each Selling Securityholder's
knowledge, no labor disturbance by the employees of the Company or its
subsidiary exists or is imminent; and the Company and the Selling
Securityholders are not aware of any existing or imminent labor disturbance
by the employees of any of its principal suppliers, subcontractors, licensors
or customers that might be expected to result in a material adverse effect on
the business properties, financial condition or results of operations of the
Company and its subsidiary, taken as a whole. No collective bargaining
agreement exists with any of the Company's employees and, to the best of the
Company's and each Selling Securityholder's knowledge, no such agreement is
imminent.
(xxii) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date, or any date on which Option Stock is to be
purchased, as the case may be, and (ii) completion of the distribution of the
Stock, any offering material in connection with the offering and sale of the
Stock other than any Preliminary Prospectuses, the Prospectus, the Registration
Statement and other materials, if any, permitted by the Securities Act.
(xxiii) Neither the Company nor its subsidiary has at any time
during the last four (4) years (i) made any unlawful contribution to any
candidate for foreign office or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.
(xxiv) The Company and the Selling Securityholders have not taken and
will not take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Stock.
(xxv) (i) Each of the Company and its subsidiary is in compliance with
all rules, laws and regulations relating to the use, treatment, storage and
disposal of toxic substances and protection of health or the environment (herein
called "ENVIRONMENTAL LAWS") which are applicable to its business, (ii) neither
the Company nor its subsidiary has received notice from any governmental
authority or third party of an asserted claim under Environmental Laws, which
claim is required to be disclosed in the Registration Statement and the
Prospectus and is not so disclosed, (iii) to the Company's and each Selling
Securityholder's knowledge, neither the Company nor its subsidiary will be
required to make future material capital expenditures to comply with existing
Environmental Laws, and (iv) no property which is owned, leased or occupied by
the Company or its subsidiary has been designated as a Superfund site pursuant
to the Comprehensive Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. Section 9601, ET SEQ.), or otherwise designated as a
contaminated site under applicable state or local law.
(xxvi) The Company and its subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to
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maintain accountability for assets, (iii) access to assets is permitted only
in accordance with management's general or specific authorization, and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxvii) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of them,
except as disclosed in the Registration Statement and the Prospectus.
(xxviii) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or with
any person or affiliate located in Cuba.
(xxix) The Company has not been advised by [Ford] that [Ford] intends to
terminate or in any way alter its relationship with the Company that might be
expected to result in a material adverse effect on the business, properties,
financial condition or results of operation of the Company, and the Company has
no reason to believe that any such termination or alteration will occur.
(xxx) The execution and delivery of the [Agreement and Plan of Merger]
dated as of _____________, 1998 (herein called the "MERGER AGREEMENT") between
Newgen Results Corporation, a California corporation (herein called the
"CALIFORNIA CORPORATION"), and the Company, effecting the reincorporation of the
California Corporation under the laws of the State of Delaware, was duly
authorized by all necessary corporate action on the part of each of the
California Corporation and the Company. Each of the California Corporation and
the Company had all corporate power and authority to execute and deliver the
Merger Agreement, to file the Merger Agreement with the Secretary of State of
California and the Secretary of State of Delaware and to consummate the
reincorporation contemplated by the Merger Agreement, and the Merger Agreement
at the time of execution and filing constituted a valid and binding obligation
of each of the California Corporation and the Company.
(xxxi)The Company has not been advised, and has no reason to believe,
that either it or its subsidiary is not conducting business in compliance with
all applicable laws, rules and regulations of the jurisdictions in which it is
conducting business, including, without limitation, all applicable local, state
and federal environmental laws and regulations; except where failure to be so in
compliance would not have a material adverse effect on the business, properties,
financial condition or results of operations of the Company and its subsidiary,
taken as a whole.
[ADDITIONAL REPRESENTATIONS AND WARRANTIES MAY BE REQUESTED AS IDENTIFIED
PURSUANT TO OUR CONTINUING DUE DILIGENCE INVESTIGATION.]
(b) Each of the Selling Securityholders hereby represents and warrants
as follows:
(i) Such Selling Securityholder has good and marketable title to all
the shares of Stock to be sold by such Selling Securityholder hereunder, free
and clear of all liens, encumbrances, equities,
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security interests and claims whatsoever, with full right and authority to
deliver the same hereunder, subject, in the case of each Selling
Securityholder, to the rights of __________, as Custodian (herein called the
"CUSTODIAN"), and that upon the delivery of and payment for such shares of
Stock hereunder, the several Underwriters will receive good and marketable
title thereto, free and clear of all liens, encumbrances, equities, security
interests and claims whatsoever.
(ii) Certificates in negotiable form for the shares of the Stock to be
sold by such Selling Securityholder have been placed in custody under a Custody
Agreement for delivery under this Agreement with the Custodian (herein called
the "CUSTODY AGREEMENT"); such Selling Securityholder specifically agrees that
the shares of the Stock represented by the certificates so held in custody for
such Selling Securityholder are subject to the interests of the several
Underwriters and the Company, that the arrangements made by such Selling
Securityholder for such custody, including the Power of Attorney provided for in
such Custody Agreement (herein called the "POWER OF ATTORNEY"), are to that
extent irrevocable, and that the obligations of such Selling Securityholder
shall not be terminated by any act of such Selling Securityholder or by
operation of law, whether by the death or incapacity of such Selling
Securityholder (or, in the case of a Selling Securityholder that is not an
individual, the dissolution or liquidation of such Selling Securityholder) or
the occurrence of any other event; if any such death, incapacity, dissolution,
liquidation or other such event should occur before the delivery of such shares
of the Stock hereunder, certificates for such shares of the Stock shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement as if such death, incapacity, dissolution, liquidation or other event
had not occurred, regardless of whether the Custodian shall have received notice
of such death, incapacity, dissolution, liquidation or other event.
(iii) Such Selling Securityholder has reviewed the Registration
Statement and the Prospectus and, although such Selling Securityholder has not
independently verified the accuracy or completeness of all the information
contained therein, nothing has come to the attention of such Selling
Securityholder that would lead such Selling Securityholder to believe that on
the Effective Date, the Registration Statement contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading;
and, on the Effective Date the Prospectus contained and, on the Closing Date and
any later date on which Option Stock is to be purchased, contains any untrue
statement of a material fact or omitted or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company agrees to issue and sell
________ shares of the Underwritten Stock to the several Underwriters, each
Selling Securityholder agrees to sell to the several Underwriters the number of
shares of the Underwritten Stock set forth in Schedule II opposite the name of
such Selling Securityholder, and each of the Underwriters agrees to purchase
from the Company and the Selling Securityholders the respective aggregate number
of shares of Underwritten Stock set forth opposite its name in Schedule I. The
price at which such shares of Underwritten Stock shall be sold by the Company
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and the Selling Securityholders and purchased by the several Underwriters shall
be $___ per share. The obligation of each Underwriter to the Company and each
of the Selling Securityholders shall be to purchase from the Company and the
Selling Securityholders that number of shares of the Underwritten Stock which
represents the same proportion of the total number of shares of the Underwritten
Stock to be sold by each of the Company and the Selling Securityholders pursuant
to this Agreement as the number of shares of the Underwritten Stock set forth
opposite the name of such Underwriter in Schedule I hereto represents of the
total number of shares of the Underwritten Stock to be purchased by all
Underwriters pursuant to this Agreement, as adjusted by you in such manner as
you deem advisable to avoid fractional shares. In making this Agreement, each
Underwriter is contracting severally and not jointly; except as provided in
paragraphs (b) and (c) of this Section 3, the agreement of each Underwriter is
to purchase only the respective number of shares of the Underwritten Stock
specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company or the Selling Securityholders shall
immediately give notice thereof to you, and the non-defaulting Underwriters
shall have the right within 24 hours after the receipt by you of such notice
to purchase, or procure one or more other Underwriters to purchase, in such
proportions as may be agreed upon between you and such purchasing Underwriter
or Underwriters and upon the terms herein set forth, all or any part of the
shares of the Stock which such defaulting Underwriter or Underwriters agreed
to purchase. If the non-defaulting Underwriters fail so to make such
arrangements with respect to all such shares and portion, the number of
shares of the Stock which each non-defaulting Underwriter is otherwise
obligated to purchase under this Agreement shall be automatically increased
on a pro rata basis to absorb the remaining shares and portion which the
defaulting Underwriter or Underwriters agreed to purchase; PROVIDED, HOWEVER,
that the non-defaulting Underwriters shall not be obligated to purchase the
shares and portion which the defaulting Underwriter or Underwriters agreed to
purchase if the aggregate number of such shares of the Stock exceeds 10% of
the total number of shares of the Stock which all Underwriters agreed to
purchase hereunder. If the total number of shares of the Stock which the
defaulting Underwriter or Underwriters agreed to purchase shall not be
purchased or absorbed in accordance with the two preceding sentences, the
Company and the Selling Securityholders shall have the right, within 24 hours
next succeeding the 24-hour period above referred to, to make arrangements
with other underwriters or purchasers satisfactory to you for purchase of
such shares and portion on the terms herein set forth. In any such case,
either you or the Company and the Selling Securityholders shall have the
right to postpone the Closing Date determined as provided in Section 5 hereof
for not more than seven business days after the date originally fixed as the
Closing Date pursuant to said Section 5 in order that any necessary changes
in the Registration Statement, the Prospectus or any other documents or
arrangements may be made. If neither the non-defaulting Underwriters nor the
Company and the Selling Securityholders shall make arrangements within the
24-hour periods stated above for the purchase of all the shares of the Stock
which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall be terminated without further act or deed and
without any liability on the part of the Company or the Selling
Securityholders to any non-defaulting Underwriter and without any liability
on the part of any non-defaulting Underwriter to the Company or the Selling
Securityholders. Nothing in this paragraph (b),
11
and no action taken hereunder, shall relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth,
the Company grants an option to the several Underwriters to purchase,
severally and not jointly, up to _________ shares in the aggregate of the
Option Stock from the Company at the same price per share as the Underwriters
shall pay for the Underwritten Stock. Said option may be exercised only to
cover over-allotments in the sale of the Underwritten Stock by the
Underwriters and may be exercised in whole or in part at any time (but not
more than once) on or before the thirtieth day after the date of this
Agreement upon written or telegraphic notice by you to the Company setting
forth the aggregate number of shares of the Option Stock as to which the
several Underwriters are exercising the option. Delivery of certificates for
the shares of Option Stock, and payment therefor, shall be made as provided
in Section 5 hereof. The number of shares of the Option Stock to be
purchased by each Underwriter shall be the same percentage of the total
number of shares of the Option Stock to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten Stock, as
adjusted by you in such manner as you deem advisable to avoid fractional
shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of
the Stock to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the front cover
page and under "Underwriting" in the Registration Statement, any Preliminary
Prospectus and the Prospectus relating to the Stock filed by the Company
(insofar as such information relates to the Underwriters) constitutes the only
information furnished by the Underwriters to the Company for inclusion in the
Registration Statement, any Preliminary Prospectus and the Prospectus, and you,
on behalf of the respective Underwriters, represent and warrant to the Company
that the statements made therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten Stock
and the Option Stock (if the option granted by Section 3(c) hereof shall have
been exercised not later than 7:00 A.M., San Francisco time, on the date two
business days preceding the Closing Date), and payment therefor, shall be made
at the office of Xxxxxx Godward LLP, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx
Xxxxx, Xxxxxxxxxx 00000, at 7:00 A.M., San Francisco time, on the third full
business day following the first day the Stock is traded, or on the fourth full
business day after the date of this Agreement if this Agreement is executed and
delivered after 1:30 P.M., San Francisco time, or at such time on such other
day, not later than seven full business days after such third or fourth business
day, as the case may be, as shall
12
be agreed upon in writing by the Company, the Selling Securityholders and
you. The date and hour of such delivery and payment (which may be postponed
as provided in Section 3(b) hereof) are herein called the "CLOSING DATE".
(b) If the option granted by Section 3(c) hereof shall be exercised
after 7:00 A.M., San Francisco time, on the date two business days preceding the
Closing Date, delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made at the office of Xxxxxx Godward LLP, 0000
Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000, at 7:00 A.M., San
Francisco time, on the third business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made to
the Company or its order, and payment for the Stock purchased from the Selling
Securityholders shall be made to the Custodian, for the account of the Selling
Securityholders, in each case by one or more certified or official bank check or
checks in same day funds or, if you so elect, by wire transfer of immediately
available funds to an account specified in writing by the Company for the Stock
purchased from the Company and to an account specified in writing by the
Custodian for the respective accounts of the Selling Securityholders for the
Stock purchased from the Selling Securityholders. Such payment shall be made
upon delivery of certificates for the Stock to you for the respective accounts
of the several Underwriters against receipt therefor signed by you.
Certificates for the Stock to be delivered to you shall be registered in such
name or names and shall be in such denominations as you may request at least one
business day before the Closing Date, in the case of Underwritten Stock, and at
least one business day prior to the purchase thereof, in the case of the Option
Stock. Such certificates will be made available to the Underwriters for
inspection, checking and packaging at the offices of Lewco Securities
Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the business day prior to
the Closing Date or, in the case of the Option Stock, by 3:00 p.m., New York
time, on the business day preceding the date of purchase. If you so elect,
delivery of the Stock may be made through full fast transfer to the accounts at
The Depository Trust Company designated by you.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
and the Selling Securityholders for shares to be purchased by any Underwriter
whose check or wire transfer shall not have been received by you on the
Closing Date or any later date on which Option Stock is purchased for the
account of such Underwriter. Any such payment by you shall not relieve such
Underwriter from any of its obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING SECURITYHOLDERS.
Each of the Company and the Selling Securityholders respectively covenants and
agrees as follows:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A and
(ii) not file any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and furnished
with a copy or to which you shall have reasonably objected in writing or which
is not in compliance with the Securities Act or the Rules and Regulations.
13
(b) The Company will promptly notify each Underwriter in the event of
(i) the request by the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceeding for that purpose, (iv) the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction, or (v) the receipt by it of notice of the
initiation or threatening of any proceeding for such purpose. The Company and
the Selling Securityholders will make every reasonable effort to prevent the
issuance of such a stop order and, if such an order shall at any time be issued,
to obtain the withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to
you a signed copy of the Registration Statement as originally filed and of
each amendment thereto filed prior to the time the Registration Statement
becomes effective and, promptly upon the filing thereof, a signed copy of
each post-effective amendment, if any, to the Registration Statement
(together with, in each case, all exhibits thereto unless previously
furnished to you) and will also deliver to you, for distribution to the
Underwriters, a sufficient number of additional conformed copies of each of
the foregoing (but without exhibits) so that one copy of each may be
distributed to each Underwriter, (ii) as promptly as possible deliver to you
and send to the several Underwriters, at such office or offices as you may
designate, as many copies of the Prospectus as you may reasonably request,
and (iii) thereafter from time to time during the period in which a
prospectus is required by law to be delivered by an Underwriter or dealer,
likewise send to the Underwriters as many additional copies of the Prospectus
and as many copies of any supplement to the Prospectus and of any amended
prospectus, filed by the Company with the Commission, as you may reasonably
request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing by
you, shall occur as a result of which it is necessary, in the opinion of counsel
for the Company or of counsel for the Underwriters, to supplement or amend the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser of the Stock,
the Company will forthwith prepare and file with the Commission a supplement to
the Prospectus or an amended prospectus so that the Prospectus as so
supplemented or amended will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time such Prospectus
is delivered to such purchaser, not misleading. If, after the initial public
offering of the Stock by the Underwriters and during such period, the
Underwriters shall propose to vary the terms of offering thereof by reason of
changes in general market conditions or otherwise, you will advise the Company
in writing of the proposed variation, and, if in the opinion either of counsel
for the Company or of counsel for the Underwriters such proposed variation
requires that the Prospectus be supplemented or amended, the Company will
forthwith prepare and file with the Commission a supplement to the Prospectus or
an amended Prospectus setting forth such variation. The Company authorizes the
Underwriters and all dealers to whom any of the Stock may be sold by the several
Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock
14
in accordance with the applicable provisions of the Securities Act and the
applicable Rules and Regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment to
the Registration Statement and any supplement to the Prospectus or any amended
Prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; PROVIDED, HOWEVER, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. The Company will, from time
to time, prepare and file such statements, reports and other documents as are or
may be required to continue such qualifications in effect for so long a period
as you may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, the
Company will furnish to you, and to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to stockholders of
the Company and of all information, documents and reports filed with the
Commission.
(h) Not later than the 45th day following the end of the fiscal
quarter first occurring after the first anniversary of the Effective Date, the
Company will make generally available to its security holders an earnings
statement in accordance with Section 11(a) of the Securities Act and Rule 158
thereunder.
(i) The Company and the Selling Securityholders jointly and severally
agree to pay all costs and expenses incident to the performance of their
obligations under this Agreement, including all costs and expenses incident to
(i) the preparation, printing and filing with the Commission and the National
Association of Securities Dealers, Inc. (herein called the "NASD") of the
Registration Statement, any Preliminary Prospectus and the Prospectus, (ii) the
furnishing to the Underwriters of copies of any Preliminary Prospectus and of
the several documents required by paragraph (c) of this Section 6 to be so
furnished, (iii) the printing of this Agreement and related documents delivered
to the Underwriters, (iv) the preparation, printing and filing of all
supplements and amendments to the Prospectus referred to in paragraph (d) of
this Section 6, (v) the furnishing to you and the Underwriters of the reports
and information referred to in paragraph (g) of this Section 6 and (vi) the
printing and issuance of stock certificates, including the transfer agent's
fees. The Selling Securityholders will pay any transfer taxes incident to the
transfer to the Underwriters of the shares of the Stock being sold by the
Selling Securityholders.
(j) The Company and the Selling Securityholders jointly and severally
agree to reimburse you, for the account of the several Underwriters, for blue
sky fees and related disbursements (including counsel fees and disbursements and
cost of printing memoranda for the Underwriters) paid by or for the
15
account of the Underwriters or their counsel in qualifying the Stock under
state securities or blue sky laws and in the review of the offering by the
NASD.
(k) The provisions of paragraphs (i) and (j) of this Section are
intended to relieve the Underwriters from the payment of the expenses and costs
which the Company and the Selling Securityholders hereby agree to pay and shall
not affect any agreement which the Company and the Selling Securityholders may
make, or may have made, for the sharing of any such expenses and costs.
(l) The Company and each of the Selling Securityholders hereby
agrees that, without the prior written consent of Xxxxxxxxx & Xxxxx LLC on
behalf of the Underwriters, the Company or such Selling Securityholder, as
the case may be, will not, for a period of 180 days following the
commencement of the public offering of the Stock by the Underwriters,
directly or indirectly, (i) sell, offer, contract to sell, make any short
sale, pledge, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any shares of Common Stock or any securities
convertible into or exchangeable or exercisable for or any rights to purchase
or acquire Common Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences or ownership
of Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise. The foregoing sentence shall not apply to (A) the
Stock to be sold to the Underwriters pursuant to this Agreement, (B) shares
of Common Stock issued by the Company pursuant to the Company's 1996 Equity
Incentive Plan (herein called the "OPTION PLAN") or pursuant to currently
outstanding contractual obligations, options, warrants or similar rights, all
as described in the Preliminary Prospectus, and (C) options to purchase
Common Stock granted under the Option Plan; provided, however, that, without
the prior written consent of Xxxxxxxxx & Xxxxx LLC, such additional
options shall not be exercisable during such period.
(m) The Company agrees to use its best efforts to cause all directors,
officers and stockholders to agree that, without the prior consent of Xxxxxxxxx
& Xxxxx LLC on behalf of the Underwriters, such person or entity will not, for a
period of 180 days following the commencement of the public offering of the
Stock by the Underwriters, directly or indirectly, (i) sell, offer, contract to
sell, make any short sale, pledge, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for or any rights to
purchase or acquire Common Stock or (ii) enter into any swap or other agreement
that transfers, in whole or in part, any of the economic consequences or
ownership of Common Stock, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise.
(n) The Company agrees: (i) to enforce the terms of each Lock-Up
Agreement and (ii) issue stop-transfer instructions to the transfer agent for
the Common Stock with respect to any transaction or contemplated transaction
that would constitute a breach of or default under the applicable Lock-Up
Agreement. In addition, except with the prior written consent of Xxxxxxxxx &
Xxxxx LLC, the Company agrees (i) not to amend or terminate, or waive any right
under, any Lock-Up Agreement, or take any other action that would directly or
indirectly have the same effect as an amendment or termination, or
16
waiver of any right under, any Lock-Up Agreement, that would permit any
holder of shares of Common Stock, or securities convertible into or
exercisable or exchangeable for Common Stock, to sell, make any short sale
of, grant any option for the purchase of, or otherwise transfer or dispose
of, any such shares of Common Stock or other securities prior to the
expiration of 180 days after the date of the Prospectus, and (ii) not to
consent to any sale, short sale, grant of an option for the purchase of, or
other disposition or transfer of shares of Common Stock, or securities
convertible into or exercisable or exchangeable for Common Stock, subject to
a Lock-Up Agreement.
(o) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you, responding to
or commenting on such rumor, publication or event.
(p) The Company is familiar with the Investment Company Act of 1940,
as amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not and
will not be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (f) of this Section 7, the
Company and the Selling Securityholders jointly and severally agree to indemnify
and hold harmless each Underwriter and each person (including each partner or
officer thereof) who controls any Underwriter within the meaning of Section 15
of the Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Securities Act, the Securities Exchange Act of
1934, as amended (herein called the "EXCHANGE ACT"), or the common law or
otherwise, and the Company and the Selling Securityholders jointly and severally
agree to reimburse each such Underwriter and controlling person for any legal or
other expenses (including, except as otherwise hereinafter provided, reasonable
fees and disbursements of counsel) incurred by the respective indemnified
parties in connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any Rule 462(b) registration
statement) or any post-effective amendment thereto (including any Rule 462(b)
registration statement), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus or the Prospectus (as
amended or as supplemented if the
17
Company shall have filed with the Commission any amendment thereof or
supplement thereto) or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that (1) the indemnity agreements of the Company and the Selling
Securityholders contained in this paragraph (a) shall not apply to any such
losses, claims, damages, liabilities or expenses if such statement or
omission was made in reliance upon and in conformity with information
furnished as herein stated or otherwise furnished in writing to the Company
by or on behalf of any Underwriter for use in any Preliminary Prospectus or
the Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto, and (2) the indemnity agreement contained in this
paragraph (a) with respect to any Preliminary Prospectus shall not inure to
the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages, liabilities or expenses purchased the Stock which is
the subject thereof (or to the benefit of any person controlling such
Underwriter) if at or prior to the written confirmation of the sale of such
Stock a copy of the Prospectus (or the Prospectus as amended or supplemented)
was not sent or delivered to such person and the untrue statement or omission
of a material fact contained in such Preliminary Prospectus was corrected in
the Prospectus (or the Prospectus as amended or supplemented) unless the
failure is the result of noncompliance by the Company with paragraph (c) of
Section 6 hereof. The indemnity agreements of the Company and the Selling
Securityholders contained in this paragraph (a) and the representations and
warranties of the Company and the Selling Securityholders contained in
Section 2 hereof shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any indemnified party
and shall survive the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its officers who signs the Registration Statement on his or
her own behalf or pursuant to a power of attorney, each of its directors, each
other Underwriter and each person (including each partner or officer thereof)
who controls the Company or any such other Underwriter within the meaning of
Section 15 of the Securities Act, and the Selling Securityholders from and
against any and all losses, claims, damages or liabilities, joint or several, to
which such indemnified parties or any of them may become subject under the
Securities Act, the Exchange Act, or the common law or otherwise and to
reimburse each of them for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement) or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment thereof or supplement thereto) or
the omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, if such statement or omission was made in
reliance upon and in conformity with information furnished as herein
18
stated or otherwise furnished in writing to the Company by or on behalf of
such indemnifying Underwriter for use in the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto. The
indemnity agreement of each Underwriter contained in this paragraph (b) shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified party and shall survive the delivery
of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and
(b) of this Section 7 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the "NOTICE") of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
such indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of such indemnity agreement. Any indemnifying party shall be entitled at its
own expense to participate in the defense of any action, suit or proceeding
against, or investigation or inquiry of, an indemnified party. Any indemnifying
party shall be entitled, if it so elects within a reasonable time after receipt
of the Notice by giving written notice (herein called the "NOTICE OF DEFENSE")
to the indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; PROVIDED, HOWEVER, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or parties
shall be entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified party
or parties and (ii) in any event, the indemnified party or parties shall be
entitled to have counsel chosen by such indemnified party or parties participate
in, but not conduct, the defense. If, within a reasonable time after receipt of
the Notice, an indemnifying party gives a Notice of Defense and the counsel
chosen by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs (a) through (c) of this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding,
except that (A) the indemnifying party or parties shall bear the legal and other
expenses incurred in connection with the conduct of the defense as referred to
in clause (i) of the proviso to the preceding sentence and (B) the indemnifying
party or parties shall bear such other expenses as it or they have authorized to
be incurred by the indemnified party or parties. If, within a reasonable time
after receipt of the Notice, no Notice
19
of Defense has been given, the indemnifying party or parties shall be
responsible for any legal or other expenses incurred by the indemnified party
or parties in connection with the defense of the action, suit, investigation,
inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Securityholders on the one hand and the Underwriters on
the other shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Stock received by the Company and the
Selling Securityholders and the total underwriting discount received by the
Underwriters, as set forth in the table on the cover page of the Prospectus,
bear to the aggregate public offering price of the Stock. Relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by each indemnifying party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party
20
from whom contribution may be sought from any obligation it may have
hereunder or otherwise (except as specifically provided in paragraph (c) of
this Section 7).
(e) Neither the Company nor the Selling Securityholders will, without
the prior written consent of each Underwriter, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not such Underwriter or any person who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of such Underwriter and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding.
8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company and the
Selling Securityholders if after the date of this Agreement trading in the
Common Stock shall have been suspended, or if there shall have occurred (i) the
engagement in hostilities or an escalation of major hostilities by the United
States or the declaration of war or a national emergency by the United States on
or after the date hereof, (ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic or political conditions
if the effect of such outbreak, calamity, crisis or change in economic or
political conditions in the financial markets of the United States would, in the
Underwriters' reasonable judgment, make the offering or delivery of the Stock
impracticable, (iii) suspension of trading in securities generally or a material
adverse decline in value of securities generally on the New York Stock Exchange,
the American Stock Exchange, or The Nasdaq Stock Market, or limitations on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such exchange or system, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of, or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
Underwriters' reasonable opinion has a material adverse effect on the securities
markets in the United States. If this Agreement shall be terminated pursuant to
this Section 8, there shall be no liability of the Company or the Selling
Securityholders to the Underwriters and no liability of the Underwriters to the
Company or the Selling Securityholders; PROVIDED, HOWEVER, that in the event of
any such termination the Company and the Selling Securityholders agree to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company and the Selling
Securityholders under this Agreement, including all costs and expenses referred
to in paragraphs (i) and (j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company and by the Selling Securityholders of all their
respective obligations to be performed hereunder at or prior to the Closing
21
Date or any later date on which Option Stock is to be purchased, as the case
may be, and to the following further conditions:
(a) The Registration Statement shall have become effective; and no
stop order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder
and the validity and form of the certificates representing the Stock, all
corporate proceedings and other legal matters incident to the foregoing and the
form of the Registration Statement and of the Prospectus (except as to the
financial statements contained therein) shall have been approved at or prior to
the Closing Date by Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel for the
Underwriters (herein called "UNDERWRITERS' COUNSEL").
(c) You shall have received from Xxxxxx Godward LLP, counsel for the
Company and the Selling Securityholders, an opinion, addressed to the
Underwriters and dated the Closing Date, covering the matters set forth in Annex
A hereto, and if Option Stock is purchased at any date after the Closing Date,
an additional opinion from such counsel, addressed to the Underwriters and dated
such later date, confirming that the statements expressed as of the Closing Date
in such opinions remain valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true and
correct and neither the Registration Statement nor the Prospectus omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, respectively, not misleading, (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in such a
supplement or amendment, (iii) since the respective dates as of which
information is given in the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the business, properties, financial
condition or results of operations of the Company and its subsidiary, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, and, since such dates, except in the ordinary course of business,
neither the Company nor its subsidiary has entered into any material transaction
not referred to in the Registration Statement in the form in which it originally
became effective and the Prospectus contained therein, (iv) neither the Company
nor its subsidiary has any material contingent obligations which are not
disclosed in the Registration Statement and the Prospectus, (v) there are not
any pending or known threatened legal proceedings to which the Company or its
subsidiary is a party or of which property of the Company or its subsidiary is
the subject which are material and which are not disclosed in the Registration
Statement and the Prospectus, (vi) there are not any franchises, contracts,
leases or other documents which are required to be filed as exhibits to the
Registration Statement which have not been filed as required, (vii) the
representations and warranties of the Company herein are true and correct in all
material respects as of the Closing Date or any later date on which Option Stock
is to be purchased, as the case may be, and (viii) there has not been any
material change in the market for securities in general or in political,
financial or economic conditions
22
from those reasonably foreseeable as to render it impracticable in your
reasonable judgment to make a public offering of the Stock, or a material
adverse change in market levels for securities in general (or those of
companies in particular) or financial or economic conditions which render it
inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later date
on which Option Stock is purchased a certificate, dated the Closing Date or such
later date, as the case may be, and signed by the President and the Chief
Financial Officer of the Company, stating that the respective signers of said
certificate have carefully examined the Registration Statement in the form in
which it originally became effective and the Prospectus contained therein and
any supplements or amendments thereto, and that the statements included in
clauses (i) through (vii) of paragraph (d) of this Section 9 are true and
correct.
(f) You shall have received from Xxxxxx Xxxxxxxx LLP a letter or
letters, addressed to the Underwriters and dated the Closing Date and any later
date on which Option Stock is purchased, confirming that they are independent
public accountants with respect to the Company within the meaning of the
Securities Act and the applicable published rules and regulations thereunder and
based upon the procedures described in their letter delivered to you
concurrently with the execution of this Agreement (herein called the "ORIGINAL
LETTER"), but carried out to a date not more than three business days prior to
the Closing Date or such later date on which Option Stock is purchased (i)
confirming, to the extent true, that the statements and conclusions set forth in
the Original Letter are accurate as of the Closing Date or such later date, as
the case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter which are necessary
to reflect any changes in the facts described in the Original Letter since the
date of the Original Letter or to reflect the availability of more recent
financial statements, data or information. The letters shall not disclose any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company or its subsidiary which, in your sole
judgment, makes it impractical or inadvisable to proceed with the public
offering of the Stock or the purchase of the Option Stock as contemplated by the
Prospectus.
(g) You shall have received from Xxxxxx Xxxxxxxx LLP letter
stating that their review of the Company's system of internal accounting
controls, to the extent they deemed necessary in establishing the scope of
their examination of the Company's financial statements as at ______________,
19__, did not disclose any weakness in internal controls that they
considered to be material weaknesses.
(h) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several jurisdictions,
or other evidence satisfactory to you, of the qualification referred to in
paragraph (f) of Section 6 hereof.
(i) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly authorized for listing by The Nasdaq National
Market upon official notice of issuance.
(j) On or prior to the Closing Date, you shall have received from all
directors, officers, and beneficial holders of more than 5% of the outstanding
Common Stock agreements, in form reasonably
23
satisfactory to Xxxxxxxxx & Xxxxx LLC, stating that without the prior written
consent of Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, such person
or entity will not, for a period of 180 days following the commencement of
the public offering of the Stock by the Underwriters, directly or indirectly,
(i) sell, offer, contract to sell, make any short sale, pledge, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any rights to purchase or acquire Common
Stock or (ii) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences or ownership of Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise.
(k) You shall be satisfied that, and you shall have received a
certificate, dated the Closing Date, from the Attorney-in-Fact for the Selling
Securityholders as designated in the Power of Attorney to the effect that, as of
the Closing Date, they have not been informed that:
(1) The representations and warranties made by each Selling
Securityholder herein are not true or correct in any material
respect on the Closing Date; or
(2) Any Selling Securityholder has not complied with any
obligation or satisfied any condition which is required to be
performed or satisfied on the part of such Selling Securityholder
at or prior to the Closing Date.
(l) You shall have received on the Closing Date and on any later date
on which Option Shares are to be purchased, as the case may be, an opinion of
Underwriters' Counsel, in form and substance satisfactory to you, with respect
to the sufficiency of all such corporate proceedings and other legal matters
relating to this Agreement and the transactions contemplated hereby as you may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may have requested for the purpose of enabling them to pass
upon such matters.
(m) The Company and the Selling Securityholders shall have furnished
to you such further certificates and documents as you shall reasonably request
(including certificates of officers of the Company, the Selling Securityholders
or officers of the Selling Securityholders (when the Selling Securityholder is
not a natural person)), as to the accuracy of the representations and warranties
of the Company and the Selling Securityholders herein, as to the performance by
the Company and the Selling Securityholders of their respective obligations
hereunder and as to the other conditions concurrent and precedent to the
obligations of the Underwriters hereunder.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Underwriters' Counsel shall be satisfied that they
comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and to the Selling Securityholders. Any such
24
termination shall be without liability of the Company or the Selling
Securityholders to the Underwriters and without liability of the Underwriters
to the Company or the Selling Securityholders; PROVIDED, HOWEVER, that (i) in
the event of such termination, the Company and the Selling Securityholders
agree to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company and
the Selling Securityholders under this Agreement, including all costs and
expenses referred to in paragraphs (i) and (j) of Section 6 hereof, and (ii)
if this Agreement is terminated by you because of any refusal, inability or
failure on the part of the Company or the Selling Securityholders to perform
any agreement herein, to fulfill any of the conditions herein or to comply
with any provision hereof other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the transactions contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY AND THE SELLING
SECURITYHOLDERS. The obligation of the Company and the Selling
Securityholders to deliver the Stock shall be subject to the conditions that
(a) the Registration Statement shall have become effective and (b) no stop
order suspending the effectiveness thereof shall be in effect and no
proceedings therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall
not be fulfilled, this Agreement may be terminated by the Company and the
Selling Securityholders by giving notice to you. Any such termination shall
be without liability of the Company and the Selling Securityholders to the
Underwriters and without liability of the Underwriters to the Company or the
Selling Securityholders; PROVIDED, HOWEVER, that in the event of any such
termination the Company and the Selling Securityholders jointly and severally
agree to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company and
the Selling Securityholders under this Agreement, including all costs and
expenses referred to in paragraphs (i) and (j) of Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to their other
obligations under Section 7 of this Agreement, the Company and the Selling
Securityholders hereby jointly and severally agree to reimburse on a
quarterly basis the Underwriters for all reasonable legal and other expenses
incurred in connection with investigating or defending any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of
a judicial determination as to the propriety and enforceability of the
obligations under this Section 11 and the possibility that such payments
might later be held to be improper; PROVIDED, HOWEVER, that (i) to the extent
any such payment is ultimately held to be improper, the persons receiving
such payments shall promptly refund them and (ii) such persons shall provide
to the Company, upon request, reasonable assurances of their ability to
effect any refund, when and if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company, the Selling Securityholders and the several
Underwriters and, with respect to the
25
provisions of Section 7 hereof, the several parties (in addition to the
Company, the Selling Securityholders and the several Underwriters)
indemnified under the provisions of said Section 7, and their respective
personal representatives, successors and assigns. Nothing in this Agreement
is intended or shall be construed to give to any other person, firm or
corporation any legal or equitable remedy or claim under or in respect of
this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser,
of any of the Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Xxxxxxxxx & Xxxxx LLC, Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000; and if to the Company, shall be mailed,
telegraphed or delivered to it at its office, 00000 Xxxx Xxxxx Xxxxx, Xxxxx 000,
Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: [Xxx Xxxxxx, Vice President and CFO];
and if to the Selling Securityholders, shall be mailed, telegraphed or delivered
to the Selling Securityholders in care of [Xxxxxx Godward LLP] at [4365
Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000]. All notices given by
telegraph shall be promptly confirmed by letter.
14. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation made
by or on behalf of any Underwriter or controlling person thereof, or by or on
behalf of the Company or the Selling Securityholders or their respective
directors or officers, and (c) delivery and payment for the Stock under this
Agreement; PROVIDED, HOWEVER, that if this Agreement is terminated prior to the
Closing Date, the provisions of paragraphs (l) and (m) of Section 6 hereof shall
be of no further force or effect.
26
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
Please sign and return to the Company and to the Selling Securityholders
in care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement among the Company, the Selling
Securityholders and the several Underwriters in accordance with its terms.
Very truly yours,
NEWGEN RESULTS CORPORATION
By __________________________
[Name]
[Title]
SELLING SECURITYHOLDERS:
By __________________________
[Attorney-in-Fact]
27
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
XXXX XXXXXXXX XXXXXXX
By Xxxxxxxxx & Xxxxx LLC
By __________________________
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
28
SCHEDULE I
UNDERWRITERS
NUMBER OF SHARES
UNDERWRITERS TO BE PURCHASED
------------ ----------------
Xxxxxxxxx & Xxxxx LLC. . . . . . . . . . . . . . . . . . . . .
BancBoston Xxxxxxxxx Xxxxxxxx Inc. . . . . . . . . . . . . . .
Xxxx Xxxxxxxx Xxxxxxx. . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . .
29
SCHEDULE II
SELLING SECURITYHOLDERS
NAME AND ADDRESS NUMBER OF SHARES
OF SELLING SECURITYHOLDERS TO BE SOLD
-------------------------- ----------------
Total. . . . . . . . . . . . . . . . . . . . . . . . .
30
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF XXXXXX GODWARD LLP
COUNSEL FOR THE COMPANY AND THE SELLING SECURITYHOLDERS
(i) Each of the Company and its subsidiary has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified as a foreign corporation
and in good standing in each state of the United States of America in which its
ownership or leasing of property requires such qualification (except where the
failure to be so qualified would not have a material adverse effect on the
business, properties, financial condition or results of operations of the
Company and its subsidiary, taken as a whole), and has full corporate power and
authority to own or lease its properties and conduct its business as described
in the Registration Statement; all the issued and outstanding capital stock of
the subsidiary of the Company has been duly authorized and validly issued and is
fully paid and nonassessable, and is owned by the Company free and clear of all
liens, encumbrances and security interests, and to the best of such counsel's
knowledge, no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into shares of
capital stock or ownership interests in such subsidiaries are outstanding; to
such counsel's knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entity other than Newgen
Dealer Pricing Center, Inc.;
(ii) the authorized capital stock of the Company consists of
__________ shares of Series A Preferred Stock, of which there are
outstanding _________ shares, _________ shares of Series B Preferred Stock,
of which there are outstanding _________ shares, and _________ shares of
Common Stock, $ _________ par value, of which there are outstanding _________
shares (including the Underwritten Stock plus the number of shares of Option
Stock issued on the date hereof); proper corporate proceedings have been
taken validly to authorize such authorized capital stock; all of the
outstanding shares of such capital stock (including the Underwritten Stock
and the shares of Option Stock issued, if any) have been duly and validly
issued and are fully paid and nonassessable; any Option Stock purchased after
the Closing Date, when issued and delivered to and paid for by the
Underwriters as provided in the Underwriting Agreement, will have been duly
and validly issued and be fully paid and nonassessable; and no preemptive
rights of, or rights of refusal in favor of, shareholders exist with respect
to the Stock, or the issue and sale thereof, pursuant to the Certificate of
Incorporation or Bylaws of the Company and, to the knowledge of such counsel,
there are no contractual preemptive rights that have not been waived, rights
of first refusal or rights of co-sale which exist with respect to the Stock
being sold by the Selling Securityholders or the issue and sale of the Stock;
(iii) the Registration Statement has become effective under the
Securities Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus is in effect and no proceedings for that
purpose have been instituted or are pending or contemplated by the Commission;
(iv) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial data contained 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 with the Rules
and Regulations;
(v) such counsel have no reason to believe that the Registration
Statement (except as to the financial statements and schedules and other
financial data contained therein, as to which such counsel need not express any
opinion or belief) at 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 to make the statements therein not misleading, or that the
Prospectus (except as to the financial statements and schedules and other
financial data contained therein, as to which such counsel need not express any
opinion or belief) as of its date or at the Closing Date (or any later date on
which Option Stock is purchased), contained or contains any untrue statement of
a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading;
(vi) the information required to be set forth in the Registration
Statement in answer to Items 9, 10 (insofar as it relates to such counsel) and
11(c) of Form S-1 is to the best of such counsel's knowledge accurately and
adequately set forth therein in all material respects or no response is required
with respect to such Items, and the description of the Company's stock option
plans and the options granted and which may be granted thereunder and the
options granted otherwise than under such plans set forth in the Prospectus
accurately and fairly presents the information required to be shown with respect
to said plans and options to the extent required by the Securities Act and the
Rules and Regulations;
(vii) such counsel do not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion of
such counsel are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required;
(viii) the Company has the corporate power and authority to enter into
the Underwriting Agreement and to issue, sell and deliver to the Underwriters
the Stock to be issued and sold by it hereunder; the Underwriting Agreement has
been duly authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable in accordance with its terms,
except insofar as indemnification and contribution provisions may be limited by
applicable law and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally or by general equitable principles and limitations
on equitable remedies;
(ix) the Underwriting Agreement has been duly executed and delivered by
or on behalf of the Selling Securityholders and the Custody Agreement between
the Selling Securityholders and ____________________ , as Custodian, and the
Power of Attorney referred to in such Custody Agreement have been duly executed
and delivered by the several Selling Securityholders; each Selling
Securityholder that is not
1
a natural person has full power and authority under its charter documents to
enter into and to perform its obligations under the Underwriting Agreement
and to sell, transfer, assign and deliver the Stock to be sold by such
Selling Securityholder hereunder; the Underwriting Agreement has been duly
authorized by each Selling Securityholder that is not a natural person; each
Selling Securityholder that is not a natural person has full power and
authority under its charter documents to enter into and to perform its
obligations under the Power of Attorney and Custody Agreement to be executed
and delivered by it in connection with the transactions contemplated herein;
the Power of Attorney and Custody Agreement of each Selling Securityholder
that is not a natural person has been duly authorized by such Selling
Securityholder; and the Underwriting Agreement and the Power of Attorney and
Custody Agreement of each Selling Securityholder constitutes the valid and
binding agreement of such Selling Securityholder, enforceable in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles and limitations on equitable remedies.
(x) the execution and delivery by the Company and the Selling
Shareholders of, and the performance by the Company and the Selling Shareholders
of their obligations under, the Underwriting Agreement, and the issue and sale
by the Company of the shares of Stock sold by the Company as contemplated by the
Underwriting Agreement will not conflict with, or result in a breach of, the
respective charter or bylaws of the Company or its subsidiary or any agreement
or instrument known to such counsel to which the Company or its subsidiary is a
party or any applicable law or regulation, or so far as is known to such
counsel, any order, writ, injunction or decree, of any jurisdiction, court or
governmental instrumentality;
(xi) all holders of securities of the Company having rights to the
registration of shares of Common Stock, or other securities, because of the
filing of the Registration Statement by the Company have waived such rights or
such rights have expired by reason of lapse of time following notification of
the Company's intent to file the Registration Statement;
(xii) good and marketable title to the shares of Stock sold by the
Selling Securityholders under the Underwriting Agreement, free and clear of all
liens, encumbrances, equities, security interests and claims, has been
transferred to the Underwriters who have severally purchased such shares of
Stock under the Underwriting Agreement, assuming for the purpose of this opinion
that the Underwriters purchased the same in good faith without notice of any
adverse claims;
(xiii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated in the Underwriting Agreement, except such as have been obtained
under the Securities Act and such as may be required under state securities or
blue sky laws in connection with the purchase and distribution of the Stock by
the Underwriters;
(xiv) the statements (1) in the Prospectus under the captions [to be
completed after S-1 filed] "Risk Factors--___________ , " "Dividend Policy,"
"Business--Intellectual Property," "Management," "Certain
1
Transactions," "Description of Capital Stock," "Shares Eligible for Future
Sale" and "Underwriters" and (2) in the Registration Statement in Items 14
and 15, in each case insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein;
(xv) the Stock sold by the Selling Securityholders and issued and sold
by the Company will been duly authorized for listing by The Nasdaq National
Market Stock Exchange upon official notice of issuance;
(xvi) to such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against the Company or its subsidiary of a
character required to be disclosed in the Registration Statement or the
Prospectus by the Act or the rules and regulations of the Commission, other than
those described therein;
(xvii) to such counsel's knowledge, neither the Company nor its
subsidiary is presently (a) in material violation of its respective charter or
bylaws, or (b) subject to any order, writ or decree of any court or governmental
agency or body having jurisdiction over the Company or its subsidiary, or over
any of their properties or operations;
(xviii) the execution and delivery of the Merger Agreement, effecting the
reincorporation of the California Corporation under the laws of the State of
Delaware, was duly authorized by all necessary corporate action on the part of
each of the California Corporation and the Company; each of the California
Corporation and the Company had all corporate power and authority to execute and
deliver the Merger Agreement, to file the Merger Agreement with the Secretary of
State of California and the Secretary of State of Delaware and to consummate the
reincorporation contemplated by the Merger Agreement, and the Merger Agreement
at the time of execution and filing constituted a valid and binding obligation
of each of the California Corporation and the Company.
[ADDITIONAL OPINIONS MAY BE REQUESTED AS IDENTIFIED PURSUANT TO OUR CONTINUING
DUE DILIGENCE INVESTIGATION.]
In addition, such counsel shall state that such counsel has participated
in conferences with officials and other representatives of the Company, the
representatives of the Underwriters, Underwriters' Counsel and the independent
public accountants of the Company, at which such conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed,
and although they have not verified, and are not passing upon, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, nothing has come to the attention of such counsel
which leads such counsel to believe that, at the time the Registration Statement
became effective, the Registration Statement and any post-effective amendment
thereto (other than the financial statements, including supporting schedules,
financial information and statistical information derived therefrom, as to which
such counsel need express no comment) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or
4
necessary to make the statements therein not misleading, or as of its date or
at the Closing Date (or any later date on which the Option Stock is purchased),
as the case may be, the Prospectus and any supplement thereto (except as
aforesaid) contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States or the State of California or the
Delaware General Corporation Law upon opinions of local counsel satisfactory in
form and scope to Underwriters' Counsel. Copies of any opinions so relied upon
shall be delivered to you, as representatives of the Underwriters, and to
Underwriters' Counsel, and the foregoing opinion shall also state that counsel
knows of no reason the Underwriters are not entitled to rely upon the opinions
of such local counsel.
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