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2,950,000 Shares
SDL, INC.
Common Stock
UNDERWRITING AGREEMENT
September 21, 1999
CIBC World Markets Corp.
Xxxxxxxxx & Xxxxx LLC
Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities Corporation
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
XX Xxxxx Securities Corporation
SoundView Technology Group, Inc.
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
SDL, Inc., a Delaware corporation (the "Company"), proposes, subject to
the terms and conditions contained herein, to sell to you and the other
underwriters named on Schedule I to this Agreement (the "Underwriters"), for
whom you are acting as Representatives (the "Representatives"), an aggregate of
2,950,000 shares (the "Firm Shares") of the Company's Common Stock, $0.001 par
value (the "Common Stock"). All of the Firm Shares are to be issued and sold by
the Company. The respective amounts of the Firm Shares to be purchased by each
of the several Underwriters are set forth opposite their names on Schedule I
hereto. In addition, the Company proposes to grant to the Underwriters an option
to purchase up to an additional 442,500 shares (the "Option Shares") of Common
Stock from it for the purpose of covering over-allotments in connection with the
sale of the Firm Shares. The Firm Shares and the Option Shares are together
called the "Shares."
1. Sale and Purchase of the Shares.
On the basis of the representations, warranties and agreements contained
in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Company, at a price of $78.64 per share (the "Initial Price"), the number of
Firm Shares set forth opposite the name of such Underwriter under the column
"Number of Firm Shares to be Purchased from the Company" on Schedule I to this
Agreement, subject to adjustment in accordance with Section 10 hereof.
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(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option Shares at the
Initial Price. The number of Option Shares to be purchased by each Underwriter
shall be the same percentage (adjusted by the Representatives to eliminate
fractions) of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares. Such option
may be exercised only to cover over-allotments in the sales of the Firm Shares
by the Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the Firm
Shares Closing Date (as defined below), and from time to time thereafter within
30 days after the date of this Agreement, in each case upon written, facsimile
or telegraphic notice, or verbal or telephonic notice confirmed by written,
facsimile or telegraphic notice, by the Representatives to the Company no later
than 12:00 noon, New York City time, on the business day before the Firm Shares
Closing Date or at least two business days before the Option Shares Closing Date
(as defined below), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm Shares
Closing Date) of such purchase.
2. Delivery and Payment. Delivery by the Company of the Firm Shares to
the Representatives for the respective accounts of the Underwriters, and payment
of the purchase price by certified or official bank check or checks payable in
New York Clearing House (same day) funds drawn to the order of the Company,
against delivery of the certificates therefor to the Representatives, shall take
place at the offices of CIBC World Markets Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time, on the third
business day following the date of this Agreement, or at such time on such other
date, not later than 10 business days after the date of this Agreement, as shall
be agreed upon by the Company and the Representatives (such time and date of
delivery and payment are called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is exercised
in whole or in part on one or more occasions, delivery by the Company of the
Option Shares to the Representatives for the respective accounts of the
Underwriters and payment of the purchase price thereof in immediately available
funds by wire transfer or by certified or official bank check or checks payable
in New York Clearing House (same day) funds to the Company shall take place at
the offices of CIBC World Markets Corp. specified above at the time and on the
date (which may be the same date as, but in no event shall be earlier than, the
Firm Shares Closing Date) specified in the notice referred to in Section 1(b)
(such time and date of delivery and payment are called the "Option Shares
Closing Date"). The Firm Shares Closing Date and the Option Shares Closing Date
are called, individually, a "Closing Date" and, together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as the Representatives shall request at least two
full business days before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the option as described in Section
l(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, on the full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).
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3. Registration Statement and Prospectus; Public Offering. The Company
has prepared and filed in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the published rules and
regulations thereunder (the "Rules") adopted by the Securities and Exchange
Commission (the "Commission") a Registration Statement (as hereinafter defined)
on Form S-3 (No. 333-84925), including a preliminary prospectus relating to the
Shares, and has filed with, or transmitted for filing to, or shall promptly
hereafter file with or transmit for filing to, the Commission a prospectus
supplement (the "Prospectus Supplement") specifically relating to the Shares and
has filed with the Commission such amendments thereof as may have been required
to the date of this Agreement. Copies of such Registration Statement (including
all amendments thereof), the related Preliminary Prospectus (as hereinafter
defined) and the related Prospectus Supplement have heretofore been delivered by
the Company to you. The term "Preliminary Prospectus" means any prospectus
supplement filed with the Commission pursuant to Rule 424 or Rule 430A under the
Securities Act and any preliminary prospectus (as described in Rule 430 of the
Rules) included at any time as a part of the Registration Statement or filed
with the Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules. The term "Registration Statement" as used
in this Agreement means the initial registration statement (including all
exhibits, financial schedules and information deemed to be a part of the
Registration Statement through incorporation by reference or otherwise), as
amended and supplemented at the time and on the date it becomes effective (the
"Effective Date") including the information (if any) deemed to be part thereof
at the time of effectiveness pursuant to Rule 430A of the Rules. If the Company
has filed an abbreviated registration statement to register additional Shares
pursuant to Rule 462(b) under the Rules (the "462(b) Registration Statement")
then any reference herein to the Registration Statement shall also be deemed to
include such 462(b) Registration Statement. The term "Prospectus" as used in
this Agreement means the prospectus (including the Prospectus Supplement) in the
form included in the Registration Statement at the time of effectiveness or, if
Rule 430A of the Rules is relied on, the term Prospectus shall also include the
final prospectus filed with the Commission pursuant to Rule 424(b) of the Rules.
Any reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to the applicable form under the Securities Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or Prospectus shall be
deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by
reference in such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement; and
any reference to the Prospectus as amended or supplemented shall be deemed to
refer to the Prospectus as amended or supplemented in relation to the applicable
Shares in the form in which it is filed with the Commission pursuant to Rule
424(b) under the Securities Act in accordance with Section 4(b) hereof,
including any documents incorporated by reference therein as of the date of such
filing.
The Company understands that the Underwriters propose to make a public
offering of the Shares, as set forth in and pursuant to the Prospectus, as soon
after the Effective Date and the date of this Agreement as the Representatives
deem advisable. The Company hereby confirms that the
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Underwriters and dealers have been authorized to distribute or cause to be
distributed each Preliminary Prospectus and are authorized to distribute the
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters).
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement complied,
and on the date of the Prospectus, the date any post-effective amendment to the
Registration Statement becomes effective, the date any supplement or amendment
to the Prospectus is filed with the Commission and each Closing Date, the
Registration Statement and the Prospectus (and any amendment thereof or
supplement thereto) will comply, in all material respects, with the applicable
provisions of the Securities Act and the Rules and the Exchange Act and the
rules and regulations of the Commission thereunder. The Registration Statement
did not, as of the Effective Date, contain any untrue statement of a material
fact or 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 and the other dates referred to above neither the Registration
Statement nor the Prospectus, nor any amendment thereof or supplement thereto,
will contain any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. When any related preliminary prospectus was
first filed with the Commission (whether filed as part of the Registration
Statement or any amendment thereto or pursuant to Rule 424(a) of the Rules) and
when any amendment thereof or supplement thereto was first filed with the
Commission, such preliminary prospectus as amended or supplemented complied in
all material respects with the applicable provisions of the Securities Act and
the Rules and did not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading. Notwithstanding the foregoing, none
of the representations and warranties in this paragraph 4(a) 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 by the Representatives on behalf of the several
Underwriters for use in the Registration Statement or the Prospectus. With
respect to the preceding sentence, the Company acknowledges that the only
information furnished in writing by the Representatives on behalf of the several
Underwriters for use in the Registration Statement or the Prospectus is the
paragraph with respect to stabilization on the inside front cover page of the
Prospectus and the statements contained under the caption "Underwriting" in the
Prospectus.
(b) The Registration Statement is effective under the Securities
Act and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the Prospectus has
been issued and no proceedings for that purpose have been instituted or are
threatened under the Securities Act. Any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the Rules has been or will be
made in the manner and within the time period required by such Rule 424(b).
(c) The documents incorporated by reference in the Registration
Statement and the Prospectus, at the they became effective or were filed with
the Commission, as the case may be,
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complied in all material respects with the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations thereunder, and
none or such documents contained an untrue statement of material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed and
incorporated by reference in the Registration Statement and the Prospectus or
any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(d) The financial statements of the Company (including all notes
and schedules thereto) included or incorporated by reference in the Registration
Statement and Prospectus present accurately and fairly the financial position,
the results of operations, the statements of cash flows and the statements of
stockholders' equity and the other information purported to be shown therein of
the Company at the respective dates and for the respective periods to which they
apply; and such financial statements and related schedules and notes have been
prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved, and all adjustments
necessary for an accurate and fair presentation of the results for such periods
have been made. The summary and selected financial data included in the
Prospectus present accurately and fairly the information shown therein as at the
respective dates and for the respective periods specified and the summary and
selected financial data have been presented on a basis consistent with the
consolidated financial statements so set forth in the Prospectus and other
financial information.
(e) Ernst & Young LLP, whose reports are filed with the
Commission as a part of the Registration Statement, are and, during the periods
covered by their reports, are and were independent public accountants as
required by the Securities Act and the Rules.
(f) The Company and each of its Subsidiaries (as hereinafter
defined) is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. The Company and each such
subsidiary or other entity controlled directly or indirectly by the Company
(collectively, "Subsidiaries") is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
the business conducted by it or location of the assets or properties owned,
leased or licensed by it requires such qualification, except for such
jurisdictions where the failure to so qualify would not have a material adverse
effect on the assets or properties, business, prospects, results of operations
or financial condition of the Company (a "Material Adverse Effect"). The Company
and each of its Subsidiaries has all requisite corporate power and authority,
and all necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory bodies or
any other person or entity (collectively, the "Permits"), to own, lease and
license its assets and properties and conduct its business, all of which are
valid and in full force and effect, as described in the Registration Statement
and the Prospectus, except where the lack of such Permits, individually or in
the aggregate, would not have a Material Adverse Effect. The Company and each of
its Subsidiaries has fulfilled and performed in all material respects all of its
material obligations with respect to such Permits and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material
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impairment of the rights of the Company thereunder. Except as may be required
under the Securities Act and state and foreign Blue Sky laws, no other Permits
are required to enter into, deliver and perform this Agreement and to issue and
sell the Shares.
(g) The Company and each of its Subsidiaries owns or possesses
adequate and enforceable rights to use all trademarks, trademark applications,
trade names, service marks, copyrights, copyright applications, licenses,
know-how and other similar rights and proprietary knowledge (collectively,
"Intangibles") described in the Prospectus as being owned by it necessary for
the conduct of its business. Except as described in the Prospectus, neither the
Company nor any of its Subsidiaries has received any notice of, or is not aware
of, any infringement of or conflict with asserted rights of others with respect
to any Intangibles.
(h) The Company and each of its Subsidiaries has good and
marketable title in fee simple to all items of real property and good and
marketable title to all personal property described in the Prospectuses as being
owned by it. Any real property and buildings described in the Prospectuses as
being held under lease by the Company and each of its Subsidiaries is held by it
under valid, existing and enforceable leases, free and clear of all liens,
encumbrances, claims, security interests and defects, except such as are
described in the Registration Statement and the Prospectus or would not have a
Material Adverse Effect.
(i) There is no litigation or governmental proceeding to which
the Company or its Subsidiaries is subject or which is pending or, to the
knowledge of the Company, threatened, against the Company or any of its
Subsidiaries, which, individually or in the aggregate, might have a Material
Adverse Effect, affect the consummation of this Agreement or which is required
to be disclosed in the Registration Statement and the Prospectus that is not so
disclosed.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
therein, (a) there has not been any material adverse change with regard to the
assets or properties, business, prospects, results of operations or financial
condition of the Company; (b) neither the Company nor its Subsidiaries has
sustained any loss or interference with its assets, businesses or properties
(whether owned or leased) from fire, explosion, earthquake, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or any
court or legislative or other governmental action, order or decree which would
have a Material Adverse Effect; and (c) since the date of the latest balance
sheet included in the Registration Statement and the Prospectus, except as
reflected therein, neither the Company nor its Subsidiaries has (i) issued any
securities or incurred any liability or obligation, direct or contingent, for
borrowed money, except such liabilities or obligations incurred in the ordinary
course of business, (ii) entered into any transaction not in the ordinary course
of business or (iii) declared or paid any dividend or made any distribution on
any shares of its stock or redeemed, purchased or otherwise acquired or agreed
to redeem, purchase or otherwise acquire any shares of its stock.
(k) There is no document, contract or other agreement of a
character required to be described in the Registration Statement or Prospectus
or to be filed as an exhibit to the Registration Statement which is not
described or filed as required by the Securities Act or Rules. Each description
of a contract, document or other agreement in the Registration Statement and the
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Prospectus accurately reflects in all respects the terms of the underlying
document, contract or agreement. Each agreement described in the Registration
Statement and Prospectus or listed in the Exhibits to the Registration Statement
or incorporated by reference is in full force and effect and is valid and
enforceable by and against the Company or the Subsidiary, as the case may be, in
accordance with its terms. Neither the Company nor the Subsidiary, if the
Subsidiary is a party, nor to the Company's knowledge, any other party is in
default in the observance or performance of any term or obligation to be
performed by it under any such agreement, and no event has occurred which with
notice or lapse of time or both would constitute such a default, in any such
case which default or event, individually or in the aggregate, would have a
Material Adverse Effect. No default exists, and no event has occurred which with
notice or lapse of time or both would constitute a default, in the due
performance and observance of any term, covenant or condition, by the Company or
the Subsidiary, if the Subsidiary is a party thereto, of any other agreement or
instrument to which the Company or the Subsidiary is a party or by which it or
the Subsidiary or their properties or business may be bound or affected which
default or event, individually or in the aggregate, would have a Material
Adverse Effect.
(l) Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of its certificate of incorporation or
by-laws or of any franchise, license, permit, judgment, decree, order, statute,
rule or regulation, where the consequences of such violation, individually or in
the aggregate, would have a Material Adverse Effect.
(m) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the
Company of the Shares will give rise to a right to terminate or accelerate the
due date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which with notice
or lapse of time or both would constitute a default) under, or require any
consent or waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or its
Subsidiary pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or its Subsidiary is a party
or by which either the Company or its Subsidiary or any of their properties or
businesses is bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation applicable to the Company or its Subsidiary or
violate any provision of the certificate of incorporation or by-laws of the
Company or its Subsidiary, except for such consents or waivers which have
already been obtained and are in full force and effect.
(n) The Company has authorized and outstanding capital stock as
set forth under the captions "Description of Common Stock" and "Description of
Preferred Stock" in the Prospectus. The certificates evidencing the Shares are
in due and proper legal form and have been duly authorized for issuance by the
Company. All of the issued and outstanding shares of Common Stock have been duly
and validly issued and are fully paid and nonassessable. There are no statutory
preemptive or other similar rights to subscribe for or to purchase or acquire
any shares of Common Stock of the Company or its Subsidiaries or any such rights
pursuant to its Certificate of Incorporation or by-laws or any agreement or
instrument to or by which the Company or any of its Subsidiaries is a party or
bound. The Shares, when issued and sold pursuant to this Agreement, will be duly
and validly issued, fully paid and nonassessable and none of them will be issued
in violation
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of any preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and there is no commitment,
plan or arrangement to issue, any share of stock of the Company or its
Subsidiaries or any security convertible into, or exercisable or exchangeable
for, such stock. The Common Stock and the Shares conform in all material
respects to all statements in relation thereto contained in the Registration
Statement and the Prospectus. All outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued, and are fully paid and
nonassessable and are owned directly by the Company or by another wholly-owned
subsidiary of the Company free and clear of any security interests, liens,
encumbrances, equities or claims, other than those described in the Prospectus.
(o) No holder of any security of the Company has the right to
have any security owned by such holder included in the Registration Statement or
to demand registration of any security owned by such holder during the period
ending 60 days after the date of this Agreement. By the Closing, officers,
directors and other stockholders holding approximately 2,280,000 shares of
Common Stock shall have delivered to the Representatives enforceable written
lock-up agreements in the form attached to this Agreement ("Lock-Up Agreement").
(p) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares by the Company. This
Agreement has been duly and validly authorized, executed and delivered by the
Company and constitute and will constitute legal, valid and binding obligations
of the Company enforceable against the Company in accordance with their
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
(q) Neither the Company nor any of its Subsidiaries is involved
in any labor dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a Material Adverse Effect. The Company is
not aware of any existing or imminent labor disturbance by the employees of any
of its principal suppliers or contractors which would have a Material Adverse
Effect. The Company is not aware of any threatened or pending litigation between
the Company or its Subsidiaries and any of its executive officers which, if
adversely determined, could have a Material Adverse Effect and has no reason to
believe that such officers will not remain in the employment of the Company.
(r) No transaction has occurred between or among the Company and
any of its officers or directors or five percent shareholders or any affiliate
or affiliates of any such officer or director or five percent shareholders that
is required to be described in and is not described in the Registration
Statement and the Prospectus.
(s) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of any of the Shares.
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(t) The Company and its Subsidiaries has filed all Federal,
state, local and foreign tax returns which are required to be filed through the
date hereof, or has received extensions thereof, and has paid all taxes shown on
such returns and all assessments received by it to the extent that the same are
material and have become due. There are no tax audits or investigations pending,
which if adversely determined would have a Material Adverse Effect; nor are
there any material proposed additional tax assessments against the Company and
any of its Subsidiaries.
(u) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation ("Nasdaq")
National Market System, subject to official Notice of Issuance.
(v) The books, records and accounts of the Company and its
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its Subsidiaries. The Company and each of its
Subsidiaries maintains 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
accordance with generally accepted accounting principles and to maintain asset
accountability, (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 the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(w) The Company and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are customary in the businesses in which they are engaged or propose
to engage after giving effect to the transactions described in the Prospectus;
all policies of insurance and fidelity or surety bonds insuring the Company or
any of its subsidiaries or the Company's or its subsidiaries' respective
businesses, assets, employees, officers and directors are in full force and
effect; the Company and each of its subsidiaries are in compliance with the
terms of such policies and instruments in all material respects; and neither the
Company nor any Subsidiary of the Company has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material Adverse
Effect.
(x) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated required to be obtained or performed by the Company (except such
additional steps as may be necessary to qualify the Shares for public offering
by the Underwriters under the state securities or Blue Sky laws) has been
obtained or made and is in full force and effect.
(y) Each of the Company and its Subsidiaries is in compliance in
all material respects with all rules, laws and regulations relating to the use,
treatment, storage and disposal of toxic substances and protection of health or
the environment ("Environmental Law") which are applicable to its business; (ii)
neither the Company nor its Subsidiaries has received any notice from any
governmental authority or third party of an asserted claim under Environmental
Laws; (iii) each
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of the Company and its Subsidiaries has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its
business, except in the cases where the lack of such permits, licenses or other
approvals would not result in a Material Adverse Effect and is in compliance
with all terms and conditions of any such permit, license or approval, except in
the cases where such non-compliance would not result in a Material Adverse
Effect; (iv) to the Company's knowledge, no facts currently exist that will
require the Company or its Subsidiaries to make future material capital
expenditures to comply with Environmental Laws; and (v) no property which is or
has been owned, leased or occupied by the Company or its Subsidiaries has been
designated as a Superfund site pursuant to the Comprehensive Environmental
Response, Compensation of 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. Neither the Company nor any of its Subsidiaries has been
named as a "potentially responsible party" under the CER, CLA 1980.
(z) Neither the Company nor any of its Subsidiaries has violated
any federal or state law relating to discrimination in the hiring, promotion or
pay of employees nor any applicable federal or state wages and hours laws, nor
any provisions of the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, which in each case might result in any
material adverse change in the business, prospects, financial condition or
results of operation of the Company and its Subsidiaries, taken as a whole.
(aa) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of
which the Company identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, or
any permit, license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a Material Adverse Effect.
(bb) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of proceeds thereof as described in
the Prospectus, will not be an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(cc) The Company, its Subsidiaries, or any other person
associated with or acting on behalf of the Company or its Subsidiaries
including, without limitation, any director, officer, agent or employee of the
Company or its Subsidiaries has not, directly or indirectly, while acting on
behalf of the Company or its Subsidiaries (i) used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses relating
to political activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.
(dd) The Company has reviewed its operations and that of its
Subsidiaries to evaluate the extent to which the business or operations of the
Company or any of its subsidiaries will be affected by the Year 2000 Problem
(that is, any significant risk that computer hardware or
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software applications used by the Company and its subsidiaries will not, in the
case of dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring prior to
January 1, 2000); as a result of such review, (i) the Company has no reason to
believe, and does not believe, that (A) there are any issues related to the
Company's preparedness to address the Year 2000 Problem that are of a character
required to be described or referred to in the Registration Statement or
Prospectus which have not been accurately described in the Registration
Statement or Prospectus and (B) the Year 2000 Problem will have a Material
Adverse Effect, or result in any material loss or interference with the business
or operations of the Company and its subsidiaries, taken as a whole; and (ii)
the Company reasonably believes, after due inquiry, that the suppliers, vendors,
customers or other material third parties used or served by the Company and such
subsidiaries are addressing or will address the Year 2000 Problem in a timely
manner, except to the extent that a failure to address the Year 2000 by a
supplier, vendor, customer or material third party would not have a Material
Adverse Effect.
5. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the Prospectus
shall have been timely filed with the Commission in accordance with Section 6(a)
of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or threatened by the
Commission, and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of the Commission
and the Representatives.
(c) The representations and warranties of the Company contained
in this Agreement and in the certificates delivered pursuant to Section 5(d)
shall be true and correct when made and on and as of each Closing Date as if
made on such date. The Company shall have performed all covenants and agreements
and satisfied all the conditions contained in this Agreement required to be
performed or satisfied by it at or before such Closing Date.
(d) The Representatives shall have received on each Closing Date
a certificate, addressed to the Representatives and dated such Closing Date, of
the chief executive or chief operating officer and the chief financial officer
or chief accounting officer of the Company to the effect that (i)the signers of
such certificate have carefully examined the Registration Statement, the
Prospectus and this Agreement and that the representations and warranties of the
Company in this Agreement are true and correct on and as of such Closing Date
with the same effect as if made on such Closing Date and the Company has
performed all covenants and agreements and satisfied all conditions contained in
this Agreement required to be performed or satisfied by it at or prior to such
Closing Date, and (ii)no stop order suspending the effectiveness of the
Registration Statement has been issued and to the best of their knowledge, no
proceedings for that purpose have been instituted or are pending under the
Securities Act.
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(e) The Representatives shall have received, at the time this
Agreement is executed and on each Closing Date a signed letter from Ernst &
Young LLP addressed to the Representatives and dated, respectively, the date of
this Agreement and each such Closing Date, in form and substance reasonably
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the Securities Act and the Rules, that the
response to Item 10 of the Registration Statement is correct insofar as it
relates to them and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated by reference in the
Registration Statement and the Prospectus and reported on by them comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act and the Rules;
(ii) on the basis of a reading of the amounts included
in the Registration Statement and the Prospectus under the headings "Ratio of
Earnings to Fixed Charges" and "Selected Financial Data," carrying out certain
procedures (but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters of significance
with respect to the comments set forth in such letter, a reading of the minutes
of the meetings of the stockholders and directors of the Company, and inquiries
of certain officials of the Company who have responsibility for financial and
accounting matters of the Company as to transactions and events subsequent to
the date of the latest audited financial statements, except as disclosed in the
Registration Statement and the Prospectus, nothing came to their attention which
caused them to believe that:
(A) the amounts in "Ratio of Earnings to Fixed
Charges," and "Selected Financial Data" included in the Registration Statement
and the Prospectus do not agree with the corresponding amounts in the audited
and unaudited financial statements from which such amounts were derived; or
(B) with respect to the Company, there were, at a
specified date not more than three business days prior to the date of the
letter, any increases in the current liabilities and long-term liabilities of
the Company or any decreases in net income or in working capital or the
stockholders' equity in the Company, as compared with the amounts shown on the
Company's audited balance sheet for the fiscal year ended and the 6 months ended
June 30, 1999 included in the Registration Statement;
(iii) they have performed certain other procedures as
may be permitted under Generally Acceptable Auditing Standards as a result of
which they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company) set
forth in the Registration Statement and the Prospectus and reasonably specified
by the Representatives agrees with the accounting records of the Company; and
(iv) based upon the procedures set forth in clauses
(ii) and (iii) above and a reading of the amounts included in the Registration
Statement under the headings "Ratio of Earnings to Fixed Charges" and "Selected
Financial Data" included in the Registration Statement and Prospectus and a
reading of the financial statements from which certain of such data were
derived,
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nothing has come to their attention that gives them reason to believe that the
"Ratio of Earnings to Fixed Charges" and "Selected Financial Data" included in
the Registration Statement and Prospectus do not comply as to the form in all
material respects with the applicable accounting requirements of the Securities
Act and the Rules or that the information set forth therein is not fairly stated
in relation to the financial statements included in the Registration Statement
or Prospectus from which certain of such data were derived are not in conformity
with generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Registration Statement and Prospectus.
References to the Registration Statement and the Prospectus in this paragraph
(e) are to such documents as amended and supplemented at the date of the letter.
(f) The Representatives shall have received on each Closing Date
from Xxxxxxxx & Xxxxxxxx LLP, counsel for the Company, an opinion, addressed to
the Representatives and dated such Closing Date, and stating in effect that:
(i) Each of the Company and its domestic Subsidiaries
has been duly organized and is validly existing as a corporation in good
standing under the laws of its respective jurisdiction of incorporation. Each of
the Company and its domestic Subsidiaries is duly qualified and in good standing
as a foreign corporation in each jurisdiction in which the character or location
of its assets or properties (owned, leased or licensed) or the nature of its
businesses makes such qualification necessary, except for such jurisdictions
where the failure to so qualify, individually or in the aggregate, would not
have a Material Adverse Effect.
(ii) Each of the Company and its domestic Subsidiaries
has all requisite corporate power and authority to own, lease and license its
assets and properties and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus and with respect to
the Company to enter into, deliver and perform this Agreement and to issue and
sell the Shares other than those required under the state and foreign Blue Sky
laws.
(iii) The Company has authorized and issued capital
stock as set forth in the Registration Statement and the Prospectus under the
captions "Description of Common Stock" and "Description of Preferred Stock" as
of the dates set forth therein; the certificates evidencing the Shares are in
due and proper legal form and have been duly authorized for issuance by the
Company; all of the outstanding shares of Common Stock of the Company have been
duly and validly authorized and issued and are fully paid and nonassessable and
none of them was issued in violation of any preemptive or other similar right.
The Shares when issued and sold pursuant to this Agreement will be duly and
validly issued, outstanding, fully paid and nonassessable and none of them will
have been issued in violation of any preemptive or other similar right. To the
best of such counsel's knowledge, except as disclosed in the Registration
Statement and the Prospectus, there are no preemptive or other rights to
subscribe for or to purchase or any restriction upon the voting or transfer of
any securities of the Company pursuant to the Company's Certificate of
Incorporation or by-laws or other governing documents or any agreements or other
instruments to which the Company is a party or by which it is bound. To the best
of such counsel's knowledge, except as disclosed in the Registration Statement
and the Prospectus and except for options issued under the Company's benefit
plans in the ordinary course of business after June 30, 1999, there is no
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outstanding option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any share of stock of the Company or
any security convertible into, exercisable for, or exchangeable for stock of the
Company. The Common Stock and the Shares conform in all material respects to the
descriptions thereof contained in the Registration Statement and the Prospectus.
The issued and outstanding shares of capital stock of each of the Company's
domestic Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned by the Company or by another wholly owned
subsidiary of the Company, free and clear of any perfected security interest or,
to the best knowledge of such counsel, any other security interests, liens,
encumbrances, equities or claims, other than those disclosed in the Registration
Statement and the Prospectus.
(iv) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares. This
Agreement has been duly and validly authorized, executed and delivered by the
Company and this Agreement constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms
except as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles.
(v) Neither the execution, delivery and performance of
this Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate or accelerate the
due date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or any event which with
notice or lapse of time, or both, would constitute a default) under, or require
consent or waiver under, or result in the execution or imposition of any lien,
charge, claim, security interest or encumbrance upon any properties or assets of
the Company or any domestic Subsidiary pursuant to the terms of any indenture,
mortgage, deed trust, note or other agreement or instrument of which such
counsel is aware and to which the Company or any domestic Subsidiary is a party
or by which either the Company or the Subsidiary or any of its properties or
businesses is bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation of which such counsel is aware or violate any
provision of the charter or by-laws of the Company or any domestic Subsidiary.
(vi) To the best of such counsel's knowledge, no
default exists, and no event has occurred which with notice or lapse of time, or
both, would constitute a default, in the due performance and observance of any
term, covenant or condition by the Company of any indenture, mortgage, deed of
trust, note or any other agreement or instrument to which the Company is a party
or by which it or any of its assets or properties or businesses may be bound or
affected, where the consequences of such default, individually or in the
aggregate, would have a Material Adverse Effect.
(vii) To the best of such counsel's knowledge, the
Company and its Subsidiaries are not in violation of any term or provision of
its charter or by-laws or any franchise, license, permit, judgment, decree,
order, statute, rule or regulation, where the consequences of such violation,
individually or in the aggregate, would have a Material Adverse Effect.
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(viii) No consent, approval, authorization or order of
any court or governmental agency or regulatory body is required for the
execution, delivery or performance of this Agreement by the Company or the
consummation of the transactions contemplated hereby, 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 Shares by the several Underwriters.
(ix) To the best of such counsel's knowledge, except
as disclosed in the Prospectus, there is no litigation or governmental or other
proceeding or investigation, before any court or before or by any public body or
board pending or threatened against, or involving the assets, properties or
businesses of, the Company which would have a Material Adverse Effect.
(x) The statements in the Prospectus under the
captions "Description Of Common Stock," "Description Of Preferred Stock,"
"Description Of Depositary Shares," "Description Of Warrants" and "Description
Of Debt Securities," "Delaware Law and Certain Charter Provisions" and
"Description of Capital Stock," insofar as such statements constitute a summary
of documents referred to therein or matters of law, are fair summaries in all
material respects and accurately present the information called for with respect
to such documents and matters. Accurate copies of all contracts and other
documents required to be filed as exhibits to, or described in, the Registration
Statement have been so filed with the Commission or are fairly described in the
Registration Statement, as the case may be.
(xi) The Registration Statement, all preliminary
prospectuses and the Prospectus and each amendment or supplement thereto (except
for the financial statements and schedules and other financial and statistical
data included therein, as to which such counsel expresses no opinion) comply as
to form in all material respects with the requirements of the Securities Act and
the Exchange Act and the rules promulgated by the Commission thereunder.
(xii) The Registration Statement is effective under
the Securities Act, and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are threatened, pending or contemplated. Any required filing
of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time period required
by such Rule 424(b).
(xiii) The Shares have been approved for listing on
the Nasdaq National Market.
(xiv) The capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus under
the caption "Description of Capital Stock."
(xv) The Company is not an "investment company" or an
entity controlled by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
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In addition, such counsel shall state that such counsel has participated
in conferences with officers and other representatives of the Company,
representatives of the Representatives and representatives of the independent
public accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus as they related to the matters set
forth in the foregoing opinion were discussed. While such counsel has not
undertaken to independently verify and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as specified in the foregoing
opinion), on the basis of the foregoing, no facts have come to the attention of
such counsel with respect to the matters set forth in the foregoing opinion
which lead such counsel to believe that the Registration Statement at the time
it became effective (except with respect to the financial statements and notes
and schedules thereto and other financial data, as to which such counsel need
express no belief) 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 as amended or
supplemented (except with respect to the financial statements, notes and
schedules thereto and other financial data, as to which such counsel need make
no statement) on the date thereof and the date of such opinion contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of
the State of New York, the General Corporation Law of the State of Delaware and
the Federal laws of the United States. Copies of such certificates and other
opinions shall be furnished to the Representatives and counsel for the
Underwriters.
(g) The Representatives shall have received on each Closing Date
from local counsel for the Company satisfactory to the Representatives, an
opinion, addressed to the Representatives and dated such Closing Date, and
stating in effect that, with respect to each non-domestic Subsidiary of the
Company:
(i) The Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation.
(ii) The Subsidiary has corporate power and authority to
own, lease and operate its properties and to conduct its business as currently
conducted.
(iii) The Subsidiary is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock
of the Subsidiary is _________ shares of Common Stock; all of the shares of
issued and outstanding capital stock of the Subsidiary have been duly authorized
and validly issued and are fully paid and non-assessable and are held of record
and beneficially owned by the Company; and, to our knowledge, none of the
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outstanding shares of capital stock of the Subsidiary was issued in violation of
the preemptive or other similar rights of any securityholder of the Subsidiary.
(v) To the knowledge of such counsel, there is not pending
or threatened any action, suit, proceeding, inquiry or investigation to which
the Subsidiary is a party, or to which the property of the Subsidiary is
subject, before or brought by any court or governmental agency or body, domestic
or foreign, which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely affect
the properties or assets thereof.
(vi) To the knowledge of such counsel, the Subsidiary is
not in violation of its charter or by-laws and no default by the Subsidiary
exists in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument.
In rendering such opinion, such counsel may rely as to matters of fact (but not
as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Subsidiary and public officials.
(h) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives, and their counsel and
the Underwriters shall have received from Wilson, Sonsini, Xxxxxxxx & Xxxxxx,
Professional Corporation a favorable opinion, addressed to the Representatives
and dated such Closing Date, with respect to the Shares, the Registration
Statement and the Prospectus, and such other related matters, as the
Representatives may reasonably request, and the Company shall have furnished to
Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional Corporation such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters.
(i) If the Shares have been qualified for sale in Florida, the
Representatives shall have received on each Closing Date certificates, addressed
to the Representatives, and dated such Closing Date, of an executive officer of
the Company, to the effect that the signer of such certificate has reviewed and
understands the provisions of Section 517.075 of the Florida Statutes, and
represents that the Company has complied, and at all times will comply, with all
provisions of Section 517.075 and further, that as of such Closing Date, neither
the Company nor any of its affiliates does business with the government of Cuba
or with any person or affiliate located in Cuba.
(j) The Representatives shall have received copies of the Lock-up
Agreements executed by each entity or person described in Section 4(o).
(k) The Company shall have furnished or caused to be furnished to
the Representatives such further certificates or documents as the
Representatives shall have reasonably requested.
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6. Covenants of the Company.
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto, to become effective as promptly as
possible. The Company shall prepare the Prospectus and Prospectus Supplement in
a form approved by the Representatives and file such Prospectus and Prospectus
Supplement pursuant to Rule 424(b) under the Securities Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the Representatives
in writing (i) when any amendment to the Registration Statement shall have
become effective, (ii) of any request by the Commission for any amendment of the
Registration Statement, Prospectus or Prospectus Supplement or for any
additional information, (iii) of the prevention or suspension of the use of any
preliminary prospectus or the Prospectus or of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company shall not file any
amendment of the Registration Statement or supplement to the Prospectus unless
the Company has furnished the Representatives a copy for its review prior to
filing and shall not file any such proposed amendment or supplement to which the
Representatives reasonably object. The Company shall use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the
Shares is required to be delivered under the Securities Act and the Rules, any
event occurs as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall be
necessary to amend or supplement the Prospectus to comply with the Securities
Act or the Rules, the Company promptly shall prepare and file with the
Commission, subject to the second sentence of paragraph (ii) of this Section
6(a), an amendment or supplement which shall correct such statement or omission
or an amendment which shall effect such compliance.
(iv) The Company shall make generally available to its
security holders and to the Representatives as soon as practicable, but not
later than 45 days after the end of the 12-month period beginning at the end of
the fiscal quarter of the Company during which the Effective Date occurs (or 90
days if such 12-month period coincides with the Company's fiscal year), an
earning statement (which need not be audited) of the Company, covering such
12-month period, which shall satisfy the provisions of Section 11(a) of the
Securities Act or Rule 158 of the Rules.
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(v) The Company shall furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof) and to each
other Underwriter a copy of the Registration Statement (without exhibits
thereto) and all amendments thereof and, so long as delivery of a prospectus by
an Underwriter or dealer may be required by the Securities Act or the Rules, as
many copies of any preliminary prospectus and the Prospectus and any amendments
thereof and supplements thereto as the Representatives may reasonably request.
(vi) The Company shall cooperate with the Representatives
and their counsel in endeavoring to qualify the Shares for offer and sale in
connection with the offering under the laws of such jurisdictions as the
Representatives may designate and shall maintain such qualifications in effect
so long as required for the distribution of the Shares; provided, however, that
the Company shall not be required in connection therewith, as a condition
thereof, to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself to taxation as doing
business in any jurisdiction.
(vii) Without the prior written consent of CIBC World
Markets Corp., for a period of 60 days after the date of this Agreement, the
Company and each of its individual directors and executive officers shall not
issue, sell or register with the Commission, or otherwise dispose of, directly
or indirectly, any equity securities of the Company (or any securities
convertible into, exercisable for or exchangeable for equity securities of the
Company), except for the issuance of the Shares pursuant to the Registration
Statement and the issuance of shares pursuant to the Company's existing stock
option plan or bonus plan as described in the Registration Statement and the
Prospectus.
(viii) On or before completion of this offering, the
Company shall make all filings required under applicable securities laws and by
the Nasdaq National Market (including any required registration under the
Exchange Act).
(ix) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of Proceeds" in the
Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the obligations of the
Company under this Agreement including those relating to: (i) the preparation,
printing, filing and distribution of the Registration Statement including all
exhibits thereto, each preliminary prospectus, the Prospectus, all amendments
and supplements to the Registration Statement and the Prospectus, and the
printing, filing and distribution of this Agreement; (ii) the preparation and
delivery of certificates for the Shares to the Underwriters; (iii) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred to in Section
6(a)(vi), including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such registration and qualification and the
preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs of
shipping and mailing) to the Representatives and to the Underwriters of copies
of each preliminary prospectus, the Prospectus and all amendments or
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supplements to the Prospectus, and of the several documents required by this
Section to be so furnished, as may be reasonably requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold; (v) inclusion of the Shares for quotation on the Nasdaq
National Market; and (vi) all transfer taxes, if any, with respect to the sale
and delivery of the Shares by the Company to the Underwriters. Subject to the
provisions of Section 9, the Underwriters agree to pay, whether or not the
transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the performance of the
obligations of the Underwriters under this Agreement not payable by the Company
pursuant to the preceding sentence, including, without limitation, the fees and
disbursements of counsel for the Underwriters.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all losses, claims, damages and liabilities, joint or several
(including any reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they, or any of them, may become
subject under the Securities Act, the Exchange Act or other Federal or state law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement, the Prospectus, as amended or
supplemented and any other prospectus relating to the Shares, or any amendment
thereof or supplement thereto, or in any Blue Sky application or other
information or other documents executed by the Company filed in any state or
other jurisdiction to qualify any or all of the Shares under the securities laws
thereof (any such application, document or information being hereinafter
referred to as a "Blue Sky Application") or arise out of or are based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
provided, however, that the indemnification contained in this subsection (a)
with respect to any preliminary prospectus or prospectus supplement shall not
inure to the benefit of any Underwriter (or to the benefit any person
controlling such Underwriter) on account of any such losses, claims, damages,
liabilities or judgments arising from the sale of Shares by such Underwriter to
any person if a copy of the Prospectus (as amended or supplemented, if
applicable) shall not have been sent to such person within the time required by
the Act, and the untrue statement or alleged untrue statement or omission or
alleged omission of material fact contained in such preliminary prospectus or
prospectus supplement was corrected in the Prospectus (as amended or
supplemented, if applicable), provided that the Company has furnished the
Prospectus (as amended or supplemented, if applicable) to the Underwriters in
requisite quantity on a timely basis to permit such delivery or sending, (ii) in
whole or in part upon any breach of the representations and warranties set forth
in Section 4 hereof, or (iii) in whole or in part upon any failure of the
Company to perform any of its obligations hereunder or under law; provided,
however, that such indemnity shall not inure to the benefit of any Underwriter
(or any person controlling such Underwriter) on account of any losses, claims,
damages or liabilities arising from the sale of the Shares to any person by such
Underwriter if such untrue statement or omission or alleged untrue statement or
omission was made in such preliminary prospectus, the Registration Statement,
the Prospectus, as amended or supplemented and any other
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prospectus relating to the Shares, or any amendment or supplement thereto, or in
any Blue Sky Application in reliance upon and in conformity with information
furnished in writing to the Company by the Representatives on behalf of any
Underwriter specifically for use therein; and provided further, that the
indemnification contained in this subsection (a) with respect to any preliminary
prospectus or prospectus supplement shall not inure to the benefit of any
Underwriter (or to the benefit any person controlling such Underwriter) on
account of any such losses, claims, damages, liabilities or judgments arising
from the sale of Shares by such Underwriter to any person if a copy of the
Prospectus (as amended or supplemented, if applicable) shall not have been sent
to such person within the time required by the Act, and the untrue statement or
alleged untrue statement or omission or alleged omission of material fact
contained in such preliminary prospectus was corrected in the Prospectus (as
amended or supplemented, if applicable), provided that the Company has furnished
the Prospectus (as amended or supplemented, if applicable) to the Underwriters
in requisite quantity on a timely basis to permit such delivery or sending. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, each director of the Company, and each officer of the
Company who signs the Registration Statement, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only insofar as
such losses, claims, damages or liabilities arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which was
made in any preliminary prospectus, the Registration Statement, the Prospectus,
as amended or supplemented and any other prospectus relating to the Shares, or
any amendment thereof or supplement thereto, contained in the (i) concession and
reallowance figures appearing under the caption "Underwriting" and (ii) the
stabilization information contained under the caption "Underwriting" in the
Prospectus; provided, however, that the obligation of each Underwriter to
indemnify the Company (including any controlling person, director or officer
thereof) shall be limited to the net proceeds received by the Company from such
Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section, notify each
such indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served. No indemnification provided for in
Section 7(a) or 7(b) shall be available to any party who shall fail to give
notice as provided in this Section 7(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice but the omission so to notify
such indemnifying party of any such action, suit or proceeding shall not relieve
it from any liability that it may have to any indemnified party for contribution
or otherwise than under this Section. In case any such action, suit or
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and the approval by the indemnified
party of such counsel, the
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indemnifying party shall not be liable to such indemnified party for any legal
or other expenses, except as provided below and except for the reasonable costs
of investigation subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right to employ
its counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of counsel
by such indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have been advised by counsel that
there may be one or more legal defenses available to it which are different from
or in addition to those available to the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party; it being understood that the
indemnifying parties shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all indemnified parties in such action or actions) or
(iii) the indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the commencement
thereof, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying parties. An indemnifying party shall not be liable
for any settlement of any action, suit, proceeding or claim effected without its
written consent, which consent shall not be unreasonably withheld or delayed.
8. Contribution. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Section 7(a) or
7(b) is due in accordance with its terms but for any reason is held to be
unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 7 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts but before deducting expenses) received by the
Company as set forth in the table on the cover page of the Prospectus, bear to
(y) the underwriting discounts received by the Underwriters, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company or
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact related to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable
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considerations referred to above. Notwithstanding the provisions of this Section
8, (i) in no case shall any Underwriter (except as may be provided in the
Agreement Among Underwriters) be liable or responsible for any amount in excess
of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder; and (ii) the Company shall be liable and responsible for
any amount in excess of such underwriting discount; provided, however, that 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. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act shall
have the same rights to contribution as such Underwriter, and each person, if
any, who controls the Company within the meaning of the Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to clauses (i) and (ii) in the immediately preceding sentence of this
Section 8. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties under this Section, notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriter's obligations to contribute
pursuant to this Section 8 are several in proportion to their respective
underwriting commitments and not joint.
9. Termination. This Agreement may be terminated with respect to the
Shares to be purchased on a Closing Date by the Representatives by notifying the
Company at any time if one of the following conditions is met:
(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in the
opinion of the Representatives will in the future materially disrupt, the
securities markets; (ii) if there has occurred any new outbreak or material
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the Representatives, inadvisable to proceed with the offering; (iii) if there
shall be such a material adverse change in general financial, political or
economic conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of the
Representatives, inadvisable or impracticable to market the Shares; (iv) if
trading in the Shares has been suspended by the Commission or trading generally
on the New York Stock Exchange, Inc., on the American Stock Exchange, Inc. or
the Nasdaq National Market has been suspended or limited, or minimum or maximum
ranges for prices for securities shall have been fixed, or maximum ranges for
prices for securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or any other
governmental or regulatory authority; or (v) if a banking moratorium has been
declared by any state or Federal authority; or (vi) if, in the judgment of the
Representatives, there has occurred a Material Adverse Effect, or
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(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as required by
this Agreement.
If this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to any Underwriter, and no Underwriter
shall be under any liability to the Company, except that (y) if this Agreement
is terminated by the Representatives or the Underwriters because of any failure,
refusal or inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or refused to
purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the Company
or to the other Underwriters for damages occasioned by its failure or refusal.
10. Substitution of Underwriters. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then each of
the nondefaulting Underwriters shall be obligated to purchase such Shares on the
terms herein set forth in proportion to their respective obligations hereunder;
provided, that in no event shall the maximum number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 10 by more than one-ninth of such number of Shares without the
written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, then the Company
shall be entitled to one additional business day within which it may, but is not
obligated to, find one or more substitute underwriters reasonably satisfactory
to the Representatives to purchase such Shares upon the terms set forth in this
Agreement.
In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives and the COMPANY. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing
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Date, and none of the nondefaulting Underwriters or the Company shall make
arrangements pursuant to this Section within the period stated for the purchase
of the Shares that the defaulting Underwriters agreed to purchase, this
Agreement shall terminate with respect to the Shares to be purchased on such
Closing Date without liability on the part of any nondefaulting Underwriter to
the Company and without liability on the part of the Company, except in both
cases as provided in Sections 6(b), 7, 8 and 9. The provisions of this Section
shall not in any way affect the liability of any defaulting Underwriter to the
Company or the nondefaulting Underwriters arising out of such default. A
substitute underwriter hereunder shall become an Underwriter for all purposes of
this Agreement.
11. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 7 and 8 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 6(b), 7, 8
and 9 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters
and the Company and their respective successors and assigns, and, to the extent
expressed herein, for the benefit of persons controlling any of the
Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing and mailed
or delivered or by telephone or telegraph if subsequently confirmed in writing,
(a) if to the Representatives, c/o CIBC World Markets Corp., Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxx Xxxxxxx, with a copy to Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxx 00000 Attention: Xxxxxxx X. Xxxxx, Esq., and (b) if to the
Company, to its agent for service as such agent's address appears on the cover
page of the Registration Statement with a copy to Xxxxxxxx & Xxxxxxxx LLP, 000
Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 Attention: Xxxxxxx X. Xxxxxxx, Esq.
This Agreement shall be governed by and construed in accordance with the
laws of the State of California without regard to principles of conflict of
laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
SDL, INC.
By__________________________________
Title:_________________________
Confirmed:
CIBC WORLD MARKETS CORP.
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed
hereto.
By CIBC WORLD MARKETS CORP.
By__________________________________
Title:_________________________
27
SCHEDULE I
Number of Firm Shares
Name to be Purchased
---- ---------------------
CIBC World Markets Corp. 1,061,250
Xxxxxxxxx & Xxxxx LLC 523,550
Xxxxxxxxx Lufkin & Xxxxxxxx Securities Corporation 311,300
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated 311,300
XX Xxxxx Securities Corporation 311,300
SoundView Technology Group, Inc. 311,300
FAC/Equities, a division of First Albany Corporation 30,000
Gruntal & Co., L.L.C. 30,000
Xxxxxx & Xxxxxx, Inc. 30,000
U.S. Bancorp Xxxxx Xxxxxxx Inc. 30,000
---------
TOTAL 2,950,000
=========
