1
Exhibit 1.1
Primary and Secondary
Common Stock Offering
_______________ Shares
TRITEAL CORPORATION
Common Stock
UNDERWRITING AGREEMENT
__________, 1997
PAINEWEBBER INCORPORATED
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
TriTeal Corporation, a Delaware corporation (the "Company"), and the
persons named in Schedule I (the "Selling Stockholders") propose to sell an
aggregate of _________ shares (the "Firm Shares") of the Company's Common Stock,
$____ par value per share (the "Common Stock"), of which _______ shares are to
be issued and sold by the Company and an aggregate of _________ shares are to be
sold by the Selling Stockholders in the respective amounts set forth opposite
their respective names in Schedule I, in each case to you and to the other
underwriters named in Schedule II (collectively, the "Underwriters"), for whom
you are acting as representatives (the "Representatives"). The Company has also
agreed to grant to you and the other Underwriters an option (the "Option") to
purchase up to an additional _______ shares of Common Stock (the "Option
Shares") on the terms and for the purposes set forth in Section 1(b). The Firm
Shares and the Option Shares are hereinafter collectively referred to as the
"Shares."
The public offering price per share for the Shares and the purchase
price per share for the Shares to be paid by the several Underwriters shall be
agreed upon by the Company, the Selling Stockholders and the Representatives,
acting on behalf of the several Underwriters, and such agreement shall be set
forth in a separate written instrument substantially in the form of Exhibit A
hereto (the "Price Determination Agreement"). The
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Price Determination Agreement may take the form of an exchange of any standard
form of written telecommunication among the Company, the Selling Stockholders
and the Representatives and shall specify such applicable information as is
indicated in Exhibit A hereto. The offering of the Shares will be governed by
this Agreement, as supplemented by the Price Determination Agreement. From and
after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and, unless the
context otherwise indicates, all references contained herein to "this Agreement"
and to the phrase "herein" shall be deemed to include the Price Determination
Agreement.
Each Selling Stockholder has executed and delivered a Custody
Agreement and a Power of Attorney in the form attached hereto as Exhibit B
(collectively, the "Agreement and Power of Attorney") pursuant to which each
Selling Stockholder has placed his Firm Shares in custody and appointed the
persons designated therein as a committee (the "Committee") with authority to
execute and deliver this Agreement on behalf of such Selling Stockholder and to
take certain other actions with respect thereto and hereto.
The Company and the Selling Stockholders confirm as follows their
respective agreements with the Representatives and the several other
Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the respective representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions of this Agreement, (i) the Company and
each of the Selling Stockholders, severally and not jointly, agree to sell to
the several Underwriters and (ii) each of the Underwriters, severally and not
jointly, agrees to purchase from the Company and the Selling Stockholders, at
the purchase price per share for the Firm Shares to be agreed upon by the
Representatives, the Company and the Selling Stockholders in accordance with
Section 1(c) and set forth in the Price Determination Agreement, the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule II, plus
such additional number of Firm Shares which such Underwriter may become
obligated to purchase pursuant to Section 9 hereof. Schedule II may be attached
to the Price Determination Agreement.
(b) Subject to all the terms and conditions of this Agreement, the Company
grants the Option to the several Underwriters to purchase, severally and not
jointly, up to ___ Option Shares from the Company at the same price per share as
the Underwriters shall pay for the Firm Shares. The Option may be exercised only
to cover over-allotments in the sale of the Firm Shares by the Underwriters and
may be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of this Agreement (or, if the Company has
elected to rely on Rule 430A, on or before the 30th day after the date of the
Price Determination Agreement), upon written or telegraphic notice (the "Option
Shares Notice") by the Representatives to the Company no later than 12:00 noon,
New York City time, at least two and no more than five business days before the
date specified for closing in the Option Shares Notice (the "Option Closing
Date") setting forth the aggregate number of Option Shares to be purchased and
the time and date for such purchase. On the Option Closing Date, the Company
will issue and sell to the Underwriters the number of Option
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Shares set forth in the Option Shares Notice, and each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of Firm
Shares that such Underwriter is purchasing, as adjusted by the Representatives
in such manner as they deem advisable to avoid fractional shares.
(c) The public offering price per share for the Firm Shares and the
purchase price per share for the Firm Shares to be paid by the several
Underwriters shall be agreed upon and set forth in the Price Determination
Agreement. In the event such price has not been agreed upon and the Price
Determination Agreement has not been executed by the close of business on the
fourteenth business day following the date on which the Registration Statement
becomes effective, this Agreement shall terminate forthwith, without liability
of any party to any other party except that Section 7 shall remain in effect.
2. Delivery and Payment. Delivery of the Firm Shares shall be made to the
Representatives for the accounts of the Underwriters at the office of
PaineWebber Incorporated, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
credit to the account of the Company with the Depository Trust Company, against
payment of the purchase price by wire transfer of Federal Funds or similar same
day funds to an account designated in writing by the Company to PaineWebber
Incorporated at least one business day prior to the Closing Date (as hereinafter
defined). Such payment shall be made at 10:00 a.m., New York City time, on the
third business day (or fourth business day, if the Price Determination Agreement
is executed after 4:30 p.m.) after the date on which the first bona fide
offering of the Shares to the public is made by the Underwriters or at such time
on such other date, not later than ten business days after such date, as may be
agreed upon by the Company and the Representatives (such date is hereinafter
referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above at the time and date (which may be the
Closing Date) specified in the Option Shares Notice.
The cost of original issue tax stamps, if any, in connection with
the issuance and delivery of the Firm Shares and Option Shares by the Company to
the respective Underwriters shall be borne by the Company. The cost of tax
stamps, if any, in connection with the sale of the Firm Shares by the Selling
Stockholders shall be borne by the Selling Stockholders. The Company and the
Selling Stockholders will pay and save each Underwriter and any subsequent
holder of the Shares harmless from any and all liabilities with respect to or
resulting from any failure or delay in paying Federal and state stamp and other
transfer taxes, if any, which may be payable or determined to be payable in
connection with the original issuance or sale to such Underwriter of the Firm
Shares and Option Shares.
3. Representations and Warranties of the Company. The Company represents,
warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No. 333-20579) on Form S-1
relating to the Shares, including a preliminary prospectus and such amendments
to such registration
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statement as may have been required to the date of this Agreement, has been
prepared by the Company under the provisions of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (collectively referred to as
the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. The term
"preliminary prospectus" as used herein means a preliminary prospectus as
contemplated by Rule 430 or Rule 430A ("Rule 430A") of the Rules and Regulations
included at any time as part of the registration statement. Copies of such
registration statement and amendments and of each related preliminary prospectus
have been delivered to the Representatives. The term "Registration Statement"
means the registration statement as amended at the time it becomes or became
effective (the "Effective Date"), including financial statements and all
exhibits and any information deemed to be included by Rule 430A or Rule 434 of
the Rules and Regulations. If the Company files a registration statement to
register a portion of the Shares and relies on Rule 462(b) of the Rules and
Regulations for such registration statement to become effective upon filing with
the Commission (the "Rule 462 Registration Statement"), then any reference to
the "Registration Statement" shall be deemed to include the Rule 462
Registration Statement, as amended from time to time. The term "Prospectus"
means the prospectus as first filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations or, if no such filing is required, the form of
final prospectus included in the Registration Statement at the Effective Date.
(b) On the Effective Date, the date the Prospectus is first filed with the
Commission pursuant to Rule 424(b) (if required), at all times subsequent to and
including the Closing Date and, if later, the Option Closing Date and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment or supplement
thereto), including the financial statements included in the Prospectus, did or
will comply with all applicable provisions of the Act and the Rules and
Regulations and will contain all statements required to be stated therein in
accordance with the Act and the Rules and Regulations. On the Effective Date and
when any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement or any such amendment did or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading. At the Effective Date, the date the Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission and at
the Closing Date and, if later, the Option Closing Date, the Prospectus did not
or will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. For all purposes of this
Agreement, the amounts of the selling concession and reallowance set forth in
the Prospectus constitute the only information relating to any Underwriter
furnished in writing to the Company by the Representatives specifically for
inclusion in the preliminary prospectus, the Registration Statement or the
Prospectus. The Company has not distributed
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any offering material in connection with the offering or sale of the Shares
other than the Registration Statement, the preliminary prospectus, the
Prospectus or any other materials, if any, permitted by the Act.
(c) The only subsidiaries (as defined in the Rules and Regulations) of the
Company is the subsidiary listed on Exhibit 21 to the Registration Statement
(the "Subsidiary"). Each of the Company and the Subsidiary is, and at the
Closing Date will be, a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each of the
Company and the Subsidiary has, and at the Closing Date will have, full power
and authority to conduct all the activities conducted by it, to own or lease all
the assets owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus. Each of the Company and the
Subsidiary is, and at the Closing Date will be, duly licensed or qualified to do
business and in good standing as a foreign corporation in all jurisdictions in
which the nature of the activities conducted by it or the character of the
assets owned or leased by it makes such licensing or qualification necessary,
except where failure to be so qualified would not have a material adverse effect
on the Company and the Subsidiary, considered as a whole. All of the outstanding
shares of capital stock of the Subsidiary have been duly authorized and validly
issued, and are fully paid and non-assessable and are owned by the Company free
and clear of all liens, encumbrances and claims whatsoever. Except for the stock
of the Subsidiary and as disclosed in the Registration Statement, the Company
does not own, and at the Closing Date will not own, directly or indirectly, any
shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint venture,
association or other entity. Complete and correct copies of the certificate of
incorporation and of the bylaws of each of the Company and the Subsidiary and
all amendments thereto have been delivered to the Representatives, and no
changes therein will be made subsequent to the date hereof and prior to the
Closing Date or, if later, the Option Closing Date, except as contemplated by
the Registration Statement.
(d) The outstanding shares of Common Stock have been, and the Shares to be
issued and sold by the Company upon such issuance will be, duly authorized,
validly issued, fully paid and nonassessable and will not be subject to any
preemptive or similar right. The description of the Common Stock in the
Registration Statement and the Prospectus is, and at the Closing Date will be,
complete and accurate in all respects. Except as set forth in the Prospectus,
the Company does not have outstanding, and at the Closing Date will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock, any shares of capital
stock of the Subsidiary or any such warrants, convertible securities or
obligations.
(e) The financial statements and schedules included in the Registration
Statement or the Prospectus present fairly the consolidated financial condition
of the Company as of the respective dates thereof and the consolidated results
of operations and cash flows of the Company for the respective periods covered
thereby, all in conformity with generally accepted accounting principles applied
on a consistent basis throughout the entire period involved, except as otherwise
disclosed in the Prospectus. No other financial statements or schedules of
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the Company are required by the Act or the Rules and Regulations to be included
in the Registration Statement or the Prospectus. Ernst & Young LLP (the
"Accountants") who have reported on such financial statements and schedules, are
independent accountants with respect to the Company as required by the Act and
the Rules and Regulations.
(f) The Company maintains a system of internal accounting control
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(g) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus and prior to the Closing Date,
except as set forth in or contemplated by the Registration Statement and the
Prospectus, (i) there has not been and will not have been any change in the
capitalization of the Company and the Subsidiary, (ii) neither the Company nor
the Subsidiary has incurred nor will it incur any material liabilities or
obligations, direct or contingent, nor has it entered into nor will it enter
into any material transactions other than pursuant to this Agreement and the
transactions referred to herein and (iii) the Company has not and will not have
paid or declared any dividends or other distributions of any kind on any class
of its capital stock.
(h) The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
(i) Except as set forth in the Registration Statement and the Prospectus,
there are no actions, suits or proceedings pending or, to the best knowledge of
each of the Company and the Subsidiary, threatened against or affecting the
Company or the Subsidiary or any of their respective officers in their capacity
as such, before or by any Federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding might materially and adversely affect
the Company and the Subsidiary or their businesses, properties, business
prospects, condition (financial or otherwise) or results of operations,
considered as a whole.
(j) Each of the Company and the Subsidiary has, and at the Closing Date
will have, (i) all governmental licenses, permits, consents, orders, approvals
and other authorizations necessary to carry on its business as contemplated in
the Prospectus, except for those which would not materially and adversely affect
the Company or the Subsidiary or the business or results of operations of the
Company or the Subsidiary, (ii) complied in all respects with all laws,
regulations and orders applicable to it or its business and (iii) performed all
its obligations required to be performed by it, and is not, and at the Closing
Date will not be, in default, under any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement, lease,
contract or other agreement or instrument
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(collectively, a "contract or other agreement") to which it is a party or by
which its property is bound or affected in each case where any such failure to
perform might adversely affect the Company and the Subsidiary or their
businesses, properties, business prospects condition (financial or otherwise) or
results of operations. To the best knowledge of the Company and the Subsidiary,
no other party under any contract or other agreement to which it is a party is
in default in any respect thereunder. Neither the Company nor the Subsidiary is,
nor at the Closing Date will either of them be, in violation of any provision of
its certificate of incorporation or bylaws.
(k) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of this Agreement by the Company or in connection with the taking by
the Company of any action contemplated hereby, except such as have been obtained
under the Act or the Rules and Regulations and such as may be required under
state securities or Blue Sky laws or the bylaws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the Underwriters of the Shares to be sold by the
Company.
(l) The Company has full corporate power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company and is
enforceable against the Company in accordance with the terms hereof, except as
may be limited by the effect of any applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally. The
performance of this Agreement and the consummation of the transactions
contemplated hereby and the application of the net proceeds from the offering
and sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds" will not result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the Company or the
Subsidiary pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or give any other party a right to terminate any of its obligations under, or
result in the acceleration of any obligation under, the certificate of
incorporation or bylaws of the Company or the Subsidiary, any contract or other
agreement to which the Company or the Subsidiary is a party or by which the
Company or the Subsidiary or any of its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to the
business or properties of the Company or the Subsidiary.
(m) The Company and the Subsidiary has good and valid title to all
properties and assets described in the Prospectus as owned by it, free and clear
of all liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material to the business of the Company
or the Subsidiary, constituted as a whole. Each of the Company and the
Subsidiary has valid, subsisting and enforceable leases for the properties
described in the Prospectus as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such properties by the Company and such Subsidiary.
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(n) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company or the Subsidiary is a party
have been duly authorized, executed and delivered by the Company or the
Subsidiary, constitute valid and binding agreements of the Company or the
Subsidiary and are enforceable against the Company or the Subsidiary in
accordance with the terms thereof, except as may be limited by the effect of any
applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally.
(o) No statement, representation, warranty or covenant made by the Company
in this Agreement or made in any certificate or document required by this
Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect in any material respect.
(p) Neither the Company nor any of its directors, officers or controlling
persons has taken, directly or indirectly, any action intended, or which might
reasonably be expected, to cause or result, under the Act or otherwise, in, or
which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(q) No holder of securities of the Company has rights to the registration
of any securities of the Company because of the filing of the Registration
Statement.
(r) Prior to the Closing Date, the Shares will be duly authorized for
quotation on the Nasdaq National Market upon official notice of issuance.
(s) Neither the Company nor the Subsidiary is involved in any material
labor dispute nor, to the knowledge of the Company and the Subsidiary, is any
such dispute threatened.
(t) Each of the Company and the Subsidiary own, or have licensed or
otherwise possess adequate rights to use, all material trademarks and trade
names which are used in or necessary for the conduct its business as described
in the Prospectus. No claims have been asserted by any person to the use of any
such trademarks or trade names or challenging or questioning the validity or
effectiveness of any such trademark or trade name. The use, in connection with
the business and operations of the Company and the Subsidiary of such trademarks
and trade names does not, to the Company's knowledge, infringe on the rights of
any person.
(u) Neither the Company nor the Subsidiary nor, to the Company's
knowledge, any employee or agent of the Company or the Subsidiary has made any
payment of funds of the Company or the Subsidiary or received or retained any
funds in violation of any law, rule or regulation or of a character required to
be disclosed in the Prospectus.
(v) The Company has complied, and until the completion of the distribution
of the Shares will comply in all material respects with the provisions of
(including, without limitation, filing all forms required by) Section 517.075 of
the Florida Securities and Investor
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Protection Act and regulation 3E-900.001 issued thereunder with respect to the
offering and sale of the Shares.
(w) The Company and its Subsidiary (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or imposing liability
or standards of conduct concerning any Hazardous Material (as hereinafter
defined) ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, individually or in the
aggregate, result in a material adverse effect on the financial condition or on
the earnings, business, properties, business prospects or operations of the
Company and its Subsidiary, taken as a whole. The term "Hazardous Material"
means (A) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, (B)
any "hazardous waste" as defined by the Resource Conservation and Recovery Act,
as amended, (C) any petroleum or petroleum product, (D) any polychlorinated
biphenyl and (E) any pollutant or contaminant or hazardous, dangerous, or toxic
chemical, material, waste or substance regulated under or within the meaning of
any other Environmental Law.
4. Representations and Warranties of the Selling Stockholders. Each
Selling Stock- holder, severally and not jointly, represents, warrants and
covenants to each Underwriter that:
(a) Such Selling Stockholder has full power and authority to enter into
this Agreement and the Agreement and Power of Attorney. All authorizations and
consents necessary for the execution and delivery by such Selling Stockholder of
the Agreement and Power of Attorney, and for the execution of this Agreement on
behalf of such Selling Stockholder, have been given. Each of the Agreement and
Power of Attorney and this Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder and constitutes a valid
and binding agreement of such Selling Stockholder and is enforceable against
such Selling Stockholder in accordance with the terms thereof and hereof, except
as may be limited by the effect of any applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally.
(b) Such Selling Stockholder now has, and at the time of delivery thereof
hereunder will have, (i) good and valid title to the Shares to be sold by such
Selling Stockholder hereunder, free and clear of all liens, encumbrances and
claims whatsoever (other than pursuant to the Agreement and Power of Attorney),
and (ii) full legal right and power, and all authorizations and approvals
required by law, to sell, transfer and deliver such Shares to the Underwriters
hereunder and to make the representations, warranties and agreements made by
such Selling Stockholder herein. Upon the delivery of and payment for such
Shares hereunder, such Selling Stockholder will deliver good and valid title
thereto, free and clear of all liens, encumbrances and claims whatsoever.
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(c) The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of such Selling
Stockholder pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the acceleration of any obligation under, if such Selling
Stockholder is a corporation or partnership, the organizational documents of
such Selling Stockholder, or, as to all such Selling Stockholders, any contract
or other agreement to which such Selling Stockholder is a party or by which such
Selling Stockholder or any of its property is bound or affected, or under any
ruling, decree, judgment, order, statute, rule or regulation of any court or
other governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder, except where such
breach, violation or default would not have a material adverse effect on the
properties, assets, operations, business or financial condition of each such
Selling Stockholder.
(d) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by such Selling Stockholder of the transactions on its part
contemplated herein and in the Agreement and Power of Attorney, except such as
have been obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the bylaws and rules of the
NASD in connection with the purchase and distribution by the Underwriters of the
Shares to be sold by such Selling Stockholder.
(e) Such Selling Stockholder has no actual knowledge of any material fact
or condition not set forth in the Registration Statement or the Prospectus which
has adversely affected, or may adversely affect, the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company, and the sale of the Shares proposed to be sold by such Selling
Stockholder is not prompted by any such knowledge.
(f) All information with respect to such Selling Stockholder contained in
the Registration Statement and the Prospectus (as amended or supplemented, if
the Company shall have filed with the Commission any amendment or supplement
thereto) does not 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 in
order to make the statements therein not misleading.
(g) Other than as permitted by the Act and the Rules and Regulations, such
Selling Stockholder has not distributed and will not distribute any preliminary
prospectus, the Prospectus or any other offering material in connection with the
offering and sale of the Shares. Such Selling Stockholder has not taken,
directly or indirectly, any action intended, or which might reasonably be
expected, to cause or result in, under the Act or otherwise, or which has caused
or resulted in, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
(h) Certificates in negotiable form for the Firm Shares to be sold
hereunder by such Selling Stockholder have been placed in custody, for the
purpose of making delivery of such Firm Shares under this Agreement, under the
Agreement and Power of Attorney which appoints American Stock Transfer & Trust
Company as custodian (the "Custodian") for each
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Selling Stockholder. Such Selling Stockholder agrees that the Shares represented
by the certificates held in custody for him or it under the Agreement and Power
of Attorney are for the benefit of and coupled with and subject to the interest
hereunder of the Custodian, the Committee, the Underwriters, each other Selling
Stockholder and the Company, that the arrangements made by such Selling
Stockholder for such custody and the appointment of the Custodian and the
Committee by such Selling Stockholder are irrevocable, and that the obligations
of such Selling Stockholder hereunder shall not be terminated by operation of
law, whether by the death, disability, incapacity or liquidation of any Selling
Stockholder or the occurrence of any other event. If any Selling Stockholder
should die, become disabled or incapacitated or be liquidated or if any other
such event should occur before the delivery of the Shares hereunder,
certificates for the Shares shall be delivered by the Custodian in accordance
with the terms and conditions of this Agreement and actions taken by the
Committee and the Custodian pursuant to the Agreement and Power of Attorney
shall be as valid as if such death, liquidation, incapacity or other event had
not occurred, regardless of whether or not the Custodian or the Committee, or
either of them, shall have received notice thereof.
5. Agreements of the Company and the Selling Stockholders. The Company and
the Selling Stockholders (as to Sections 5(i), (j), (o), (p), (q) and (r))
agree, severally and not jointly, with the several Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or thereafter
during such period as the Prospectus is required by law to be delivered in
connection with sales of the Shares by an Underwriter or dealer, file any
amendment or supplement to the Registration Statement or the Prospectus, unless
a copy thereof shall first have been submitted to the Representatives within a
reasonable period of time prior to the filing thereof and the Representatives
shall not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representatives promptly, and
will confirm such advice in writing, (i) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (ii) of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose or the threat thereof, (iv) of the happening of any event
during the period mentioned in the second sentence of Section 5(e) that in the
judgment of the Company makes any statement made in the Registration Statement
or the Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (v) of receipt by the Company or any representative of the Company of any
other communication from the Commission relating to the Company, the
Registration Statement, any preliminary prospectus or the Prospectus. If at any
time the Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. The Company will
use its best efforts to comply with the provisions of and make all requisite
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filings with the Commission pursuant to Rule 430A and to notify the
Representatives promptly of all such filings.
(c) The Company will furnish to the Representatives, without charge, three
signed copies of the Registration Statement and of any post-effective amendment
thereto, including financial statements and schedules, and all exhibits thereto
and will furnish to the Representatives, without charge, for transmittal to each
of the other Underwriters, a copy of the Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
but without exhibits.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the Company
will deliver to each of the Underwriters, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the several Underwriters and by all dealers
to whom the Shares may be sold, both in connection with the offering or sale of
the Shares and for any period of time thereafter during which the Prospectus is
required by law to be delivered in connection therewith. If during such period
of time any event shall occur which in the judgment of the Company or counsel to
the Underwriters should be set forth in the Prospectus in order to make any
statement therein, in the light of the circumstances under which it was made,
not misleading, or if it is necessary to supplement or amend the Prospectus to
comply with law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and will deliver to
each of the Underwriters, without charge, such number of copies thereof as the
Representatives may reasonably request.
(f) Prior to any public offering of the Shares by the Underwriters, the
Company will cooperate with the Representatives and counsel to the Underwriters
in connection with the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may request; provided, that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the Effective Date, the
Company will furnish to the Representatives and each other Underwriter who may
so request copies of such financial statements and other periodic and special
reports as the Company may from time to time distribute generally to the holders
of any class of its capital stock, and will furnish to the Representatives and
each other Underwriter who may so request a copy of each annual or other report
it shall be required to file with the Commission.
(h) The Company will make generally available to holders of its securities
as soon as may be practicable but in no event later than the last day of the
fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which
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need not be audited but shall be in reasonable detail) for a period of 12 months
ended commencing after the Effective Date, and satisfying the provisions of
Section 11(a) of the Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or reimburse
if paid by the Representatives, all costs and expenses incident to the
performance of the obligations of the Company and the Selling Stockholders under
this Agreement, including but not limited to costs and expenses of or relating
to (i) the preparation, printing and filing of the Registration Statement and
exhibits to it, each preliminary prospectus, the Prospectus and any amendment or
supplement to the Registration Statement or the Prospectus, (ii) the preparation
and delivery of certificates representing the Shares, (iii) the printing of this
Agreement, the Agreement Among Underwriters, any Dealer Agreements, any
Underwriters' Questionnaire and the Agreement and Power of Attorney, (iv)
furnishing (including costs of shipping, mailing and courier) such copies of the
Registration Statement, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be 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) the listing of the Shares on the Nasdaq National
Market, (vi) any filings required to be made by the Underwriters with the NASD,
and the fees, disbursements and other charges of counsel for the Underwriters in
connection therewith, (vii) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions
designated pursuant to Section 5(f), including the reasonable fees,
disbursements and other charges of counsel to the Underwriters in connection
therewith, and the preparation and printing of preliminary, supplemental and
final Blue Sky memoranda, (viii) counsel to the Company and counsel to the
Selling Stockholders where ▇▇▇▇▇▇ Godward LLP is acting as counsel to a Selling
Stockholder, (ix) the transfer agent for the Shares and (x) the Accountants. To
the extent that any Selling Stockholder engages special legal counsel to
represent him in connection with this offering, the fees and expenses of such
counsel shall be borne by such Selling Stockholder.
(j) If this Agreement shall be terminated by the Company or the Selling
Stockholders pursuant to any of the provisions hereof (otherwise than pursuant
to Section 9) or if for any reason the Company or any Selling Stockholder shall
be unable to perform its obligations hereunder, the Company or such Selling
Stockholders, as applicable, will reimburse the several Underwriters for all
out-of-pocket expenses (including the fees, disbursements and other charges of
counsel to the Underwriters) reasonably incurred by them in connection herewith
as a result of such termination by the Company or such Selling Stockholder, as
applicable.
(k) The Company will not at any time, directly or indirectly, take any
action intended, or which might reasonably be expected, to cause or result in,
or which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares in violation of the
Exchange Act or any applicable NASD National Market rules.
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(l) The Company will apply the net proceeds from the offering and sale of
the Shares to be sold by the Company in the manner set forth in the Prospectus
under "Use of Proceeds."
(m) During the period of ninety (90) days commencing at the Closing Date,
the Company will not, without the prior written consent of PaineWebber
Incorporated, grant options to purchase shares of Common Stock at a price less
than the public offering price, other than grants made pursuant to the Company's
1995 Stock Option Plan or rights granted pursuant to the Company's Employee
Stock Purchase Plan.
(n) The Company will not, for a period of ninety (90) days after the
commencement of the public offering of the Shares, without the prior written
consent of PaineWebber Incorporated, sell, contract to sell or otherwise dispose
of any shares of Common Stock or rights to acquire such shares (other than
pursuant to (i) agreements with corporate partners, research institutions or
leasing entities or (ii) employee, director or consultant stock option plans,
the Company's Employee Stock Purchase Plan or in connection with other employee,
director or consultant incentive compensation arrangements).
(o) The Selling Stockholders will not, and the Company will (i) cause each
of its executive officers and directors to and (ii) request that each beneficial
owner of more than five percent (5%) of the outstanding shares of Common Stock
to enter into agreements with the Representatives in the form set forth in
Exhibit C to the effect that they will not, for a period of ninety (90) days
after the commencement of the public offering of the Shares, without the prior
written consent of PaineWebber Incorporated, sell, contract to sell or otherwise
dispose of any shares of Common Stock, other than pursuant to bona fide gifts to
or, if the stockholder is a partnership, any distribution to partners so long as
such transferees and donees agree in writing with PaineWebber Incorporated to be
bound by the provisions of this Section 5(o).
(p) The Selling Stockholders will not, without the prior written consent
of PaineWebber Incorporated, make any bid for or purchase any shares of Common
Stock during the one hundred twenty (120) day period following the date hereof.
(q) As soon as any Selling Stockholder is advised thereof, such Selling
Stockholder will advise the Representatives and confirm such advice in writing,
(i) of receipt by such Selling Stockholder, or by any representative of such
Selling Stockholder, of any communication from the Commission relating to the
Registration Statement, the Prospectus or any preliminary prospectus, or any
notice or order of the Commission relating to the Company or any of the Selling
Stockholders in connection with the transactions contemplated by this Agreement
and (ii) of the happening of any event during the period from and after the
Effective Date that in the judgment of such Selling Stockholder makes any
statement made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they were made, not materially misleading.
(r) The Selling Stockholders will deliver to the Representatives prior to
or on the Effective Date a properly completed and executed United States
Treasury Department
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Form W-9 (or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
6. Conditions of the Obligations of the Underwriters. In addition to the
execution and delivery of the Price Determination Agreement, the obligations of
each Underwriter hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Representatives not later than 5:00 p.m., New York City
time, on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Representatives and all filings required by Rule
424 of the Rules and Regulations and Rule 430A shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Shares under the securities or Blue Sky laws of any jurisdiction shall be
in effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities, and (iv)
after the date hereof no amendment or supplement to the Registration Statement
or the Prospectus shall have been filed unless a copy thereof was first
submitted to the Representatives and the Representatives did not object thereto
in good faith, and the Representatives shall have received certificates, dated
the Closing Date and the Option Closing Date and signed by the Chief Executive
Officer or the Chairman of the Board of Directors of the Company and the Chief
Financial Officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of clauses (i),
(ii) and (iii).
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company and the Subsidiary, taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus and (ii) neither the Company nor the Subsidiary shall have sustained
any material loss or interference with its business or properties from fire,
explosion, flood or other casualty, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement and the
Prospectus, if in the judgment of the Representatives any such development makes
it impracticable or inadvisable to consummate the sale and delivery of the
Shares by the Underwriters at the public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding
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instituted against the Company or the Subsidiary or any of their respective
officers or directors in their capacities as such, before or by any federal,
state or local court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or proceeding
an unfavorable ruling, decision or finding would materially and adversely affect
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company and the Subsidiary taken as a whole.
(e) Each of the representations and warranties of the Company and the
Selling Stockholders contained herein shall be true and correct in all material
respects at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, as if made at the Closing Date and, with respect to the
Option Shares, at the Option Closing Date, and all covenants and agreements
herein contained to be performed on the part of the Company and the Selling
Stockholders and all conditions herein contained to be fulfilled or complied
with by the Company and the Selling Stockholders at or prior to the Closing Date
and, with respect to the Option Shares, at or prior to the Option Closing Date,
shall have been duly performed, fulfilled or complied with.
(f) The Representatives shall have received opinions, each dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
and satisfactory in form and substance to counsel for the Underwriters, from
▇▇▇▇▇▇ Godward LLP, counsel to the Company, to the effect set forth in Exhibit D
and from legal counsel on behalf of each of the Selling Stockholders (in each
instance, with such counsel to be reasonably acceptable to counsel for the
Underwriters), to the effect set forth in Exhibit E.
(g) The Representatives shall have received an opinion, dated the Closing
Date and the Option Closing Date, from Pillsbury Madison & Sutro LLP, counsel to
the Underwriters, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be reasonably satisfactory to the
Representatives.
(h) On the date of the Prospectus, the Accountants shall have furnished to
the Representatives a letter, dated the date of its delivery, addressed to the
Representatives and in form and substance satisfactory to the Representatives,
confirming that they are independent accountants with respect to the Company as
required by the Act and the Rules and Regulations and with respect to the
financial and other statistical and numerical information contained in the
Registration Statement. At the Closing Date and, as to the Option Shares, the
Option Closing Date, the Accountants shall have furnished to the Representatives
a letter, dated the date of its delivery, which shall confirm, on the basis of a
review in accordance with the procedures set forth in the letter from the
Accountants, that nothing has come to their attention during the period from the
date of the letter referred to in the prior sentence to a date (specified in the
letter) not more than five days prior to the Closing Date and the Option Closing
Date which would require any change in their letter dated the date of the
Prospectus, if it were required to be dated and delivered at the Closing Date
and the Option Closing Date.
(i) At the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall be furnished to the Representatives an accurate certificate,
dated the date of its delivery,
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signed by each of the Chief Executive Officer and the Chief Financial Officer of
the Company, in form and substance satisfactory to the Representatives, to the
effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, such documents are true and correct in all material respects
and do not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not untrue or misleading
and (B) since the Effective Date, no event has occurred as a result of
which it is necessary to amend or supplement the Prospectus in order to
make the statements therein not untrue or misleading in any material
respect;
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects;
(iii) Each of the covenants required herein to be performed by the
Company on or prior to the date of such certificate has been duly, timely
and fully performed and each condition herein required to be complied with
by the Company on or prior to the delivery of such certificate has been
duly, timely and fully complied with;
(j) At the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall have been furnished to the Representatives an accurate
certificate, dated the date of its delivery, signed by the Committee on behalf
of each of the Selling Stockholders, in form and substance satisfactory to the
Representatives, to the effect that the representations and warranties of each
of the Selling Stockholders contained herein are true and correct in all
material respects on and as of the date of such certificate as if made on and as
of the date of such certificate, and each of the covenants and conditions
required herein to be performed or complied with by the Selling Stockholders on
or prior to the date of such certificate has been duly, timely and fully
performed or complied with.
(k) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 5(n).
(l) The Shares shall be qualified for sale in such states as the
Representatives may reasonably request, and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall have been duly authorized
for quotation on the Nasdaq National Market upon official notice of issuance.
(n) The NASD shall have approved the underwriting terms and arrangements
and such approval shall not have been withdrawn or limited.
(o) The Company and the Selling Stockholders shall have furnished to the
Representatives such certificates, in addition to those specifically mentioned
herein, as the Representatives may have reasonably requested as to the accuracy
and completeness at the
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Closing Date and the Option Closing Date of any statement in the Registration
Statement or the Prospectus, as to the accuracy at the Closing Date and the
Option Closing Date of the representations and warranties of the Company and the
Selling Stockholders herein, as to the performance by the Company and the
Selling Stockholders of its and their respective obligations hereunder, or as to
the fulfillment of the conditions concurrent and precedent to the obligations
hereunder of the Representatives.
7. Indemnification.
(a) The Company and __________ (the "Principal Selling Stockholders")
will, jointly and severally, indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls each Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), from and against any and all losses, claims, liabilities,
expenses and damages (including any and all investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding between any of the indemnified
parties and any indemnifying parties or between any indemnified party and any
third party, or otherwise, or any claim asserted), to which any Underwriter, or
any such person, may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out of or
are based on (i) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus, or (ii) the omission or alleged omission to state in such document a
material fact required to be stated in it or necessary to make the statements in
it not misleading, or (iii) any act or failure to act or any alleged act or
failure to act by an underwriter in connection with, or relating in any manner
to, the Shares or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action arising
out of or based upon matters covered by clause (i) or (ii) above (provided that
neither the Company nor the Principal Selling Stockholders shall be liable under
this clause (iii) to the extent it is finally judicially determined by a court
of competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or omitted to
be taken by such underwriter through its negligence or willful misconduct);
provided that neither the Company nor the Principal Selling Stockholders will be
liable to the extent that such loss, claim, liability, expense or damage (A)
arises from the sale of the Shares in the public offering to any person by an
Underwriter and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives on behalf of any Underwriter expressly for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus or (B)
results from an untrue statement of a material fact contained in, or the
omission of a material fact from, such preliminary prospectus, which untrue
statement or omission was corrected in the Prospectus (as then amended or
supplemented) if the Underwriters sold Shares to the person alleging such loss,
claim, liability, expense or damage without sending or giving, at or prior to
the written confirmation of such sale, a copy of the Prospectus (as then amended
or supplemented) if the Company had previously furnished
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copies thereof to the Underwriters within a reasonable amount of time prior to
such sale or such confirmation, and the Underwriters failed to deliver the
corrected Prospectus, if required by law to have so delivered it.
Notwithstanding anything to the contrary contained in this Section 7, the
liability of each Principal Selling Stockholder to the Underwriters or any other
person shall be limited to an amount equal to the net proceeds received (after
deducting underwriters' discounts and commissions) by such Principal Selling
Stockholder from the sale of the Shares in this Offering. [No Principal Selling
Stockholder shall be required to provide indemnification hereunder until the
Underwriters or control person seeking indemnification shall have first made a
demand for payment on the Company with respect to any such losses, claims,
liabilities, expenses or damages, and the Company shall have either rejected
such demand or failed to make such requested payment within [30] days after
receipt of such demand.] This indemnity agreement will be in addition to any
liability that the Company or any Principal Selling Stockholder may otherwise
have.
(b) Each Selling Stockholder, severally and not jointly, agrees to
indemnify and hold harmless the Company, each Underwriter, the directors,
officers, employees and agents of the Company and each Underwriter, and each
person, if any, who controls the Company and each Underwriter within the meaning
of the Act or the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only insofar as losses, claims,
damages, liabilities or expenses arise out of or are based on (i) a breach of
such Selling Stockholder's representations and warranties contained in Section 4
above or (ii) any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to such
Selling Stockholder furnished to the Company by or on behalf of such Selling
Stockholder specifically for use in the preparation of the documents referred to
in the foregoing indemnity; provided that such Selling Stockholder will not be
liable to the extent that such loss, claims, damage, liability or expense
results solely from an untrue statement of a material fact contained in, or the
omission of a material fact from, such preliminary prospectus, which untrue
statement or omission was corrected in the Prospectus (as then amended or
supplemented) if the Underwriters sold Shares to the person alleging such loss,
claim, liability, expense or damage without sending or giving, at or prior to
the written confirmation of such sale, a copy of the Prospectus (as then amended
or supplemented) if the Company had previously furnished copies thereof to the
Underwriters within a reasonable amount of time prior to such sale or such
confirmation, and the Underwriters failed to deliver the corrected Prospectus,
if required by law to have so delivered it. Notwithstanding anything to the
contrary contained in this Section 7, the liability of each Selling Stockholder
to the Underwriters or any other person shall be limited to an amount equal to
the net proceeds received (after deducting underwriters' discounts and
commissions) by such Selling Stockholder from the sale of the Shares in this
offering. The Company and the Selling Stockholders may otherwise agree, as among
themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible. This indemnity agreement will be in addition to any
liability that each Selling Stockholder may otherwise have. This Section 7(b)
shall not be construed to limit in any manner the liability of the Principal
Selling Stockholders as set forth in Section 7(a) above.
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(c) Each Underwriter will indemnify and hold harmless the Company, the
Selling Stockholders, each person, if any, who controls the Company or any of
the Selling Stockholders within the meaning of Section 15 of the 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 and the Selling Stockholders to each Underwriter, but
only insofar as losses, claims, liabilities, expenses or damages arise out of or
are based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of such Underwriter expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus. This indemnity will be in addition to
any liability that each Underwriter might otherwise have.
(d) Any party that proposes to assert the right to be indemnified under
this Section 7 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 7, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 7 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(i) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (iii) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (iv) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm
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admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld). No indemnifying party shall, without the prior written consent of
each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding relating to
the matters contemplated by this Section 7 (whether or not any indemnified party
is a party thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company, the Selling Stockholders
or the Underwriters, the Company, the Selling Stockholders and the Underwriters
will contribute to the total losses, claims, liabilities, expenses and damages
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted, but after deducting any contribution received
by the Company or the Selling Stockholders from persons other than the
Underwriters, such as persons who control the Company or the Selling
Stockholders within the meaning of the Act, officers of the Company who signed
the Registration Statement and directors of the Company, who also may be liable
for contribution) to which the Company or the Selling Stockholders and any one
or more of the Underwriters may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company, the
Selling Stockholders and the Underwriters. The relative benefits received by the
Company, the Selling Stockholders and the Underwriters shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Stockholders,
respectively, bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the relative
fault of the Company, the Selling Stockholders and the Underwriters with respect
to the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Selling Stockholders or
the Representatives on behalf of the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling Stockholders and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(e) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein.
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The amount paid or payable by an indemnified party as a result of the loss,
claim, liability, expense or damage, or action in respect thereof, referred to
above in this Section 7(e) shall be deemed to include, for purpose of this
Section 7(e), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7(e), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions received by it, and (ii) no Selling
Stockholder shall be required to contribute any amount in excess of the net
proceeds received by such Selling Stockholder from the sale of the Shares
hereunder (after deducting underwriter discounts and commissions), and no person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 7(e) are several in proportion to their
respective underwriting obligations and not joint. For purposes of this Section
7(e), any person who controls a party to this Agreement within the meaning of
the Act will have the same rights to contribution as that party, and each
officer of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 7(e), will notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 7(e). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(f) The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company and the Selling
Stockholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of any of the Shares and payment therefor or (iii)
any termination of this Agreement.
8. Termination. The obligations of the several Underwriters under this
Agreement may be terminated at any time prior to the Closing Date (or, with
respect to the Option Shares, on or prior to the Option Closing Date), by notice
to the Company from the Representatives, without liability on the part of any
Underwriter to the Company or any Selling Stockholder, if, prior to delivery and
payment for the Shares (or the Option Shares, as the case may be), in the sole
judgment of the Representatives, (i) trading in any of the equity securities of
the Company shall have been suspended by the Commission, by an exchange that
lists the Shares or by the Nasdaq National Market, (ii) trading in securities
generally on the New York Stock Exchange shall have been suspended or limited or
minimum or maximum prices shall have been generally established on such exchange
or over-the-counter market, or additional material governmental restrictions,
not in force on the date of this Agreement, shall have been imposed upon trading
in securities generally by such exchange or by order of the Commission or the
NASD or any court or other governmental authority, (iii) a general banking
moratorium shall have been declared by either federal or New York State
authorities or (iv) any material adverse change in the financial or securities
markets in the
-22-
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United States or in political, financial or economic conditions in the United
States or any outbreak or material escalation of hostilities or declaration by
the United States of a national emergency or war or other calamity or crisis
shall have occurred, the effect of any of which is such as to make it, in the
sole judgment of the Representatives, impracticable or inadvisable to market the
Shares on the terms and in the manner contemplated by the Prospectus.
9. Substitution of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Firm Shares which it or they have
agreed to purchase hereunder, and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Firm Shares, the other
Underwriters shall be obligated, severally, to purchase the Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase, in the proportions which the number of Firm Shares which they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares which all such non-defaulting Underwriters have so agreed
to purchase, or in such other proportions as the Representatives may specify;
provided that in no event shall the maximum number of Firm Shares which any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by more than one-ninth of the number of Firm Shares
agreed to be purchased by such Underwriter without the prior written consent of
such Underwriter. If any Underwriter or Underwriters shall fail or refuse to
purchase any Firm Shares and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
exceeds one-tenth of the aggregate number of the Firm Shares and arrangements
satisfactory to the Representatives, the Company and the Committee for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, or the Company or any Selling Stockholder for the
purchase or sale of any Shares under this Agreement. In any such case either the
Representatives or the Company and the Committee shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken pursuant to this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. Miscellaneous. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, (b) if
to any Selling Stockholder, __________________, or (c) if to the Underwriters,
to PaineWebber Incorporated at the offices of PaineWebber Incorporated, ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance
Department. Any such notice shall be effective only upon receipt. Any notice
under Section 8 or 9 may be made by telex or telephone, but if so made shall be
subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company and the Selling Stockholders and of the controlling
persons,
-23-
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directors and officers referred to in Section 7, 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" as used in this
Agreement shall not include a purchaser, as such purchaser, of Shares from any
of the several Underwriters.
With respect to any obligation of the Company and the Selling Stockholders
hereunder to make any payment, to indemnify for any liability or to reimburse
for any expense, notwithstanding the fact that such obligation is a joint and
several obligation of the Company and the Selling Stockholders, the Underwriters
(or any other person to whom such payment, indemnification or reimbursement is
owed) may pursue the Company with respect thereto prior to pursuing any Selling
Stockholder.
All representations, warranties and agreements of the Company and the
Selling Stockholders contained herein or in certificates or other instruments
delivered pursuant hereto, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or any
of their controlling persons and shall survive delivery of and payment for the
Shares hereunder.
Any action required or permitted to be taken by the Representatives under
this Agreement may be taken by them jointly or by PaineWebber Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company, the Selling Stockholders and the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
This Agreement may not be amended or otherwise modified or any provision
hereof waived except by an instrument in writing signed by the Representatives
and the Company.
-24-
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Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
TRITEAL CORPORATION
By________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President,
Chairman and Chief Executive Officer
THE SELLING STOCKHOLDERS NAMED
IN SCHEDULE I ATTACHED HERETO
By: The Committee
By________________________________
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule II hereof.
By: PAINEWEBBER INCORPORATED
By________________________________
Title_____________________________
▇▇
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
By________________________________
Title_____________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
By________________________________
Title_____________________________
27
SCHEDULE I
SELLING STOCKHOLDERS
Total Number
of Firm Shares
Name of Selling Stockholder to be Sold
--------------------------- ----------
Total
28
SCHEDULE II
UNDERWRITERS
Number of
Firm Shares
Name of Underwriters to be Purchased
-------------------- ---------------
PaineWebber Incorporated
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
------------
Total.......................................... ____________
29
EXHIBIT A
TRITEAL CORPORATION
---------------------
PRICE DETERMINATION AGREEMENT
_____ 1997
PAINEWEBBER INCORPORATED
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated __________, 1997
(the Underwriting Agreement"), among TriTeal Corporation, a Delaware corporation
(the "Company"), the Selling Stockholders named in Schedule I thereto or hereto
(the "Selling Stockholders"), and the several Underwriters named in Schedule II
thereto or hereto (the "Underwriters"), for whom PaineWebber Incorporated,
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. are acting as representatives (the
"Representatives"). The Underwriting Agreement provides for the purchase by the
Underwriters from the Company and the Selling Stockholders, subject to the terms
and conditions set forth therein, of an aggregate of ____________ shares (the
"Firm Shares") of the Company's common stock, par value $.001 per share. This
Agreement is the Price Determination Agreement referred to in the Underwriting
Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned agree
with the Representatives as follows:
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The public offering price per share for the Firm Shares shall be $_______.
The purchase price per share for the Firm Shares to be paid by the several
Underwriters shall be $_______ representing an amount equal to the public
offering price set forth above, less $______ per share.
The Company represents and warrants to each of the Underwriters that the
representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
The Selling Stockholders represent and warrant to each of the Underwriters
that the representations and warranties of the Selling Stockholders set forth in
Section 4 of the Underwriting Agreement are accurate as though expressly made at
and as of the date hereof.
As contemplated by the Underwriting Agreement, attached as Schedule II is
a completed list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
If the foregoing is in accordance with your understanding of the agreement
among the Underwriters, the Company and the Selling Stockholders, please sign
and return to the Company a counterpart hereof, whereupon this instrument along
with all counterparts and together with the Underwriting Agreement shall be a
binding agreement among the Underwriters, the Company and the Selling
Stockholders in accordance with its terms and the terms of the Underwriting
Agreement.
Very truly yours,
TRITEAL CORPORATION
By______________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President,
Chairman and Chief Executive Officer
A-2
31
THE SELLING STOCKHOLDERS NAMED
IN SCHEDULE I TO THE UNDERWRITING
AGREEMENT
By: The Committee
By_________________________________
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule II hereof.
By: PAINEWEBBER INCORPORATED
By_________________________________
Title______________________________
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
By_________________________________
Title______________________________
A-3
32
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
By_________________________________
Title______________________________
A-4
33
EXHIBIT B
POWER OF ATTORNEY
TRITEAL CORPORATION
Common Stock
[Names and Addresses of Committee]
Ladies and Gentlemen:
The undersigned understands that TriTeal Corporation, a Delaware
corporation (the "Company"), has filed a registration statement (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), in connection with the proposed public offering and sale by the Company,
the undersigned (the "Selling Stockholder") and certain other Selling
Stockholders of the Company's Common Stock, par value $.001 per share (the
"Common Stock").
The Selling Stockholder desires to sell certain shares of Common Stock and
to include such shares among the shares covered by the Registration Statement.
The number of shares of Common Stock which the undersigned desires to sell (the
"Shares") are set forth beneath the signature of the Selling Stockholder below.
Concurrently with the execution and delivery of this Power of Attorney,
the undersigned is delivering to you, or requesting the Company to deliver to
you, certificates for the Shares, which you are authorized to deposit with
American Stock Transfer & Trust Company, as custodian (the "Custodian"),
pursuant to a custody agreement in the form attached as Attachment A hereto (the
"Custody Agreement").
1. In connection with the foregoing, the Selling Stockholder hereby makes,
constitutes and appoints you collectively, and each of you, individually (a
"Member") and each of your respective substitutes under Section 3, the true and
lawful attorneys-in-fact of the undersigned (the Members or any of them or their
respective substitutes, being herein referred to collectively as the
"Committee"), with full power and authority, in the name and on behalf of the
Selling Stockholder:
B-1
34
(a) To enter into the Custody Agreement and deposit with the Custodian
pursuant thereto the certificates for the Shares delivered to the Committee
concurrently herewith;
(b) For the purpose of effecting the sale of the Shares, to execute and
deliver (i) an Underwriting Agreement (the "Underwriting Agreement"), by and
among the Company, the other Selling Stockholders and the representatives (the
"Representatives"), selected by the Company, of the several Underwriters (the
"Underwriters") and (ii) a Price Determination Agreement (as defined in the
Underwriting Agreement), by and among the Company, the other Selling
Stockholders and the Representatives of the several Underwriters;
(c) To endorse, transfer and deliver certificates for the Shares to or on
the order of the Representatives or to their nominee or nominees, and to give
such orders and instructions to the Custodian as the Committee may in its sole
discretion determine with respect to (i) the transfer on the books of the
Company of the Shares in order to effect such sale (including the names in which
new certificates for such Shares are to be issued and the denominations
thereof); (ii) the delivery to or for the account of the Representatives of the
certificates for the Shares against receipt by the Custodian of the full
purchase price to be paid therefor; (iii) the remittance to the Selling
Stockholder of the Selling Stockholder's share of the proceeds, after payment of
expenses described in the Underwriting Agreement, from any sale of Shares; and
(iv) the return to the Selling Stockholder of certificates representing the
number of Shares (if any) deposited with the Custodian but not sold by the
Selling Stockholder under the Registration Statement for any reason;
(d) To retain ▇▇▇▇▇▇ Godward LLP (who are also counsel to the Company) as
legal counsel for the Selling Stockholders in connection with any and all
matters referred to herein;
(e) To take for the Selling Stockholder all steps deemed necessary or
advisable by the Committee in connection with the registration of the Shares
under the Act, including without limitation filing amendments to the
Registration Statement, requesting acceleration of effectiveness of the
Registration Statement, advising the Securities and Exchange Commission that the
reason the Selling Stockholder is offering the Shares for sale is to diversify
the Selling Stockholder's investments and to assist the Company in enlarging the
public market for the Common Stock, informing said Commission that the Selling
Stockholder has no knowledge of any material adverse information with regard to
the current and prospective operations of the Company which is not stated in the
Registration Statement, and such other steps as the Committee may in its
absolute discretion deem necessary or advisable;
(f) To make, acknowledge, verify and file on behalf of the Selling
Stockholder applications, consents to service of process and such other
undertakings or reports as may be required by law with state commissioners or
officers administering state securities or Blue Sky laws and to take any other
action required to facilitate the qualification of the Shares under the
securities or Blue Sky laws of the jurisdictions in which the Shares are to be
offered;
B-2
35
(g) If necessary, to endorse (in blank or otherwise) on behalf of the
Selling Stockholder the certificate or certificates representing the Shares, or
a stock power or powers attached to such certificate or certificates; and
(h) To make, execute, acknowledge and deliver all such other contracts,
orders, receipts, notices, requests, instructions, certificates, letters and
other writings and, in general, to do all things and to take all action which
the Committee in its sole discretion may consider necessary or proper in
connection with or to carry out the aforesaid sale of Shares, as fully as could
the Selling Stockholder if personally present and acting.
2. This Power of Attorney and all authority conferred hereby is granted
and conferred subject to and in consideration of the interests of the Company,
the Representatives, the Underwriters and the other Selling Stockholders and,
for the purpose of completing the transactions contemplated by this Power of
Attorney, this Power of Attorney and all authority conferred hereby shall be
irrevocable and shall not be terminated by any act of the Selling Stockholder or
by operation of law, whether by the death, disability, incapacity or liquidation
of the Selling Stockholder or by the occurrence of any other event or events
(including without limitation the termination of any trust or estate for which
the Selling Stockholder is acting as a fiduciary or fiduciaries), and if, after
the execution hereof, the Selling Stockholder shall die or become disabled or
incapacitated or is liquidated, or if any other such event or events shall occur
before the completion of the transactions contemplated by this Power of
Attorney, the Committee shall nevertheless be authorized and directed to
complete all such transactions as if such death, disability, incapacity,
liquidation or other event or events had not occurred and regardless of notice
thereof.
3. Each Member shall have full power to make and substitute any person in
the place and stead of such Member, and the Selling Stockholder hereby ratifies
and confirms all that each Member or substitute or substitutes shall do by
virtue of these presents. All actions hereunder may be taken by any one Member
or his substitute. In the event of the death, disability or incapacity of any
Member, the remaining Member or Members shall appoint a substitute therefor.
4. The Selling Stockholder hereby represents, warrants and covenants that:
(a) All information furnished to the Company by or on behalf of the
Selling Stockholder for use in connection with the preparation of the
Registration Statement is and will be true and correct in all material respects
and does not and will not omit any material fact necessary to make such
information not misleading;
(b) The Selling Stockholder, having full right, power and authority to do
so, has duly executed and delivered this Power of Attorney;
(c) The Selling Stockholder has carefully reviewed the Registration
Statement and will carefully review each amendment thereto immediately upon
receipt thereof from the Company and will promptly advise the Company in writing
if:
B-3
36
(i) The name and address of the Selling Stockholder is not properly
set forth in each preliminary prospectus (collectively, the "Preliminary
Prospectus") contained in the Registration Statement and the prospectuses
(collectively, the "Prospectus") contained in the Registration Statement
at the time it becomes effective;
(ii) The Selling Stockholder has reason to believe that (A) any
information furnished to the Company by or on behalf of the Selling
Stockholder for use in connection with the Registration Statement or the
Prospectus or any Preliminary Prospectus is not true and complete; and (B)
any Preliminary Prospectus, the Prospectus and any supplements thereto
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, in the light of the circumstances under which they
were made, not misleading;
(iii) The Selling Stockholder knows of any material adverse
information with regard to the current or prospective operations of the
Company or any of its subsidiaries which is not disclosed in any
Preliminary Prospectus, the Prospectus or the Registration Statement; or
(iv) Except as indicated in the Prospectus, the Selling Stockholder
knows of any arrangements made or to be made by any person, or of any
transaction already effected, (A) to limit or restrict the sale of shares
of the Common Stock during the period of the public distribution, (B) to
stabilize the market for the Common Stock or (C) for withholding
commissions, or otherwise to hold any other person responsible for the
distribution of the Selling Stockholder's participation;
(d) In connection with the offering of the Shares, the Selling Stockholder
has not taken and will not take, directly or indirectly, any action intended to,
or which might reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Shares to facilitate the sale or resale of the
Shares;
(e) The Selling Stockholder has not distributed and will not distribute
any prospectus or other offering material in connection with the offering and
sale of the Shares other than a Preliminary Prospectus, a Prospectus or other
material permitted by the Act;
(f) The Selling Stockholder will notify the Company in writing immediately
of any changes in the foregoing information which should be made as a result of
developments occurring after the date hereof and prior to the Closing Date under
the Underwriting Agreement, and the Committee may consider that there has not
been any such development unless advised to the contrary;
(g) The Selling Stockholder has, and at the time of delivery of the Shares
to the Representatives and the Manager[s] it will have, full power and authority
to enter into this
B-4
37
Power of Attorney, to carry out the terms and provisions hereof and to make all
the representations, warranties and covenants contained herein; and
(h) This Power of Attorney is the valid and binding agreement of the
Selling Stockholder and is enforceable against the Selling Stockholder in
accordance with its terms.
5. The representations, warranties and covenants of the Selling
Stockholder in this Power of Attorney are made for the benefit of, and may be
relied upon by, the other Selling Stockholders, the Committee, the Company and
its counsel, and their representatives, agents and counsel, the Custodian, the
Underwriters and the Representatives.
6. The Committee shall be entitled to act and rely upon any statement,
request, notice or instructions respecting this Power of Attorney given to it by
the Selling Stockholder, not only as to the authorization, validity and
effectiveness thereof, but also as to the truth and acceptability of any
information therein contained.
It is understood that the Committee assumes no responsibility or liability
to any person other than to deal with the Shares deposited with it and the
proceeds from the sale of the Shares in accordance with the provisions hereof.
The Committee makes no representations with respect to and shall have no
responsibility for the Registration Statement, the Prospectus or any Preliminary
Prospectus nor, except as herein expressly provided, for any aspect of the
offering of Common Stock, and it shall not be liable for any error of judgment
or for any act done or omitted or for any mistake of fact or law except for its
own negligence or bad faith. The Selling Stockholder agrees to indemnify the
Committee for and to hold the Committee harmless against any loss, claim, damage
or liability incurred on its part arising out of or in connection with it acting
as the Committee under this Power of Attorney, as well as the cost and expense
of investigating and defending against any such loss, claim, damage or
liability, except to the extent such loss, claim, damage or liability is due to
the negligence or bad faith of the Member seeking indemnification. The Selling
Stockholder agrees that the Committee may consult with counsel of its own choice
(who may be counsel for the Company) and it shall have full and complete
authorization and protection for any action taken or suffered by it hereunder in
good faith and in accordance with the opinion of such counsel.
It is understood that the Committee may, without breaching any express or
implied obligation to the Selling Stockholder hereunder, release, amend or
modify any other Power of Attorney granted by any other Selling Stockholder.
7. It is understood that the Committee shall serve entirely without
compensation.
8. This Power of Attorney shall be governed by the laws of the State of
New York without regard to the conflict of laws principles of such State.
This Power of Attorney may be signed in two or more counterparts with the
same effect as if the signature thereto and hereto were upon the same
instrument.
B-5
38
In case any provision in this Power of Attorney shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
This Power of Attorney shall be binding upon the Committee and the Selling
Stockholder and the heirs, legal representatives, distributees, successors and
assigns of the Selling Stockholder.
Dated: __________, 19__
Very truly yours,
_________________________________________(1)
_________________________________________(1)
Signature(s) of Selling Stockholder(s)
_________________________________________
Address: _______________________________
_______________________________
_______________________________
SHARES TO BE SOLD:
__________ shares of Common Stock
--------
1 To be signed in exactly the same manner as the shares are registered.
B-6
39
ACKNOWLEDGED AND ACCEPTED:
THE COMMITTEE:
_____________________________________
_____________________________________
_____________________________________
_____________________________________
B-7
40
ATTACHMENT A
CUSTODY AGREEMENT
CUSTODY AGREEMENT, dated ________, 1997, among ______________________, as
Custodian (the "Custodian"), and the persons listed on Annex I hereto (each a
"Selling Stockholder" and collectively the "Selling Stockholders").
TriTeal Corporation, a Delaware corporation (the "Company"), intends to
file a Registration Statement (the "Registration Statement") with the Securities
and Exchange Commission to register for sale to the public under the Securities
Act of 1933, as amended (the "Act"), shares of the Company's common stock, $.001
par value per share (the "Common Stock").
The shares to be covered by the Registration Statement shall consist of
(a) up to _________ shares of Common Stock to be sold by the Company and (b) up
to ________ shares of Common Stock (the "Shares") to be sold by the Selling
Stockholders.
Each of the Selling Stockholders has executed and delivered a Power of
Attorney (the "Power of Attorney") naming _____________, ____________ and
_______________, and each of them, as his attorney-in-fact (the "Committee"),
for certain purposes, including the execution, delivery and performance of this
Agreement in his name, place and ▇▇▇▇▇, in connection with the proposed sale by
each Selling Stockholder of the number of Shares set forth opposite such Selling
Stockholder's name in Annex I.
1. A custody arrangement is hereby established by the Selling Stockholders
with the Custodian with respect to the Shares, and the Custodian is hereby
instructed to act in accordance with this Agreement and any amendments or
supplements hereto authorized by the Committee.
2. There are herewith delivered to the Custodian, and the Custodian hereby
acknowledges receipt of, certificates representing the Shares, which
certificates have been endorsed in blank or are accompanied by duly executed
stock powers, in each case with all signatures guaranteed by a commercial bank
or trust company or by a member firm of the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. or a member of the National Association of
Securities Dealers, Inc. Such certificates are to be held by the Custodian for
the account of the Selling Stockholders and are to be disposed of by the
Custodian in accordance with this Agreement.
3. The Custodian is authorized and directed by the Selling Stockholders:
(a) To hold the certificates representing the Shares delivered by the
Selling Stockholders in its custody;
-1-
41
(b) On or immediately prior to the settlement date for any Shares sold
pursuant to the Registration Statement (the "Closing Date"), to cause such
Shares to be transferred on the books of the Company into such names as the
Custodian shall have been instructed by the representatives (the
"Representatives") of the several Underwriters (the "Underwriters"); to cause to
be issued, against surrender of the certificates for the Shares, a new
certificate or certificates for such Shares, free of any restrictive legend,
registered in such name or names; to deliver such new certificates representing
such Shares to the Representatives, as instructed by the Representatives on the
Closing Date for their account or accounts against full payment therefor; and to
give receipt for such payment;
(c) To disburse such payments in the following manner: (i) to itself, as
agent for the Selling Stockholders, a reserve amount to be designated in writing
by the Committee from which amount the Custodian shall pay, as soon as
reasonably practicable, (A) the Selling Stockholders' proportionate share of all
expenses of the offering and sale of the Shares as provided in the Underwriting
Agreement by and among the Company, the Selling Stockholders and the
Representatives, (B) its reasonable charges and disbursements for acting
hereunder with respect to the sale of the Shares and (C) any applicable stock
transfer taxes; and (ii) to each Selling Stockholder, pursuant to the written
instructions of the Committee, (A) on the Closing Date, a sum equal to the share
of the proceeds to which such Selling Stockholder is entitled, as determined by
the Committee, less the reserve amount designated by the Committee, and (B)
promptly after all proper charges, disbursements, costs and expenses shall have
been paid, any remaining balance of the amount reserved under clause (i) above.
Before making any payment from the amount reserved under clause (i) above,
except payments made pursuant to subclause (B) of clause (ii) above, the
Custodian shall request and receive the written approval of the Committee. To
the extent the expenses referred to in subclause (A) of clause (i) above exceed
the amount reserved, the Selling Stockholders shall remain liable for their
proportionate share of such expenses.
Subject in each case to the indemnification obligations set forth in
Section 7, in the event Shares of any Selling Stockholder are not sold [prior to
____________, 19__], the Custodian shall deliver to such Selling Stockholder as
soon as practicable after such date termination of the offering of the Shares,
certificates representing such Shares deposited by such Selling Stockholder.
Certificates returned to any Selling Stockholder shall be returned with any
related stock powers, and any new certificates issued to the Selling
Stockholders with respect to such Shares shall bear any appropriate legend
reflecting the unregistered status thereof under the Act.
This Agreement is for the express benefit of the Company and the Selling
Stockholders, the Underwriters and the Representatives. The obligations and
authorizations of the Selling Stockholders hereunder are irrevocable and shall
not be terminated by any act of any Selling Stockholder or by operation of law,
whether by the death, disability, incapacity or liquidation of any Selling
Stockholder or by the occurrence of any other event or events (including without
limitation the termination of any trust or estate for which any Selling
Stockholder is acting as a fiduciary or fiduciaries), and if after the execution
hereof any Selling Stockholder shall die or become disabled or incapacitated or
is liquidated, or if any other event or events shall occur before the delivery
of such Selling Stockholder's Shares
-2-
42
hereunder to the Representatives, such Shares shall be delivered to the
Representatives in accordance with the terms and conditions of this Agreement,
as if such event had not occurred, regardless of whether or not the Custodian
shall have received notice of such event.
Until payment of the purchase price for the Shares has been made to the
Selling Stockholders or to the Custodian, the Selling Stockholders shall remain
the owner of (and shall retain the right to receive dividends and distributions
on, and to vote) the number of Shares delivered by each of them to the Custodian
hereunder. Until such payment in full has been made or until the offering of
Shares has been terminated, each Selling Stockholder agrees that it will not
give, sell, pledge, hypothecate, grant any lien on, transfer, deal with or
contract with respect to the Shares and any interests therein.
The Custodian shall assume no responsibility to any person other than to
deal with the certificates for the Shares and the proceeds from the sale of the
Shares represented thereby in accordance with the provisions hereof, and the
Selling Stockholders, severally and not jointly, hereby agree to indemnify the
Custodian for and to hold the Custodian harmless against any and all losses,
claims, damages or liabilities incurred on its part arising out of or in
connection with it acting as the Custodian pursuant hereto, as well as the cost
and expenses of investigating and defending any such losses, claims, damages or
liabilities, except to the extent such losses, claims, damages or liabilities
are due to the negligence or bad faith of the Custodian. The Selling
Stockholders agree that the Custodian may consult with counsel of its own choice
(who may be counsel for the Company), and the Custodian shall have full and
complete authorization and protection for any action taken or suffered by the
Custodian hereunder in good faith and in accordance with the opinion of such
counsel.
Each of the Selling Stockholders, jointly and not severally, hereby
represents and warrants that: (a) it has, and at the time of delivery of its
Shares to the Representatives it will have, full power and authority to enter
into this Agreement and the Power of Attorney, to carry out the terms and
provisions hereof and thereof and to make all of the representations, warranties
and agreements contained herein and therein; and (b) this Agreement and the
Power of Attorney are the valid and binding agreements of such Selling
Stockholder and are enforceable against such Selling Stockholder in accordance
with their respective terms.
The Custodian's acceptance of this Agreement by the execution hereof shall
constitute an acknowledgment by the Custodian of the authorization herein
conferred and shall evidence the Custodian's agreement to carry out and perform
this Agreement in accordance with its terms.
The Custodian shall be entitled to act and rely upon any statement,
request, notice or instruction with respect to this Agreement given to it on
behalf of each of the Selling Stockholders if the same shall be made or given to
the Custodian by the Committee, not only as to the authorization, validity and
effectiveness thereof, but also as to the truth and acceptability of any
information therein contained.
This Agreement may be executed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
Execution by the
-3-
43
Custodian of one counterpart hereof and its delivery thereof to the Committee
shall constitute the valid execution of this Agreement by the Custodian.
This Agreement shall be binding upon the Custodian, each of the Selling
Stockholders and the respective heirs, legal representatives, distributees,
successors and assigns of the Selling Stockholders.
This Agreement shall be governed by the laws of the State of New York
without regard to the conflict of laws principles of such State.
Any notice given pursuant to this Agreement shall be deemed given if in
writing and delivered in person, or if given by telephone or telegraph if
subsequently confirmed by letter: (i) if to a Selling Stockholder, to his
address set forth in Annex I; and (ii) if to the Custodian, to it at
___________________.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
________________________________________________
__________, as Custodian
THE SELLING STOCKHOLDERS LISTED
IN ANNEX I HERETO:
By: The Committee
By_____________________________________
-4-
44
ANNEX I
Names and Addresses of
Selling Stockholders Shares to be Sold
-------------------- -----------------
----------
Total............................................... ==========
45
EXHIBIT C
_____ 1997
PAINEWEBBER INCORPORATED
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
In consideration of the agreement of the several Underwriters, for which
PaineWebber Incorporated, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC and ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. (the
"Representatives") intend to act as Representatives, to underwrite a proposed
public offering (the "Offering") of the Common Stock, par value $.001 per share
(the "Common Stock") of TriTeal Corporation, a Delaware corporation (the
"Company"), the undersigned hereby agrees that the undersigned will not, from
the date hereof through ninety (90) days from the commencement of the public
offering of such shares, without the prior written consent of PaineWebber
Incorporated, offer to sell, sell, contract to sell, grant any option to sell,
or otherwise dispose of, or require the Company to file with the Securities and
Exchange Commission a registration statement under the Securities Act of 1933 to
register, any shares of Common Stock or securities convertible into or
exchangeable for Common Stock or warrants or other rights to acquire shares of
Common Stock of which the undersigned is now, or may in the future become, the
beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934) (other than pursuant to employee stock option plans or in
connection with other employee incentive compensation arrangements) provided,
however, that the foregoing shall not prohibit (i) a bona fide gift or gifts so
long as such donee or donees thereof agree to be bound by the terms of this
Lock-Up Agreement, or (ii) any distribution by a partnership to its partners so
long as such partners agree in writing to be bound by the terms of this Lock-Up
Agreement.
Very truly yours,
By_____________________________________
Name___________________________________
C-1
46
EXHIBIT D
FORM OF OPINION OF
COUNSEL TO THE COMPANY
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has full
corporate power and authority to conduct all the activities conducted by it, to
own or lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus.
All of the outstanding shares of Common Stock have been, and the Shares,
when paid for by the Underwriters in accordance with the terms of the Agreement,
will be, duly and validly authorized, validly issued, fully paid and
nonassessable are not subject to any preemptive or similar right under (i) the
general corporation law of the State of Delaware, (ii) the Company's certificate
of incorporation or bylaws, or (iii) any instrument, document, contract or other
agreement filed as an exhibit to the Registration Statement. Except as described
in the Registration Statement or the Prospectus, to the best of our knowledge,
there is no commitment or arrangement to issue, and there are no outstanding
options, warrants or other rights calling for the issuance of, any share of
capital stock of the Company or any Subsidiary to any person or any security or
other instrument that by its terms is convertible into, exercisable for or
exchangeable for capital stock of the Company.
No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of the Agreement(1) by the Company or in connection with the taking
by the Company of any action contemplated thereby, except such as have been
obtained under the Act and the Rules and Regulations and such as may be required
under state securities or "Blue Sky" laws or by the bylaws and rules of the NASD
in connection with the purchase and distribution by the Underwriters of the
Shares to be sold by the Company.
The authorized, issued and outstanding capital stock of the Company was as
set forth in the Registration Statement and the Prospectus under the caption
"Capitalization" as of the date stated therein. The description of the Common
Stock contained under the caption "Description of Capital Stock" in the
Prospectus is accurate in all material respects and is a fair summary to the
extent required by the Act and the Rules and Regulations. The form of
--------
1 All references in this opinion to the Agreement shall include the Underwriting
Agreement and the Price Determination Agreement.
D-1
47
stock certificate filed as an exhibit to the Registration Statement is in due
and proper form and complies with all applicable statutory requirements.
The Registration Statement and the Prospectus comply in all material
respects as to form with the requirements of the Act and the Rules and
Regulations (except that we express no opinion as to financial statements,
schedules and other financial and statistical data contained in the Registration
Statement or the Prospectus).
To the best of our knowledge, any instrument, document, lease, license,
contract or other agreement (collectively, "Documents") required to be described
or referred to in the Registration Statement or the Prospectus has been properly
described or referred to therein to the extent required by the Act and the Rules
and Regulations and any Document required to be filed as an exhibit to the
Registration Statement has been filed as an exhibit thereto.
To the best of our knowledge, except as disclosed in the Registration
Statement or the Prospectus, no person or entity has the right to require the
registration under the Act of shares of Common Stock or other securities of the
Company by reason of the filing or effectiveness of the Registration Statement
or the offering contemplated thereby.
To the best of our knowledge, there are no legal or governmental
proceedings to which the Company is a party or to which any of the properties of
the Company is subject which are required to be shown in the Prospectus under
the Act and the Rules and Regulations.
The Company has full corporate power and authority to enter into the
Agreement, and the Agreement has been duly authorized, executed and delivered by
the Company, is a valid and binding agreement of the Company and, except for the
indemnification and contribution provisions thereof, as to which we express no
opinion, is enforceable against the Company in accordance with the terms
thereof.
The execution and delivery by the Company of, and the performance by the
Company of its agreements in, the Agreement do not and will not (i) violate the
certificate of incorporation or bylaws of the Company, (ii) breach or result in
a default under, cause the time for performance of any obligation to be
accelerated under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the assets of the Company or the Subsidiary pursuant
to the terms of any Document filed as an exhibit to the Registration Statement
(iii) breach or otherwise violate any existing obligation of the Company under
any court or administrative order, judgment or decree of which we have knowledge
or (iv) violate applicable provisions of any statute or regulation of the State
of California, of the United States or the Delaware General Corporation Law.
The Shares have been duly authorized for quotation on the Nasdaq National
Market.
We have been advised by the staff of the Commission that the Registration
Statement has become effective under the Act and that no order suspending the
effectiveness of the
▇-▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ has been issued and no proceeding for that purpose has
been instituted or is threatened or pending.
To our knowledge, there are no actions, suits, proceedings or
investigations pending or, to our knowledge, overtly threatened in writing
against the Company, before or by any court, governmental agency or arbitrator
which (i) seek to challenge the legality or enforceability of the Agreement,
(ii) seek to challenge the legality or enforceability of any of the Documents
filed, or required to be filed, as exhibits to the Registration Statement, (iii)
seek damages or other remedies with respect to any of the Documents filed, or
required to be filed, as exhibits to the Registration Statement, (iv) except as
set forth in or contemplated by the Registration Statement and the Prospectus,
seek money damages in excess of $1,000,000 or seek to impose criminal penalties
upon the Company or the Subsidiary of which we have knowledge or (v) seek to
enjoin any of the business activities of the Company or the Subsidiary or the
transactions described in the Prospectus and of which we have knowledge.
In connection with the preparation of the Registration Statement and the
Prospectus, we have participated in conferences with officers and
representatives of the Company and with its certified public accountants (as you
and your counsel have done). As such conferences we have made inquires of such
officers, representatives and accountants, and discussed the contents of the
Registration Statement and the Prospectus. Except with respect to matters
expressly covered by paragraph 4 of this opinion, we have not ourselves
independently verified, and, accordingly, do not render any opinion upon, the
accuracy, completeness or fairness of the Registration Statement or the
Prospectus. Based on the foregoing, nothing has come to our attention that
causes us to believe that, as of the Effective Date, the Registration Statement
contained any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus at the time such Prospectus was
issued, or at the Closing Date [and the Option Closing Date,] contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances in which they were made, not misleading (except that we
express no opinion as to financial statements, schedules and other financial or
statistical data contained in the Registration Statement or the Prospectus).
The foregoing opinion is subject to the qualification that the
enforceability of the Agreement may be: (i) subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally; and (ii) subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity),
including principles of commercial reasonableness or conscionability and an
implied covenant of good faith and fair dealing.
This letter is furnished by us solely for your benefit in connection with
the transactions referred to in the Agreement and may not be circulated to, or
relied upon by, any other person, except that this letter may be relied upon by
your counsel in connection with the opinion letter to be delivered to you
pursuant to Section 6(g) of the Agreement.
D-3
49
In rendering the foregoing opinion, counsel may rely, to the extent they
deem such reliance proper, on the opinions (in form and substance reasonably
satisfactory to Under-writers' counsel) of other counsel reasonably acceptable
to Underwriters' counsel as to matters governed by the laws of jurisdictions
other than the United States, the State of California and the State of Delaware,
and as to matters of fact, upon certificates of officers of the Company and of
government officials; provided that such counsel shall state that the opinion of
any other counsel is in form satisfactory to such counsel. Copies of all such
opinions and certificates shall be furnished to counsel to the Underwriters on
the Closing Date.
D-4
50
EXHIBIT E
FORM OF OPINION
OF COUNSEL TO THE
SELLING STOCKHOLDERS
[Each of the Selling Stockholders who is a trustee has full power and
authority under his or her respective trust agreement to enter into the
Agreement and the Agreement and Power of Attorney and to sell, transfer and
deliver the Shares pursuant to the Agreement. All authorizations and consents
necessary under the respective trust agreements for the execution and delivery
of the Agreement and the Agreement and Power of Attorney on behalf of each of
the Selling Stockholders who is a trustee has been given.] Assuming each of the
Underwriters has purchased the Shares in good faith and without notice of any
adverse claim within the meaning of the applicable Uniform Commercial Code, the
delivery of the Shares on behalf of the Selling Stockholders pursuant to the
terms of the Agreement and payment therefor by the Underwriters will transfer
good and marketable title to the Shares to the several Underwriters purchasing
the Shares, free and clear of any adverse claims.
Each of the Agreement and the Agreement and Power of Attorney has been
duly authorized, executed and delivered by or on behalf of each of the Selling
Stockholders, is a valid and binding agreement of each Selling Stockholder and,
except for the indemnification and contribution provisions of the Agreement and
the Agreement and Power of Attorney are enforceable against the Selling
Stockholders in accordance with the terms thereof.
No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by or on behalf of the Selling Stockholders, in connection with the
execution, delivery and performance of the Agreement and the Agreement and Power
of Attorney by or on behalf of the Selling Stockholders or in connection with
the taking by or on behalf of the Selling Stockholders of any action
contemplated thereby [or, if so required, all such consents, approvals,
authorizations and orders [specifying the same] have been obtained and are in
full force and effect], except such as have been obtained under the Act or the
Rules and Regulations and such as may be required under state securities or
"Blue Sky" laws or by the bylaws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares to be sold by the
Selling Stockholders.
The execution and delivery by the Selling Stockholders of, and the
performance by the Selling Stockholders of their agreements in, the Agreement
and the Agreement and Power of Attorney, do not and will not (i) violate the
certificate of incorporation or bylaws of any corporate Selling Stockholder,
(ii) breach or result in a default under, cause the time for performance of any
obligation to be accelerated under, or result in the creation or imposition
E-1
51
of any lien, charge or encumbrance upon any of the assets of any Selling
Stockholder pursuant to the terms of (A) any indenture, mortgage, deed of trust,
loan agreement, bond, debenture, note agreement, capital lease or other evidence
of indebtedness of which we have knowledge, or (B) any voting trust arrangement
to which any Selling Stockholder is a party that restricts the ability of any
such Selling Stockholder to issue or sell securities and of which we have
knowledge, (iii) breach or otherwise violate any existing obligation of any
Selling Stockholder under any court or administrative order, judgment or decree
of which we have knowledge or (iv) violate applicable provisions of any statute
or regulation in the States of Delaware, California or of the United States.
There are no transfer or similar taxes payable in connection with the sale
and delivery of the Shares by the Selling Stockholders to the several
Underwriters, except as specified in such opinion.
The foregoing opinion is subject to the qualification that the
enforceability of the Agreement and the Agreement and Power of Attorney may be:
(i) subject to bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally; and (ii) subject to general
principles of equity and limitations on the availability of equitable remedies
(regardless of whether such enforceability is considered in a proceeding at law
or in equity), including principles of commercial reasonableness or
conscionability and an implied covenant of good faith and fair dealing.
This letter is furnished by us solely for your benefit in connection with
the transactions referred to in the Agreement and may not be circulated to, or
relied upon by, any other person, [except that this letter may be relied upon by
your counsel in connection with the opinion letter to be delivered to you
pursuant to Section 6(g) of the Agreement].
In rendering the foregoing opinion, counsel may rely, to the extent they
deem such reliance proper, on the opinions (in form and substance reasonably
satisfactory to Underwriters' counsel) of other counsel reasonably acceptable to
Underwriters' counsel as to matters governed by the laws of jurisdictions other
than the United States and the State of Delaware, and as to matters of fact,
upon certificates of the Selling Stockholders and of government officials;
provided that such counsel shall state that the opinion of any other counsel is
in form satisfactory to such counsel. Copies of all such opinions and
certificates shall be furnished to counsel to the Underwriters on the Closing
Date.
E-2
