1
4,500,000 Shares
N2H2, Inc.
Common Stock
FORM OF UNDERWRITING AGREEMENT
July __, 1999
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx, Inc.
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
N2H2, Inc., a Washington corporation (the "Company"), and the
shareholders of the Company named in Schedule II to this Agreement (the "Selling
Shareholders," which term shall include, except where otherwise noted, that
certain shareholder of the Company named as the "Affiliated Selling Shareholder"
in Schedule II hereto) severally propose, subject to the terms and conditions
contained herein, to sell to you and the other underwriters named on Schedule I
to this Agreement (the "Underwriters"), for whom you are acting as
Representatives (the "Representatives"), an aggregate of 4,500,000 shares (the
"Firm Shares") of the Company's Common Stock, no par value (the "Common Stock").
Of the Firm Shares, 4,450,000 are to be issued and sold by the Company and
50,000 are to be sold by the Selling Shareholders. The respective amounts of the
Firm Shares to be purchased by each of the several Underwriters are set forth
opposite their names on Schedule I hereto. In addition, the Company proposes to
grant to the Underwriters an option to purchase up to an additional 675,000
shares (the "Option Shares") of Common Stock from it for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The Firm Shares
and the Option Shares are together called the "Shares."
1. SALE AND PURCHASE OF THE SHARES.
On the basis of the representations, warranties and agreements contained
in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a price of $_____ per share (the "Initial Price"),
the number of Firm Shares set forth opposite the name of such Underwriter under
the column "Number of Firm Shares to be Purchased from the
1.
2
Company" on Schedule I to this Agreement, subject to adjustment in accordance
with Section 11 hereof. The Selling Shareholders agree to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Selling Shareholders, at the "Initial Price", the number of
Firm Shares set forth opposite the name of such Underwriter under the column
"Number of Firm Shares to be Purchased from the Selling Shareholders" on
Schedule I to this Agreement, subject to adjustment in accordance with Section
11 hereof.
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option Shares at the
Initial Price. The number of Option Shares to be purchased by each Underwriter
shall be the same percentage (adjusted by the Representatives to eliminate
fractions) of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares. Such option
may be exercised only to cover over-allotments in the sales of the Firm Shares
by the Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the Firm
Shares Closing Date (as defined below), and from time to time thereafter within
30 days after the date of this Agreement, in each case upon written or
telegraphic notice, or verbal or telephonic notice confirmed by written or
telegraphic notice, by the Representatives to the Company no later than 12:00
noon, New York City time, on the business day before the Firm Shares Closing
Date or at least two and no more than three business days before the Option
Shares Closing Date (as defined below), as the case may be, setting forth the
number of Option Shares to be purchased and the time and date (if other than the
Firm Shares Closing Date) of such purchase.
2. DELIVERY AND PAYMENT. Delivery by the Company and the Selling
Shareholders of the Firm Shares to the Representatives for the respective
accounts of the Underwriters, and payment of the purchase price by certified or
official bank check or checks payable in New York Clearing House (same day)
funds drawn to the order of the Company for the shares purchased from the
Company and to the Selling Shareholders for the shares purchased from the
Selling Shareholders, against delivery of the respective certificates therefor
to the Representatives, shall take place at the offices of CIBC World Markets
Corp., at CIBC World Markets Tower, World Financial Center, Xxx Xxxx, Xxx Xxxx
00000, at 10:00 a.m., New York City time, on the third business day following
the date of this Agreement, or at such time on such other date, not later than
10 business days after the date of this Agreement, as shall be agreed upon by
the Company and the Representatives (such time and date of delivery and payment
are called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is exercised,
delivery by the Company of the Option Shares to the Representatives for the
respective accounts of the Underwriters and payment of the purchase price by
certified or official bank check or checks payable in New York Clearing House
(same day) funds to the Company shall take place at the offices of CIBC World
Markets Corp. specified above at the time and on the date (which may be the same
date as, but in no event shall be earlier than, the Firm Shares Closing Date)
specified in the notice referred to in Section 1(b) (such time and date of
delivery and payment are called the "Option Shares Closing Date"). The Firm
Shares Closing Date and the Option Shares Closing Date are called, individually,
a "Closing Date" and, together, the "Closing Dates."
2.
3
Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as the Representatives shall request at least two
full business days before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the option as described in Section
l(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, on the full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING. The Company
has prepared and filed in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the published rules and
regulations thereunder (the "Rules") adopted by the Securities and Exchange
Commission (the "Commission") a Registration Statement (as hereinafter defined)
on Form S-1 (No. 333-78495), including a preliminary prospectus relating to the
Shares, and such amendments thereof as may have been required to the date of
this Agreement. Copies of such Registration Statement (including all amendments
thereof) and of the related Preliminary Prospectus (as hereinafter defined) have
heretofore been delivered by the Company to you. The term "Preliminary
Prospectus" means any preliminary prospectus (as described in Rule 430 of the
Rules) included at any time as a part of the Registration Statement or filed
with the Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules. The term "Registration Statement" as used
in this Agreement means the initial registration statement (including all
exhibits and financial schedules), as amended at the time and on the date it
becomes effective (the "Effective Date") and as thereafter amended by post
effective amendments. If the Company has filed an abbreviated registration
statement to register additional Shares pursuant to Rule 462(b) under the Rules
(the "462(b) Registration Statement") then any reference herein to the
Registration Statement shall also be deemed to include such 462(b) Registration
Statement. The term "Prospectus" as used in this Agreement means the prospectus
in the form included in the Registration Statement at the time of effectiveness
or, if Rule 430A of the Rules is relied on, the term Prospectus shall also
include the final prospectus filed with the Commission pursuant to Rule 424(b)
of the Rules.
The Company and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Shares, as set forth in
and pursuant to the Prospectus, as soon after the Effective Date and the date of
this Agreement as the Representatives deem advisable. The Company and the
Selling Shareholders hereby confirm that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each Preliminary Prospectus
and are authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement complied,
and on the date of the Prospectus, the date any post-effective amendment to the
Registration Statement becomes effective, the date any supplement or amendment
to the Prospectus is filed with the Commission and each Closing Date, the
Registration Statement and the Prospectus (and any amendment thereof or
supplement thereto) will comply, in all material respects, with the applicable
provisions of the Securities Act and the Rules and the Securities Exchange Act
of
3.
4
1934, as amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder. The Registration Statement did not, as of the Effective
Date, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and on the other dates referred to above
neither the Registration Statement nor the Prospectus, nor any amendment thereof
or supplement thereto, will contain any untrue statement of a material fact or
will omit to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading. When any related
preliminary prospectus was first filed with the Commission (whether filed as
part of the Registration Statement or any amendment thereto or pursuant to Rule
424(a) of the Rules) and when any amendment thereof or supplement thereto was
first filed with the Commission, such preliminary prospectus as amended or
supplemented complied in all material respects with the applicable provisions of
the Securities Act and the Rules and did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading.
Notwithstanding the foregoing, none of the representations and warranties in
this paragraph 4(a) shall apply to statements in, or omissions from, the
Registration Statement or the Prospectus made in reliance upon, and in
conformity with, information herein or otherwise furnished in writing by the
Representatives on behalf of the several Underwriters for use in the
Registration Statement or the Prospectus. With respect to the preceding
sentence, the Company acknowledges that the only information furnished in
writing by the Representatives on behalf of the several Underwriters for use in
the Registration Statement or the Prospectus is the paragraph with respect to
stabilization on the inside front cover page of the Prospectus and the
statements contained under the caption "Underwriting" in the Prospectus.
(b) The Registration Statement is effective under the Securities
Act and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the Prospectus has
been issued and no proceedings for that purpose have been instituted or are
threatened under the Securities Act; any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the Rules has been or will be
made in the manner and within the time period required by such Rule 424(b).
(c) The financial statements of the Company (including all notes
and schedules thereto) included in the Registration Statement and Prospectus
present fairly the financial position, the results of operations, the statements
of cash flows and the statements of shareholders' equity and the other
information purported to be shown therein of the Company at the respective dates
and for the respective periods to which they apply; and such financial
statements and related schedules and notes have been prepared in conformity with
generally accepted accounting principles, consistently applied throughout the
periods involved, and all adjustments necessary for a fair presentation of the
results for such periods have been made. The summary and selected financial data
included in the Prospectus present fairly the information shown therein as at
the respective dates and for the respective periods specified and the summary
and selected financial data have been presented on a basis consistent with the
consolidated financial statements so set forth in the Prospectus and other
financial information. No other financial statements or supporting schedules are
required to be included in the Registration Statement. The financial data set
forth in the Prospectus under the captions "Prospectus Summary Financial Data,"
"Selected Financial Data," "Management's Discussion and Analysis of Financial
Conditions and Results of Operations" and "Capitalization" fairly present the
4.
5
information set forth therein on a basis consistent with that of the audited
financial statements contained in the Registration Statement.
(d) PricewaterhouseCoopers LLP whose reports are filed with the
Commission as a part of the Registration Statement, are and, during the periods
covered by their reports, were independent public accountants as required by the
Securities Act and the Rules.
(e) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Washington. The Company has
no subsidiary or subsidiaries and does not control, directly or indirectly, any
corporation, partnership, joint venture, association or other business
organization. The Company is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
the business conducted by it or location of the assets or properties owned,
leased or licensed by it requires such qualification, except for such
jurisdictions where the failure to so qualify would not have a material adverse
effect on the assets or properties, business, results of operations or financial
condition of the Company (a "Material Adverse Effect"). The Company has all
requisite corporate power and authority, and all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits of and from all
governmental or regulatory bodies or any other person or entity (collectively,
the "Permits"), to own, lease and license its assets and properties and conduct
its business, all of which are valid and in full force and effect, as described
in the Registration Statement and the Prospectus, except where the lack of such
Permits would not have a Material Adverse Effect; the Company has fulfilled and
performed in all material respects all its material obligations with respect to
such Permits and no event has occurred that allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the Company thereunder. Except as may be
required under the Securities Act and state and foreign Blue Sky laws, no other
Permits are required to enter into, deliver and perform this Agreement and to
issue and sell the Shares (including registration of the Shares under the
Securities Act, listing of the shares on the National Association of Securities
Dealers Automated Quotation ("Nasdaq") National Market System and such Permits
as may be required).
(f) The Company owns or possesses adequate and enforceable rights
to use all trademarks, trademark applications, trade names, service marks,
copyrights, copyright applications, licenses, know-how and other similar rights
and proprietary knowledge (collectively, "Intangibles") described in the
Prospectus as being owned by it and necessary for the conduct of its business.
The Company has not received any notice of, or is not aware of, any infringement
of or conflict with asserted rights of others with respect to any Intangibles,
except as described in the Prospectus.
(g) The Company has good and marketable title in fee simple to
all items of real property and good and marketable title to all personal
property described in the Prospectuses as being owned by it and any real
property and buildings described in the Prospectuses as being held under lease
by the Company is held by it under valid, existing and enforceable leases, free
and clear of all liens, encumbrances, claims, security interests and defects,
except such as are described in the Registration Statement and the Prospectus or
would not have a Material Adverse Effect.
5.
6
(h) There are no litigation or governmental proceedings to which
the Company is subject or which is pending or, to the knowledge of the Company,
threatened, against the Company, which might have a Material Adverse Effect,
affect the consummation of this Agreement or which is required to be disclosed
in the Registration Statement and the Prospectus that is not so disclosed.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
therein, (a) there has not been any material adverse change with regard to the
assets or properties, business, results of operations or financial condition of
the Company; (b) the Company has not sustained any loss or interference with its
assets, businesses or properties (whether owned or leased) from fire, explosion,
earthquake, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental action,
order or decree which would have a Material Adverse Effect; and (c) since the
date of the latest balance sheet included in the Registration Statement and the
Prospectus, except as described or reflected therein, the Company has not (i)
issued any securities or incurred any liability or obligation, direct or
contingent, for borrowed money, except such liabilities or obligations incurred
in the ordinary course of business, (ii) entered into any transaction not in the
ordinary course of business or (iii) declared or paid any dividend or made any
distribution on any shares of its stock or redeemed, purchased or otherwise
acquired or agreed to redeem, purchase or otherwise acquire any shares of its
stock.
(j) There is no document, contract or other agreement of a
character required to be described in the Registration Statement or Prospectus
or to be filed as an exhibit to the Registration Statement which is not
described or filed as required by the Securities Act or Rules. Each description
of a contract, document or other agreement in the Registration Statement and the
Prospectus accurately reflects in all material respects the terms of the
underlying document, contract or agreement. Each agreement described in the
Registration Statement and Prospectus or listed in the Exhibits to the
Registration Statement is in full force and effect and is valid and enforceable
by and against the Company in accordance with its terms. Neither the Company
nor, to the Company's knowledge, any other party is in default in the observance
or performance of any term or obligation to be performed by it under any such
agreement, and no event has occurred which with notice or lapse of time or both
would constitute such a default, in any such case which default or event would
have a Material Adverse Effect. No default exists, and no event has occurred
which with notice or lapse of time or both would constitute a default, in the
due performance and observance of any term, covenant or condition, by the
Company of any other agreement or instrument to which the Company is a party or
by which it or its properties or business may be bound or affected which default
or event would have a Material Adverse Effect.
(k) The Company is not in violation of any term or provision of
its charter or by-laws or of any franchise, license, permit, judgment, decree,
order, statute, rule or regulation, where the consequences of such violation
would have a Material Adverse Effect.
(l) Neither the execution, delivery and performance of this
Agreement nor the consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the Company of the
Shares) will give rise to a right to terminate or accelerate the due date of any
payment due under, or conflict with or result in the breach of any
6.
7
term or provision of, or constitute a default (or an event which with notice or
lapse of time or both would constitute a default) under, or require any consent
or waiver under, or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company pursuant to the terms
of, any indenture, mortgage, deed of trust or other agreement or instrument to
which the Company is a party or by which it or any of its properties or
businesses is bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation applicable to the Company or violate any provision
of the charter or by-laws of the Company, except for such consents or waivers
which have already been obtained and are in full force and effect.
(m) The Company has authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus. The certificates
evidencing the Shares are in due and proper legal form and have been duly
authorized for issuance by the Company. All of the issued and outstanding shares
of Common Stock have been duly and validly issued and are fully paid and
nonassessable. There are no statutory preemptive or other similar rights to
subscribe for or to purchase or acquire any shares of Common Stock of the
Company or any such rights pursuant to its Articles of Incorporation or by-laws
or any agreement or instrument to or by which the Company is a party or bound.
The Shares, when issued and sold pursuant to this Agreement will be duly and
validly issued, fully paid and nonassessable and none of them will be issued in
violation of any preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and there is no commitment,
plan or arrangement to issue, any share of stock of the Company or any security
convertible into, or exercisable or exchangeable for, such stock. The Common
Stock and the Shares conform in all material respects to all statements in
relation thereto contained in the Registration Statement and the Prospectus.
(n) Except as described in the Prospectus, no holder of any
security of the Company has the right to have any security owned by such holder
included in the Registration Statement or to demand registration of any security
owned by such holder during the period ending 180 days after the date of this
Agreement. Except as agreed to by CIBC World Markets Corp., each shareholder,
director and executive officer of the Company has delivered to the
Representatives his enforceable written lock-up agreement in the form attached
to this Agreement ("Lock-Up Agreement").
(o) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares by the Company. This
Agreement has been duly and validly authorized, executed and delivered by the
Company and constitute and will constitute legal, valid and binding obligations
of the Company enforceable against the Company in accordance with their
respective terms, except (i) as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles and (ii) to the extent that rights to indemnity or
contribution under this Agreement may be limited by Federal and state securities
laws or the public policy underlying such laws.
(p) The Company is not involved in any labor dispute nor, to the
knowledge of the Company, is any such dispute threatened, which dispute would
have a Material Adverse
7.
8
Effect. The Company is not aware of any existing or imminent labor disturbance
by the employees of any of its principal suppliers or contractors which would
have a Material Adverse Effect. The Company is not aware of any threatened or
pending litigation between the Company and any of its executive officers which,
if adversely determined, could have a Material Adverse Effect and has no reason
to believe that such officers will not remain in the employment of the Company.
(q) No transaction has occurred between or among the Company and
any of its officers or directors or five percent shareholders or any affiliate
or affiliates of any such officer or director or five percent shareholders that
is required to be described in and is not described in the Registration
Statement and the Prospectus.
(r) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of any of the Shares.
(s) The Company has filed all Federal, state, local and foreign
tax returns which are required to be filed through the date hereof, or has
received extensions thereof, and has paid all taxes shown on such returns and
all assessments received by it to the extent that the same are material and have
become due, and there are no tax audits or investigations pending, which if
adversely determined would have a Material Adverse Effect; nor, to the knowledge
of the Company, are there any material proposed additional tax assessments
against the Company.
(t) The Shares have been duly authorized for quotation on the
Nasdaq National Market System, subject to official Notice of Issuance, and a
registration statement has been filed on Form 8-A pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which
registration statement complies in all material respects with the Exchange Act.
(u) The Company has complied with all of the requirements and
filed the required forms as specified in Florida Statutes Section 517.075.
(v) The books, records and accounts of the Company accurately and
fairly reflect, in reasonable detail, the transactions in, and dispositions of,
the assets of, and the results of operations of, the Company. The Company
maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(w) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the businesses in which it is engaged or propose to engage after
giving effect to the transactions described in the
8.
9
Prospectus; and the Company has no reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect. The
Company has not been denied any insurance coverage which it has sought or for
which it has applied.
(x) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated required to be obtained or performed by the Company (except such
additional steps as may be required by the National Association of Securities
Dealers, Inc. (the "NASD") or may be necessary to qualify the Shares for public
offering by the Underwriters under the state securities or Blue Sky laws) has
been obtained or made and is in full force and effect.
(y) There are no affiliations with the NASD among the Company's
officers, directors or, to the best of the knowledge of the Company, any five
percent or greater shareholder of the Company, except as set forth in the
Registration Statement or otherwise disclosed in writing to the Representatives
of the Underwriters.
(z) (i) The Company is in compliance in all material respects
with all rules, laws and regulation relating to the use, treatment, storage and
disposal of toxic substances and protection of health or the environment
("Environmental Law") which are applicable to its business; (ii) the Company has
not received any notice from any governmental authority or third party of an
asserted claim under Environmental Laws; (iii) the Company has received all
permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and is in compliance with all terms
and conditions of any such permit, license or approval; (iv) to the Company's
knowledge, no facts currently exist that will require the Company to make future
material capital expenditures to comply with Environmental Laws; and (v) no
property which is or has been owned, leased or occupied by the Company has been
designated as a Superfund site pursuant to the Comprehensive Environmental
Response, Compensation of Liability Act of 1980, as amended (42 U.S.C. Section
9601, et. seq.) or otherwise designated as a contaminated site under applicable
state or local law.
(aa) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of proceeds thereof as described in
the Prospectus, will not be an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(bb) The Company or any other person associated with or acting on
behalf of the Company including, without limitation, any director, officer,
agent or employee of the Company has, to the Company's knowledge, directly or
indirectly, while acting on behalf of the Company (i) used any corporate funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other
unlawful payment.
9.
10
(cc) There are no issues of a material nature related to the
Company's preparedness for the Year 2000 that (i) are of a character required to
be described or referred to in the Registration Statement or Prospectus by the
Securities Act which have not been accurately described in the Registration
Statement or Prospectus or (ii) might reasonably be expected to result in any
Material Adverse Effect or that might materially affect their properties, assets
or rights. All internal computer systems and each Constituent Component (as
defined below) of those systems and all computer-related products and each
Constituent Component (as defined below) of those products of the Company fully
comply with Year 2000 Qualification Requirements. "Year 2000 Qualifications
Requirements" means that the internal computer systems and each Constituent
Component (as defined below) of those systems and all computer-related products
and each Constituent Component (as defined below) of those products of the
Company (i) have been reviewed to confirm that they store, process (including
sorting and performing mathematical operations, calculations and computations),
input and output data containing date and information correctly regardless of
whether the date contains dates and times before, on or after January 1, 2000,
(ii) have been designated to ensure date and time entry recognition and
calculations, and date data interface values that reflect the century, (iii)
accurately manage and manipulate data involving dates and times, including
single century formulas and multi-century formulas, and will not cause an
abnormal ending scenario within the application or generate incorrect values or
invalid results involving such dates, (iv) accurately process any date rollover,
and (v) accept and respond to two-digit year date input in a manner that
resolves any ambiguities as to the century. "Constituent Component" means all
software (including operating systems, programs, packages and utilities),
firmware, hardware, networking components, and peripherals provided as part of
the configuration. The Company has inquired of material vendors as to their
preparedness for the Year 2000 and has disclosed in the Registration Statement
or Prospectus any issues that might reasonably be expected to result in any
Material Adverse Effect.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. Each of
the Selling Shareholders hereby represents and warrants, severally and not
jointly, to each Underwriter as follows:
(a) The Selling Shareholder has caused certificates for the
number of Shares to be sold by such Selling Shareholder hereunder to be
delivered to _______________ (the "Custodian"), endorsed in blank or with blank
stock powers duly executed, with a signature appropriately guaranteed, such
certificates to be held in custody by the Custodian for delivery, pursuant to
the provisions of this Agreement and an agreement dated ____________, 1999
between the Custodian and the Selling Shareholder (the "Custody Agreement").
(b) The Selling Shareholder has granted an irrevocable power of
attorney (the "Power of Attorney") to the person named therein, on behalf of the
Selling Shareholder, to execute and deliver this Agreement and any other
document necessary or desirable in connection with the transactions contemplated
hereby and to deliver the shares to be sold by the Selling Shareholder pursuant
hereto.
(c) This Agreement, the Custody Agreement, the Power of Attorney
and the Lock-Up Agreement have each been duly authorized, executed and delivered
by or on behalf of the Selling Shareholder and, assuming due authorization,
execution and delivery by the other
10.
11
parties hereto, constitutes the valid and legally binding agreement of the
Selling Shareholder, enforceable against the Selling Shareholder in accordance
with its terms, except (i) as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles and (ii) to the extent that rights to indemnity or
contribution under this Agreement may be limited by Federal and state securities
laws or the public policy underlying such laws.
(d) The execution and delivery by the Selling Shareholder of this
Agreement and the performance by the Selling Shareholder of its obligations
under this Agreement (i) will not contravene any provision of applicable law,
statute, regulation or filing or any agreement or other instrument binding upon
the Selling Shareholder or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Selling Shareholder, (ii)
does not require any consent, approval, authorization or order of or
registration or filing with any court or governmental agency or body having
jurisdiction over it, except (assuming the accuracy of Section 4(x) above) such
as may be required by the securities and Blue Sky laws of the various states and
any actions required by the NASD in connection with the offer and sale of the
Shares which have been or will be effected in accordance with this Agreement,
(iii) does not and will not violate any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to the Selling Shareholder or
(iv) will not result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Selling Shareholder pursuant to
the terms of any agreement or instrument to which the Selling Shareholder is a
party or by which the Selling Shareholder may be bound or to which any of the
property or assets of the Selling Shareholder is subject, except in each case as
would not have a material adverse effect on the Selling Shareholder's ability to
perform his or her obligations hereunder.
(e) The Selling Shareholder has, and on the Firm Shares Closing
Date will have, good and marketable title to the Shares to be sold by the
Selling Shareholder free and clear of any lien, claim, security interest or
other encumbrance, including, without limitation, any restriction on transfer,
except as otherwise described in the Registration Statement and Prospectus.
(f) The Selling Shareholder has, and on the Firm Shares Closing
Date will have, full legal right, power and authorization, and any approval
required by law, to sell, assign, transfer and deliver the Shares to be sold by
the Selling Shareholder in the manner provided by this Agreement.
(g) Upon delivery of and payment for the Shares to be sold by the
Selling Shareholder pursuant to this Agreement, the several Underwriters will
receive good and marketable title to such Shares free and clear of any lien,
claim, security interest or other encumbrance.
(h) All information relating to the Selling Shareholder furnished
in writing by the Selling Shareholder expressly for use in the Registration
Statement is, and on each Closing Date will be, true, correct, and complete, and
does not, and on each Closing Date will not, contain any untrue statement of a
material fact or omit to state any material fact necessary to make such
information not misleading. All information relating to the Selling Shareholder
11.
12
furnished in writing by the Selling Shareholder expressly for use in the
Prospectus is, and on each Closing Date will be, true, correct, and complete,
and does not, and on each Closing Date will not, contain any untrue statement of
a material fact or omit to state any material fact necessary to make such
information not misleading.
(i) The Affiliated Selling Shareholder has reviewed the
Registration Statement and Prospectus and, although the Affiliated Selling
Shareholder has not independently verified the accuracy or completeness of all
the information contained therein, nothing has come to the attention of the
Affiliated Selling Shareholder that would lead the Affiliated Selling
Shareholder to believe that (i) on the Effective Date, the Registration
Statement contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein in order to make the statements
made therein not misleading and (ii) on the Effective Date the Prospectus
contained and, on each Closing Date contains, no untrue statement of a material
fact or omitted or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, misleading.
(j) The sale of Shares by the Selling Shareholder pursuant to
this Agreement is not prompted by the Selling Shareholder's knowledge of any
material information concerning the Company which is not set forth in the
Prospectus.
(k) The Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(l) The Affiliated Selling Shareholder has no actual knowledge
that any representation or warranty of the Company set forth in Section 4 above
is untrue or inaccurate in any material respect.
(m) The representations and warranties of the Selling Shareholder
in the Custody Agreement are and on each Closing Date will be, true and correct.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the Prospectus
shall have been timely filed with the Commission in accordance with Section 7(a)
of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or threatened by the
Commission, and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of the Commission
and the Representatives.
12.
13
(c) The representations and warranties of the Company and the
Selling Shareholders contained in this Agreement and in the certificates
delivered pursuant to Section 6(d) shall be true and correct when made and on
and as of each Closing Date as if made on such date and the Company and the
Selling Shareholders shall have performed all covenants and agreements and
satisfied all the conditions contained in this Agreement required to be
performed or satisfied by them at or before such Closing Date.
(d) The Representatives shall have received on each Closing Date
a certificate, addressed to the Representatives and dated such Closing Date, of
the chief executive or chief operating officer and the chief financial officer
or chief accounting officer of the Company, in their capacities as officers of
the Company, to the effect that (i) the signers of such certificate have
carefully examined the Registration Statement, the Prospectus and this Agreement
and that the representations and warranties of the Company in this Agreement are
true and correct on and as of such Closing Date with the same effect as if made
on such Closing Date and the Company has performed all covenants and agreements
and satisfied all conditions contained in this Agreement required to be
performed or satisfied by it at or prior to such Closing Date, and (ii) no stop
order suspending the effectiveness of the Registration Statement has been issued
and to the best of their knowledge, no proceedings for that purpose have been
instituted or are pending under the Securities Act.
(e) The Representatives shall have received on each Closing Date
a certificate, addressed to the Representatives and dated such Closing Date, of
the Affiliated Selling Shareholder, to the effect that the Affiliated Selling
Shareholder has carefully examined the Registration Statement, the Prospectus
and this Agreement and a certificate, addressed to the Representatives and dated
such Closing Date, of each Selling Shareholder that the representations and
warranties of such Selling Shareholder in this Agreement are true and correct on
and as of such Closing Date with the same effect as if made on such Closing Date
and such Selling Shareholder has performed all covenants and agreements and
satisfied all conditions contained in this Agreement required to be performed or
satisfied by him or her at or prior to such Closing Date.
(f) The Representatives shall have received on the Effective
Date, at the time this Agreement is executed and on each Closing Date a signed
letter from PricewaterhouseCoopers LLP addressed to the Representatives and
dated, respectively, the Effective Date, the date of this Agreement and each
such Closing Date, in form and substance reasonably satisfactory to the
Representatives, confirming that they are independent accountants within the
meaning of the Securities Act and the Rules, that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them and stating in
effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement and the
Prospectus and reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Securities Act and the Rules;
(ii) on the basis of a reading of the amounts included in
the Registration Statement and the Prospectus under the headings "Summary
Financial Information" and "Selected Financial Data," carrying out certain
procedures (but not an examination in
13.
14
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments set
forth in such letter, a reading of the minutes of the meetings of the
shareholders and directors of the Company, and inquiries of certain officials of
the Company who have responsibility for financial and accounting matters of the
Company as to transactions and events subsequent to the date of the latest
audited financial statements, except as disclosed in the Registration Statement
and the Prospectus, nothing came to their attention which caused them to believe
that:
(1) the amounts in "Summary Financial Information,"
and "Selected Financial Data" included in the Registration Statement and the
Prospectus do not agree with the corresponding amounts in the audited and
unaudited financial statements from which such amounts were derived; or
(2) with respect to the Company, there were, at a
specified date not more than five business days prior to the date of the letter,
any increases in the current liabilities and long-term liabilities of the
Company or any decreases in net income or in working capital or the
shareholders' equity in the Company, as compared with the amounts shown on the
Company's audited balance sheet for the fiscal year ended September 30, 1998 and
the six months ended March 31, 1999 included in the Registration Statement; and
(iii) they have performed certain other procedures as may
be permitted under Generally Acceptable Auditing Standards as a result of which
they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company) set
forth in the Registration Statement and the Prospectus and reasonably specified
by the Representatives agrees with the accounting records of the Company.
(iv) based upon the procedures set forth in clauses (ii)
and (iii) above and a reading of the amounts included in the Registration
Statement under the headings "Summary Financial and Other Data" and "Selected
Financial Data" included in the Registration Statement and Prospectus and a
reading of the financial statements from which certain of such data were
derived, nothing has come to their attention that gives them reason to believe
that the "Summary Financial and Other Data" and "Selected Financial Data"
included in the Registration Statement and Prospectus do not comply as to the
form in all material respects with the applicable accounting requirements of the
Securities Act and the Rules or that the information set forth therein is not
fairly stated in relation to the financial statements included in the
Registration Statement or Prospectus from which certain of such data were
derived are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial
statements included in the Registration Statement and Prospectus.
References to the Registration Statement and the Prospectus in this
paragraph (f) are to such documents as amended and supplemented at the date of
the letter.
(g) The Representatives shall have received on each Closing Date
from Xxxx Xxxxxx Xxxxxx Lubersky LLP counsel for the Company, an opinion,
addressed to the Representatives and dated such Closing Date, in the form
attached hereto as Exhibit A and stating in effect that:
14.
15
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Washington. To the best of such counsel's knowledge, the Company has no
subsidiary and does not control, directly or indirectly, any corporation,
partnership, joint venture, association or other business organization. The
Company is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or properties
(owned, leased or licensed) or the nature of its businesses makes such
qualification necessary, except for such jurisdictions where the failure to so
qualify would not have a Material Adverse Effect.
(ii) The Company has all requisite corporate power and
authority to own, lease and license its assets and properties and conduct its
business as now being conducted and as described in the Registration Statement
and the Prospectus and to enter into, deliver and perform this Agreement and to
issue and sell the Shares other than those required under the Securities Act and
state and foreign Blue Sky laws.
(iii) The Company has authorized and issued capital stock
as set forth in the Registration Statement and the Prospectus under the caption
"Capitalization"; the certificates evidencing the Shares are in due and proper
legal form and have been duly authorized for issuance by the Company; all of the
outstanding shares of Common Stock of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable and, to the knowledge
of such counsel, none of them was issued in violation of any preemptive or other
similar right. The Shares when issued and sold pursuant to this Agreement will
be duly and validly issued, outstanding, fully paid and nonassessable and, to
the knowledge of such counsel, none of them will have been issued in violation
of any preemptive or other similar right. To the best of such counsel's
knowledge, except as disclosed in the Registration Statement and the Prospectus,
there are no preemptive rights or any restriction upon the voting or transfer of
any securities of the Company pursuant to the Company's Articles of
Incorporation or bylaws or other governing documents or any other instrument to
which the Company is a party or by which it may be bound. To the best of such
counsel's knowledge, except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other right calling for
the issuance of, and no commitment, plan or arrangement to issue, any share of
stock of the Company or any security convertible into, exercisable for, or
exchangeable for stock of the Company. The Common Stock and the Shares conform
in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(iv) Each of the Lock-Up Agreements executed by the
Company's shareholders, directors and officers has been duly and validly
delivered by such persons and constitutes the legal, valid and binding
obligation of each such person enforceable against each such person in
accordance with its terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
(v) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares. This
Agreement has been duly and validly authorized, executed and delivered by the
Company, and this Agreement constitutes the legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms
except
15.
16
(A) as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles and (B) to the
extent that rights to indemnity or contribution under this Agreement may be
limited by Federal or state securities laws or the public policy underlying such
laws.
(vi) Neither the execution, delivery and performance of
this Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate or accelerate the
due date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or any event which with
notice or lapse of time, or both, would constitute a default) under, or require
consent or waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company pursuant to
the terms of any indenture, mortgage, deed trust, note or other agreement or
instrument of which such counsel is aware and to which the Company is a party or
by which it or any of its properties or businesses is bound, or any franchise,
license, permit, judgment, decree, order, statute, rule or regulation of which
such counsel is aware or violate any provision of the charter or bylaws of the
Company.
(vii) To the best of such counsel's knowledge, no default
exists, and no event has occurred which with notice or lapse of time, or both,
would constitute a default, in the due performance and observance of any term,
covenant or condition by the Company of any indenture, mortgage, deed of trust,
note or any other agreement or instrument to which the Company is a party or by
which it or any of its assets or properties or businesses may be bound or
affected, where the consequences of such default would have a Material Adverse
Effect.
(viii) To the best of such counsel's knowledge, the
Company is not in violation of any term or provision of its charter or by-laws
or any franchise, license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation would have a Material
Adverse Effect.
(ix) No consent, approval, authorization or order of any
court or governmental agency or regulatory body is required for the execution,
delivery or performance of this Agreement by the Company or the consummation of
the transactions contemplated hereby or thereby, except such as have been
obtained under the Securities Act and such as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the several Underwriters.
(x) To the best of such counsel's knowledge, except as
described in the Prospectus, there is no litigation or governmental or other
proceeding or investigation, before any court or before or by any public body or
board pending or threatened against, or involving the assets, properties or
businesses of, the Company which would have a Material Adverse Effect.
(xi) The statements in the Prospectus under the captions
"Description of Capital Stock" and "Shares Eligible for Future Sale" insofar as
such statements constitute a summary of documents referred to therein or matters
of law, are fair summaries in all material
16.
17
respects and accurately present the information called for with respect to such
documents and legal matters. Accurate copies of all material contracts and other
documents required to be filed as exhibits to, or described in, the Registration
Statement have been so filed with the Commission or are fairly described in the
Registration Statement, as the case may be.
(xii) The Registration Statement, all preliminary
prospectuses and the Prospectus and each amendment or supplement thereto (except
for the financial statements and schedules and other financial and statistical
data included therein, as to which such counsel expresses no opinion) comply as
to form in all material respects with the requirements of the Securities Act and
the Rules.
(xiii) The Registration Statement is effective under the
Securities Act, and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are threatened, pending or contemplated. Any required filing
of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time period required
by such Rule 424(b).
(xiv) The Shares have been approved for listing on the
Nasdaq National Market.
(xv) The capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus under
the caption "Description of Capital Stock."
(xvi) The Company is not an "investment company" or an
entity controlled by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of
the State of Washington and the Federal laws of the United States; provided that
such counsel shall state that in their opinion to the Underwriters and they are
justified in relying on such other opinions. Copies of such certificates and
other opinions shall be furnished to the Representatives and counsel for the
Underwriters.
In addition, such counsel shall state that such counsel has participated
in conferences with officers and other representatives of the Company,
representatives of the Representatives and representatives of the independent
certified public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except as expressly
stated in the foregoing opinion), on the basis of the foregoing, no facts have
come to the attention of such counsel which lead such counsel to believe that
the Registration Statement at the time it became effective (except with respect
to the financial statements and notes and schedules thereto and other financial
data, as to which such counsel need express no belief) contained any untrue
statement of a material
17.
18
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the Prospectus
as amended or supplemented (except with respect to the financial statements,
notes and schedules thereto and other financial data, as to which such counsel
need make no statement) on the date thereof contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(h) The Representatives shall have received on each Closing Date
from Seed and Xxxxx LLP, patent counsel for the Company, an opinion, addressed
to the Representatives and dated such Closing Date, in the form of attached as
Exhibit B and stating in effect that:
(i) To the best of such counsel's knowledge, the Company
has not received notice of any claim of infringement of any patent, except as
set forth in the Registration Statement and the Prospectus; and
(ii) Such counsel has reviewed the Registration Statement
and Prospectus, the amendments and supplements thereto, and insofar as they
concern patents, patent rights or patent licenses, such counsel has no reason to
believe that either the Registration Statement or the Prospectus or any
amendment or supplement thereto (including particularly the information in the
Prospectus under the captions "Risk Factors--We Have Limited Protection of Our
Intellectual Property and Proprietary Technology", "--We Are Subject to Risks of
Infringement" and "--We Are Involved in Intellectual Property Disputes and
Cannot Predict the Likelihood or Impact of an Unfavorable Outcome",
"Business--Intellectual Property" and "--Legal Matters") contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements therein not misleading.
In addition, in such opinion, such counsel (i) shall state that they
have represented the Company as to patent matters, are knowledgeable about its
technologies and have discussed such technologies with engineers for the
Company, (ii) may state that insofar as such opinion related to factual matters,
it is based upon certificates by officers of the Company, provided that such
counsel shall state that they believe that both you and they are justified in
relying upon such certificates and (iii) shall state that the Representatives
may rely on the opinions expressed in the letter dated June 22, 1999, and any
supplements thereto, from such counsel to Xxxx Xxxxxx Xxxxxx Lubersky LLP
regarding Analysis of U.S. Patent No. 5,884,033 to Xxxxxx et al., a copy of
which shall be attached to such opinion delivered pursuant to this Section 6(h),
as if such letter had originally been delivered to the Representatives.
(i) The Representatives shall have received on the Firm Shares
Closing Date from Xxxxxxx Coie LLP, counsel for the Selling Shareholders, an
opinion, addressed to the Representatives and dated such Closing Date, in the
form attached hereto as Exhibit C and stating in effect that:
(i) This Agreement has been duly and validly executed and
delivered by or on behalf of the Selling Shareholders.
18.
19
(ii) This Agreement, the Custody Agreement, the Power of
Attorney and the Lock-Up Agreement each constitute the legal, valid and binding
obligation of each Selling Shareholder enforceable against such Selling
Shareholder in accordance with its terms except (A) as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles and (B) to the extent that rights to indemnity
or contribution under this Agreement may be limited by Federal or state
securities laws or the public policy underlying such laws; and each Selling
Shareholder has full legal right and authority to enter into this Agreement and
to sell, transfer and deliver in the manner provided in this Agreement, the
Shares to be sold by such Selling Shareholder hereunder.
(iii) The transfer and sale by each Selling Shareholder of
the Shares to be sold by such Selling Shareholder as contemplated by this
Agreement will not conflict with, result in a breach of, or constitute a default
under any agreement or instrument known to such counsel to which such Selling
Shareholder is a party or by which such Selling Shareholder or any of its
properties may be bound, or any franchise, license, permit, judgment, decree,
order, statute, rule or regulation.
(iv) All of the rights of each Selling Shareholder in the
Shares to be sold by such Selling Shareholder pursuant to this Agreement, have
been transferred to the Underwriters who have severally purchased such Shares
pursuant to this Agreement, free and clear of adverse claims, assuming for
purposes of this opinion that the Underwriters purchased the same in good faith
without notice of any adverse claims.
(v) No consent, approval, authorization, license,
certificate, permit or order of any court, governmental or regulatory agency,
authority or body or financial institution is required in connection with the
performance of this Agreement by the Selling Shareholders or the consummation of
the transactions contemplated hereby, including the delivery and sale of the
Shares to be delivered and sold by the Selling Shareholders, except such as may
be required under state securities or blue sky laws in connection with the
purchase and distribution of the Shares by the several Underwriters.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of the Selling Shareholders and on the opinions
of other counsel satisfactory to the Representatives as to matters which are
governed by laws other than the laws of the States of Washington or the Federal
laws of the United States; provided that such counsel shall state that in their
opinion the Underwriters and they are justified in relying on such other
opinions. Copies of such certificates and other opinions shall be furnished to
the Representatives and counsel for the Underwriters.
(j) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives, and their counsel and
the Underwriters shall have received from Xxxxxx Godward LLP a favorable
opinion, addressed to the Representatives and dated such Closing Date, with
respect to the Shares, the Registration Statement and the Prospectus, and such
other related matters, as the Representatives may reasonably request, and the
Company shall have
19.
20
furnished to Xxxxxx Godward LLP such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
(k) If the Shares have been qualified for sale in Florida, the
Representatives shall have received on each Closing Date certificates, addressed
to the Representatives, and dated such Closing Date, of an executive officer of
the Company, to the effect that the signer of such certificate has reviewed and
understands the provisions of Section 517.075 of the Florida Statutes, and
represents that the Company has complied, and at all times will comply, with all
provisions of Section 517.075 and further, that as of such Closing Date, neither
the Company nor any of its affiliates does business with the government of Cuba
or with any person or affiliate located in Cuba.
(l) The Representatives shall have received copies of the Lock-up
Agreements executed by each entity or person described in Section 4(n).
7. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees as follows:
(i) The Company shall prepare the Prospectus in a form
approved by the Representatives and file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of business on
the second business day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act.
(ii) The Company shall promptly advise the Representatives
in writing (i) when any amendment to the Registration Statement shall have
become effective, (ii) of any request by the Commission for any amendment of the
Registration Statement or the Prospectus or for any additional information,
(iii) of the prevention or suspension of the use of any preliminary prospectus
or the Prospectus or of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company shall not file any amendment of the
Registration Statement or supplement to the Prospectus unless the Company has
furnished the Representatives a copy for its review prior to filing and shall
not file any such proposed amendment or supplement to which the Representatives
reasonably object. The Company shall use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as possible
the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the
Shares is required to be delivered under the Securities Act and the Rules, any
event occurs as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall be
necessary to amend or supplement the Prospectus to comply with the Securities
Act or the Rules, the Company promptly shall prepare and file with the
Commission, subject to the second sentence of
20.
21
paragraph (ii) of this Section 7(a), an amendment or supplement which shall
correct such statement or omission or an amendment which shall effect such
compliance.
(iv) The Company shall make generally available to its
security holders and to the Representatives as soon as practicable, but not
later than 45 days after the end of the 12-month period beginning at the end of
the fiscal quarter of the Company during which the Effective Date occurs (or 90
days if such 12-month period coincides with the Company's fiscal year), an
earnings statement (which need not be audited) of the Company, covering such
12-month period, which shall satisfy the provisions of Section 11(a) of the
Securities Act or Rule 158 of the Rules.
(v) The Company shall furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof) and to each
other Underwriter a copy of the Registration Statement (without exhibits
thereto) and all amendments thereof and, so long as delivery of a prospectus by
an Underwriter or dealer may be required by the Securities Act or the Rules, as
many copies of any preliminary prospectus and the Prospectus and any amendments
thereof and supplements thereto as the Representatives may reasonably request.
(vi) The Company shall cooperate with the Representatives
and their counsel in endeavoring to qualify the Shares for offer and sale in
connection with the offering under the laws of such jurisdictions as the
Representatives may designate and shall maintain such qualifications in effect
so long as required for the distribution of the Shares; provided, however, that
the Company shall not be required in connection therewith, as a condition
thereof, to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself to taxation as doing
business in any jurisdiction.
(vii) For a period of five years after the date of this
Agreement, the Company shall supply to the Representatives, and to each other
Underwriter who may so request in writing, 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 to
furnish to the Representatives a copy of each annual or other report it shall be
required to file with the Commission.
(viii) Without the prior written consent of CIBC World
Markets Corp., for a period of 180 days after the date of this Agreement, the
Company and each of its individual directors and executive officers shall not
issue, sell or register with the Commission (other than on Form S-8 or on any
successor form), or otherwise dispose of, directly or indirectly, any equity
securities of the Company (or any securities convertible into, exercisable for
or exchangeable for equity securities of the Company), except for the issuance
of the Shares pursuant to the Registration Statement and the issuance of shares
pursuant to the Company's existing stock option plan or bonus plan as described
in the Registration Statement and the Prospectus. In the event that during this
period, (i) any shares are issued pursuant to the Company's existing stock
option plan or bonus plan that are exercisable during such 180 day period or
(ii) any registration is effected on Form S-8 or on any successor form relating
to shares that are exercisable during such 180 period, the Company shall obtain
the written agreement of such grantee or purchaser or holder of such registered
securities that, for a period of 180 days after the date of this Agreement,
21.
22
such person will not, without the prior written consent of CIBC World Markets
Corp., offer for sale, sell, distribute, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, or exercise any registration
rights with respect to, any shares of Common Stock (or any securities
convertible into, exercisable for, or exchangeable for any shares of Common
Stock) owned by such person.
(ix) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws and by the
Nasdaq National Market (including any required registration under the Exchange
Act).
(x) The Company shall file timely and accurate reports in
accordance with the provisions of Florida Statutes Section 517.05, or any
successor provision, and any regulation promulgated thereunder, if at any time
after the Effective Date, the Company or any of its affiliates commences
engaging in business with the government of Cuba or any person or affiliate
located in Cuba.
(xi) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of Proceeds" in the
Prospectus.
(xii) If at any time during the 25-day period after the
Registration Statement becomes effective any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in your
opinion the market price for the Shares has been or is likely to be materially
affected (regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you, responding to
or commenting on such rumor, publication or event.
(xiii) The Company is familiar with the Investment Company
Act of 1940, as amended, and has in the past conducted its affairs, and does not
intend in the future to conduct its affairs, in such a manner to ensure that the
Company was not and will not be an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the obligations of the
Company under this Agreement including those relating to: (i) the preparation,
printing, filing and distribution of the Registration Statement including all
exhibits thereto, each preliminary prospectus, the Prospectus, all amendments
and supplements to the Registration Statement and the Prospectus, and the
printing, filing and distribution of this Agreement; (ii) the preparation and
delivery of certificates for the Shares to the Underwriters; (iii) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred to in Section
7(a)(vi), including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such registration and
22.
23
qualification and the preparation, printing, distribution and shipment of
preliminary and supplementary Blue Sky memoranda; (iv) the furnishing (including
costs of shipping and mailing) to the Representatives and to the Underwriters of
copies of each preliminary prospectus, the Prospectus and all amendments or
supplements to the Prospectus, and of the several documents required by this
Section to be so furnished, as may be reasonably requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold; (v) the filing fees of the NASD in connection with its
review of the terms of the public offering and reasonable fees and disbursements
of counsel for the Underwriters in connection with such review; (vi) the
furnishing (including costs of shipping and mailing) to the Representatives and
to the Underwriters of copies of all reports and information required by Section
7(a)(vii); (vii) inclusion of the Shares for quotation on the Nasdaq National
Market; and (viii) all transfer taxes, if any, with respect to the sale and
delivery of the Shares by the Company to the Underwriters. Subject to the
provisions of Section 10, the Underwriters agree to pay, whether or not the
transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the performance of the
obligations of the Underwriters under this Agreement not payable by the Company
pursuant to the preceding sentence, including, without limitation, the fees and
disbursements of counsel for the Underwriters.
(c) The Selling Shareholders will pay any transfer taxes incident
to the transfer to the Underwriters of the Shares being sold by the Selling
Shareholders.
8. INDEMNIFICATION.
(a) The Company and the Selling Shareholders agree, jointly and
severally, to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities, joint or several (including any
reasonable investigation, legal and other expenses incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other Federal or state law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment thereof or supplement
thereto, or arise out of or are based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) in whole or in part upon any breach
of the representations and warranties set forth in Section 4 hereof, or (iii) in
whole or in part upon any failure of the Company to perform any of its
obligations hereunder or under law; provided, however, that such indemnity shall
not inure to the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities arising
from the sale of the Shares to any person by such Underwriter if such untrue
statement or omission or alleged untrue statement or omission was made in such
preliminary prospectus, the Registration Statement or the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with information
furnished in writing to the Company by the Representatives on behalf of any
Underwriter specifically for use therein. Notwithstanding the foregoing, the
liability of each Selling Shareholders pursuant to the
23.
24
provisions of Section 8(a) shall be limited to an amount equal to the aggregate
net proceeds received by such Selling Shareholder from the sale of the Shares
sold by such Selling Shareholder hereunder. This indemnity agreement will be in
addition to any liability which the Company and the Selling Shareholders may
otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Shareholders and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each director of the Company,
and each officer of the Company who signs the Registration Statement, to the
same extent as the foregoing indemnity from the Company and the Selling
Shareholders to each Underwriter, but only insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in any
preliminary prospectus, the Registration Statement or the Prospectus, or any
amendment thereof or supplement thereto, contained in the last paragraph of the
cover page, in the paragraph relating to stabilization on the inside front cover
page of the Prospectus and the statements contained under the caption
"Underwriting" in the Prospectus; provided, however, that the obligation of each
Underwriter to indemnify the Company or the Selling Shareholders (including any
controlling person, director or officer thereof) shall be limited to the net
proceeds received by the Company from such Underwriter. This indemnity agreement
will be in addition to any liability the Underwriters may otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section, notify each
such indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served. No indemnification provided for in
Section 8(a) or 8(b) shall be available to any party who shall fail to give
notice as provided in this Section 8(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice but the omission so to notify
such indemnifying party of any such action, suit or proceeding shall not relieve
it from any liability that it may have to any indemnified party for contribution
or otherwise than under this Section. In case any such action, suit or
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and the approval by the indemnified
party of such counsel, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses, except as provided below and
except for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The indemnified party
shall have the right to employ its counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party has been
authorized in writing by the indemnifying parties, (ii) the indemnified party
shall have reasonably concluded that there may be a conflict of interest between
the indemnifying parties and the indemnified party in the conduct of the defense
of such action (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the
24.
25
indemnified party) or (iii) the indemnifying parties shall not have employed
counsel to assume the defense of such action within a reasonable time after
notice of the commencement thereof, in each of which cases the fees and expenses
of counsel shall be at the expense of the indemnifying parties. An indemnifying
party shall not be liable for any settlement of any action, suit, proceeding or
claim effected without its written consent, which consent shall not be
unreasonably withheld or delayed.
9. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Section 8(a) or
8(b) is due in accordance with its terms but for any reason is held to be
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or 8(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Shareholders on
the one hand and the Underwriters on the other from the offering of the Shares
or, if such allocation is not permitted by applicable law or indemnification is
not available as a result of the indemnifying party not having received notice
as provided in Section 8 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and the Selling Shareholders on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Selling Shareholders and the Underwriters shall be deemed to be in the same
proportion as (x) the total proceeds from the offering (net of underwriting
discounts but before deducting expenses) received by the Company or the Selling
Shareholders, as set forth in the table on the cover page of the Prospectus,
bear to (y) the underwriting discounts received by the Underwriters, as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company and the Selling Shareholders or the Underwriters shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact related to information supplied by the Company and
the Selling Shareholders or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section 9, (i) in no
case shall any Underwriter (except as may be provided in the Agreement Among
Underwriters) be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder; (ii) the Company shall be liable and responsible for any amount in
excess of such underwriting discount; and (iii) in no case shall any Selling
Shareholder be liable and responsible for any amount in excess of the aggregate
net proceeds of the sale of Shares received by such Selling Shareholder;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each person, if any,
25.
26
who controls an Underwriter within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each person, if any, who controls the
Company or a Selling Shareholder within the meaning of the Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to clauses (i), (ii) and (iii) in the immediately preceding sentence
of this Section 9. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section, notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
from whom contribution may be sought shall not relieve the party or parties from
whom contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriter's obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
10. TERMINATION. This Agreement may be terminated with respect to the
Shares to be purchased on a Closing Date by the Representatives by notifying the
Company and the Selling Shareholders at any time
(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in the
opinion of the Representatives will in the future materially disrupt, the
securities markets; (ii) if there has occurred any new outbreak or material
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the Representatives, inadvisable to proceed with the offering; (iii) if there
shall be such a material adverse change in general financial, political or
economic conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of the
Representatives, inadvisable or impracticable to market the Shares; (iv) if
trading in the Shares has been suspended by the Commission or trading generally
on the New York Stock Exchange, Inc., on the American Stock Exchange, Inc. or
the Nasdaq National Market has been suspended or limited, or minimum or maximum
ranges for prices for securities shall have been fixed, or maximum ranges for
prices for securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or any other
governmental or regulatory authority; or (v) if a banking moratorium has been
declared by any state or Federal authority; or (vi) if, in the judgment of the
Representatives, there has occurred a Material Adverse Effect, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 6 shall not have been fulfilled when and as required by
this Agreement.
If this Agreement is terminated pursuant to any of its provisions,
neither the Company nor the Selling Shareholders shall be under any liability to
any Underwriter, and no Underwriter shall be under any liability to the Company,
except that (y) if this Agreement is terminated by the Representatives or the
Underwriters because of any failure, refusal or inability on the part of the
Company or the Selling Shareholders to comply with the terms or to fulfill any
of the conditions
26.
27
of this Agreement, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including the reasonable fees and disbursements of their
counsel) incurred by them in connection with the proposed purchase and sale of
the Shares or in contemplation of performing their obligations hereunder and (z)
no Underwriter who shall have failed or refused to purchase the Shares agreed to
be purchased by it under this Agreement, without some reason sufficient
hereunder to justify cancellation or termination of its obligations under this
Agreement, shall be relieved of liability to the Company, the Selling
Shareholders or to the other Underwriters for damages occasioned by its failure
or refusal.
11. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 10) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then each of
the nondefaulting Underwriters shall be obligated to purchase such Shares on the
terms herein set forth in proportion to their respective obligations hereunder;
provided, that in no event shall the maximum number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 11 by more than one-ninth of such number of Shares without the
written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, then the Company
shall be entitled to one additional business day within which it may, but is not
obligated to, find one or more substitute underwriters reasonably satisfactory
to the Representatives to purchase such Shares upon the terms set forth in this
Agreement.
In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company or the Selling
Shareholders and without liability on the part of the Company, except in both
cases as provided in Sections 7(b), 8, 9 and 10. The provisions of this Section
shall not in any way affect the liability of any
27.
28
defaulting Underwriter to the Company, the Selling Shareholders or the
nondefaulting Underwriters arising out of such default. A substitute underwriter
hereunder shall become an Underwriter for all purposes of this Agreement.
12. MISCELLANEOUS. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers, of
the Selling Shareholders and of the Underwriters set forth in or made pursuant
to this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or the
Selling Shareholders or any of the officers, directors or controlling persons
referred to in Sections 8 and 9 hereof, and shall survive delivery of and
payment for the Shares. The provisions of Sections 7(b), 8, 9 and 10 shall
survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters,
the Company and the Selling Shareholders and their respective successors and
assigns, and, to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters, or the Company, and directors and officers
of the Company, and their respective successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser of Shares from any
Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed
or delivered or by telephone or telegraph if subsequently confirmed in writing,
(a) if to the Representatives, c/o CIBC World Markets Corp., CIBC World Markets
Tower, World Financial Center, New York, New York 10281 Attention: Xxxxxxxx
Xxxxxxx, Esq., with a copy to Xxxxxxx Xxxxxx, Esq., Codley Goodward LLP, 0000
Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000-0000 and (b) if to the Company, to
its agent for service as such agent's address appears on the cover page of the
Registration Statement with a copy to Xxxxxxx X. Xxxxxx, Esq., Xxxx Xxxxxx
Spears Lubersky LLP, 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx
00000-0000 and (c) if to the Selling Shareholders to Xxxx X. Xxxxxx, 00000
Xxxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000 with a copy to Xxxxxxx
Xxxxxx, Esq., Xxxxxxx Coie LLP, 0000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx,
Xxxxxxxxxx 00000-0000.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
28.
29
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
ISSUER
By:
----------------------------------------
Title:
AFFILIATED SELLING SHAREHOLDER
By:
----------------------------------------
Xxxx Xxxxxx
SELLING SHAREHOLDER
By:
----------------------------------------
Title: Attorney In Fact
Confirmed:
CIBC WORLD MARKETS CORP.
----------------------------------------
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed hereto.
By CIBC WORLD MARKETS CORP.
By:
-------------------------------------
Title:
29.
30
SCHEDULE I
UNDERWRITERS
NUMBER OF FIRM
SHARES TO BE
NAME AND ADDRESS PURCHASED
---------------- ---------
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx, Inc.
---------
TOTAL:..............................................
=========
30.
31
SCHEDULE II
SELLING SHAREHOLDERS
NUMBER OF FIRM
SHARES TO BE
NAME AND ADDRESS SOLD
---------------- --------------
Xxxx X. Xxxxxx(1) 28,445
Xxxx X. Xxxxxx 7,310
Xxxx X. Xxxxx 7,310
Xxxx X. Xxxxxxx 3,610
Xxx X. Xxxxxxx 1,845
Xxxxx X. Xxxxxx 1,480
------
TOTAL:............................................................. 50,000
======
--------
(1) Affiliated Selling Shareholder
31.
