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XXX, Inc.
2,200,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
[_____], 2000
PRUDENTIAL SECURITIES INCORPORATED
CIBC WORLD MARKETS CORP.
WIT SOUNDVIEW CORPORATION
ABN AMRO INCORPORATED
PACIFIC CREST INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
XXX, Inc., a Delaware corporation (the "Company") and certain
stockholders of the Company named in Schedule 2 hereto (the "Selling
Securityholders"), hereby confirm their agreement with the several underwriters
named in Schedule I hereto (the "Underwriters"), for whom you have been duly
authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. Securities. Subject to the terms and conditions herein contained, the
Company proposes to issue and sell to the several Underwriters an aggregate of
2,100,000 shares, and the Selling Securityholders propose to sell to the several
Underwriters an aggregate of 100,000 shares (in the specific amounts set forth
opposite each Selling Securityholder's name in Schedule 2), of the Company's
Common Stock, par value $.001 per share ("Common Stock"). The shares set forth
in the preceding sentence to be sold by the Company and the Selling
Securityholders are collectively referred to herein as the "Firm Securities."
The Company also proposes to issue and sell to the several Underwriters not more
than 330,000 additional shares of Common Stock if requested by the
Representatives as provided in Section 3 of this Agreement. Any and all shares
of Common Stock to be purchased by the Underwriters pursuant to such option are
referred to herein as the "Option
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(1) Plus an option to purchase from XXX, Inc. up to 330,000 additional
shares to cover over-allotments.
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Securities," and the Firm Securities and any Option Securities are collectively
referred to herein as the "Securities."
2. Representations and Warranties of the Company and the Selling
Securityholders.
(a) The Company represents and warrants to, and agrees with, each
of the several Underwriters that:
(i) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). A registration
statement on such Form (File No. 333-44704) with respect to the
Securities, including a prospectus subject to completion, has been filed
by the Company with the Securities and Exchange Commission (the
"Commission") under the Act, and one or more amendments to such
registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (i) if
such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (A) if
the Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall identify the
Preliminary Prospectus (as hereinafter defined) that it supplements, and,
if required to be filed pursuant to Rules 434(c)(2) and 424(b), an
Integrated Prospectus (as hereinafter defined), in either case,
containing such information as is required or permitted by Rule 434, 430A
and 424(b) under the Act or (B) if the Company does not rely on Rule 434
under the Act, a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment shall
have been filed, in such registration statement), with such changes or
insertions as are required by Rule 430A under the Act or permitted by
Rule 424(b) under the Act, and in the case of clause (i)(A) or (i)(B) of
this sentence as have been provided to and approved by the
Representatives prior to the execution of this Agreement, or (ii) if such
registration statement, as it may have been amended, has not been
declared by the Commission to be effective under the Act, an amendment to
such registration statement, including a form of prospectus, a copy of
which amendment has been furnished to and approved by the Representatives
prior to the execution of this Agreement. The Company may also file a
related registration statement with the Commission pursuant to Rule
462(b) under the Act for the purpose of registering certain additional
Securities, which registration shall be effective upon filing with the
Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating to
the Securities, as amended at the time when it was or is declared
effective, including (A) all financial schedules and exhibits thereto,
(B) all documents incorporated by reference therein filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and (C)
any information omitted therefrom pursuant to Rule 430A under the Act and
included in the Prospectus (as hereinafter defined) or, if required to be
filed pursuant to Rule 434(c)(2) and 424(b), in the Integrated
Prospectus; the term "Rule 462(b) Registration Statement" means any
registration statement filed with the Commission pursuant to Rule 462(b)
under the Act (including the Registration Statement and any Preliminary
Prospectus or Prospectus incorporated therein at the time such
Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any Rule
462(b) Registration Statement; the term "Preliminary Prospectus" means
each prospectus subject to completion filed with such registration
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statement or any amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement or any
amendment thereto at the time it was or is declared effective), including
all documents incorporated by reference therein filed under the Exchange
Act; the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act,
the Term Sheet relating to the Securities that is first filed
pursuant to Rule 424(b)(7) under the Act, together with the
preliminary Prospectus identified therein that such Term Sheet
supplements:
(B) if the Company does not rely on Rule 434 under
the Act, the prospectus first filed with the Commission pursuant
to Rule 424(b) under the Act; or
(C) if the Company does not rely on Rule 434 under
the Act and if no prospectus is required to be filed pursuant to
Rule 424(b) under the Act, the prospectus included in the
Registration Statement, including, in the case of clauses (A), (B)
or (C) of this sentence, all documents incorporated by reference
therein filed under the Exchange Act; the term "Integrated
Prospectus" means a prospectus first filed with the Commission
pursuant to Rules 434(c)(2) and 424(b) under the Act; and the term
"Term Sheet" means any abbreviated term sheet that satisfies the
requirements of Rule 434 under the Act. Any reference in this
Agreement to an "amendment or supplement" to any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or an
"amendment" to any registration statement (including the
Registration Statement) shall be deemed to include any document
incorporated by reference therein that is filed with the
Commission under the Exchange Act after the date of such
Preliminary Prospectus, Prospectus, Integrated Prospectus or
registration statement, as the case may be; any reference herein
to the "date" of a Prospectus that includes a Term Sheet shall
mean the date of such Term Sheet. For purposes of the preceding
sentence, any reference to the "effective date" of an amendment to
a registration statement shall, if such amendment is effected by
means of the filing with the Commission under the Exchange Act of
a document incorporated by reference in such registration
statement, be deemed to refer to the date on which such document
was so filed with the Commission.
(ii) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus and any amendment or supplement thereto was filed with the
Commission, it (i) contained all statements required to be stated therein
in accordance with, and complied in all material respects with the
requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder, and (ii) did not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared
effective, it (i) contained or will contain all statements required to be
stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act, the Exchange Act and
the respective rules and regulations of the Commission thereunder and
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(ii) did not or will not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein not misleading. When the Prospectus or any Term Sheet that is a
part thereof or any Integrated Prospectus or any amendment or supplement
to the Prospectus is filed with the Commission pursuant to Rule 424(b)
(or, if the Prospectus or part thereof or such amendment or supplement is
not required to be so filed, when the Registration Statement or the
amendment thereto containing such amendment or supplement to the
Prospectus was or is declared effective), on the date when the Prospectus
is otherwise amended or supplemented and on the Firm Closing Date and any
Option Closing Date (both as hereinafter defined), each of the
Prospectus, and, if required to be filed pursuant to Rules 434(c)(2) and
424(b) under the Act, the Integrated Prospectus as amended or
supplemented at any such time, (i) contained or will contain all
statements required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements of, the
Act, the Exchange Act and the respective rules and regulations of the
Commission thereunder and (ii) did not or will not include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (ii) do not apply to statements or omissions
made in any Preliminary Prospectus or any amendment or supplement
thereto, the Registration Statement or any amendment thereto, the
Prospectus or, if required to be filed pursuant to Rules 434(c)(2) and
424(b) and the Act, the Integrated Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(iii) If the Company has elected to rely on Rule 462(b) and
the Rule 462(b) Registration Statement has not been declared effective
(i) the Company has filed a Rule 462(b) Registration Statement in
compliance with and that is effective upon filing pursuant to Rule 462(b)
and has received confirmation of its receipt and (ii) the Company has
given irrevocable instructions for transmission of the applicable filing
fee in connection with the filing of the Rule 462(b) Registration
Statement, in compliance with Rule 111 promulgated under the Act or the
Commission has received payment of such filing fee.
(iv) The Company and each of its subsidiaries have been
duly organized and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation and are
duly qualified to transact business as foreign corporations and are in
good standing under the laws of all other jurisdictions where the
ownership or leasing of their respective properties or the conduct of
their respective businesses requires such qualification, except where the
failure to be so qualified does not amount to a material liability or
disability to the Company and its subsidiaries, taken as a whole.
(v) The Company and each of its subsidiaries have full
power (corporate and other) to own or lease their respective properties
and conduct their respective businesses as described in the Registration
Statement and each of the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus); and the Company has
full power (corporate and
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other) to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it.
(vi) The issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and are owned beneficially by the Company
free and clear of any security interests, liens, encumbrances, equities
or claims.
(vii) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, each of the Prospectus
and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus). All of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. The Firm Securities to be sold by the Company and the
Option Securities have been duly authorized and at the Firm Closing Date
or the related Option Closing Date (as the case may be), after payment
therefor in accordance herewith, will be validly issued, fully paid and
nonassessable. No holders of outstanding shares of capital stock of the
Company are entitled as such to any preemptive or other rights to
subscribe for any of the Securities, and no holder of securities of the
Company has any right which has not been fully exercised or waived to
require the Company to register the offer or sale of any securities owned
by such holder under the Act in the public offering contemplated by this
agreement.
(viii) The capital stock of the Company conforms to the
description thereof contained in the Prospectus or, each of the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus).
(ix) Except as disclosed in the Prospectus or, each of the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus), there are not outstanding (A) securities or
obligations of the Company or any of its subsidiaries convertible into or
exchangeable for any capital stock of the Company or any such subsidiary,
(B) warrants, rights or options to subscribe for or purchase from the
Company or any such subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (C) obligations
of the Company or any such subsidiary to issue any shares of capital
stock, any such convertible or exchangeable securities or obligations, or
any such warrants, rights or options.
(x) The consolidated financial statements and schedules of
the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus or, each of the Prospectus and
any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus) fairly present the financial position of the Company and its
consolidated subsidiaries and the results of operations and changes in
financial condition as of the dates and periods therein specified. Such
financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods
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involved (except as otherwise noted therein). The selected financial data
set forth under the caption "Selected Financial Information" in the
Prospectus or, each of the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus) and in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999,
fairly present, on the basis stated in the each of Prospectus and any
Integrated Prospectus (or such Preliminary Prospectus) and such Annual
Report, the information included therein.
(xi) To the best of our knowledge, PricewaterhouseCoopers
LLP, who has certified certain financial statements of the Company and
its consolidated subsidiaries and delivered its report with respect to
the audited consolidated financial statements and schedules included in
the Registration Statement or each the Prospectus and Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus
are not in existence, the most recent Preliminary Prospectus), are
independent public accountants as required by the Act, the Exchange Act
and the related published rules and regulations thereunder.
(xii) The execution and delivery of this Agreement have
been duly authorized by the Company and this Agreement has been duly
executed and delivered by the Company, and is the valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms.
(xiii) No legal or governmental proceedings are pending to
which the Company or any of its subsidiaries is a party or to which the
property of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus
or, each of the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus), and no such proceedings have
been threatened against the Company or any of its subsidiaries or with
respect to any of their respective properties; and no contract or other
document is required to be described in the Registration Statement or the
Prospectus or any Integrated Prospectus or to be filed as an exhibit to
the Registration Statement that is not described therein (or, if the
Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus) or filed as required.
(xiv) The issuance, offering and sale of the Securities to
the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement and
the consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have
been obtained, such as may be required under state securities or blue sky
laws and, if the registration statement filed with respect to the
Securities (as amended) is not effective under the Act as of the time of
execution hereof, such as may be required (and shall be obtained as
provided in this Agreement) under the Act, or (ii) conflict with or
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, lease
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties are bound, or the
charter documents or by-laws of the Company or any of its subsidiaries,
or
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any statute or any judgment, decree, order, rule or regulation of any
court or other governmental authority or any arbitrator applicable to the
Company or any of its subsidiaries.
(xv) Subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus or any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus),
neither the Company nor any of its subsidiaries has sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding and there has not been any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management,
business prospects, net worth, or results of operations of the Company or
any of its subsidiaries, except in each case as described in or
contemplated by the Prospectus or, each of the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus).
(xvi) The Company has not, directly or indirectly, (i)
taken any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities or (ii) since the
filing of the Registration Statement (A) sold, bid for, purchased, or
paid anyone any compensation for soliciting purchases of, the Securities
or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company
(except for the sale of Securities by the Selling Securityholders under
this Agreement).
(xvii) The Company has not distributed and, prior to the
later of (i) the Closing Date and (ii) the completion of the distribution
of the Securities, will not distribute any offering material in
connection with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
other materials, if any permitted by the Act.
(xviii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), (1) the Company and its subsidiaries have not incurred any
material liability or obligation, direct or contingent, nor entered into
any material transaction not in the ordinary course of business; (2) the
Company has not purchased any of its outstanding capital stock, other
than pursuant to the terms of its stock option plans, nor declared, paid
or otherwise made any dividend or distribution of any kind on its capital
stock; and (3) there has not been any material change in the capital
stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
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(xix) The Company and each of its subsidiaries have good
and marketable title in fee simple to all items of real property and
marketable title to all personal property owned by each of them, in each
case free and clear of any security interests, liens, encumbrances,
equities, claims and other defects, other than as security under credit
and loan agreements, except such as do not materially and adversely
affect the value of such property and do not interfere with the use made
or proposed to be made of such property by the Company or such
subsidiary, and any real property and buildings held under lease by the
Company or any such subsidiary are held under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or such subsidiary, in each case except as
described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(xx) No labor dispute with the employees of the Company or
any of its subsidiaries exists or is threatened or imminent that could
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(xxi) The Company and its subsidiaries own or possess, or
can acquire on reasonable terms, all material patents, patent
applications, trademarks, service marks, trade names, licenses,
copyrights and proprietary or other confidential information currently
employed by them in connection with their respective businesses, and
neither the Company nor any such subsidiary has received any notice of
infringement of or conflict with asserted rights of any third party with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and
its subsidiaries, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(xxii) The Company and each of its subsidiaries are insured
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied for;
and neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that
would not materially and adversely affect the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(xxiii) No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to
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such subsidiary from the Company or from transferring any of such
subsidiary's property or assets to the Company or any other subsidiary of
the Company, except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xxiv) The Company and its subsidiaries possess all
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xxv) The Company will conduct its operations in a manner
that will not subject it to registration as an investment company under
the Investment Company Act of 1940, as amended, and this transaction will
not cause the Company to become an investment company subject to
registration under such Act.
(xxvi) The Company has filed all foreign, federal, state
and local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a material adverse effect on the Company and its
subsidiaries) and has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such assessment,
fine or penalty that is currently being contested in good faith or as
described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(xxvii) Neither the Company nor any of its subsidiaries is
in violation of any federal or state law or regulation relating to
occupational safety and health or to the storage, handling or
transportation of hazardous or toxic materials and the Company and its
subsidiaries have received all permits, licenses or other approvals
required of them under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct their
respective businesses, and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals which would not, singly or in the aggregate, result in a
material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and
its subsidiaries, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
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(xxviii) Each certificate signed by any officer of the
Company and delivered to the Representatives or counsel for the
Underwriters shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
(xxix) Except for the shares of capital stock of each of
the subsidiaries owned by the Company and such subsidiaries, neither the
Company nor any such subsidiary owns any shares of stock or any other
equity securities of any corporation or has any equity interest in any
firm, partnership, association or other entity, except as set forth in
Schedule 3 hereto.
(xxx) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (3) access to assets is permitted only in
accordance with management's general or specific authorization; and (4)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxxi) 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 of any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or any of their
respective properties is bound or may be affected in any material adverse
respect with regard to property, business or operations of the Company
and its subsidiaries.
(b) Each Selling Securityholder severally and not jointly
represents and warrants to, and agrees with, each of the several Underwriters
that:
(i) Such Selling Securityholder has full power (corporate
and other) to enter into this Agreement and to sell, assign, transfer and
deliver to the Underwriters the Securities to be sold by such Selling
Securityholder hereunder in accordance with the terms of this Agreement;
the execution and delivery of this Agreement have been duly authorized by
all necessary corporate action of such Selling Securityholder; and this
Agreement has been duly executed and delivered by such Selling
Securityholder.
(ii) Such Selling Securityholder has duly executed and
delivered a power of attorney and custody agreement (with respect to such
Selling Securityholder, the "Power of Attorney" and the "Custody
Agreement," respectively), each in the form heretofore delivered to the
Representatives, appointing [________] as such Selling Securityholder's
Attorney-in-Fact (the "Attorney-in-Fact") with authority to execute,
deliver and perform this Agreement on behalf of such Selling
Securityholder and appointing [________], as custodian thereunder (the
"Custodian"). Certificates in negotiable form, endorsed in blank or
accompanied by blank stock powers duly executed, with signatures
appropriately guaranteed, representing the Securities to be sold by such
Selling Securityholder hereunder have been
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deposited with the Custodian pursuant to the Custody Agreement for the
purpose of delivery pursuant to this Agreement. Such Selling
Securityholder has full power (corporate and other) to enter into the
Custody Agreement and the Power of Attorney and to perform its
obligations under the Custody Agreement. The execution and delivery of
the Custody Agreement and the Power of Attorney have been duly authorized
by all necessary corporate action of such Selling Securityholder; the
Custody Agreement and the Power of Attorney have been duly executed and
delivered by such Selling Securityholder and, assuming due authorization,
execution and delivery by the Custodian, are the legal, valid, binding
and enforceable instruments of such Selling Securityholder. Such Selling
Securityholder agrees that each of the Securities represented by the
certificates on deposit with the Custodian is subject to the interests of
the Underwriters hereunder, that the arrangements made for such custody,
the appointment of the Attorney-in-Fact and the right, power and
authority of the Attorney-in-Fact to execute and deliver this Agreement,
to agree on the price at which the Securities (including such Selling
Securityholder's Securities) are to be sold to the Underwriters, and to
carry out the terms of this Agreement, are to that extent irrevocable and
that the obligations of such Selling Securityholder hereunder shall not
be terminated, except as provided in this Agreement or the Custody
Agreement, by any act of such Selling Securityholder, by operation of law
or otherwise, whether in the case of any individual Selling
Securityholder by the death or incapacity of such Selling Securityholder,
in the case of a trust or estate by the death of the trustee or trustees
or the executor or executors or the termination of such trust or estate,
or in the case of a corporate or partnership Selling Securityholder by
its liquidation or dissolution or by the occurrence of any other event.
If any individual Selling Securityholder, trustee or executor should die
or become incapacitated or any such trust should be terminated, or if any
corporate or partnership Selling Securityholder shall liquidate or
dissolve, or if any other event should occur, before the delivery of such
Securities hereunder, the certificates for such Securities deposited with
the Custodian shall be delivered by the Custodian in accordance with the
respective terms and conditions of this Agreement as if such death,
incapacity, termination, liquidation or dissolution or other event had
not occurred, regardless of whether or not the Custodian or the
Attorney-in-Fact shall have received notice thereof.
(iii) Such Selling Securityholder is the lawful owner of
the Securities to be sold by such Selling Securityholder hereunder and
upon sale and delivery of, and payment for, such Securities, as provided
herein, such Selling Securityholder will convey good and marketable title
to such Securities, free and clear of any security interests, liens,
encumbrances, equities, claims or other defects.
(iv) Such Selling Securityholder has not, directly or
indirectly, (i) taken any action designed to cause or result in, or that
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities or (ii) since the
filing of the Registration Statement (A) sold, bid for, purchased, or
paid anyone any compensation for soliciting purchases of, the Securities
or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company
(except for the sale of Securities by the Selling Securityholders under
this Agreement).
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(v) To the extent that any statements or omissions are made
in the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by such Selling
Securityholder specifically for use therein, such Preliminary Prospectus
did, and the Registration Statement and the Prospectus and any amendments
or supplements thereto, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act, the Exchange Act and the respective rules
and regulations of the Commission thereunder and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. Such Selling Securityholder has reviewed the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) and the Registration Statement, and the information regarding
such Selling Securityholder set forth therein under the caption
"Principal and Selling Securityholders" is complete and accurate.
(vi) The sale by such Selling Securityholder of Securities
pursuant hereto is not prompted by any adverse information concerning the
Company that is not set forth in the Registration Statement or the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(vii) The sale of the Securities to the Underwriters by
such Selling Securityholder pursuant to this Agreement, the compliance by
such Selling Securityholder with the other provisions of this Agreement,
the Custody Agreement and the consummation of the other transactions
herein contemplated do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required
under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended) is not
effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under
the Act and the Exchange Act, or (ii) conflict with or result in a breach
or violation of any of the terms and provisions of, or constitute a
default under any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which such Selling Securityholder or any of
its subsidiaries is a party or by which such Selling Securityholder or
any of its subsidiaries or any of their respective properties are bound,
or the charter documents or by laws of such Selling Securityholder or any
of its subsidiaries or any statute or any judgment, decree, order, rule
or regulation of any court or other governmental authority or any
arbitrator applicable to such Selling Securityholder or any of its
subsidiaries.
(viii) The Selling Securityholders have not distributed
and, prior to the later of (i) the Closing Date and (ii) the completion
of the distribution of the Securities, will not distribute any offering
material in connection with the offering and sale of the Securities other
than the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
other materials, if any permitted by the Act.
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(ix) When any Preliminary Prospectus and any amendment or
supplement thereto was filed with the Commission, it (i) contained all
statements required to be stated therein in accordance with, and complied
in all material respects with the requirements of, the Act, the Exchange
Act and the respective rules and regulations of the Commission
thereunder, and (ii) did not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (i) contained or will
contain all statements required to be stated therein in accordance with,
and complied or will comply in all material respects with the
requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading.
When the Prospectus or any Term Sheet that is a part thereof or any
Integrated Prospectus or any amendment or supplement to the Prospectus is
filed with the Commission pursuant to Rule 424(b) (or, if the Prospectus
or part thereof or such amendment or supplement is not required to be so
filed, when the Registration Statement or the amendment thereto
containing such amendment or supplement to the Prospectus was or is
declared effective), on the date when the Prospectus is otherwise amended
or supplemented and on the Firm Closing Date and any Option Closing Date
(both as hereinafter defined), each of the Prospectus, and, if required
to be filed pursuant to Rules 434(c)(2) and 424(b) under the Act, the
Integrated Prospectus as amended or supplemented at any such time, (i)
contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects
with the requirements of, the Act, the Exchange Act and the respective
rules and regulations of the Commission thereunder and (ii) did not or
will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The foregoing provisions of this paragraph do not apply to
statements or omissions made in any Preliminary Prospectus or any
amendment or supplement thereto, the Registration Statement or any
amendment thereto or the Prospectus or, if required to be filed pursuant
to Rules 434(c)(2) and 424(b) and the Act, the Integrated Prospectus or
any amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties, agreements
and covenants herein contained and subject to the terms and conditions herein
set forth, the Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters, severally and not jointly, agrees to purchase from the
Company, at a purchase price of $[______] per share, the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule 1 hereto.
One or more certificates in definitive form for the Firm Securities that the
several Underwriters have agreed to purchase hereunder, and in such denomination
or denominations and registered in such name or names as the Representatives
request upon notice to the Company at least 48 hours prior to the Firm Closing
Date, shall be delivered by or on behalf of the Company to the Representatives
for the respective accounts of the Underwriters, against payment by or on behalf
of the Underwriters of the
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purchase price therefor by wire transfer in same-day funds (the "Wired Funds")
to the account of the Company. Such delivery of and payment for the Firm
Securities shall be made at the offices of Xxxx Xxxx Xxxx & Freidenrich LLP, 000
Xxxxxxxx Xxxxxx, Xxxx Xxxx, XX 00000, at 9:30 a.m., New York time, on [_____],
2000, or at such other place, time or date as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date." The Company will make such certificate
or certificates for the Firm Securities available for checking and packaging by
the Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential Securities Incorporated at least 24
hours prior to the Firm Closing Date
(b) For the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option to
purchase, severally and not jointly, the Option Securities. The purchase price
to be paid for any Option Securities shall be the same price per share as the
price per share for the Firm Securities set forth above in paragraph (a) of this
Section 3. The option granted hereby may be exercised as to all or any part of
the Option Securities from time to time within thirty days after the date of the
Prospectus (or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange is open for
trading). The Underwriters shall not be under any obligation to purchase any of
the Option Securities prior to the exercise of such option. The Representatives
may from time to time exercise the option granted hereby by giving notice in
writing or by telephone (confirmed in writing) to the Company setting forth the
aggregate principal amount of Option Securities as to which the several
Underwriters are then exercising the option and the date and time for delivery
of and payment for such Option Securities. Any such date of delivery shall be
determined by the Representatives but shall not be earlier than two business
days or later than five business days after such exercise of the option and, in
any event, shall not be earlier than the Firm Closing Date. The time and date
set forth in such notice, or such other time on such other date as the
Representatives and the Company may agree upon or as the Representatives may
determine pursuant to Section 9 hereof, is herein called the "Option Closing
Date" with respect to such Option Securities. Upon exercise of the option as
provided herein, the Company shall become obligated to sell to each of the
several Underwriters, and, subject to the terms and conditions herein set forth,
each of the Underwriters (severally and not jointly) shall become obligated to
purchase from the Company, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the option
as such Underwriter is obligated to purchase of the aggregate number of Firm
Securities, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional Shares. If the option is exercised as to all or
any portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered on the
related Option Closing Date in the manner, and upon the terms and conditions,
set forth in paragraph (a) of this Section 3, except that reference therein to
the Firm Securities and the Firm Closing Date shall be deemed, for purposes of
this paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
(c) The Company hereby acknowledges that the wire transfer by or
on behalf of the Underwriters of the purchase price for any Shares does not
constitute closing of a purchase and sale of the Shares. Only execution and
delivery of a receipt for Shares by the Underwriters indicates
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completion of the closing of a purchase of the Shares from the Company.
Furthermore, in the event that the Underwriters wire funds to the Company prior
to the completion of the closing of a purchase of Shares, the Company hereby
acknowledges that until the Underwriters execute and deliver a receipt for the
Shares, by facsimile or otherwise, the Company will not be entitled to the Wired
Funds and shall return the Wired Funds to the Underwriters as soon as
practicable (by wire transfer of same-day funds) upon demand. In the event that
the closing of a purchase of Shares is not completed and the Wired Funds are not
returned by the Company to the Underwriters on the same day the Wired Funds were
received by the Company, the Company agrees to pay to the Underwriters in
respect of each day the Wired Funds are not returned by it, in same-day funds,
interest on the amount of such Wired Funds in an amount representing the
Underwriters' cost of financing as reasonably determined by Prudential
Securities Incorporated.
(d) It is understood that any of you, individually and not as one
of the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the release
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company and the Selling Securityholders.
(a) The Company covenants and agrees with each of the Underwriters
that:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto to become effective as promptly as
possible. If required, the Company will file the Prospectus or any Term
Sheet that constitutes a part thereof or, each of the Prospectus and any
amendment or supplement thereto with the Commission in the manner and
within the time period required by Rule 434 and 424(b) under the Act.
During any time when a prospectus relating to the Securities is required
to be delivered under the Act, the Company (i) will comply with all
requirements imposed upon it by the Act, the Exchange Act and the Trust
Indenture Act and the respective rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of
or dealings in the Securities in accordance with the provisions hereof
and of each of the Prospectus and any Integrated Prospectus, as then
amended or supplemented, and (ii) will not file with the Commission the
prospectus or the amendment referred to in the third sentence of Section
2(a)(i) hereof, any amendment or supplement to such prospectus or any
amendment to the Registration Statement or any Rule 462(b) Registration
Statement of which the Representatives shall not previously have been
advised and furnished with a copy for a reasonable period of time prior
to the proposed filing and as to which filing the Representatives shall
not have given their consent. The Company will prepare and file with the
Commission, in accordance with the rules and regulations of the
Commission, promptly upon request by the Representatives or counsel for
the Underwriters, any amendments to the Registration Statement or
amendments
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or supplements to the Prospectus and any Integrated Prospectus that may
be necessary or advisable in connection with the distribution of the
Securities by the several Underwriters, and will use its best efforts to
cause any such amendment to the Registration Statement to be declared
effective by the Commission as promptly as possible. The Company will
advise the Representatives, promptly after receiving notice thereof, of
the time when the Registration Statement or any amendment thereto has
been filed or declared effective or the Prospectus and any Integrated
Prospectus or any amendment or supplement thereto has been filed and will
provide evidence satisfactory to the Representatives of each such filing
or effectiveness.
(ii) The Company will advise the Representatives, promptly
after receiving notice or obtaining knowledge thereof, of (i) the
issuance by the Commission of any stop order suspending the effectiveness
of the Original Registration Statement or any Rule 462(b) Registration
Statement or any post-effective amendment thereto or any order directed
at any document incorporated by reference in the Registration Statement
or if the Prospectus and any required Integrated Prospectus are or any
amendment or supplement thereto or any order preventing or suspending the
use of any Preliminary Prospectus, the Prospectus and any Integrated
Prospectus or any amendment or supplement thereto, (ii) the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the
Commission for amending the Original Registration Statement or any Rule
462(b) Registration Statement, for amending or supplementing any
Preliminary Prospectus, the Prospectus and any Integrated Prospectus or
for additional information. The Company will use its best efforts to
prevent the issuance of any such stop order and, if any such stop order
is issued, to obtain the withdrawal thereof as promptly as possible.
(iii) The Company will arrange for the qualification of the
Securities for offering and sale under the securities or blue sky laws of
such jurisdictions as the Representatives may designate and will continue
such qualifications in effect for as long as may be necessary to complete
the distribution of the Securities, provided, however, that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(iv) If, at any time prior to the later of (i) the final
date when a prospectus relating to the Securities is required to be
delivered under the Act or (ii) the Option Closing Date, 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 a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if for any other reason it is necessary at any time to amend or
supplement the Prospectus to comply with the Act, the Exchange Act or the
respective rules or regulations of the Commission thereunder, the Company
will promptly notify the Representatives thereof and, subject to Section
5(a) hereof, will prepare and file with the Commission, at the Company's
expense, an amendment to the Registration Statement, an amendment or
supplement to the Prospectus or any Integrated Prospectus that corrects
such statement or omission or effects such compliance.
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(v) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a conformed copy of
the registration statement originally filed with respect to the
Securities and each amendment thereto (in each case including exhibits
thereto) or any Rule 462(b) Registration Statement, certified by the
Secretary or an Assistant Secretary of the Company to be true and
complete copies thereof as filed with the Commission by electronic
transmission, (ii) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so
long as a prospectus relating to the Securities is required to be
delivered under the Act, as many copies of each Preliminary Prospectus,
the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto as the Representatives may reasonably request; without
limiting the application of clause (iii) of this sentence, the Company,
not later than (A) 6:00 p.m., New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 10:00 a.m., New York City time on such date of
(B) 2:00 p.m., New York City time, on the business day following the date
of determination of the public offering price, if such determination
occurred after 10:00 a.m., New York City time, on such date, will deliver
to the Underwriters, without charge, as many copies of the Prospectus and
any amendment or supplement thereto as the Representatives may reasonably
request for purposes of confirming orders that are expected to settle on
the Firm Closing Date.
(vi) The Company, as soon as practicable, will make
generally available to its securityholders and to the Representatives a
consolidated earnings statement of the Company and its subsidiaries that
satisfies the provisions of Section 11(a) of the Act and Rule 158
thereunder.
(vii) The Company will apply the net proceeds from the sale
of the Securities as set forth under "Use of Proceeds" in the Prospectus
or any Integrated Prospectus.
(viii) The Company will not, directly or indirectly,
without the prior written consent of Prudential Securities Incorporated,
on behalf of the Underwriters, offer, sell, offer to sell, contract to
sell, pledge, grant any option to purchase or otherwise sell or dispose
(or announce any offer, sale, offer of sale, contract of sale, pledge,
grant of any option to purchase or other sale or disposition) of any
shares of Common Stock or any securities convertible into, or
exchangeable or exercisable for, shares of Common Stock for a period of
90 days after the date hereof, except pursuant to this Agreement and
except for issuances of options pursuant to Company's stock option plan
and issuances pursuant to the exercise of employee stock options
outstanding on the date hereof, pursuant to the Company's employee stock
purchase plan, pursuant to the Company's dividend reinvestment plan or
pursuant to the terms of convertible securities of the Company
outstanding on the date hereof.
(ix) The Company will not, directly or indirectly, (i) take
any action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities or (ii) (A) sell, bid for, purchase,
or pay anyone any compensation for soliciting purchases of, the
Securities or (B) pay or agree
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to pay to any person any compensation for soliciting another to purchase
any other securities of the Company (except for the sale of Securities by
the Selling Securityholders under this Agreement).
(x) The Company will obtain the agreements described in
Section 7(h) hereof prior to the Firm Closing Date.
(xi) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the
Option Closing Date, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion
the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus and any
Integrated Prospectus), the Company will, after notice from you advising
the Company to the effect set forth above and in consultation with
Company counsel, 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.
(xii) If the Company elects to rely on Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) and pay the applicable fees in
accordance with Rule 111 promulgated under the Act by the earlier of (i)
10:00 p.m. New York time on the date of this Agreement and (ii) the time
confirmations are sent or given, as specified by Rule 462(b)(2).
(xiii) The Company will cause the Securities to be duly
included for quotation on The Nasdaq Stock Market's National Market (the
"Nasdaq National Market") prior to the Firm Closing Date. The Company
will ensure that the Securities remain included for quotation on the
Nasdaq National Market following the Firm Closing Date.
(b) Each Selling Securityholder covenants and agrees with each of
the several Underwriters that:
(i) Each Selling Securityholder will not, directly or
indirectly, without the prior written consent of Prudential Securities
Incorporated, offer, sell, offer to sell, contract to sell, pledge, grant
any option to purchase or otherwise sell or dispose (or announce any
offer, sale, offer of sale, contract of sale, pledge, grant of any option
to purchase or other sale or disposition) of any Securities legally or
beneficially owned by such Selling Securityholder or any securities
convertible into, or exchangeable or exercisable for, Securities for a
period of 90 days after the date hereof.
(ii) Each Selling Securityholder will not, directly or
indirectly, (i) take any action designed to cause or result in, or that
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities or (ii) (A) sell, bid
for, purchase, or pay anyone any compensation for soliciting purchases
of, the Securities or (B) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities
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of the Company (except for the sale of Securities by the Selling
Securityholders under this Agreement).
6. Expenses. The Company will pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus and any amendment or supplement thereto, this Agreement
and any blue sky memoranda, (ii) all arrangements relating to the delivery to
the Underwriters of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, accountants and any other experts or advisors
retained by the Company, (iv) preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities, including transfer
agent's and registrar's fees, (v) the qualification of the Securities under
state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (vi) the filing
fees of the Commission (and the National Association of Securities Dealers,
Inc.) relating to the Securities, (vii) the quotation of the Securities on the
Nasdaq National Market, (viii) meetings with prospective investors in the
Securities (other than shall have been specifically approved by the
Representatives to be paid for by the Underwriters) and (ix) advertising
relating to the offering of the Securities (other than shall have been
specifically approved by the Representatives to be paid for by the
Underwriters). If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 11 hereof or because of any failure, refusal or inability on
the part of the Company to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities. The Company shall not in
any event be liable to any of the Underwriters for the loss of anticipated
profits from the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm Closing
Date, to the accuracy of the statements of the Company's officers made pursuant
to the provisions hereof, to the performance by the Company of its covenants and
agreements hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not been declared effective as
of the time of execution hereof, and, if the Company has elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have been declared
effective not later than the earlier of (i) 11:00 a.m., New York time, on the
date on which the amendment to the registration statement originally filed with
respect to the Securities or to the Registration Statement, as the case may be,
containing information regarding the initial public
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offering price of the Securities has been filed with the Commission and (ii) the
time confirmations are sent or given as specified by Rule 462(b)(2), or with
respect to the Original Registration Statement, or such later time and date as
shall have been consented to by the Representatives; if required, the Prospectus
or any Term Sheet that constitutes a part thereof and any Integrated Prospectus
and any amendment or supplement thereto shall have been filed with the
Commission in the manner and within the time period required by Rule 434 and
424(b) under the Act; no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no order
directed at any document incorporated by reference in the Registration
Statement, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto shall have been issued and no proceedings for that purpose
shall have been instituted or threatened or, to the knowledge of the Company or
the Representatives, shall be contemplated by the Commission; and the Company
shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement, the Prospectus or any
Integrated Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Xxxx Xxxx Xxxx & Freidenrich LLP, counsel for the Company
and the Selling Securityholders, to the effect that:
(i) the Company and each of its U.S. subsidiaries listed in
Schedule 4 hereto (the "Subsidiaries") have been duly incorporated and
are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing under
the laws of all other jurisdictions where the ownership or leasing of
their respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so qualified
does not amount to a material liability or disability to the Company and
the Subsidiaries, taken as a whole;
(ii) the Company and each of the Subsidiaries have
corporate power to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement
and the Prospectus or any Integrated Prospectus, and the Company has
corporate power to enter into this Agreement and to carry out all the
terms and provisions hereof and thereof to be carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and, except for directors' qualifying shares and as
otherwise set forth in each of the Prospectus and any Integrated
Prospectus, are owned beneficially by the Company free and clear of any
perfected security interests or, to the best knowledge of such counsel,
any other security interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in each of the Prospectus or any Integrated
Prospectus; all of the issued shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable federal
and state securities laws and were not issued in violation of or subject
to any preemptive rights or other rights to subscribe for or purchase
securities; the Firm Securities to be sold by the Company
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have been duly authorized by all necessary corporate action of the
Company and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly issued, fully
paid and nonassessable; the Securities have been duly included for
trading on the Nasdaq National Market; no holders of outstanding shares
of capital stock of the Company are entitled as such to any preemptive or
other rights to subscribe for any of the Securities; and no holders of
securities of the Company are entitled to have such securities registered
under the Registration Statement;
(v) the statements set forth under the heading "Description
of Capital Stock" in each of the Prospectus and any Integrated
Prospectus, insofar as such statements purport to summarize certain
provisions of the capital stock of the Company, provide a fair summary of
such provisions;
(vi) the execution and delivery of this Agreement have been
duly authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(vii) no legal or governmental proceedings are pending to
which the Company or any of the Subsidiaries is a party or to which the
property of the Company or any of the Subsidiaries is subject that are
required to be described in the Registration Statement, the Prospectus
and any Integrated Prospectus and are not described therein, and, to the
best knowledge of such counsel, no such proceedings have been threatened
against the Company or any of the Subsidiaries or with respect to any of
their respective properties; and no contract or other document is
required to be described in the Registration Statement, the Prospectus
and any Integrated Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein or filed as
required;
(viii) the issuance, offering and sale of the Securities to
the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement and
the consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have
been obtained and such as may be required under state securities or blue
sky laws, or (B) conflict with or result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, lease or other agreement or
instrument, known to such counsel, to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries or any of their respective properties are bound, or the
charter documents or by-laws of the Company or any of the Subsidiaries,
or any statute or any judgment, decree, order, rule or regulation of any
court or other governmental authority or any arbitrator known to such
counsel and applicable to the Company or any of the Subsidiaries;
(ix) the Registration Statement is effective under the Act;
any required filing of the Prospectus, or any Term Sheet that constitutes
a part thereof, and any Integrated Prospectus pursuant to Rules 434 and
424(b) has been made in the manner and within the time period required by
Rules 434 and 424(b); and no stop order suspending the effectiveness
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of the Registration Statement or any post-effective amendment thereto and
no order directed at any document incorporated by reference in the
Registration Statement, the Prospectus and any Integrated Prospectus or
any amendment or supplement thereto has been issued, and no proceedings
for that purpose have been instituted or threatened or, to the best
knowledge of such counsel, are contemplated by the Commission; and
(x) the Registration Statement originally filed with
respect to the Securities and each amendment thereto and any Rule 462(b)
Registration Statement, the Prospectus and any Integrated Prospectus (in
each case, including the documents incorporated by reference therein but
not including the financial statements and other financial information
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder.
(xi) in the case of each Selling Securityholder that is a
corporation, such Selling Securityholder has full corporate power to
enter into this Agreement, the Custody Agreement and the Power of
Attorney and to sell, transfer and deliver the Securities being sold by
such Selling Securityholder hereunder in the manner provided in this
Agreement and to perform its obligations under the Custody Agreement; the
execution and delivery of this Agreement, the Custody Agreement and the
Power of Attorney have been duly authorized by all necessary corporate
action of each Selling Securityholder; this Agreement, the Custody
Agreement and the Power of Attorney have been duly executed and delivered
by each Selling Securityholder; assuming due authorization, execution and
delivery by the Custodian, the Custody Agreement and the Power of
Attorney are the legal, valid, binding and enforceable instruments of
such Selling Securityholder, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(xii) upon delivery of and payment for the Securities to be
sold by each Selling Securityholder as contemplated by this Agreement,
the Underwriters will be "protected purchasers" within the meaning of
Division 8 of the Uniform Commercial Code, and will acquire their
interests therein free of any "adverse claim" within the meaning of
Division 8 of the Uniform Commercial Code, provided that the Underwriters
are purchasing such Securities in good faith and without notice of any
such adverse claim;
(xiii) the sale of the Securities to the Underwriters by
such Selling Securityholder pursuant to this Agreement, the compliance by
such Selling Securityholder with the other provisions of this Agreement,
the Custody Agreement and the consummation of the other transactions
herein contemplated do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained and such as may be required
under state securities or blue sky laws, or (ii) conflict with or result
in a breach or violation of any of the terms and provisions of, or
constitute a default under any indenture, mortgage, deed of trust, lease
or other agreement or instrument to which such Selling Securityholder or
any of its subsidiaries is a party or by which such Selling
Securityholder or any of its subsidiaries or any of such Selling
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Securityholder's their respective properties are bound, or the charter
documents or by laws of such Selling Securityholder or any of its
subsidiaries or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
applicable to such Selling Securityholder or any of its subsidiaries.
Such counsel shall also state that they have no reason to believe that
the Registration Statement, other than the financial statements, including
supporting schedules and other financial and statistical information contained
therein as to which they make no comment, as of its effective date, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus and any Integrated Prospectus, as of its date
or the date of such opinion, included or includes any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company, the Selling Securityholders and public officials, and
copies of such opinion shall be delivered to the Representatives and counsel for
the Underwriters..
References to the Registration Statement and the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated the
Firm Closing Date, of [_________], counsel for the Company in China, to the
effect that:
(i) Beijing Tongmeixtal Technology Co., Ltd (XXX-TM) (the
"Chinese Subsidiary") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified does not amount to a material liability or
disability to the Company and its subsidiaries, taken as a whole;
(ii) The Chinese Subsidiary has corporate power to own or
lease its properties and conduct its business as described in the
Registration Statement and the Prospectus or any Integrated Prospectus;
(iii) the issued shares of capital stock of the Chinese
Subsidiary have been duly authorized and validly issued, are fully paid
and nonassessable and, except for directors' qualifying shares and as
otherwise set forth in each of the Prospectus and any Integrated
Prospectus, are owned beneficially by the Company free and clear of any
perfected security interests or, to the best knowledge of such counsel,
any other security interests, liens, encumbrances, equities or claims;
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(iv) no legal or governmental proceedings are pending to
which the Chinese Subsidiary is a party or to which the property of the
Chinese Subsidiary is subject that are required to be described in the
Registration Statement, the Prospectus or any Integrated Prospectus and
are not described therein, and, to the best knowledge of such counsel, no
such proceedings have been threatened against the Chinese Subsidiary or
with respect to its properties; and
(v) the issuance, offering and sale of the Securities to
the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement and
the consummation of the other transactions herein contemplated do not
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, lease or other agreement or instrument known to such
counsel to which the Chinese Subsidiary is a party or by which the Hong
Kong Subsidiary or any of its properties are bound, or the charter
documents or by-laws of the Chinese Subsidiary, or any statute or any
judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to the Chinese Subsidiary.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials.
References to the Registration Statement and the Prospectus and any
Integrated Prospectus in this paragraph (c) shall include any amendment or
supplement thereto at the date of such opinion.
(d) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xx., Xxxx
Xxxx, XX 00000, counsel for the Underwriters, with respect to the issuance and
sale of the Firm Securities, the Registration Statement, the Prospectus or any
Integrated Prospectus, and such other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters. In rendering such opinion, such counsel may rely as to
all matters of law upon the opinion of referred to in paragraphs (b) and (c)
above.
(e) The Representatives shall have received from
PricewaterhouseCoopers LLP a letter or letters dated, respectively, the date
hereof and the Firm Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) they are independent accountants with respect to the
Company and its consolidated subsidiaries within the meaning of the Act,
the Exchange Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules examined by them and included in the
Registration Statement, the Prospectus and any Integrated Prospectus
comply in form in all material respects with the applicable accounting
requirements of the Act, the Exchange Act and the related published rules
and regulations thereunder;
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(iii) on the basis of their limited review in accordance
with standards established by the American Institute of Certified Public
Accountants of any interim unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries as indicated
in their reports incorporated in the Registration Statement, the
Prospectus and any Integrated Prospectus, and of the unaudited
consolidated financial statements of the Company and its consolidated
subsidiaries for the periods from which such amounts are derived,
carrying out certain specified procedures (which do not constitute an
examination made in accordance with generally accepted auditing
standards) that would not necessarily reveal matters of significance with
respect to the comments set forth in this paragraph (iii), a reading of
the minute books of the shareholders, the board of directors and any
committees thereof of the Company and each of its consolidated
subsidiaries, and inquiries of certain officials of the Company and its
consolidated subsidiaries who have responsibility for financial and
accounting matters, nothing came to their attention that caused them to
believe that:
(A) the unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement, the Prospectus and any
Integrated Prospectus do not comply in form in all material
respects with the applicable accounting requirements of the Act,
the Exchange Act and the related published rules and regulations
thereunder, or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited consolidated financial statements
included in the Registration Statement and the Prospectus and any
Integrated Prospectus;
(B) at a specific date not more than five business
days prior to the date of such letter, there were any changes in
the capital stock or long-term debt of the Company and its
consolidated subsidiaries or any decreases in net current assets
or stockholders' equity of the Company and its consolidated
subsidiaries, in each case compared with amounts shown on the June
30, 2000 audited consolidated balance sheet included in the
Registration Statement, the Prospectus and any Integrated
Prospectus, or for the period from July 1, 2000 to such specified
date there were any decreases, as compared with the six months
ended June 30, 2000, in revenue, gross profit, income before
income taxes or total or per share amounts of net income of the
Company and its consolidated subsidiaries, except in all instances
for changes, decreases or increases set forth in such letter; and
(iv) they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts, percentages
and financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries and are included
in the Registration Statement, the Prospectus and any Integrated
Prospectus under the captions "Summary Consolidated Financial Data,"
"Capitalization," "Selected Consolidated Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" and in Exhibit II to the Registration Statement, and have
compared such amounts, percentages and financial information with such
records of the Company and its consolidated subsidiaries and with
information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation.
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In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (e) with respect to either letter
referred to above shall include any amendment or supplement thereto at the date
of such letter.
(f) The Representatives shall have received a certificate, dated
the Firm Closing Date, of Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxxx of the Company to
the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein
not misleading, the Prospectus and any Integrated Prospectus, as amended
or supplemented as of the Firm Closing Date, does not include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Company
has performed all covenants and agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to the Firm Closing
Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the
Registration Statement or the Prospectus or any amendment or supplement
thereto has been issued, and no proceedings for that purpose have been
instituted or threatened or, to the best of the Company's knowledge, are
contemplated by the Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus and
any Integrated Prospectus, neither the Company nor any of its
Subsidiaries has sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has not been
any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth or results of operations of the
Company or any of its subsidiaries, except in each case as described in
or contemplated by the Prospectus and any Integrated Prospectus.
(g) The Representatives shall have received a certificate from
Selling Securityholder, dated the Closing Date, to the effect that:
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(i) the representations and warranties of such Selling
Securityholder in this Agreement are true and correct as if made on and
as of the Closing Date;
(ii) to the extent that any statements or omissions are
made in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by such
Selling Securityholder specifically for use therein, the Registration
Statement, as amended as of the Closing Date, does not include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading, and the Prospectus, as
amended or supplemented as of the Closing Date, does not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(iii) such Selling Securityholder has performed all
covenants and agreements on its part to be performed or satisfied at or
prior to the Closing Date.
(h) The Representatives shall have received from each person who
is a director or officer of the Company, and from the Selling Securityholders,
an agreement to the effect that such person will not, directly or indirectly,
without the prior written consent of Prudential Securities Incorporated, on
behalf of the Underwriters, offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise sell or dispose (or announce
any offer, sale, offer of sale, contract of sale, pledge, grant of an option to
purchase or other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days after the date of this Agreement.
(i) The Company shall have sent a letter (a copy of which shall
have been provided to the Representatives) to each person who purchased Company
Common Stock pursuant to the [private placement offering], requesting that each
such person will not, directly or indirectly, without the prior written consent
of Prudential Securities Incorporated, on behalf of the Underwriters, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of an option to purchase or other sale or disposition) of
any shares of Common Stock or any securities convertible into, or exchangeable
or exercisable for, shares of Common Stock until the resale Registration
Statement filed in connection with [private placement offering] becomes
effective.
(j) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(k) Prior to the commencement of the offering of the Securities,
the Securities shall have been included for trading on the Nasdaq National
Market.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the
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Representatives such conformed copies of such opinions, certificates, letters
and documents in such quantities as the Representatives and counsel for the
Underwriters shall reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made
by the Company or such Selling Securityholder in Section 2 of this
Agreement,
(ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or any
amendment thereto or any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (B) any application or other document,
or any amendment or supplement thereto, executed by the Company or such
Selling Securityholder or based upon written information furnished by or
on behalf of the Company or such Selling Securityholder filed in any
jurisdiction in order to qualify the Securities under the securities or
blue sky laws thereof or filed with the Commission or any securities
association or securities exchange (each an "Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
any Application a material fact required to be stated therein or
necessary to make the statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials prepared by
the Company or based upon information furnished by or on behalf of the
Company used in connection with the marketing of the Securities,
including without limitation, slides, videos, films, tape recordings and
statements communicated to securities analysts employed by the
Underwriters,
and will reimburse, as incurred, each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
Company and such Selling Securityholder will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or alleged untrue statement or
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omission or alleged omission made in such registration statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application in reliance upon and in conformity
with written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein; and provided, further, that the
Company and such Selling Securityholder will not be liable to any Underwriter or
any person controlling such Underwriter with respect to any such untrue
statement or omission made in any Preliminary Prospectus that is corrected in
the Prospectus (or any amendment or supplement thereto) if the person asserting
any such loss, claim, damage or liability purchased Securities from such
Underwriter but was not sent or given a copy of the Prospectus (as amended or
supplemented), other than the documents incorporated by reference therein at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
Section 5(d) and (e) of this Agreement. This indemnity agreement will be in
addition to any liability which the Company and such Selling Securityholder may
otherwise have. Neither the Company nor any Selling Securityholder will, without
the prior written consent of the Underwriter or Underwriters purchasing, in the
aggregate, more than fifty percent (50%) of the Securities, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not any such Underwriter or any person who controls any
such Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of all
of the Underwriters and such controlling persons from all liability arising out
of such claim, action, suit or proceeding.
(b) Each Selling Securityholder jointly and severally agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, each Underwriter and each person
who controls the Company or any Underwriter within the meaning of the Act or the
Exchange Act against any losses, claims, damages or liabilities to which the
Company, any such director, officer, such Underwriter or any such controlling
person may become subject under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon
(i) any untrue statement or alleged untrue statement made
in Section 2(b) of this Agreement;
(ii) any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or any Application or
(iii) the omission or the alleged omission to state therein
a material fact required to be stated in the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or
any amendment or supplement thereto, or any Application or necessary to
make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such
Selling Securityholder for use therein;
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provided, however, that such Selling Securityholder will not be liable to
any Underwriter or any person controlling such Underwriter with respect
to any such untrue statement or omission made in any Preliminary
Prospectus that is corrected in the Prospectus (or any amendment or
supplement thereto) if the person asserting any such loss, claim, damage
or liability purchased Securities from such Underwriter but was not sent
or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such
person in any case where such delivery of the Prospectus (as amended or
supplemented) is required by the Act, unless such failure to deliver the
Prospectus (as amended or supplemented) was a result of noncompliance by
the Company with Section 5(a)(iv) and 5(a)(v) of this Agreement;
and, subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any legal or other expenses reasonably
incurred by the Company, any such director, officer, such Underwriter or any
such controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which any Selling Securityholder
may otherwise have. Each Selling Securityholder will not, without the prior
written consent of the Underwriter or Underwriters purchasing, in the aggregate,
more than fifty percent (50%) of the Securities, settle or comprise or consent
to the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Underwriter or any person who controls any such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.
(c) Each Underwriter will, severally and not jointly, indemnify
and hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, each Selling Securityholder and each person,
if any, who controls the Company or such Selling Securityholder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities to which the Company, any such director
or officer of the Company, such Selling Securityholder or any such controlling
person of the Company or such Selling Securityholder may become subject under
the Act, the Exchange Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or any Application or (ii) the omission or the alleged omission to state therein
a material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company, any such director, officer or
controlling person or such Selling Securityholder in connection with
investigating or defending
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any such loss, claim, damage, liability or any action in respect thereof. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 8 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 8, representing the indemnified parties under such
paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party.
(e) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 8 is unavailable or insufficient,
for any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
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the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Securityholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company and the Selling
Securityholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Selling
Securityholders or the Underwriters, the parties' relative intents, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company, the Selling Securityholders and the Underwriters
agree that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to above
in this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of the Securities purchased
by such Underwriter under this Agreement, less the aggregate amount of any
damages that such Underwriter has otherwise been required to pay in respect of
the same or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11 (f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company or any
Selling Securityholder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, shall have the same rights to contribution as the Company
or such Selling Securityholder, as the case may be.
(f) The liability of each Selling Securityholder under this
Section 8 shall not exceed an amount equal to the purchase price per share set
forth in Section 3 hereof multiplied by the number of the Securities sold by
such Selling Securityholder.
9. Default of Underwriters. If one or more Underwriters default in their
obligations to purchase Firm Securities or Option Securities hereunder and the
aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments
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hereunder to purchase the Firm Securities or Option Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase. If one or
more Underwriters so default with respect to an aggregate number of Securities
that is more than ten percent of the aggregate number of Firm Securities or
Option Securities, as the case may be, to be purchased by all of the
Underwriters at such time hereunder, and if arrangements satisfactory to the
Representatives are not made within 36 hours after such default for the purchase
by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 10 hereof. In the event of any default by one or more Underwriters as
described in this Section 9, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination.
(a) This Agreement may be terminated with respect to the Firm
Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or any of its subsidiaries shall have, in
the sole judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Company), in
the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, except in each
case as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
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(ii) trading in the Common Stock shall have been suspended
by the Commission or the Nasdaq National Market or trading in securities
generally on the New York Stock Exchange or the Nasdaq National Market
shall have been suspended or minimum or maximum prices shall have been
established on either any such exchange or (market) system,
(iii) a banking moratorium shall have been declared by New
York or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U. S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or inadvisable
to proceed with the public offering or the delivery of the Securities as
contemplated by the Registration Statement, as amended as of the date
hereof.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by Underwriters. The statements set forth under
the heading "Underwriting" in any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus (to the extent such statements relate to the Underwriters)
constitute the only information furnished by any Underwriter through the
Representatives to the Company for the purposes of Sections 2(b) and 8 hereof.
The Underwriters confirm that such statements (to such extent) are correct.
13. Notices. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Company at
XXX, Inc., 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, XX 00000, (000) 000-0000 (facsimile).
14. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 8 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Underwriters contained in Section 8 of this
Agreement shall also be for the benefit of the directors of the Company, the
officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the Act or Section 20 of
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the Exchange Act. No purchaser of Securities from any Underwriter shall be
deemed a successor because of such purchase.
15. Applicable Law. The validity and interpretation of this Agreement,
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, the Selling Shareholder accepts for
itself and in connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. The Selling Shareholder designates
and appoints [_____], and such other persons as may hereafter be selected by the
Selling Shareholder irrevocable agreeing in writing to so serve, as its agent to
receive on its behalf service of all process in any such proceedings in any such
court, such service being hereby acknowledged by the Selling Shareholder to be
effective and binding service in every respect. A copy of any such process so
served shall be mailed by registered mail to the Selling Securityholder at its
address provided in Section 13 hereof; provided, however, that, unless otherwise
provided by applicable law, any failure to mail such copy shall not affect the
validity of service of such process. If any agent appointed by the Selling
Shareholder refuses to accept service, the Selling Shareholder hereby agrees
that service of process sufficient for personal jurisdiction in any action
against the Selling Shareholder in the State of New York may be made by
registered or certified mail, return receipt requested, to the Selling
Shareholder at its address provided in Section 13 hereof, and the Selling
Shareholder hereby acknowledges that such service shall be effective and binding
in every respect. Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of any Underwriter to
bring proceedings against the Selling Shareholder in the courts of any other
jurisdiction.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company and each of the
several Underwriters.
Very truly yours,
XXX, INC.
By
--------------------------------------
Xxxxxx X. Xxxxx
President and Chief Executive Officer
SELLING STOCKHOLDERS
By
--------------------------------------
[name]
Attorney-in-Fact
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
CIBC WORLD MARKETS CORP.
WIT SOUNDVIEW CORPORATION
ABN AMRO INCORPORATED
PACIFIC CREST INC.
By PRUDENTIAL SECURITIES INCORPORATED
By
--------------------------------------------
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives.
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SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- ------------
Prudential Securities Incorporated
CIBC World Markets Corp.
Wit SoundView Corporation
ABN AMRO Incorporated
Pacific Crest Inc.
Total
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SCHEDULE 2
SELLING SECURITYHOLDERS
Number of Firm
Securities to
Selling Securityholder be Sold
---------------------- -------
Xxxxxx X. Xxxxx 80,000
Davis Zhang 20,000
Total 100,000
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SCHEDULE 3
EQUITY INTEREST IN OTHER ENTITIES
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SCHEDULE 4
UNITED STATES SUBSIDIARIES
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