SONIC SOLUTIONS UNDERWRITING AGREEMENT
EXHIBIT
1.1
[Common
Stock]
SONIC
SOLUTIONS
[Date]
To the
Representatives
named in
Schedule I
hereto of
the Underwriters
named in
Schedule II hereto
Dear
Ladies and Gentlemen:
Sonic
Solutions, a California corporation (the “Company”), proposes
to issue and sell to the underwriters named in Schedule II hereto (the
“Underwriters”), for whom you are acting as representatives (the “Representatives”),
__________ shares (the “[Firm] Shares”) of
its common stock, no par value (the “Common
Stock”). [In addition, the Company proposes to grant to the
Underwriters an option to purchase from the Company up to an aggregate of
[_______] additional shares of Common Stock (the “Option
Shares”). The Firm Shares and the Option Shares are
hereinafter collectively sometimes referred to as the “Shares.”] Such
Shares are to be sold to each Underwriter, acting severally and not jointly, in
such amounts as are listed in Schedule II opposite the name of each
Underwriter. The Shares are described more fully in the Prospectus,
referred to below. If the firm or firms listed in Schedule II hereto
include only the firm or firms listed in Schedule I hereto, then the terms
“Underwriters”
and “Representatives,” as
used herein, each shall be deemed to refer to such firm or firms.
1. Representations and
Warranties.
(a) The
Company represents and warrants to, and agrees with, each Underwriter
that:
(i) The
Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a
registration statement on Form S-3 (File No. 333-[____]), which contains a base
prospectus (the “Base
Prospectus”), to be used in connection with the public offering and sale
of the Shares. Such registration statement, as amended, including the
financial statements, exhibits and schedules thereto, including any required
information deemed to be a part thereof pursuant to Rule 430B under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the “Securities Act”) and
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (collectively, the “Exchange Act”), at
the time of effectiveness, is called the “Registration
Statement.” Any preliminary prospectus supplement to the Base
Prospectus that describes the Shares and the offering thereof and is used prior
to the filing of the Prospectus is called, together with the Base Prospectus, a
“preliminary
prospectus.” The term “Prospectus” shall
mean the final prospectus supplement relating to the Shares, together with the
Base Prospectus, that is first filed pursuant to Rule 424(b) after the date and
time that this Agreement is executed and delivered by the parties hereto (the
“Execution
Time”). Any reference herein to the Registration Statement,
any preliminary prospectus or the Prospectus, as the case may be, shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act; any reference to any
amendment or supplement to any preliminary prospectus or the Prospectus, as the
case may be, shall be deemed to refer to and include any documents filed after
the date of such preliminary prospectus or Prospectus, as the case may be, under
the Exchange Act, and incorporated by reference in such preliminary prospectus
or Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Section 13(a) or 15(d) under the Exchange Act
after the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement. All references in this
Agreement to the Registration Statement, a preliminary prospectus, the
Prospectus, or any amendments or supplements to any of the foregoing shall
include any copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System (“XXXXX”) (except as
may be permitted by Regulation S-T under the Securities Act).
(ii) The
term “Disclosure
Package” shall mean (A) the preliminary prospectus, as it may be amended
or supplemented, (B) the Base Prospectus, (C) the applicable issuer free writing
prospectuses (as defined under Rule 433 of the Securities Act) (each, an “Issuer Free Writing
Prospectus”), if any, identified in Schedule III hereto; (D) any other
free writing prospectus that the parties hereto shall hereafter expressly agree
in writing to treat as part of the Disclosure Package, and (E) the Final Term
Sheet (as defined herein), which also shall be identified in Schedule III
hereto. As of ____ [a.m./p.m.] (New York City time) on the date of
this Agreement (the “Initial Sale Time”),
the Disclosure Package did not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The preceding sentence does not apply to statements in or
omissions from the Disclosure Package based upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
specifically for use therein, it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter consists of the
information described as such in Section 7(b) hereof (the “Underwriter
Information”).
2
(iii) As
of the date hereof, when the Prospectus is first filed with the Commission
pursuant to Rule 424(b) under the Securities Act, when any supplement or
amendment to the Prospectus is filed with the Commission, at the Closing Date
(as hereinafter defined) and, with respect to the Registration Statement in (A)
and (B) below, as of the Initial Sale Time, (A) the Registration Statement is
effective, the Registration Statement, as amended as of any such time, and the
Prospectus, as amended or supplemented as of any such time complied, complies or
will comply in all material respects with the applicable provisions under the
Securities Act and the Exchange Act, (B) the Registration Statement, as amended
as of any such time, did not, does not 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 in order to make the statements therein not misleading, and
(C) the Prospectus, as amended or supplemented as of any such time, did not,
does not 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 in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to the Underwriter Information. The
documents that are incorporated by reference in the Registration Statement, the
Disclosure Package, the preliminary prospectus or the Prospectus or from which
information is so incorporated by reference, when they were filed with the
Commission, complied in all material respects with the requirements under the
Securities Act or the Exchange Act, as applicable, and did not, when such
documents were so filed, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Commission has not issued any stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of the preliminary prospectus, the Prospectus
or any Issuer Free Writing Prospectus, and the Company is without knowledge that
any proceedings have been instituted for either purpose. The
aggregate market value of the Company’s voting and non-voting common equity held
by non-affiliates of the Company was at least $75 million within 60 days prior
to the date of filing of the Registration Statement.
(iv) (A)
At the earliest time after the Company or another offering participant made a
bona fide offer (within the meaning under Rule 164(h)(2) under the Securities
Act) and (B) as of the date of the execution and delivery of this Agreement
(with such date being used as a determination date for purposes of this clause
(B)), the Company neither was nor is an Ineligible Issuer (as defined in Rule
405 under the Securities Act).
(v) No
Issuer Free Writing Prospectus or any final term sheet containing a description
of the Shares and the offering contemplated hereby, in a form approved by the
Representatives and contained in Schedule III of this Agreement, filed pursuant
to Rule 433(d) under the Securities Act (such term sheet, a “Final Term Sheet”),
as of its issue date and at all subsequent times through the completion of the
offering contemplated hereby or until any earlier date that the Company notified
or notifies the Representatives as described in the next sentence, included,
includes or will include any information that conflicted, conflicts, or will
conflict with the information contained in the Registration Statement, including
any document incorporated by reference therein, the preliminary prospectus or
the Prospectus, that had not or has not been superseded or
modified. If at any time following delivery of an Issuer Free Writing
Prospectus or a Final Term Sheet and prior to the end of the Prospectus Delivery
Period (as defined below), there occurred or occurs an event or development as a
result of which such Issuer Free Writing Prospectus or Final Term Sheet, as
applicable, conflicted or would conflict with the information contained in the
Registration Statement, the preliminary prospectus or the Prospectus, the
Company has promptly notified or will promptly notify the Representatives and
has promptly amended or supplemented or will promptly amend or supplement, at
its own expense, such Issuer Free Writing Prospectus or Final Term Sheet, as
applicable, to eliminate or correct such conflict. The foregoing two
sentences do not apply to statements in or omissions from an Issuer Free Writing
Prospectus or a Final Term Sheet based upon and in conformity with Underwriter
Information.
3
(vi) The
Company has not distributed and will not distribute, prior to the later of the
Closing Date and the completion of the Underwriters’ distribution of the Shares,
any offering material in connection with the offering and sale of the Shares
other than the Registration Statement, the preliminary prospectus, the
Prospectus, or any Issuer Free Writing Prospectus reviewed and consented to by
the Underwriters and included in Schedule III hereto.
(vii) The
Company has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of California and has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and to enter into and perform its obligations
under, or as contemplated under, this Agreement. The Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing would not result
in a material adverse change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
business, management, financial position, shareholders’ equity or results of
operations of the Company and its subsidiaries taken as a whole (a “Material Adverse
Effect”).
(viii) Each
subsidiary of the Company that is listed in the Company’s latest Annual Report
on Form 10-K pursuant to the requirements of Form 10-K and Item 601(b)(21) of
the Commission’s Regulation S-K (each a “Subsidiary”) has been
duly organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not result in a Material Adverse Effect; all of the
issued and outstanding capital stock of each Subsidiary has been duly authorized
and validly issued and is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; and none of the
outstanding shares of capital stock of any Subsidiary was issued in violation of
preemptive or similar rights of any security holder of such
Subsidiary.
(ix) The
Company has the requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement. The execution and
delivery of, and the performance by the Company of its obligations under this
Agreement have been duly and validly authorized by the Company and this
Agreement, has been duly executed and delivered by the Company and constitutes
the valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement hereof may be
limited by (i) applicable bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or similar laws affecting the enforcement of creditors’
rights generally, (ii) general principles of equity, whether considered in a
proceeding at law or in equity, and (iii) state or federal securities laws or
policies relating to the non-enforceability of the indemnification provisions
contained herein.
4
(x) The
Company has an authorized capitalization as set forth in the Registration
Statement, the Prospectus and the Disclosure Package under the heading
“Capitalization”; all of the issued and outstanding shares of capital stock of
the Company have been duly authorized and validly issued, are fully paid and
non-assessable and are not subject to any preemptive or similar
rights. None of the outstanding shares of Common Stock was issued in
violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. As of
the date set forth in the Disclosure Package and the Prospectus, there were no
authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital stock of the Company or any
of its subsidiaries other than those accurately described in the Disclosure
Package and the Prospectus. Since such date, the Company has not
issued any securities other than Common Stock issued pursuant to the exercise of
warrants or upon the exercise of stock options previously outstanding under the
Company’s stock option plans and the issuance of Common Stock pursuant to
employee stock purchase plans.
(xi) The
Shares have been duly and validly authorized for issuance and sale, and, when
issued and delivered to the Underwriters against payment therefor pursuant to
this Agreement, the Shares will be duly and validly issued and fully paid and
non-assessable; the issuance of the Shares is not subject to any preemptive or
similar rights; the Shares conform in all material respects to the description
thereof contained in the Registration Statement, the Prospectus and the
Disclosure Package.
(xii) The
execution, delivery and performance of this Agreement by the Company, the issue
and sale of the Shares by the Company and the consummation of the transactions
contemplated hereby will not (1) result in any violation of the provisions of
the articles of incorporation or by-laws of the Company or any of its
subsidiaries, (2) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement, 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 is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject or (3) result in any violation of
any statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries or any
of their properties or assets.
(xiii) No
consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body is required for the execution, delivery
and performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(xiv) The
statements set forth in the Prospectus under the captions “Description of Common
Stock” and “Legal Ownership of Securities,” insofar as they purport to
constitute a summary of the terms of the Shares, and under the caption “[U.S.
Federal Income Tax Considerations],” insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate, complete
and fair.
5
(xv) Except
as set forth in the Disclosure Package and the Prospectus, there are no legal or
governmental proceedings pending against the Company or any of its subsidiaries
or, to the knowledge of the Company, threatened against any of them or to which
the Company or any of its subsidiaries or to which any of the respective
properties of the Company or any of its subsidiaries is subject that are not
disclosed in the Disclosure Package and the Prospectus or that, if adversely
decided, would reasonably be expected to have a Material Adverse Effect or
materially adversely affect the issuance of the Shares or the consummation of
any of the transactions contemplated by this Agreement. There are no
indentures, mortgages, deeds of trust, loan agreements, leases or other
agreements or instruments of the Company or any of its subsidiaries that are
material to the Company and its subsidiaries, taken as a whole, that are not
described in the Disclosure Package and the Prospectus. Neither the
Company nor any of its subsidiaries is involved in any strike, job action or
labor dispute with any group of its employees that would reasonably be expected
to have a Material Adverse Effect, and, to the knowledge of the Company, no such
action or dispute is threatened.
(xvi) The
Company is not and, after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof, will not be an “investment
company,” as such term is defined in the Investment Company Act of 1940, as
amended.
(xvii) The
Company and the Subsidiaries possess all authorizations issued by the
appropriate federal, state and foreign governments, governmental or regulatory
authorities, self-regulatory organizations and all courts or other tribunals,
and are members in good standing of each federal, state or foreign exchange,
board of trade, clearing house or association and self-regulatory or similar
organization necessary to conduct their respective businesses as described in
the Prospectus, except as would not, individually or in the aggregate, have a
Material Adverse Effect.
(xviii) BDO
Xxxxxxx, LLP, which has certified certain financial statements of the Company
and its subsidiaries, and have audited the Company’s internal control over
financial reporting, are independent public accountants as required by the
Securities Act and the rules and regulations of the Commission
thereunder.
(xix) The
consolidated financial statements of the Company included in the Registration
Statement and the Prospectus, together with the related schedules and notes, as
well as those consolidated financial statements, schedules and notes of any
other entity included therein, present fairly the financial position of the
Company and its consolidated subsidiaries, or such other entity, as the case may
be, at the dates indicated and the consolidated statements of income and
comprehensive income, changes in shareholders’ equity and cash flows of the
Company and its consolidated subsidiaries, or such other entity, as the case may
be, for the periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information, if any, included in the Registration Statement or the Prospectus
present fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements incorporated by
reference or included in the Registration Statement and the
Prospectus.
6
(xx) The
Company maintains a system of internal control over financial reporting (as such
term is defined in Rule 13a-15(f) under the Exchange Act) that complies with the
requirements of the Exchange Act and has been designed by the Company’s
principal executive officer and principal financial officer, or under their
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. Except as
disclosed in the Prospectus, the Company’s internal control over financial
reporting is effective and the Company is not aware of any material weaknesses
in its internal control over financial reporting.
(xxi) The
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the
Exchange Act; such disclosure controls and procedures have been designed to
ensure that material information relating to the Company and its subsidiaries is
made known to the Company’s principal executive officer and principal financial
officer by others within those entities; and such disclosure controls and
procedures are effective.
(xxii) Subsequent
to the respective dates as of which information is given in the Prospectus or
Disclosure Package, there has not been (i) any loss or adverse change, or any
development that could reasonably be expected to have a Material Adverse Effect
on the Company and its subsidiaries taken as a whole, (ii) any transaction
entered into by each of the Company and its subsidiaries, except transactions in
the ordinary course of business, (iii) any obligation, direct or contingent,
incurred by each of the Company and its subsidiaries that is material to the
Company and its subsidiaries taken as a whole, except for liabilities or
obligations that are reflected in the Prospectus and Disclosure Package, (iv)
any change in the capital stock or outstanding indebtedness of the Company
(other than through the exercise of outstanding options and warrants or the
conversion of outstanding preferred stock), or (v) any dividend or distribution
of any kind declared, paid or made on the capital stock of the
Company.
(xxiii) Neither
the Company nor any of its subsidiary owns any real property. Each of
the Company and its subsidiaries has good and marketable title to all personal
property and assets described in the Prospectus and the Disclosure Package as
being owned by it, free and clear of all liens, claims, security interests or
other encumbrances, except such as are described in the Prospectus and the
Disclosure Package or would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect. All the property described in the
Prospectus and the Disclosure Package as being held under lease by the Company
and its subsidiaries is held by them under valid, subsisting and enforceable
leases, with such exceptions as would not reasonably be expected to have a
Material Adverse Effect and do not interfere with the use made and proposed to
be made of such property by the Company and its subsidiaries.
(xxiv) None
of the Company nor any of its affiliates (as defined in Rule 405 under the
Securities Act) has directly, or through any agent taken any action designed to
cause or to result in or that has constituted, or might reasonably be expected
to cause or result in or constitute, under the Exchange Act, or otherwise, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
7
(xxv) Each
of the Company and its subsidiaries owns, possesses, licenses or possesses
adequate rights to use all patents, trademarks, trademark registrations, service
marks, service xxxx registrations, tradenames, copyrights, licenses, inventions,
trade secrets and rights described in the Prospectus and the Disclosure Package
as being owned by it or necessary for the conduct of its business, and, except
as disclosed in the Prospectus and the Disclosure Package, the Company has not
received a claim to the contrary (a “Claim”) or any
challenge (a “Challenge”) by any
other person to the rights of each of the Company and its subsidiaries with
respect to the foregoing, except for such Claims and Challenges that would not
reasonably be expected to have a Material Adverse Effect.
(xxvi) Except
as disclosed in the Prospectus and the Disclosure Package, the Company and its
subsidiaries have filed all tax returns required to be filed (other than filings
being contested in good faith), which returns are true and correct in all
material respects, and neither of the Company nor any of its subsidiaries is in
default in the payment of any taxes that were payable pursuant to said returns
or any assessments with respect thereto (other than taxes being contested in
good faith), except where the failure to file such returns and make such
payments (whether or not being contested in good faith) would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(xxvii) None
of the Company or its subsidiaries has any liability for any prohibited
transaction or funding deficiency or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other plan which is
subject to the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), to
which the Company or any of the subsidiaries makes or ever has made a
contribution and in which any employee of the Company or any of its subsidiaries
is or has ever been a participant. With respect to such plans, the
Company and each of its subsidiaries is in compliance in all material respects
with all applicable provisions of ERISA.
(xxviii) Neither
the Company nor any of its subsidiaries own any “margin securities” as that term
is defined in Regulation U of the Board of Governors of the Federal Reserve
System (the “Federal
Reserve Board”), and none of the proceeds of the sale of the Shares will
be used, directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry any margin security or for any
other purpose which might cause any of the Shares to be considered a “purpose
credit” within the meanings of Regulation T, U or X of the Federal Reserve
Board.
(xxix) No
person or entity has the right to require registration of shares of Common Stock
or other securities of the Company or any of its subsidiaries because of the
filing or effectiveness of the Registration Statements or otherwise, except for
persons and entities who have expressly waived such right in writing or who have
been given timely and proper written notice and have failed to exercise such
right within the time or times required under the terms and conditions of such
right.
(xxx) Other
than any agreements between the Company and the Underwriters, neither the
Company nor any of its subsidiaries is a party to any agreement or understanding
with any person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Shares or any transaction
contemplated by this Agreement.
8
(xxxi) No
forward-looking statement (within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act) contained in either the Disclosure
Package or the Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(xxxii) The
operations of the Company and its subsidiaries are and have been conducted at
all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules and
regulations thereunder (collectively, the “Money Laundering
Laws”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending,
or to the Company’s knowledge, threatened.
(xxxiii) Neither
the Company nor any of its subsidiaries nor, to the Company’s knowledge, any
director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and, to the
Company’s knowledge, the Company will not directly or indirectly use the
proceeds of the Offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.
(xxxiv) Neither
the Company nor any of its subsidiaries nor, to the Company’s knowledge, any
employee or agent of the Company or any subsidiary, has (i) used any corporate
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds, (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended, or (iv) made
any other unlawful payment.
(xxxv) The
Common Stock is registered pursuant to Section 12(g) of the Exchange Act and is
quoted on the Nasdaq Global Select Market, and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or delisting the Common Stock from the
Nasdaq Global Select Market, nor has the Company received any notification that
the Commission or the Nasdaq Global Select Market is contemplating terminating
such registration or listing.
(xxxvi) The
Company is in compliance with all applicable corporate governance requirements
set forth in the Nasdaq Rules.
(b) Each
Underwriter, severally and not jointly, represents and agrees
that:
9
(i)
it has not and will not, directly or indirectly, offer, sell
or deliver any of the Shares or distribute the preliminary prospectus, the
Prospectus or any other offering materials (including any Issuer Free Writing
Prospectus or other free writing prospectuses) relating to the Shares in or from
any jurisdiction except under circumstances that will result in compliance with
any applicable laws and regulations thereof and that will not impose any
obligations on the Company except as set forth herein; and
(ii) it
will comply in all material respects with the selling restrictions set forth in
the preliminary prospectus and the Prospectus under the caption “Plan of
Distribution—Selling Restrictions.”
2. Purchase and
Sale. (a) Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
issue and sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company the number of [Firm] Shares set forth
opposite such Underwriter’s name in Schedule II hereto, subject to adjustment in
accordance with Section 7 hereof, in each case at the purchase price of $[____]
per Share (the “Purchase
Price”).
(b) [In
addition, the Company agrees to issue and sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters, subject to the
terms and conditions and in reliance upon the representations and warranties
herein set forth, shall have the option to purchase, severally and not jointly,
from the Company the Option Shares at the Purchase Price.
If any
Option Shares are to be purchased, the number of Option Shares to be purchased
by each Underwriter shall be the number of Option Shares which bears the same
ratio to the aggregate number of Option Shares being purchased as the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule II
hereto (or such number increased as set forth in Section 7 hereof) bears to the
aggregate number of Firm Shares being purchased from the Company by the several
Underwriters, subject, however, to such adjustments to eliminate any fractional
Shares as the Representatives in their sole discretion shall make.
The
Underwriters may exercise the option to purchase the Option Shares at any time
in whole, or from time to time in part, on or before the thirtieth day following
the date of this Agreement, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option
Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for which may be the same date and
time as the Closing Date but shall not be earlier than the Closing Date nor
later than the tenth full business day after the date of such notice (unless
such time and date are postponed in accordance with the provisions of Section 7
hereof). Any such notice shall be given at least three business days
prior to the date and time of delivery specified therein.]
3. Delivery and
Payment. The Company shall deliver, or cause to be delivered,
the Shares to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the Purchase Price thereof in federal (same-day) funds or
wire transfer to an account previously designated to the Representatives by the
Company, by causing Mellon Investor Services LLC, as registrar, to register the
Shares in the name of Cede & Co., as nominee for The Depository Trust
Company (“DTC”), or such other
nominee as DTC may designate, and shall cause DTC to credit the [Firm] Shares to
the account of the Representatives at DTC.
10
The time
and date of such delivery and payment, with respect to the [Firm] Shares, shall
be [____] [a.m./p.m.], New York City time on the third business day, unless
otherwise permitted by the Commission pursuant to Rule 15c6-1 of the Exchange
Act (the “Closing
Date”), following the date of the Prospectus or such other time and date
as the Representatives and the Company may agree upon in writing[, and with
respect to the Option Shares shall be [____] [a.m./p.m.], New York City time, on
the date specified by the Representatives in the written notice given by the
Representatives of the Underwriters’ election to purchase such Option Shares, or
at such other time and date as the Representatives and the Company may agree
upon in writing, which may be the Closing Date (the “Option Closing
Date”)].
4. Agreements. The
Company agrees with the several Underwriters that:
(a) During
the period beginning at the Initial Sale Time and ending on the later of the
Closing Date or such date, as in the opinion of counsel for the Underwriters,
the Prospectus is no longer required by law to be delivered in connection with
sales by an Underwriter or dealer (except for delivery requirements imposed
because such Underwriter or dealer is an affiliate of the Company), including in
circumstances where such requirement may be satisfied pursuant to Rule 172 (the
“Prospectus Delivery
Period”), the Company will not file any amendment to the Registration
Statement or supplement to the Base Prospectus or the Disclosure Package
(including the Prospectus) unless the Company has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. The Company will advise
the Representatives promptly (i) when the Prospectus and any supplements thereto
shall have been filed with the Commission pursuant to Rule 424, (ii) when any
amendment to the Registration Statement shall have become effective, (iii) of
any request by the Commission for any amendment of the Registration Statement or
amendment of or supplement to the Prospectus or the Disclosure Package or for
any additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or to the Company’s knowledge, threatening of any proceeding for
that purpose and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as possible
the withdrawal thereof.
(b) If,
at any time during the Prospectus Delivery Period, except with respect to any
such delivery requirement imposed upon an affiliate of the Company in connection
with any secondary market sales, any event occurs as a result of which the
Disclosure Package or the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in light of the circumstances
under which they were made or then prevailing, as the case may be, not
misleading, or if it shall be necessary to amend or supplement the Disclosure
Package or the Prospectus to comply with the Securities Act or the Exchange Act,
the Company promptly will prepare and file with the Commission, subject to the
first sentence of paragraph (a) of this Section 4, an amendment or supplement
that will correct such statement or omission or an amendment or supplement that
will effect such compliance (including, if consented to by the Underwriters, by
means of an Issuer Free Writing Prospectus), and will give immediate notice, and
confirm in writing, to the Underwriters to cease the solicitation of offers to
purchase the Shares, and furnish to the Underwriters a reasonable number of
copies of such amendment or supplement.
11
(c) The
Company will make generally available to its security holders and to the
Representatives as soon as practicable, but not later than 60 days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions under Rule 158 under the Securities Act) covering a
twelve-month period beginning not later than the first day of the Company’s
fiscal quarter next following the “effective date” (as defined in Rule 158) of
the Registration Statement.
(d) The
Company will furnish to the Representatives and counsel for the Underwriters,
without charge, copies of the Registration Statement (including exhibits
thereto) and each amendment thereto which shall become effective on or prior to
the Closing Date and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Securities Act, as many copies of the preliminary
prospectus, or the Prospectus and any amendments thereof and supplements thereto
as the Representatives may reasonably request. The Company will pay
the expenses of printing all documents relating to the offering.
(e) The
Company will arrange for the qualification of the Shares for sale under the laws
of such jurisdictions as the Representatives may reasonably designate, will
maintain such qualifications in effect so long as required for the distribution
of the Shares and will arrange for the determination of the legality of the
Shares for purchase by investors; provided, however, that the Company shall not
be required to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to general or unlimited
service of process in any jurisdiction where it is not now so
subject.
(f) During
the period commencing on the date hereof and ending [__] days after the date of
the Prospectus (the “Lock-Up Period”), the
Company will not, without the prior written consent of the Representatives, (1)
offer or sell in a public offering or an offering pursuant to Rule 144A under
the Securities Act, or pledge, any shares of Common Stock, any shares of
convertible preferred stock, or any capital stock or other securities, including
units or debt securities, convertible into, or exercisable for, shares of Common
Stock, or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash, or otherwise. The foregoing restriction shall not apply to (i)
the issuance of securities pursuant to or in connection with any employment
contract, benefit plan or similar arrangement with or for the benefit of
employees, officers, directors or consultants adopted before or after the date
hereof, (ii) sales or issuances of securities pursuant to contractually binding
requirements or agreements currently in effect, (iii) any issuance or commitment
to issue securities in connection with any merger or acquisition transaction, or
(iv) any issuance that is the result of an exchange or conversion of any class
or series of capital stock for any other series of capital
stock.
12
(g) The
Company represents that it has not made and agrees that, unless it obtains the
prior written consent of the Representatives, it will not make, any offer
relating to the Shares that would constitute an Issuer Free Writing Prospectus
or that would otherwise constitute a “free writing prospectus” (as defined under
Rule 405 under the Securities Act) required to be filed by the Company with the
Commission or retained by the Company under Rule 433 under the Securities Act;
provided that the prior written consent of the Representatives shall be deemed
to have been given in respect of the Issuer Free Writing Prospectuses included
in Schedule III hereto. Any such free writing prospectus consented to
by the Representatives is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company agrees that (i) it has treated and
will treat as the case may be, each Permitted Free Writing Prospectus as an
Issuer Free Writing Prospectus, and (ii) it has complied and will comply, as the
case may be, with the requirements under Rules 164 and 433 under the Securities
Act applicable to any Permitted Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping. The
Company consents to the use by any Underwriter of a free writing prospectus that
(a) is not an “issuer free writing prospectus” as defined under Rule 433, and
(b) contains only (i) information describing the preliminary terms of the
Shares or their offering, (ii) information permitted by Rule 134 under the
Securities Act or (iii) information that describes the final terms of the
Shares or their offering.
(h) In
connection with the offering contemplated hereby, the Company agrees not to
take, directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Shares; provided that the Company may repurchase shares of its Common Stock
in compliance with the safe harbor provided by Rule 10b-18 under the Exchange
Act and in compliance with Regulation M under the Exchange Act after [the
thirtieth day following the date of this Agreement][the end of the option
exercise period set forth in Section 2 hereof].
(i) The
Company agrees to use its best efforts to list, subject to notice of issuance,
the Shares on the Nasdaq Global Select Market and to maintain such listing on
the Nasdaq Global Select Market.
(j) The
Company agrees to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common
Stock.
5. Conditions to the Obligations of the
Underwriters. The obligations of the Underwriters to purchase
the Shares shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the date hereof, as
of the date of the effectiveness of any amendment to the Registration Statement
filed prior to the Closing Date (including the filing of any document
incorporated by reference therein) and as of the Closing Date [and any Option
Closing Date], to the accuracy of the statements of the Company made in any
certificates furnished pursuant to the provisions hereof, to the performance by
the Company of its obligations hereunder and to the following additional
conditions:
(a) For
the period from and after effectiveness of this Agreement and prior to the
Closing Date [and any Option Closing Date]:
13
(i)
no stop order suspending the effectiveness of the
Registration Statement, or any post-effective amendment to the Registration
Statement, shall be in effect and no proceedings for such purpose shall have
been instituted or threatened by the Commission;
(ii) the
Company shall have filed the preliminary prospectus and the Prospectus with the
Commission (including the information required by Rule 430B under the Securities
Act) in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment to
the Registration Statement containing the information required by such Rule
430B, and such post-effective amendment shall have become effective (if not
automatically effective under the rules of the Commission);
(iii) the
Financial Industry Regulatory Authority, Inc. (“FINRA”) shall have
raised no objection to the fairness and reasonableness of the underwriting terms
and arrangements;
(iv) the
Shares to be delivered on the Closing Date[, or Option Closing Date, as the case
may be,] shall have been approved for listing on the Nasdaq Global Select
Market, subject to official notice of issuance; and
(v) the
lock-up agreements, each substantially in the form of Exhibit A hereto, between
you and the officers of the Company listed on Exhibit A-1 hereto relating to
sales and certain other dispositions of shares of capital stock of the Company
or certain other securities, delivered to you on or before the date hereof,
shall be in full force and effect on the Closing Date[, and any Option Closing
Date, as the case may be].
(b) The
Company shall have furnished to the Representatives the opinion of Xxxxxxxx
& Xxxxxxxx LLP, counsel for the Company, dated the Closing Date [and any
Option Closing Date], in substantially the form attached hereto as Exhibit B,
and the opinion of the General Counsel of the Company (or such other attorney,
reasonably acceptable to counsel to the Underwriters, who exercises general
supervision or review in connection with a particular securities law matter for
the Company), dated the Closing Date [and any Option Closing Date], in
substantially the form attached hereto as Exhibit C.
(c) The
Representatives shall have received from [________], counsel for the
Underwriters, such opinion or opinions, dated the Closing Date [and any Option
Closing Date], with respect to the issuance and sale of the Shares, the
Registration Statement, the Disclosure Package, and the Prospectus and any other
related matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(d) The
Company shall have furnished to the Representatives a certificate of the
Company, signed by the Chief Executive Officer or a Senior Vice President, and
the principal financial or accounting officer of the Company, dated the Closing
Date [and any Option Closing Date], to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Disclosure
Package and the Prospectus and this Agreement and:
14
(i)
the representations and warranties of the Company in this
Agreement are true and correct with the same force and effect as though
expressly made at and as of the Closing Date [or such Option Closing Date] and
the Company has performed or complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied hereunder at or prior to
the Closing Date [or such Option Closing Date];
(ii) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or to their
knowledge threatened by the Commission; and
(iii) since
the date of the most recent financial statements included in the Disclosure
Package and the Prospectus, there has been no material adverse change or any
development involving a prospective material adverse change in the condition
(financial or other), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the
Disclosure Package and the Prospectus.
(e) At
the time this Agreement is executed, BDO Xxxxxxx, LLP shall have furnished to
the Representatives a letter or letters, dated as of the date of this Agreement,
in form and substance satisfactory to the Representatives (i) confirming that
they are an independent registered public accounting firm with respect to the
Company within the meaning under the Securities Act and the applicable rules and
regulations thereunder adopted by the Commission and the Public Company
Accounting Oversight Board (United States) and (ii) stating the conclusions and
findings of such firm, of the type ordinarily included in accountants’ “comfort
letters” to underwriters, with respect to the financial statements and certain
financial information contained or incorporated by reference in the Registration
Statement, the Disclosure Package and the Prospectus. In addition, on
the Closing Date [and any Option Closing Date], BDO Xxxxxxx, LLP shall have
furnished to the Representatives a letter or letters, dated the Closing Date [or
such Option Closing Date], in form and substance satisfactory to the
Representatives, confirming as of the date of such letter (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Disclosure Package and the
Prospectus, as the case may be, as of a date not more than three business days
prior to the date of the letter), the conclusions and findings of such firm, of
the type ordinarily included in accountants’ “bring-down comfort letters” to
underwriters, with respect to the financial information and other matters
covered by its letter delivered to the Representatives concurrently with the
execution of this Agreement pursuant to this paragraph.
(f) Since
the respective dates as of which information is given in the Prospectus or the
Disclosure Package there has not been, (i) any loss or adverse change, or any
development that could reasonably be expected to have a Material Adverse Effect
on the Company and its subsidiaries taken as a whole, (ii) any transaction
entered into by each of the Company and its subsidiaries, except transactions in
the ordinary course of business, (iii) any obligation, direct or contingent,
incurred by each of the Company and its subsidiaries that is material to the
Company and its subsidiaries taken as a while, except for liabilities or
obligations that are reflected in the Prospectus and the Disclosure Package,
(iv) any change in the capital stock or outstanding indebtedness of the Company
(other than through the exercise of outstanding options and warrants or the
conversion of outstanding preferred stock), or (v) any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company, the
effect of which, in any such case described in clause (i), (ii), (iii), (iv) or
(v) of this paragraph (f), is, in the judgment of the Representatives, so
material and adverse as to make it impracticable or inadvisable to proceed with
the sale or delivery of the Shares on the terms and in the manner contemplated
in the Disclosure Package.
15
(g) No
action shall have been taken and no law, statute, rule, regulation or order
shall have been enacted, adopted or issued by any governmental agency or body
that would prevent the issuance or sale of the Shares or that would materially
and adversely affect the business or operations of the Company; and no
injunction, restraining order or order of any other nature by any federal or
state court of competent jurisdiction shall have been issued which would prevent
the issuance or sale of the Shares or materially and adversely affect or
potentially materially and adversely affect the business or operations of the
Company.
(h) Subsequent
to the execution and delivery of this Agreement there shall not have occurred
any of the following: (i) trading in securities generally on the New
York Stock Exchange, Nasdaq Global Select Market or the NYSE Amex LLC or in the
over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or
materially limited, or minimum or maximum prices or maximum range for prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or market or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by federal or state authorities or a material disruption has
occurred in commercial banking or securities settlement or clearance services in
the United States, (iii) the United States shall have become engaged in
hostilities, or the subject of an act of terrorism, or there shall have been an
outbreak of or escalation in hostilities involving the United States, or there
shall have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it, in the judgment of the Representatives, impracticable or
inadvisable to proceed with the sale or delivery of the Shares on the terms and
in the manner contemplated in the Disclosure Package and the
Prospectus.
(i) The
Company shall have prepared and filed with the Commission a Current Report on
Form 8-K with respect to the offering and sale of the Shares, which shall
include as an exhibit thereto this Agreement and any other appropriate
exhibit.
(j) Prior
to the Closing Date [and any Option Closing Date], the Company shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(k) There
shall not have come to the Representatives’ attention any facts that would cause
the Representatives to believe that the Disclosure Package, as of the Initial
Sale Time, or the Prospectus, at the time it was required to be delivered to a
purchaser of the Shares, included any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at the time of such delivery,
not misleading.
16
If any of
the conditions specified in this Section 5 shall not have been fulfilled in all
material respects when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form and substance to
the Representatives and their counsel, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date [and any Option Closing Date] by the Representatives. Notice of
such cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
6. Payment of
Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing, delivery to the Underwriters and filing of the
Registration Statement, any Issuer Free Writing Prospectus, the preliminary
prospectus and the Prospectus as originally filed and of each amendment or
supplement thereto, (ii) the copying of this Agreement, (iii) the preparation,
issuance and delivery of the certificates for the Shares to the Underwriters,
including capital duties, stamp duties and transfer taxes, if any, payable upon
issuance of any of the Shares, the sale of the Shares to the Underwriters and
the fees and expenses of any transfer agent or registrar for the Shares, (iv)
the fees and expenses of counsel to any such transfer agent or registrar, (v)
the fees and disbursements of the Company’s counsel and accountants, (vi) the
qualification of the Shares under state securities laws in accordance with the
provisions of Section 4(e), including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of any Blue Sky survey, (vii) the printing and
delivery to the Underwriters of copies of any Blue Sky survey, (viii) the fees
of FINRA, (ix) any listing of the Shares on the Nasdaq Global Select Market, and
(x) any fees charged by rating agencies for the rating of the
Shares.
If the
sale of the Shares provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth in Section 5 hereof is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Shares.
17
7. 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
Securities Act or Section 20 of the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which such Underwriter or such
controlling person may become subject, insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or any
amendment thereto, including any information deemed to be a part thereof
pursuant to Rule 430B under the Securities Act, or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading; or (ii) any untrue statement or
alleged untrue statement of a material fact contained in the Disclosure Package
or the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and to reimburse each Underwriter and each such
controlling person for any and all expenses (including the reasonable fees and
disbursements of counsel chosen by the Representatives) as such expenses are
reasonably incurred by such Underwriter or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the
foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with the Underwriter
Information. The indemnity agreement set forth in this Section 7(a)
shall be in addition to any liabilities that the Company may otherwise
have.
(b) Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, against any loss, claim, damage, liability or expense, as incurred, to
which the Company, or any such director, officer or controlling person may
become subject, insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereto, or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading; or (ii) any
untrue statement or alleged untrue statement of a material fact contained in the
Base Prospectus, the preliminary prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of 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 each case to
the extent, and only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, the Base Prospectus, the preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), in reliance upon and in conformity with
the Underwriter Information; and to reimburse the Company, or any such director,
officer or controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action. The Company
hereby acknowledges that the only information that the Underwriters have
furnished to the Company expressly for use in the Registration Statement, the
Disclosure Package or the Prospectus (or any amendment or supplement thereto)
are the names of the Underwriters[, the sentences relating to concessions and
reallowances] and the statements set forth in [[_____] and [_____] paragraphs]
under the caption “Underwriting” in the preliminary prospectus and the
Prospectus. The indemnity agreement set forth in this Section 7(b)
shall be in addition to any liabilities that each Underwriter may otherwise
have.
18
(c) Promptly
after receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 7,
notify the indemnifying party in writing of the commencement thereof; but the
failure to so notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did
not otherwise learn of such action and such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from
any liability other than the indemnification obligation provided in paragraph
(a) or (b) above. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, 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 a conflict may arise
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select one separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses
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 preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (other than local counsel approved by the
Representatives)), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement,
compromise or consent (i) includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such action,
suit or proceeding and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
19
(e) If
the indemnification provided for in Sections 7(a) through (d) is for any reason
unavailable to or otherwise insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
paid or payable by such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to therein (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriters, on the other hand, from the
offering of the Shares pursuant to this Agreement or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, on the one
hand, and the Underwriters, on the other hand, in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the Shares
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Shares pursuant
to this Agreement (before deducting expenses) received by the Company, and the
total underwriting discount received by the Underwriters, in each case as set
forth on the front cover page of the Prospectus, bear to the aggregate initial
public offering price of the Shares as set forth on such cover. The
relative fault of the Company, on the one hand, and the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Company, on the one hand, or the Underwriters, on the other hand, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 7(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section
7(c) with respect to notice of commencement of any action shall apply if a claim
for contribution is to be made under this Section 7; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given in accordance with Section 7(c) for purposes of
indemnification. The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7(e) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section
7(e).
Notwithstanding
the provisions of this Section 7(e), no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts received by such
Underwriter in connection with the Shares underwritten by it. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) under the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters’ obligations to contribute pursuant to this Section 7(e) are
several, and not joint, in proportion to their respective underwriting
commitments as set forth opposite their names in Schedule II. For
purposes of this Section 7(e), each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Securities 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 within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Company. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this paragraph (e), notify such party or parties from whom contribution
may be sought, as contemplated by the preceding paragraph. However,
the omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this paragraph (e).
20
8. Default by an
Underwriter. If any one or more Underwriters shall fail to
purchase and pay for any of the Shares agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Shares set forth
opposite their names in Schedule II hereto bear to the aggregate amount of
Shares set forth opposite the names of all the remaining Underwriters) the
Shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Shares set forth in
Schedule II hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Shares, and
if such non-defaulting Underwriters do not purchase all the Shares, this
Agreement will terminate without liability to any non-defaulting Underwriter or
the Company. In the event of a default by any Underwriter as set
forth in this Section 8, the Closing Date shall be postponed for such period,
not exceeding seven days, as the Representatives shall determine in order that
the required changes in the Registration Statement, the Disclosure Package, the
preliminary prospectus and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any non-defaulting Underwriter for damages occasioned by its default
hereunder.
9. Termination. This
Agreement shall be subject to termination in the absolute discretion of the
Representatives, by notice given to the Company prior to delivery of and payment
for the Shares, if prior to such time (i) trading in securities generally or in
the Common Stock of the Company listed on the Nasdaq Global Select Market shall
have been suspended or limited or minimum prices shall have been established on
such exchange, or (ii) a banking moratorium shall have been declared by federal,
California or New York State authorities or a material disruption in the
commercial banking or securities settlement or clearance services in the United
States shall have occurred, or (iii) there shall have occurred any outbreak or
material escalation of hostilities or other calamity or crisis (in the United
States or elsewhere) the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Representatives,
impracticable to market the Shares.
10. Representations and Indemnities to
Survive. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 7 hereof, and will survive delivery
of and payment for the Shares. The provisions of Section 6 and 7
hereof and this Section 10 shall survive the termination or cancellation of this
Agreement.
21
11. Notices. All
communications hereunder will be in writing and effective only on receipt, and,
if sent to the Representatives, will be mailed, delivered or faxed and confirmed
to them, at the address specified in Schedule I hereto, with a copy
to: [________], [address], Attn: [________], facsimile
number: [________]; or, if sent to the Company, will be mailed,
delivered or faxed and confirmed to it at Sonic Solutions, 000 Xxxxxxx Xxx,
Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, facsimile number: [________], with a copy
to: Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, Attn: Xxxxx X. Xxxxxxxxx, Esq., facsimile
number: (000) 000-0000.
12. Successors. This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and the officers and directors and controlling
persons referred to in Section 7 hereof, and no other person will have any right
or obligation hereunder.
13. No Fiduciary Duties; Agreement
Complete.
(a) The
Company acknowledges and agrees that: (i) the purchase and sale of the Shares
pursuant to this Agreement, including the determination of the public offering
price of the Shares and any related discounts and commissions, is an
arm’s-length commercial transaction between the Company, on the one hand, and
the several Underwriters, on the other hand, and the Company is capable of
evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading to
such transaction each Underwriter is and has been acting solely as a principal
and is not the financial advisor, agent or fiduciary of the Company, or its
affiliates, shareholders, creditors or employees or any other party; (iii) no
Underwriter has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of the Company with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company on other matters)
and no Underwriter has any obligation to the Company with respect to the
offering contemplated hereby except the obligations expressly set forth in this
Agreement; (iv) the several Underwriters and their respective affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of the Company and that the several Underwriters have no obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Underwriters have not provided any legal, accounting,
regulatory or tax advice with respect to the offering contemplated hereby and
the Company has consulted its own legal, accounting, regulatory and tax advisors
to the extent it deemed appropriate.
(b) This
Agreement supersedes all prior agreements and understandings (whether written or
oral) between the Company and the several Underwriters, or any of them, with
respect to the subject matter hereof. The Company hereby waives
and releases, to the fullest extent permitted by law, any claims that the
Company may have against the several Underwriters with respect to any breach or
alleged breach of agency or fiduciary duty.
14. Applicable
Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of New York, without giving
effect to principles of conflict of laws.
22
15. Counterparts. This
Agreement may be executed by any one or more of the parties hereto in any number
of counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same
instrument.
23
If the
foregoing is in accordance with your understanding of our agreement, please sign
and return to us a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the several Underwriters and
the Company in accordance with its terms.
Very
truly yours,
|
||
SONIC
SOLUTIONS
|
||
By:
|
||
Name:
|
||
Title:
|
CONFIRMED
AND ACCEPTED,
|
||
as
of the date first above written:
|
||
[____________________]
|
||
By:
|
||
Name:
|
||
Title:
|
||
________________________
|
||
By:
|
||
Name:
|
||
Title:
|
||
For
themselves and as the Representatives
|
||
of
the several Underwriters named in
|
||
Schedule
II hereto.
|
SCHEDULE
I
Underwriting
Agreement dated ___________, 20__.
Registration
Statement No. 333- ___________.
Representatives:
Address
of Representatives:
Purchase
Price and Description of Shares:
Purchase
price (include type of funds, if applicable): ____________ in federal (same day)
funds or wire transfer to an account previously designated to the
Representatives by the Company
Other
provisions:
Closing
Date, Time and Location: _________________, New York City time,
Office of Xxxxxxxx & Xxxxxxxx LLP
Schedule I-1
SCHEDULE
II
Underwriters
|
Number
of Shares to be Purchased
|
|
[_____]
|
[_____]
|
|
[_____]
|
[_____]
|
|
Total
|
[_____]
|
Schedule II-1
SCHEDULE
III
Issuer
Free Writing Prospectuses
[Final
Term Sheet]
Schedule
III-1
EXHIBIT
A
Lock-Up
Agreement
[Date]
[Representatives]
[Address]
As
Representatives of the several Underwriters
listed in
Schedule II to the
Underwriting
Agreement referred to below
Ladies
and Gentlemen:
The
undersigned understands that you, as Representatives of the several
Underwriters, propose to enter into an Underwriting Agreement (the “Underwriting
Agreement”) with Sonic Solutions, a California corporation (the “Company”),
providing for the public offering (the “Public Offering”) by the several
Underwriters named in Schedule II to the Underwriting Agreement (the
“Underwriters”), of common stock of the Company (the
“Shares”). Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Underwriting Agreement.
In
consideration of the Underwriters’ agreement to purchase and make the Public
Offering of the Shares, and for other good and valuable consideration receipt of
which is hereby acknowledged, the undersigned hereby agrees that, without the
prior written consent of [Representatives], on behalf of the Underwriters, the
undersigned will not, during the period ending [__] days (the “Lock Up Period”)
after the date of the prospectus relating to the Public Offering (the
“Prospectus”), (1) offer or sell in a public offering or an offering pursuant to
Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”),
or pledge, any shares of common stock, no par value, of the Company (the “Common
Stock”), any shares of convertible preferred stock, or any capital stock or
other securities, including units of debt securities, convertible into, or
exercisable for, shares of Common Stock or (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise.
The
foregoing paragraph shall not apply to (a) bona fide gifts, (b) dispositions to
any trust for the direct or indirect benefit of the undersigned and/or a member
of the immediate family of the undersigned, (c) the transfer or intestate
succession to the legal representatives or a member of the immediate family of
the undersigned, (d) the sale pursuant to any existing contract, instruction or
plan that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) (a
“Plan”), (e) the establishment of any Plan provided that no sales of Common
Stock or securities convertible into, or exchangeable or exercisable for, Common
Stock, shall be made pursuant to a Plan prior to the expiration of the Lock-up
Period if such Plan was established after the date hereof, (f) dispositions from
any grantor retained annuity trust established for the direct benefit of the
undersigned and/or a member of the immediate family of the undersigned pursuant
to the terms of such trust, (g) the distribution to any partnership, corporation
or limited liability company controlled by the undersigned or by a member of the
immediate family of the undersigned, (h) the disposition pursuant to an existing
pledge of Common Stock or securities convertible into, or exchangeable or
exercisable for, Common Stock as security for a margin account pursuant to the
terms of such account, (i) the exercise pursuant to the Company’s existing stock
option plans effected by the delivery or sale of shares of Common Stock of the
Company held by the undersigned. For purposes of this paragraph,
“immediate family” shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin.
A-1
In
furtherance of the foregoing, the Company, and any duly appointed transfer agent
for the registration or transfer of the securities described herein, are hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of this Letter Agreement.
The
undersigned hereby represents and warrants that the undersigned has full power
and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The
undersigned understands that, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Shares to be sold thereunder, the undersigned shall be
released from all obligations under this Letter Agreement. The
undersigned understands that the Underwriters are entering into the Underwriting
Agreement and proceeding with the Public Offering in reliance upon this Letter
Agreement.
A-2
This
Letter Agreement shall be governed by and construed in accordance with the laws
of the State of New York, without regard to the conflict of laws principles
thereof.
Very
truly yours,
|
||
[NAME
OF OFFICER]
|
X-0
XXXXXXX
X-0
List of
Directors and Officers Signing Lock-ups:
A-4
EXHIBIT
B
Form of
Opinion of Xxxxxxxx & Xxxxxxxx LLP
A-5
EXHIBIT
C
Form of
Opinion of General Counsel of the Company
A-6