1
4,000,000 SHARES
NEW ERA OF NETWORKS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
December ___, 1998
CREDIT SUISSE FIRST BOSTON CORPORATION
XX XXXXX SECURITIES CORPORATION
SOUNDVIEW TECHNOLOGY GROUP, INC.
XXXXX XXXXX XXXXXX & COMPANY, LLC
UBS AG, ACTING THROUGH ITS SUBSIDIARY WARBURG DILLON READ LLC
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. INTRODUCTORY. New Era of Networks, Inc., a Delaware corporation
("COMPANY"), proposes to issue and sell 4,000,000 shares ("FIRM SECURITIES") of
its Common Stock ("SECURITIES") and also proposes to issue and sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than
600,000 additional shares ("OPTIONAL SECURITIES") of its Securities as set forth
below. The Firm Securities and the Optional Securities are herein collectively
called the "OFFERED SECURITIES".
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333- ) relating to the
Offered Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("COMMISSION") and either (i) has been
declared effective under the Securities Act of 1933 ("ACT") and is not proposed
to be amended or (ii) is proposed to be amended by amendment or post-effective
amendment. If such registration statement ("INITIAL REGISTRATION STATEMENT") has
been declared effective, either (i) an additional registration statement
("ADDITIONAL REGISTRATION STATEMENT") relating to the Offered Securities may
have been filed with the Commission pursuant to Rule 462(b) ("RULE 462(B)")
under the Act and, if so filed, has become effective upon filing pursuant to
such Rule and the Offered Securities all have been duly
1
2
registered under the Act pursuant to the initial registration statement and, if
applicable, the additional registration statement or (ii) such an additional
registration statement is proposed to be filed with the Commission pursuant to
Rule 462(b) and will become effective upon filing pursuant to such Rule and upon
such filing the Offered Securities will all have been duly registered under the
Act pursuant to the initial registration statement and such additional
registration statement. If the Company does not propose to amend the initial
registration statement or if an additional registration statement has been filed
and the Company does not propose to amend it, and if any post-effective
amendment to either such registration statement has been filed with the
Commission prior to the execution and delivery of this Agreement, the most
recent amendment (if any) to each such registration statement has been declared
effective by the Commission or has become effective upon filing pursuant to Rule
462(c) ("RULE 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement, "EFFECTIVE
TIME" with respect to the initial registration statement or, if filed prior to
the execution and delivery of this Agreement, the additional registration
statement means (i) if the Company has advised the Representatives that it does
not propose to amend such registration statement, the date and time as of which
such registration statement, or the most recent post-effective amendment thereto
(if any) filed prior to the execution and delivery of this Agreement, was
declared effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (ii) if the Company has advised the Representatives
that it proposes to file an amendment or post-effective amendment to such
registration statement, the date and time as of which such registration
statement, as amended by such amendment or post-effective amendment, as the case
may be, is declared effective by the Commission. If an additional registration
statement has not been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representatives that it proposes to
file one, "EFFECTIVE TIME" with respect to such additional registration
statement means the date and time as of which such registration statement is
filed and becomes effective pursuant to Rule 462(b). "EFFECTIVE DATE" with
respect to the initial registration statement or the additional registration
statement (if any) means the date of the Effective Time thereof. The initial
registration statement, as amended at its Effective Time, including all material
incorporated by reference therein, including all information contained in the
additional registration statement (if any) and deemed to be a part of the
initial registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form on which
it is filed and including all information (if any) deemed to be a part of the
initial registration statement as of its Effective Time pursuant to Rule 430A(b)
("RULE 430A(b)") under the Act, is hereinafter referred to as the "INITIAL
REGISTRATION STATEMENT". The additional registration statement, as amended at
its Effective Time, including the contents of the initial registration statement
incorporated by reference therein and including all information (if any) deemed
to be a part of the additional registration statement as of its Effective Time
pursuant to Rule 430A(b), is hereinafter referred to as the "ADDITIONAL
REGISTRATION STATEMENT". The Initial Registration Statement and the Additional
Registration Statement are herein referred to collectively as the "REGISTRATION
STATEMENTS" and individually as a "REGISTRATION Statement". The form of
prospectus relating to the Offered Securities, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("RULE 424(b)") under
the Act or (if no such filing is required) as included in a Registration
Statement, including all material incorporated by reference in such prospectus,
is
2
3
hereinafter referred to as the "PROSPECTUS". No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act.
(b) The Company has not received, and has no notice of, any
order of the Commission preventing or suspending the use of any Preliminary
Prospectus, or instituted proceedings for that purpose, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects to
the requirements of the Act and the rules and regulations of the Commission
thereunder (the "RULES AND REGULATIONS"). At the Effective Time and at all times
subsequent thereto up to and at the First Closing Date (as hereinafter defined),
the Optional Closing Date (as hereinafter defined) and when any post-effective
amendment to the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, (i) the Registration
Statement and Prospectus, and any amendments or supplements thereto, will
contain all statements which are required to be stated therein by, and will
comply with the requirements of, the Act and the Rules and Regulations, (ii)
neither the Registration Statement nor any amendment thereto, will include 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 not misleading
and (iii) neither the Prospectus nor any supplement thereto, will include any
untrue statement of a material fact omit to state a material fact required to be
stated therein or necessary to make the statement made therein, in light of the
circumstances under which they were made not misleading. The preceding sentence
does not apply to statements in or omissions from a Registration Statement or
the Prospectus based upon written furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only such information is that described as such in Section
7(b) hereof. The Company has not distributed any offering material in connection
with the offering or sale of the Offered Securities other than the Registration
Statement, the Preliminary Prospectus, the Prospectus or any other materials, if
any, permitted by the Act.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement.
The Company is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except where the
failure to so qualify would not have a material adverse effect on the business,
properties, financial condition or results of operations of the Company and
Subsidiaries (as hereinafter defined) taken as a whole (a "MATERIAL ADVERSE
EFFECT"). Complete and correct copies of the certificates of incorporation and
of the bylaws of the Company and all amendments thereto have been delivered to
the representatives of the Underwriters (the "REPRESENTATIVES"), and except as
set forth in the exhibits to the Registration Statement no changes therein will
be made subsequent to the date hereof and prior to the First Closing Date or, if
later, the Optional Closing Date. The Company has no subsidiaries (as defined in
the Rules and Regulations) other than New Era of Networks Limited, NEON
(Australia) Pty. Limited, Menhir Limited, MSB Consultants Limited and Century
Analysis Incorporated, a California Corporation (the "SUBSIDIARIES"). Other than
the Subsidiaries, the Company does not own, directly or indirectly, any shares
of stock or any other
3
4
equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other entity.
(d) The Company has full power and authority (corporate and
otherwise) to enter into this Agreement and to perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the part of the
Company, enforceable against the Company in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited by applicable laws
or equitable principles and except as enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or affecting creditors' rights generally or by general equitable principles.
The performance of this Agreement by the Company and the consummation by the
Company of the transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
(i) any indenture, mortgage, deed of trust, loan agreement, bond, debenture,
note agreement or other evidence of indebtedness that is material to the
Company, or any lease, contract or other agreement or instrument that is
material to the Company to which the Company is a party or by which its
properties are bound, or (ii) the restated certificate of incorporation, as
amended, or bylaws of the Company or (iii) any law, order, rule, regulation,
writ, injunction or decree of any court or governmental agency or body to which
the Company is subject. The Company is not required to obtain or make (as the
case may be) any consent, approval, authorization, order, designation or filing
by or with any court or regulatory, administrative or other governmental agency
or body as a requirement for the consummation by the Company of the transactions
herein contemplated, except such as may be required under the Act, the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or under state
securities or blue sky ("BLUE SKY") laws or under the rules and regulations of
the National Association of Securities Dealers, Inc. ("NASD").
(e) Other than as fairly and accurately described in the
Prospectus, there is not pending or, to the Company's knowledge, threatened, any
action, suit, claim, proceeding or investigation against the Company or any of
their respective officers or any of their respective properties, assets or
rights before any court or governmental agency or body or otherwise which if
determined adversely would result in a Material Adverse Effect or have a
material adverse effect on the Company's properties, assets or rights, or
prevent consummation of the transactions contemplated hereby. There are no
statutes, rules, regulations, agreements, contracts, leases or documents that
are required to be described in the Prospectus, or to be filed as exhibits to
the Registration Statement by the Act or by the Rules and Regulations that have
not been accurately described in all material respects in the Prospectus or
filed as exhibits to the Registration Statement.
(f) All outstanding 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 federal and state
securities laws, were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right. The authorized and outstanding
capital stock of the Company conforms in all material respects to the
description thereof contained in the Registration Statement and the Prospectus
(and such description
4
5
correctly states the substance of the provisions of the instruments defining the
capital stock of the Company). The Offered Securities have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company against payment therefor in accordance with
the terms of this Agreement, will be duly and validly issued and fully paid and
nonassessable. Except as set forth in the Prospectus, no preemptive right,
co-sale right, right of first refusal or other similar rights of securityholders
exists with respect to any of the Offered Securities to be sold by the Company
or the issue and sale thereof other than those that have been expressly waived
prior to the date hereof. No holder of securities of the Company has the right
to cause the Company to include such holder's securities in the Registration
Statement which right, if any, has not been expressly waived prior to the date
hereof. No further approval or authorization of any security holder, the Board
of Directors or any duly appointed committee thereof or others is required for
the issuance and sale or transfer of the Offered Securities, except as may be
required under the Act, the Exchange Act or under state securities or Blue Sky
laws. Except as disclosed in or contemplated by the Prospectus and the financial
statements of the Company, and the related notes thereto, included in the
Prospectus the Company does not have outstanding any options or warrants to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations. The description of the Company's
stock option and other plans or arrangements, and the options or other rights
granted and exercised thereunder, set forth in the Prospectus accurately and
fairly presents, in all material respects, the information required to be shown
with respect to such plans, arrangements, options and rights.
(g) The financial statements of the Company and its
Subsidiaries, together with the related schedules and notes, forming part of the
Registration Statement and the Prospectus, fairly present the financial position
and the results of operations and cash flows for the periods shown of the
Company and its Subsidiaries at the respective dates and for the respective
periods to which they apply. All financial statements, together with the related
schedules and notes, filed with the Commission as part of the Registration
Statement have been prepared in accordance with generally accepted accounting
principles as in effect in the United States consistently applied throughout the
periods involved except as may be otherwise stated in the Registration
Statement.
(h) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has not been
(i) any material adverse change, or any development which, in the Company's
reasonable judgment, is likely to cause a material adverse change, in the
business, properties or assets described or referred to in the Registration
Statement, or the results of operations, condition (financial or otherwise),
business or operations of the Company and Subsidiaries taken as a whole, (ii)
any transaction which is material to the Company and its Subsidiaries taken as a
whole, except transactions in the ordinary course of business, (iii) any
obligation, which is material to the Company and its Subsidiaries taken as a
whole, incurred by the Company or Subsidiaries, except obligations incurred in
the ordinary course of business, (iv) any change in the capital stock or
outstanding
5
6
indebtedness of the Company or Subsidiaries or (v) any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company.
(i) Except as set forth in the Prospectus, (i) the Company and
Subsidiaries have good and valid title to all material properties and assets
described in the Prospectus as owned by them, free and clear of any pledge,
lien, security interest, charge, encumbrance, claim, equitable interest, or
restriction which are not individually or in the aggregate material to the
Company, (ii) the agreements to which the Company is a party described in the
Prospectus are valid agreements, enforceable against the Company or Subsidiaries
in accordance with their terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles except where the inability to enforce such agreements would
not individually or in the aggregate have a Material Adverse Effect, and, to the
Company's knowledge, the other contracting party or parties thereto are not in
material breach or default under any of such agreements and (iii) the Company
has valid and enforceable leases for the properties described in the Prospectus
as leased by it, and such leases conform in all material respects to the
description thereof, if any, set forth in the Registration Statement.
(j) The Company now holds and at the First Closing Date and
any later Optional Closing Date, as the case may be, will hold, all licenses,
certificates, approvals and permits from all state, United States, foreign and
other regulatory authorities that are material to the conduct of the business of
the Company (as such business is currently conducted), except for such licenses,
certificates, approvals and permits the failure of which to hold would not have
a Material Adverse Effect), all of which are valid and in full force and effect
(and there is no proceeding pending or, to the knowledge of the Company,
threatened which may cause any such license, certificate, approval or permit to
be withdrawn, canceled, suspended or not renewed). The Company is not in
violation of its certificate of incorporation or bylaws, or, except for defaults
or violations which would not have a Material Adverse Effect, in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any bond, debenture, note or other evidence of indebtedness or in
any contract, indenture, mortgage, loan agreement, joint venture or other
agreement or instrument to which it is a party or by which it or any of its
properties are bound, or in violation of any law, order, rule, regulation, writ,
injunction or decree of any court or governmental agency or body.
(k) The Company has filed on a timely basis all necessary
federal, state and foreign income, franchise and other tax returns and has paid
all taxes shown thereon as due, and the Company has no knowledge of any tax
deficiency which has been or might be asserted against the Company which might
have a Material Adverse Effect. All material tax liabilities are adequately
provided for within the financial statements of the Company.
(l) The Company maintains insurance of the types and in the
amounts adequate for their business and consistent with insurance coverage
maintained by similar companies in similar businesses covering all risks
customarily insured against, all of which insurance is in full force and effect.
6
7
(m) The Company is not involved in any labor dispute or
disturbance nor, to the knowledge of the Company, is any such dispute or
disturbance threatened.
(n) The Company owns or possesses adequate licenses or other
rights to use all patents, patent applications, trademarks, trademark
applications, service marks, service xxxx applications, tradenames, copyrights,
manufacturing processes, formulae, trade secrets, know-how, franchises, and
other material intangible property and assets (collectively, "INTELLECTUAL
PROPERTY") necessary to the conduct of their businesses as conducted and as
proposed to be conducted as described in the Prospectus. The Company has no
knowledge of any facts which would preclude it from having rights to its patent
applications referenced in the Prospectus. The Company has not received any
notice of infringement or of conflict with rights or claims of others with
respect to any Intellectual Property, except to the extent such notices or
claims are described in the Prospectus (the "CLAIMS"). The description of the
Claims set forth in the Registration Statement does not include any untrue
statement of material fact and does not omit to state a material fact necessary
to make the statements made therein, not misleading. The Company is not aware of
any patents, trademarks or proprietary rights of others which are existing or
infringed upon by products or potential products referred to in the Prospectus
in such a manner as to have a Material Adverse Affect.
(o) The Company is conducting their businesses in compliance
with all of the laws, rules and regulations of the jurisdictions in which it is
conducting business except were the Company's failure to comply would not have a
Material Adverse Affect.
(p) The Company is not an "investment company," or a
"promoter" or "principal underwriter" for a registered investment company, as
such terms are defined in the Investment Company Act of 1940, as amended.
(q) The Company has not incurred any liability for a fee,
commission, or other compensation on account of the employment of a broker or
finder in connection with the transactions contemplated by this Agreement other
than the underwriting discounts and commissions contemplated hereby.
(r) The Company is (i) in compliance with any and all
applicable United States, state and local environmental laws, rules,
regulations, treaties, statutes and codes promulgated by any and all
governmental authorities relating to the protection of human health and safety,
the environment or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), (ii) has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its
business as currently conducted, and (iii) is in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permit
licenses or other approvals would not, individually or in the aggregate, have a
Material Adverse Effect. No action, proceeding, revocation proceeding, writ,
injunction or claim is pending or threatened relating to the Environmental Laws
or to the Company's or its Subsidiaries' activities involving Hazardous
Materials. "Hazardous Materials" means any material or substance (i) that is
prohibited or regulated by any environmental law, rule, regulation, order,
treaty, statute or code promulgated by any governmental authority, or any
amendment or modification thereto, or (ii)
7
8
that has been designated or regulated by any governmental authority as
radioactive, toxic, hazardous or otherwise a danger to health, reproduction or
the environment.
(s) Neither the Company nor its Subsidiaries has at any time
during the last five years (i) made any unlawful contribution to any candidate
for foreign office, or failed to disclose fully any contribution in violation of
law or (ii) made any payment to any foreign, United States or state governmental
officer or official, or other person charged with similar public of quasi-public
duties, other than payments required or permitted by the laws of the United
States.
(t) The Common Stock is registered pursuant to Section 12(g)
of the Exchange Act. The Offered Securities have been duly authorized for
quotation on the National Association of Securities Dealers, Inc. National
Market System ("NASDAQ NATIONAL MARKET"). 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 National Market, nor has the Company received any notification that the
Commission or the Nasdaq National Market is contemplating terminating such
registration or listing.
(u) Neither the Company nor, to the Company's knowledge, any
of the Company's officers, directors or affiliates has taken, and at the First
Closing Date and at any later Optional Closing Date, neither the Company nor, to
the Company's knowledge, any of the Company's officers, directors or affiliates
will have taken, directly or indirectly, any action which has constituted, or
might reasonably be expected to constitute, the stabilization or manipulation of
the price of sale or resale of the Offered Securities.
(v) The Company has timely and properly filed with the
Commission all reports and other documents required to have been filed by it
with the Commission pursuant to the Act and the Rules and the Regulations. True
and complete copies of all such reports and other documents have been delivered
to you.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of $____ per share, the respective numbers
of shares of Firm Securities set forth opposite the names of the Underwriters in
Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives for
the accounts of the Underwriters, against payment of the purchase price in
Federal (same day) funds by official bank check or checks or wire transfer to an
account at a bank acceptable to Credit Suisse First Boston Corporation ("CSFBC")
drawn to the order of at the office of Xxxxxx Godward LLP, 0000 Xxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, at 11:00 A.M., New York time, on
, or at such other time not later than seven full business
days thereafter as CSFBC and the Company determine, such time being herein
referred to as the "FIRST CLOSING DATE". For purposes of Rule 15c6-1 under the
Exchange Act, the First Closing
8
9
Date (if later than the otherwise applicable settlement date) shall be the
settlement date for payment of funds and delivery of securities for all the
Offered Securities sold pursuant to the offering. The certificates for the Firm
Securities so to be delivered will be in definitive form, in such denominations
and registered in such names as CSFBC requests and will be made available for
checking and packaging at the above office of Xxxxxx Godward LLP at least 24
hours prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company from
time to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the number of shares of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Securities set forth opposite such Underwriter's name
bears to the total number of shares of Firm Securities (subject to adjustment by
CSFBC to eliminate fractions) and may be purchased by the Underwriters only for
the purpose of covering over-allotments made in connection with the sale of the
Firm Securities. No Optional Securities shall be sold or delivered unless the
Firm Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price therefor in Federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank acceptable to CSFBC drawn to
the order of , at the above office of Xxxxxx Godward LLP. The Optional
Securities being purchased on each Optional Closing Date will be in definitive
form, in such denominations and registered in such names as CSFBC requests upon
reasonable notice prior to such Optional Closing Date and will be made available
for checking and packaging at the above office of Xxxxxx Godward LLP at a
reasonable time in advance of such Optional Closing Date.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that:
9
10
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the Company
will file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC, subparagraph
(4)) of Rule 424(b) not later than the earlier of (A) the second business day
following the execution and delivery of this Agreement or (B) the fifteenth
business day after the Effective Date of the Initial Registration Statement.
The Company will advise CSFBC promptly of any such filing
pursuant to Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and an
additional registration statement is necessary to register a portion of the
Offered Securities under the Act but the Effective Time thereof has not occurred
as of such execution and delivery, the Company will file the additional
registration statement or, if filed, will file a post-effective amendment
thereto with the Commission pursuant to and in accordance with Rule 462(b) on or
prior to 10:00 P.M., New York time, on the date of this Agreement or, if
earlier, on or prior to the time the Prospectus is printed and distributed to
any Underwriter, or will make such filing at such later date as shall have been
consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to
amend or supplement the initial or any additional registration statement as
filed or the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not effect
such amendment or supplementation without CSFBC's consent; and the Company will
also advise CSFBC promptly of the effectiveness of each Registration Statement
(if its Effective Time is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of a Registration Statement
or the Prospectus and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its best efforts
to prevent the issuance of any such stop order and to obtain as soon as possible
its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with sales by
any Underwriter or dealer, any event occurs as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CSFBC of such event and will
promptly prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither CSFBC's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally available
to its securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration Statement
(or, if later, the Effective Date of the Additional Registration Statement)
10
11
which will satisfy the provisions of Section 11(a) of the Act. For the purpose
of the preceding sentence, "AVAILABILITY DATE" means the 45th day after the end
of the fourth fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last quarter
of the Company's fiscal year, "AVAILABILITY DATE" means the 90th day after the
end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of
each Registration Statement, each related preliminary prospectus, and, so long
as a prospectus relating to the Offered Securities is required to be delivered
under the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in each case in
such quantities as CSFBC requests. The Prospectus shall be so furnished on or
prior to 3:00 P.M., New York time, on the business day following the later of
the execution and delivery of this Agreement or the Effective Time of the
Initial Registration Statement. All other documents shall be so furnished as
soon as available. The Company will pay the expenses of printing and
distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as CSFBC
designates and will continue such qualifications in effect so long as required
for the distribution.
(g) During the period of 10 years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a copy
of its annual report to stockholders for such year; and the Company will furnish
to the Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Exchange Act or mailed to stockholders, and (ii) from time to time, such other
information concerning the Company as CSFBC may reasonably request.
(h) The Company will pay all expenses incident to the
performance of its obligations under this Agreement, for any filing fees and
other expenses (including fees and disbursements of counsel) incurred in
connection with qualification of the Offered Securities for sale under the laws
of such jurisdictions as CSFBC designates and the printing of memoranda relating
thereto for the filing fee incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the National Association of Securities Dealers, Inc. of the Offered Securities,
for any travel expenses of the Company's officers and employees and any other
expenses of the Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities and for expenses incurred in
distributing preliminary prospectuses and the Prospectus (including any
amendments and supplements thereto) to the Underwriters.
(i) For a period of 180 days after the date of the public
offering of the Offered Securities, the Company will not offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, or file with
the Commission a registration statement under the Act relating to, any
additional shares of its Securities or securities convertible into or
exchangeable or exercisable for any shares of its Securities, or publicly
disclose the intention to make any such
11
12
offer, sale, pledge, disposition or filing, without the prior written consent of
CSFBC, except grants of employee stock options pursuant to the terms of a plan
in effect on the date hereof, issuances of Securities pursuant to the exercise
of such options or the exercise of any other employee stock options outstanding
on the date hereof.
(j) For a period of 90 days following the date of the public
offering of the Offered Securities, the Company will not waive any contractual
restrictions that exist with respect to the resale of shares of Common Stock
held by MSB Consultants Limited and Century Analysis Incorporated, a California
corporation ("CAI").
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this Agreement,
shall be on or prior to the date of this Agreement or, if the Effective Time of
the Initial Registration Statement is subsequent to the execution and delivery
of this Agreement, shall be prior to the filing of the amendment or
post-effective amendment to the registration statement to be filed shortly prior
to such Effective Time), of Xxxxxx Xxxxxxxx LLP confirming that they are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included in the Registration Statements comply as
to form in all material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations;
(ii) (A) with respect to the Company, they have
performed the procedures specified by the American Institute of Certified Public
Accountants for a review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial Information, on the
unaudited financial statements included in the Registration Statement; and (B)
with respect to CAI, for the eight months ended September 30, 1998, they have:
(1) read the unaudited financial statements of CAI as of and for the eight
months ended September 30, 1998 included in the Company's Current Report on Form
8-K/A, dated November 18, 1998; (2) compared the amounts appearing in such
statements to the accounting books and records of CAI; (3) inquired of Company
management the due diligence procedures performed by the Company on such
financial statements in connection with the Share Acquisition Agreement, by and
between the Company and CAI, dated September 30, 1998; and (4) verified the
arithmetic accuracy of those financial statements;
12
13
(iii) on the basis of the review referred to in
clause (ii) (A) above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements included in the Registration Statements
do not comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations or any
material modifications should be made to such unaudited financial statements for
them to be in conformity with generally accepted accounting principles; (B) at
the date of the latest available balance sheet read by such accountants, or at a
subsequent specified date not more than three business days prior to the date of
such letter, there was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Company and its consolidated
subsidiaries or, at the date of the latest available balance sheet read by such
accountants, there was any decrease in net assets, as compared with amounts
shown on the latest balance sheet included in the Prospectus; or (C) for the
period from the date of the latest income statement included in the Prospectus
to the date of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding period of the
previous year, in consolidated net sales, or net operating income or
consolidated net income, except in all cases for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are described
in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent that such
dollar amounts, percentages and other financial information are derived from the
general accounting records of the Company and its subsidiaries subject to the
internal controls of the Company's accounting system or are derived directly
from such records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts, percentages and
other financial information to be in agreement with such results, except as
otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "REGISTRATION STATEMENTS" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration is
subsequent to such execution and delivery, "REGISTRATION STATEMENTS" shall mean
the Initial Registration Statement and the additional registration statement as
proposed to be filed or as proposed to be amended by the post-effective
amendment to be filed shortly prior to its Effective Time, and (iii)
"PROSPECTUS" shall mean the prospectus included in the Registration Statements.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Registration
Statement for purposes of this subsection.
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later
13
14
than 10:00 P.M., New York time, on the date of this Agreement or such later date
as shall have been consented to by CSFBC. If the Effective Time of the
Additional Registration Statement (if any) is not prior to the execution and
delivery of this Agreement, such Effective Time shall have occurred not later
than 10:00 P.M., New York time, on the date of this Agreement or, if earlier,
the time the Prospectus is printed and distributed to any Underwriter, or shall
have occurred at such later date as shall have been consented to by CSFBC. If
the Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement, the Prospectus shall have been filed
with the Commission in accordance with the Rules and Regulations and Section
5(a) of this Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Company or the Representative[s], shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any development or
event involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company or its subsidiaries
which, in the judgment of a majority in interest of the Underwriters including
the Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the sale of and
payment for the Offered Securities; (ii) any downgrading in the rating of any
debt securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter market;
(iv) any banking moratorium declared by U.S. Federal or New York authorities; or
(v) any outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of a
majority in interest of the Underwriters including the Representatives, the
effect of any such outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel for the Company,
in the form attached hereto on Appendix A.
(e) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, in the form attached
hereto as Appendix B. Such counsel shall state the specific terms reviewed by
such counsel and may rely upon the opinion of Xxxxxx & Xxxxxxxx; provided, that,
such counsel state that it is reasonable for them to rely on such opinion.
(f) The Representatives shall have received the opinion, dated
such Closing Date, of patent counsel to the Company, in the form attached hereto
as Appendix C.
14
15
(g) The Representatives shall have received from Xxxxxx
Godward LLP, counsel for the Underwriters, such opinion or opinions, dated such
Closing Date, with respect to the incorporation of the Company, the validity of
the Offered Securities delivered on such Closing Date, the Registration
Statements, the Prospectus and other related matters as the Representatives may
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.
(h) The Representatives shall have received an opinion, dated
such Closing Date, from Xxxxx & Co., in the form attached hereto as Appendix D.
(i) The Representative shall have received a certificate,
dated such Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to the
best of their knowledge after reasonable investigation, shall state that: the
representations and warranties of the Company in this Agreement are true and
correct; the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date; no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of subparagraphs (1)
and (3) of Rule 462(b) was filed pursuant to Rule 462(b), including payment of
the applicable filing fee in accordance with Rule 111(a) or (b) under the Act,
prior to the time the Prospectus was printed and distributed to any Underwriter;
and, subsequent to the date[s] of the most recent financial statements in the
Prospectus, there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(j) The Representatives shall have received a letter, dated
such Closing Date, of Xxxxxx Xxxxxxxx LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to in
such subsection will be a date not more than three days prior to such Closing
Date for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. CSFBC may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder,
whether in respect of an Optional Closing Date or otherwise.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each
Underwriter, its partners, directors and officers and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Act, against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based
15
16
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company 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 an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the information described as such in subsection (b) below.
(b) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company, its directors and officers and each person, if
any who controls the Company within the meaning of Section 15 of the Act,
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein 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 Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: the concession and reallowance figures appearing in the fourth
paragraph under the caption "Underwriting" and the information contained in the
seventh paragraph under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this
Section 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 subsection (a) or (b) above, 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 subsection (a) or (b) above. 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 (who shall not, except with the consent
of the
16
17
indemnified party, be counsel to the indemnifying party), and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (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 from the offering
of the Securities 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 in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities 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 shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault 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 or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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 in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms
17
18
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed a
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on either the
First or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of shares of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
number of shares of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to CSFBC and the
Company for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect, and if any Offered Securities have been purchased hereunder
the representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect. If the purchase of the Offered Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 8 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 6(c), the Company
will reimburse the
18
19
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the
Offered Securities.
10. NOTICES. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representative c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking
Department--Transactions Advisory Group, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at New Era of Networks,
Inc., Attention: Xxxxxx X. ("Xxxx") Xxxx, 0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxx, Xx 00000; provided, however, that any notice to an Underwriter
pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to
such Underwriter.
11. 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, and no other
person will have any right or obligation hereunder.
12. REPRESENTATION OF UNDERWRITERS. The Representatives will act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives will be binding upon all the
Underwriters.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
19
20
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
NEW ERA OF NETWORKS, INC.
By
------------------------------------
Xxxxxx X. Xxxx, Xx.
President and Chief Executive Officer
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
XX XXXXX SECURITIES CORPORATION
SOUNDVIEW FINANCIAL GROUP, INC.
XXXXX XXXXX XXXXXX & COMPANY, LLC
WARBURG DILLON READ, LLC
Acting on behalf of themselves and as
the Representatives of the several
Underwriters
BY CREDIT SUISSE FIRST BOSTON CORPORATION
By
-------------------------------------
Title:
---------------------------------
20
21
SCHEDULE A
UNDERWRITER NUMBER OF
----------- FIRM SECURITIES
---------------
Credit Suisse First Boston Corporation ..................
XX Xxxxx Securities Corporation
SoundView Financial Group, Inc.
Xxxxx Xxxxx Xxxxxx & Company, LLC
Warburg Dillon Read LLC
---------
Total......................... 4,000,000
=========
A-1
22
APPENDIX A
OPINION OF COUNSEL TO THE COMPANY
Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional Corporation, shall
opine to the effect that:
(a) The Company has been duly organized and is validly existing as
a corporation, and is in good standing under, the laws of the State of Delaware.
(b) Century Analysis Incorporated ("CAI") has been duly organized
and is validly existing as a corporation, and is in good standing under, the
laws of the State of California, with corporate power and authority to own or
lease its properties and to conduct its business as it is currently being
conducted. The outstanding shares of CAI have been duly authorized and validly
issued, are fully paid and nonassessable and are owned of record, directly or
indirectly, by New Era of Networks, Inc, a Delaware corporation, and to our
knowledge, are fee and clear of all liens encumbrances and security interests.
To our knowledge, no options, warrants or other rights to purchase, agreements
or other obligations to issue or other rights to convert any obligations into
any shares of capital stock or ownership interests in CAI are outstanding.
(c) The Company has all requisite corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus, except where failure to have such power and authority would
not have a Material Adverse Effect; the Company is duly qualified to do business
as a foreign corporation and is in good standing in all jurisdictions in which
the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to so qualify would not
have a Material Adverse Effect;
(d) The authorized, issued and outstanding shares of capital stock
of the Company is as set forth under the caption "Capitalization" in the
Prospectus as of each date stated therein; the issued and outstanding shares of
the Company's capital stock have been duly authorized and validly issued and are
fully paid and nonassessable, and have not been issued in violation of any
preemptive right, co-sale right, registration right, right of first refusal or
other similar right known to such counsel which has not been subsequently cured
or waived;
(e) The Shares to be issued by the Company pursuant to this
Agreement have been duly authorized and will be, upon issuance and delivery
against payment therefor in accordance with the terms hereof, validly issued,
fully paid and nonassessable and the stockholders of the Company do not have any
preemptive right, or to our knowledge, co-sale right, registration right, right
of first refusal or other similar right, which rights have not previously been
waived, in connection with the purchase or sale of any of the Shares;
(f) The Company has full corporate power and authority to enter
into this Agreement and to issue, sell and deliver to the Underwriters the Firm
Shares or the Option Shares, as the case may be, to be issued and sold by it
hereunder;
(g) This Agreement has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed and
delivered by the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as rights to indemnity may be
limited by applicable laws and public policy and except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar
A-2
23
laws affecting creditors' rights, and subject to general equity principles and
to limitations on availability of equitable relief, including specific
performance;
(h) The Registration Statement, the Prospectus, and each amendment
or supplement thereto (other than the financial statements, financial data and
supporting schedules included therein, as to which such counsel need express no
opinion), comply as to form in all material respects with the requirements of
the Act and the applicable Rules and Regulations and to our knowledge, there are
no agreements, contracts, leases or documents of a character required to be
described in, or filed as an exhibit to, the Registration Statement which are
not described or filed as required by the Act and the applicable Rules and
Regulations;
(i) The form of certificate evidencing the Common Stock complies
with the applicable provisions of Delaware law;
(j) The statements in the Registration Statement and the Prospectus
summarizing statutes, rules and regulations, including the Delaware corporation
law and the description of the certificate of incorporation and bylaws are
accurate and fairly and correctly present the information required to be
presented by the Act or the Rules and Regulations in all material respects; and
such counsel does not know of any statutes, rules or regulations required to be
described in the Registration Statement or the Prospectus that are not described
or referred to therein as required;
(k) The execution, delivery and performance of this Agreement and
the consummation of the transactions therein contemplated do not and will not
(a) conflict with or result in a breach of any of the terms or provisions of or,
constitute a default under, the restated certificate of incorporation, as
amended (the "Certificate of Incorporation"), or bylaws of the Company, (b)
conflict with or result in the breach of any term or provision of, or constitute
a default under, any agreement filed as an exhibit to the Registration
Statement, or any statute, rule or regulation known to us which is applicable to
the Company (except that no opinion need to be expressed with respect to
compliance with federal and state securities laws) or (c) to our knowledge,
result in the creation or imposition of any lien or encumbrance upon any of the
assets of the Company pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or constitute a
default or result in the acceleration of any obligation under, any indenture,
mortgage, deed of trust, loan agreement, bond, debenture, note agreement, other
evidence of indebtedness, lease, contract or other agreement or instrument to
which the Company is a party or by which its property is bound or (d) to our
knowledge, conflict with or result in a violation or breach of, or constitute a
default under, any applicable judgment, order, writ or decree of any court or
governmental agency or body binding upon or applicable to the Company;
(l) No authorization, approval, consent, order, designation or
declaration of or filing by or with any governmental authority or agency is
necessary for the execution and delivery or performance of this Agreement or the
consummation of the transactions therein contemplated except such as may have
been obtained under the Act and the Rules and Regulations or such as may be
required under state securities or Blue Sky laws or by the bylaws and rules of
the NASD in connection with the purchase and distribution of the Shares by the
Underwriters;
(m) The Company is not in violation of its Certificate of
Incorporation or, to our knowledge, bylaws;
(n) To our knowledge, except as set forth in the Registration
Statement and Prospectus, there are no pending or threatened actions, suits,
claims, proceedings or investigations that, if successful,
A-3
24
would have a Material Adverse Effect or would limit, revoke, cancel, suspend,
or cause not to be renewed any existing license, certificate, registration,
approval or permit, known to us, from any state, federal, or regulatory
authority that is material to the conduct of the business of the Company as
presently conducted, or that is of a character otherwise required to be
disclosed in the Registration Statement or the Prospectus under the Act or the
applicable Rules and Regulations that is not so disclosed;
(o) To our knowledge, except as set forth in the Registration
Statement and Prospectus, no holders of shares of Common Stock or other
securities of the Company have registration rights with respect to securities of
the Company and, except as set forth in the Registration Statement and
Prospectus, all holders of securities of the Company having registration rights
with respect to shares of Common Stock or other securities have, with respect to
the offering contemplated hereby, waived such rights or such rights have
otherwise been waived or such rights have expired by reason of lapse of time
following notification of the Company's intent to file the Registration
Statement; and
(p) The Company will not, upon consummation of the transactions
contemplated by this Agreement, be an "investment company," or controlled by an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
In addition, counsel shall include a statement to the effect that such
counsel has participated in conferences with officials and other representatives
of the Company, the Representatives, Underwriters' Counsel and the independent
public accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed,
and although they have not verified the accuracy or completeness of the
statements contained in the Registration Statement or the Prospectus, nothing
has come to the attention of such counsel which caused them to believe that, at
the time the Registration Statement became effective the Registration Statement
(except as to financial statements, financial and statistical data and
supporting schedules contained therein, as to which such counsel need express no
opinion) contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or at the Closing Date or any later Option Closing Date,
as the case may be, the Registration Statement or the Prospectus (except as
aforesaid) contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Counsel rendering the foregoing may rely (i) as to questions of law not
involving the laws of the State of California, the United States or the General
Corporation Law of the State of Delaware upon opinions of local counsel, and
(ii) as to questions of fact upon representations or certificates of officers of
the Company and of governmental officials, as the case may be, in which case its
opinion is to state that it is so doing and that it has no actual knowledge of
any material misstatement or inaccuracy in such opinions, representations or
certificates, and that they believe that they and the Underwriters are justified
in relying on such opinions or certificates. Copies of any opinion,
representation or certificate so relied upon shall be delivered to you, as
Representatives of the Underwriters, and to Underwriters' Counsel.
A-4
25
APPENDIX B
OPINION OF TRADEMARK COUNSEL TO THE COMPANY
We have reviewed the statements regarding trademark claims from Neon Systems,
Inc. and Neon Software, Inc. set forth in the Registration Statement and the
Prospectus under the captions "Risk Factors -- Protection of Intellectual
Property; Risks of Infringement" and "Business -- Intellectual Property,
Proprietary Rights and Licenses" and such statements accurately summarize the
matters described therein. Nothing has come to our attention that would lead us
to believe that either at the effective date of the Registration Statement or at
the date hereof such sections of the Registration Statement and the Prospectus,
or any amendment or supplement, contained or contain any untrue statement of a
material fact or omitted or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
26
APPENDIX C
OPINION OF PATENT COUNSEL TO THE COMPANY
We have reviewed the statements regarding patents, patent claims and the claim
from New Paradigm Software Corp. set forth in the Registration Statement and the
Prospectus under the captions "Risk Factors -- Protection of Intellectual
Property; Risks of Infringement" and "Business -- Intellectual Property,
Proprietary Rights and Licenses" and such statements accurately summarize the
matters described therein. Nothing has come to our attention that would lead us
to believe that either at the effective date of the Registration Statement or at
the date hereof such sections of the Registration Statement and the Prospectus,
or any amendment or supplement, contained or contain any untrue statement of a
material fact or omitted or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
2
27
APPENDIX D
OPINION OF XXXXX & CO
New Era of Networks Limited has been duly organized and is validly existing as a
corporation in good standing under the laws of England, with corporate power and
authority to own or lease its properties and to conduct its business as it is
currently being conducted. The outstanding shares of capital stock of New Era of
Networks Limited have been duly authorized and validly issued, are fully paid
and nonassessable and are owned of record, directly or indirectly, by New Era of
Networks, Inc., a Delaware corporation, and to our knowledge, are free and clear
of all liens, encumbrances and security interests. To our knowledge, no options,
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into any shares of capital stock or
ownership interests in New Era of Networks are outstanding.
3
