EXHIBIT 1.1
UNDERWRITING AGREEMENT
_______________, 2000
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Bear, Xxxxxxx & Co., Inc.
X.X. Xxxxxx Securities, Inc.
Soundview Technology Group, Inc.
As Representatives of the several Underwriters
c/o FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. QuickLogic Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
SCHEDULE A (the "Underwriters") an aggregate of _________ shares of its Common
Stock, par value $0.001 per share (the "Common Shares"); and the stockholders of
the Company named in SCHEDULE B (the "Selling Stockholders") propose to sell to
the Underwriters an aggregate of _______ Common Shares. The ______ Common
Shares to be sold by the Company and the _________ shares of Common Shares to be
sold by the Selling Stockholders are collectively called the "Firm Shares". In
addition, the Company has granted to the Underwriters an option to purchase up
to an additional ________ Common Shares as provided in Section 2. The _______
additional Common Shares to be sold by the Company pursuant to such option are
called the "Option Shares". The Firm Shares and, if and to the extent such
option is exercised, the Option Shares are collectively called the "Shares".
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.("Xxxxxxxxx Xxxxxxxx"), Bear, Xxxxxxx & Co.
Inc., X.X. Xxxxxx Securities, Inc., and SoundView Technology Group, Inc. have
agreed to act as representatives of the several Underwriters (in such capacity,
the "Representatives") in connection with the offering and sale of the Common
Shares.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(File No. 333-_____), which contains a form of prospectus, subject to
completion, to be used in connection with the public offering and sale of the
Shares. Each such prospectus, subject to completion, used in connection with
such public offering is called a "preliminary prospectus". Such registration
statement, as amended,
including the financial statements, exhibits and schedules thereto, in the
form in which it was declared effective by the Commission under the
Securities Act of 1933 and the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), including any information deemed to be
a part thereof at the time of effectiveness pursuant to Rule 430A under the
Securities Act, is called the "Registration Statement". Any registration
statement filed by the Company pursuant to Rule 462(b) under the Securities
Act is called the "Rule 462(b) Registration Statement", and from and after
the date and time of filing of the Rule 462(b) Registration Statement the
term "Registration Statement" shall include the Rule 462(b) Registration
Statement. Such prospectus, in the form first used by the Underwriters to
confirm sales of the Shares, is called the "Prospectus". All references in
this Agreement to the Registration Statement, the Rule 462(b) 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").
The Company and the Selling Stockholders hereby confirm their
respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and covenants to each Underwriter as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has complied
to the Commission's satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the best knowledge of the Company, are contemplated or
threatened by the Commission.
Each preliminary prospectus and the Prospectus when filed complied
in all material respects with the Securities Act and, if filed by electronic
transmission pursuant to XXXXX (except as may be permitted by Regulation S-T
under the Securities Act), was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the Shares. Each
of the Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and at all
subsequent times, complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements
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therein not misleading. Each preliminary prospectus, as of its date and the
Prospectus, as amended or supplemented, as of its date and at all subsequent
times through the 30th day after the date hereof, did not and will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately preceding
sentences do not apply to statements in or omissions from the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment thereto, or the Prospectus, or any amendments or supplements
thereto, made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by the Representatives
expressly for use therein. There are no contracts or other documents
required to be described in the Prospectus or to be filed as exhibits to the
Registration Statement which have not been described or filed as required.
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(b) OFFERING MATERIALS FURNISHED TO UNDERWRITERS. The Company has
delivered to the Representatives four complete conformed copies of the
Registration Statement and of each consent and certificate of experts filed
as a part thereof, and conformed copies of the Registration Statement
(without exhibits) and preliminary prospectuses and the Prospectus, as
amended or supplemented, in such quantities and at such places as the
Representatives have reasonably requested for each of the Underwriters.
(c) DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY. The Company
has not distributed and will not distribute, prior to the later of the Second
Closing Date (as defined below) 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 a preliminary prospectus, the
Prospectus or the Registration Statement.
(d) THE UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement
of, the Company, enforceable in accordance with its terms, except as rights
to indemnification hereunder may be limited by applicable law and except as
the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
(e) AUTHORIZATION OF THE SHARES TO BE SOLD BY THE COMPANY. The
Shares to be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement, will be validly
issued, fully paid and nonassessable.
(f) AUTHORIZATION OF THE SHARES TO BE SOLD BY THE SELLING
STOCKHOLDERS. The Common Shares to be purchased by the Underwriters from the
Selling Stockholders, when issued, were validly issued, fully paid and
nonassessable.
(g) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. There are
no persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement, other than the
Selling Stockholders with respect to the Shares included in the Registration
Statement, except for such rights as have been duly waived.
(h) NO MATERIAL ADVERSE CHANGE. Subsequent to the respective dates
as of which information is given in the Prospectus: (i) there has been no
material adverse change, or any development that could reasonably be expected
to result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects, whether or
not arising from transactions in the ordinary course of business, of the
Company and its
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subsidiaries, considered as one entity (any such change or effect, where the
context so requires, is called a "Material Adverse Change" or a "Material
Adverse Effect"); (ii) the Company and its subsidiaries, considered as one
entity, have not incurred any material liability or obligation, indirect,
direct or contingent, not in the ordinary course of business nor entered into
any material transaction or agreement not in the ordinary course of business;
and (iii) there has been no dividend or distribution of any kind declared,
paid or made by the Company or, except for dividends paid to the Company or
other subsidiaries, any of its subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of its subsidiaries of any
class of capital stock.
(i) INDEPENDENT ACCOUNTANTS. PricewaterhouseCoopers LLP, who have
expressed their opinion with respect to the financial statements (which term
as used in this Agreement includes the related notes thereto) filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, are independent public or certified public accountants as
required by the Securities Act and the Securities and Exchange Act of 0000
(xxx "Xxxxxxxx Xxx").
(x) PREPARATION OF THE FINANCIAL STATEMENTS. The financial
statements filed with the Commission as a part of the Registration Statement
and included in the Prospectus present fairly the consolidated financial
position of the Company and its subsidiaries as of and at the dates indicated
and the results of their operations and cash flows for the periods specified.
Such financial statements have been prepared in conformity with generally
accepted accounting principles as applied in the United States, applied on a
consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto. No other financial statements or
supporting schedules are required to be included in the Registration
Statement. The financial data set forth in the Prospectus under the captions
"Prospectus Summary--Summary Consolidated Financial Data", "Selected
Consolidated Financial Data" and "Capitalization" fairly present the
information set forth therein on a basis consistent with that of the audited
financial statements contained in the Registration Statement.
(k) COMPANY'S ACCOUNTING SYSTEM. The Company and each of its
subsidiaries maintain a system of accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles as applied in the
United States and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
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(l) SUBSIDIARIES OF THE COMPANY. The Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than the subsidiaries listed in Exhibit 21 to the Registration
Statement.
(m) INCORPORATION AND GOOD STANDING OF THE COMPANY AND ITS
SUBSIDIARIES. Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation or limited liability
company, as the case may be, in good standing under the laws of the
jurisdiction in which it is organized with full corporate power and authority
to own its properties and conduct its business as described in the
prospectus, and is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction which requires such
qualification.
(n) CAPITALIZATION OF THE SUBSIDIARIES. All the outstanding shares
of capital stock of each subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise set
forth in the Prospectus, all outstanding shares of capital stock of the
subsidiaries are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any security interests, claims, liens or
encumbrances.
(o) NO PROHIBITION ON SUBSIDIARIES FROM PAYING DIVIDENDS OR MAKING
OTHER DISTRIBUTIONS. No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Prospectus.
(p) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The
authorized, issued and outstanding capital stock of the Company is as set
forth in the Prospectus under the caption "Capitalization" (other than for
subsequent issuances, if any, pursuant to employee benefit plans described in
the Prospectus or upon exercise of outstanding options described in the
Prospectus). The Common Shares (including the Shares) conform in all material
respects to the description thereof contained in the Prospectus. All of the
issued and outstanding Common Shares have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance
with federal and state securities laws. None of the outstanding Common
Shares were issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase securities of
the Company. There are 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 Prospectus. The description of the
Company's stock option and other stock plans or arrangements, and the options
or other rights granted thereunder, set forth
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in the Prospectus accurately and fairly presents the information required to
be shown with respect to such plans, arrangements, options and rights.
(q) STOCK EXCHANGE LISTING. The Common Shares are registered
pursuant to Section 12(g) of the Exchange Act and have been approved for
listing on the Nasdaq National Market subject only to official notice of
issuance and the Company has taken no action designed to, or likely to have
the effect of, terminating the registration of the Common Shares under the
Exchange Act or delisting the Common Shares from the Nasdaq National Market,
nor has the Company received any notification that the Commission or the
National Association of Securities Dealers, LLC (the "NASD") is contemplating
terminating such registration or listing.
(r) .NO CONSENTS, APPROVALS OR AUTHORIZATIONS REQUIRED. No
consent, approval, authorization, filing with or order of any court or
governmental agency or regulatory body is required in connection with the
transactions contemplated herein, except such as have been obtained or made
under the Securities Act and such as may be required (i) under the blue sky
laws of any jurisdiction in connection with the purchase and distribution of
the Shares by the Underwriters in the manner contemplated here and in the
Prospectus, (ii) by the National Association of Securities Dealers, LLC and
(iii) by the federal and provincial laws of Canada.
(s) NON-CONTRAVENTION OF EXISTING INSTRUMENTS AGREEMENTS. Neither
the issue and sale of the Shares nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, (i) the charter or by-laws of the Company or
any of its subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or any of
its subsidiaries is a party or bound or to which its or their property is
subject or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of its
subsidiaries or any of its or their properties.
(t) NO DEFAULTS OR VIOLATIONS. Neither the Company nor any
subsidiary is in violation or default of (i) any provision of its charter or
by-laws, (ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to which
its property is subject or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having jurisdiction
over the Company or such subsidiary or any of its properties, as
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applicable, except any such violation or default which would not, singly or
in the aggregate, result in a Material Adverse Change except as otherwise
disclosed in the Prospectus.
(u) NO ACTIONS, SUITS OR PROCEEDINGS. 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 or its or
their property is pending or, to the best knowledge of the Company,
threatened that (i) could reasonably be expected to have a Material Adverse
Effect on the performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected to
result in a Material Adverse Effect.
(v) ALL NECESSARY PERMITS, ETC. The Company and each subsidiary
possess such valid and current certificates, authorizations or permits issued
by the appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct their respective businesses, and neither the Company nor
any subsidiary has received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, could result in a Material
Adverse Change.
(w) TITLE TO PROPERTIES. Except as otherwise disclosed in the
Registration Statement (including the financial statements attached thereto),
the Company and each of its subsidiaries has good and marketable title to all
the properties and assets reflected as owned in the financial statements
referred to in Section 1(A) (i) above, in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except such as do not materially and adversely affect the
value of such property and do not materially interfere with the use made or
proposed to be made of such property by the Company or such subsidiary. The
real property, improvements, equipment and personal property held under lease
by the Company or any subsidiary are held under valid and enforceable leases,
with such exceptions as are not material and do not materially interfere with
the use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company or such subsidiary.
(x) TAX LAW COMPLIANCE. The Company and its consolidated
subsidiaries have filed all necessary federal, state and foreign income and
franchise tax returns and have paid all taxes required to be paid by any of
them and, if due and payable, any related or similar assessment, fine or
penalty levied against any of them. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to in
Section 1(A)(i) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Company
or any of its consolidated subsidiaries has not been finally determined. The
Company is not aware of any tax deficiency that has been or
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might be asserted or threatened against the Company that could result in a
Material Adverse Change.
(y) INTELLECTUAL PROPERTY RIGHTS. Each of the Company and its
subsidiaries owns or possesses adequate rights to use all patents, patent
rights or licenses, inventions, collaborative research agreements, trade
secrets, know-how, trademarks, service marks, trade names and copyrights
which are necessary to conduct its businesses as described in the
Registration Statement and Prospectus; the expiration of any patents, patent
rights, trade secrets, trademarks, service marks, trade names or copyrights
would not result in a Material Adverse Change that is not otherwise disclosed
in the Prospectus; the Company has not received any notice of, and has no
knowledge of, any infringement of or conflict with asserted rights of the
Company by others with respect to any patent, patent rights, inventions,
trade secrets, know-how, trademarks, service marks, trade names or
copyrights, except for those that are disclosed in the Registration Statement
and Prospectus, or that the Company believes would not, if the subject of any
unfavorable decision, ruling or finding, result in a Material Adverse Change;
and the Company has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of others with respect to
any patent, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names or copyrights which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, might have a
Material Adverse Change. There is no claim being made against the Company
regarding patents, patent rights or licenses, inventions, collaborative
research, trade secrets, know-how, trademarks, service marks, trade names or
copyrights, except for those that are disclosed in the Registration Statement
and Prospectus, or that the Company believes would not, if the subject of any
unfavorable decision, ruling or finding, result in a Material Adverse Change.
The Company and its subsidiaries do not in the conduct of their business as
now or proposed to be conducted as described in the Prospectus infringe or
conflict with any right or patent of any third party, or any discovery,
invention, product or process which is the subject of a patent application
filed by any third party, known to the Company or any of its subsidiaries,
which such infringement or conflict is reasonably likely to result in a
Material Adverse Change.
(z) Y2K. There are no Y2K issues related to the Company, or any of
its subsidiaries, that (i) are of a character required to be described or
referred to in the Registration Statement or Prospectus by the Securities Act
or by the Exchange Act or the rules and regulations of the Commission
thereunder which have not been accurately described in the Registration
Statement or Prospectus or (ii) might reasonably be expected to result in any
Material Adverse Change or that might materially affect their properties,
assets or rights.
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(aa) NO TRANSFER TAXES OR OTHER FEES. There are no transfer taxes
or other similar fees or charges under Federal law or the laws of any state,
or any political subdivision thereof, required to be paid in connection with
the execution and delivery of this Agreement or the issuance and sale by the
Company of the shares.
(bb) COMPANY NOT AN "INVESTMENT COMPANY". The Company has been
advised of the rules and requirements under the Investment Company Act of
1940, as amended (the "Investment Company Act"). The Company is not, and
after receipt of payment for the Shares will not be, an "investment company"
or an entity "controlled" by an "investment company" within the meaning of
the Investment Company Act and will conduct its business in a manner so that
it will not become subject to the Investment Company Act.
(cc) INSURANCE. Each of the Company and its subsidiaries are
insured by recognized, financially sound and reputable institutions with
policies in such amounts and with such deductibles and covering such risks as
are generally deemed adequate and customary for their businesses including,
but not limited to, policies covering real and personal property owned or
leased by the Company and its subsidiaries against theft, damage,
destruction, acts of vandalism, general liability and Directors and Officers
liability. The Company has no reason to believe that it or any subsidiary
will not be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as
now conducted and at a cost that would not result in a Material Adverse
Change. Neither of the Company nor any subsidiary has been denied any
insurance coverage which it has sought or for which it has applied.
(dd) LABOR MATTERS. To the best of Company's knowledge, no labor
disturbance by the employees of the Company or any of its subsidiaries exists
or is imminent; and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its principal suppliers,
subassemblers, value added resellers, subcontractors, original equipment
manufacturers, authorized dealers or international distributors that might be
expected to result in a Material Adverse Change.
(ee) NO PRICE STABILIZATION OR MANIPULATION. The Company has not
taken and will not take, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Shares.
(ff) LOCK-UP AGREEMENTS. Each officer and director of the Company,
each Selling Stockholder and each beneficial owner of one or more percent of
the outstanding issued share capital of the Company has agreed to sign an
agreement substantially in the form attached hereto as EXHIBIT A (the
"Lock-up Agreements"). The Company has provided to counsel for the
Underwriters a complete and
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accurate list of all securityholders of the Company and the number and type
of securities held by each securityholder. The Company has provided to
counsel for the Underwriters true, accurate and complete copies of all of the
Lock-up Agreements presently in effect or effected hereby. The Company
hereby represents and warrants that it will not release any of its officers,
directors or other stockholders from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of Xxxxxxxxx
Xxxxxxxx.
(gg) RELATED PARTY TRANSACTIONS. There are no business
relationships or related-party transactions involving the Company or any
subsidiary or any other person required to be described in the Prospectus
which have not been described as required.
(hh) ENVIRONMENTAL LAWS. (i) The Company is in compliance with all
rules, laws and regulations relating to the use, treatment, storage and
disposal of toxic substances and protection of health or the environment
("Environmental Laws") which are applicable to its business, except where the
failure to comply would not result in a Material Adverse Change, (ii) the
Company has received no notice from any governmental authority or third party
of an asserted claim under Environmental Laws, which claim is required to be
disclosed in the Registration Statement and the Prospectus, (iii) the Company
will not be required to make future material capital expenditures to comply
with Environmental Laws and (iv) no property which is owned, leased or
occupied by the Company has been designated as a Superfund site pursuant to
the Comprehensive Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. Section 9601, ET SEQ.), or otherwise designated as a
contaminated site under applicable state or local law.
(ii) PERIODIC REVIEW OF COSTS OF ENVIRONMENTAL COMPLIANCE. In the
ordinary course of its business, the Company conducts a periodic review of
the effect of Environmental Laws on the business, operations and properties
of the Company and its subsidiaries, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review and the amount of
its established reserves, the Company has reasonably concluded that such
associated costs and liabilities would not, individually or in the aggregate,
result in a Material Adverse Change.
(jj) ERISA COMPLIANCE. The Company and its subsidiaries and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or maintained
by the Company, its subsidiaries or their "ERISA Affiliates" (as defined
below) are in compliance in all material respects with ERISA. "ERISA
Affiliate" means, with
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respect to the Company or a subsidiary, any member of any group of
organizations described in Sections 414(b),(c),(m) or (o) of the Internal
Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such
subsidiary is a member. No "reportable event" (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any "employee
benefit plan" established or maintained by the Company, its subsidiaries or
any of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, its subsidiaries or any of their ERISA Affiliates,
if such "employee benefit plan" were terminated, would have any "amount of
unfounded benefit liabilities" (as defined under ERISA). Neither the
Company, its subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee benefit plan" or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit
plan" established or maintained by the Company, its subsidiaries or any of
their ERISA Affiliates that is intended to be qualified under Section 401(a)
of the Code is so qualified and nothing has occurred, whether by action or
failure to act, which would cause the loss of such qualification.
Any certificate signed by an officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each Underwriter
as to the matters set forth therein.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder represents, warrants and covenants to each Underwriter as
follows:
(a) THE UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Stockholder and is a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
(b) THE CUSTODY AGREEMENT AND POWER OF ATTORNEY. Each of the (i)
Custody Agreement signed by such Selling Stockholder and American Stock
Transfer Trust Company, as custodian (the "Custodian"), relating to the
deposit of the Shares to be sold by such Selling Stockholder (the "Custody
Agreement") and (ii) Power of Attorney appointing certain individuals named
therein as such Selling Stockholder's attorneys-in-fact (each, an
"Attorney-in-Fact") to the extent set forth therein relating to the
transactions contemplated hereby and by the Prospectus (the "Power of
Attorney"), of such Selling Stockholder has been duly authorized, executed
and delivered by such Selling Stockholder and is a valid and binding
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agreement of such Selling Stockholder, enforceable in accordance with its
terms, except as rights to indemnification thereunder may be limited by
applicable law and except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles. Each Selling Stockholder agrees that the Shares to be
sold by such Selling Stockholder on deposit with the Custodian is subject to
the interests of the Underwriters, that the arrangements made for such
custody are to that extent irrevocable until May 15, 2000, and that the
obligations of such Selling Stockholder hereunder shall not be terminated,
except as provided in this Agreement or in the Custody Agreement, by any act
of the Selling Stockholder, by operation of law, by death or incapacity of
such Selling Stockholder or by the occurrence of any other event. If such
Selling Stockholder should die or become incapacitated, or in any other event
should occur, before the delivery of the Shares to be sold by such Selling
Stockholder hereunder, the documents evidencing the Shares to be sold by such
Selling Stockholder then on deposit with the Custodian shall be delivered by
the Custodian in accordance with the terms and conditions of this Agreement
as if such death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice thereof.
(c) TITLE TO SHARES TO BE SOLD. Such Selling Stockholder is the
lawful owner of the Shares to be sold by such Selling Stockholder hereunder
and upon sale and delivery of, and payment for, such Shares, as provided
herein, such Selling Stockholder will convey good and marketable title to
such Shares, free and clear of all liens, encumbrances, equities and claims
whatsoever.
(d) ALL AUTHORIZATIONS OBTAINED. Such Selling Stockholder has, and
on the First Closing Date and the Second Closing Date (as defined below) will
have, good and valid title to all of the Shares which may be sold by such
Selling Stockholder pursuant to this Agreement on such date and the legal
right and power, and all authorizations and approvals required by law and
under its charter or by-laws, to enter into this Agreement and its Custody
Agreement and Power of Attorney, to sell, transfer and deliver all of the
Shares which may be sold by such Selling Stockholder pursuant to this
Agreement and to comply with its other obligations hereunder and thereunder.
(e) NO FURTHER CONSENTS, AUTHORIZATION OR APPROVALS. No consent,
approval, authorization or order of any court or governmental agency or body
is required for the consummation by such Selling Stockholder of the
transactions contemplated herein, except such as may have been obtained under
the Securities Act and such as may be required under the federal and
provincial securities laws of Canada or the blue sky laws or any jurisdiction
in connection with the purchase and distribution of the Shares by the
Underwriters and such other approvals as have been obtained.
13
(f) NON-CONTRAVENTION. Neither the sale of the Securities being
sold by such Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder or the
fulfillment of the terms hereof by such Selling Stockholder will conflict
with, result in a breach or violation of, or constitute a default under any
law or the terms of any indenture or other agreement or instrument to which
such Selling Stockholder is party or bound, any judgment, order or decree
applicable to such Selling Stockholder or any court or regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over such Selling Stockholder.
(g) NO REGISTRATION OR OTHER SIMILAR RIGHTS. Such Selling
Stockholder does not have any registration or other similar rights to have
any equity or debt securities registered for sale by the Company under the
Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as are described in the Prospectus under
"Shares Eligible for Future Sale".
(h) NO PREEMPTIVE, CO-SALE OR OTHER RIGHTS. Such Selling
Stockholder does not have, or has waived prior to the date hereof, any
preemptive right, co-sale right or right of first refusal or other similar
right to purchase any of the Shares that are to be sold by the Company or any
of the other Selling Stockholders to the Underwriters pursuant to this
Agreement; and such Selling Stockholder does not own any warrants, options or
similar rights to acquire, and does not have any right or arrangement to
acquire, any capital stock, right, warrants, options or other securities from
the Company, other than those described in the Registration Statement and the
Prospectus.
(i) DISCLOSURE MADE BY SUCH SELLING STOCKHOLDER IN THE PROSPECTUS.
All information furnished by or on behalf of such Selling Stockholder in
writing expressly for use in the Registration Statement and Prospectus is,
and on the First Closing Date and the Second Closing Date (as defined below)
will be, true, correct, and complete in all material respects, and does not,
and on the First Closing Date and the Second Closing Date will not, contain
any untrue statement of a material fact or omit to state any material fact
necessary to make such information not misleading. Such Selling Stockholder
confirms as accurate the number of shares of Shares set forth opposite such
Selling Stockholder's name in the Prospectus under the caption "Principal and
Selling Stockholders" (both prior to and after giving effect to the sale of
the Shares).
(j) NO PRICE STABILIZATION OR MANIPULATION. Such Selling
Stockholder has not taken and will not take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
(k) NO TRANSFER TAXES OR OTHER FEES. There are no transfer taxes or
other similar fees or charges under Federal law or the laws of any state, or any
political
14
subdivision thereof, required to be paid in connection with the execution and
delivery of this Agreement or the sale by the Selling Stockholders of the
Shares.
(l) DISTRIBUTION OF OFFERING MATERIALS BY THE SELLING STOCKHOLDERS.
The Selling Stockholders have not distributed and will not distribute, prior
to the later of the Second Closing Date (as defined below) and the completion
of the Underwriters' distribution of the Shares, any offering material in
connection with the offering and sale of the Shares by such Selling
Stockholder other than a preliminary prospectus, the Prospectus or the
Registration Statement.
(m) COMPANY REPRESENTATIONS AND WARRANTIES. In the case of ____ and
____, such Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 1(A)
hereof are not true and correct, is familiar with the Registration Statement
and the Prospectus and has no knowledge of any material fact, condition or
information not disclosed in the Registration Statement or the Prospectus
which has had or may result in a Material Adverse Change on the condition,
financial or otherwise, or on the earnings, business, operation or prospects,
whether or not arising from transactions in the ordinary course of business
of the Company and its subsidiaries, considered as one entity, and is not
prompted to sell the Shares to be sold by such Selling Stockholder by any
information concerning the Company which is not set forth in the Registration
Statement and the Prospectus.
Any certificate signed by or on behalf of any Selling Stockholder and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Stockholder to
each Underwriter as to the matters covered thereby.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) THE FIRM SHARES. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an aggregate of
_________ Firm Shares and (ii) the Selling Stockholders agree to sell to the
several Underwriters an aggregate of _________ Firm Shares. On the basis of
the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company and the Selling
Stockholders the respective number of Firm Shares set forth opposite their
names on SCHEDULE A. The purchase price per Firm Share to be paid by the
several Underwriters to the Company and the Selling Stockholders shall be
$____ per share.
(b) THE FIRST CLOSING DATE. Delivery of the Firm Shares to be
purchased by the Underwriters and payment therefor shall be made by the
Company and the Representatives at 6:00 a.m. San Francisco time, at the
offices of Xxxxxx Xxxxxxx
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Xxxxxxxx & Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx (or at such other place as may be agreed upon among the
Representatives and the Company), (i) on the third (3rd) full business day
following the first day that Shares are traded, (ii) if this Agreement is
executed and delivered after 1:30 P.M., San Francisco time, the fourth (4th)
full business day following the day that this Agreement is executed and
delivered or (iii) at such other time and date not later that seven (7) full
business days following the first day that Shares are traded as the
Representatives and the Company may determine (or at such time and date to
which payment and delivery shall have been postponed pursuant to Section 8
hereof), such time and date of payment and delivery being herein called the
"Closing Date;" provided, however, that if the Company has not made available
to the Representatives copies of the Prospectus within the time provided in
Section 2(g) hereof, the Representatives may, in its sole discretion,
postpone the Closing Date until no later that two (2) full business days
following delivery of copies of the Prospectus to the Representatives.
(c) THE OPTION SHARES; THE SECOND CLOSING DATE. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of _________ Option Shares from
the Company at the purchase price per share to be paid by the Underwriters
for the Firm Shares. The option granted hereunder is for use by the
Underwriters solely in covering any over-allotments in connection with the
sale and distribution of the Firm Shares. The option granted hereunder may
be exercised at any time upon notice by the Representatives to the Company,
which notice may be given at any time within 30 days from the date of this
Agreement. The time and date of delivery of the Option Shares, if subsequent
to the First Closing Date, is called the "Second Closing Date" and shall be
determined by the Representatives and shall not be earlier than three nor
later than five full business days after delivery of such notice of exercise.
If any Option Shares are to be purchased, (i) each Underwriter agrees,
severally and not jointly, to purchase the number of Option Shares (subject
to such adjustments to eliminate fractional shares as the Representatives may
determine) that bears the same proportion to the total number of Option
Shares to be purchased as the number of Firm Shares set forth on SCHEDULE A
opposite the name of the Underwriter bears to the total number of Firm Shares
and (ii) the Company agrees to sell the Option Shares. The Representatives
may cancel the option at any time prior to its expiration by giving written
notice of such cancellation to the Company.
(d) PUBLIC OFFERING OF THE SHARES. The Representatives hereby
advise the Company and the Selling Stockholders that the Underwriters intend
to offer for sale to the public, as described in the Prospectus, their
respective portions of the Shares as soon after this Agreement has been
executed and the Registration
16
Statement has been declared effective as the Representatives, in its sole
judgment, has determined is advisable and practicable.
(e) PAYMENT FOR THE SHARES. Payment for the Shares to be sold by
the Company shall be made at the First Closing Date (and, if applicable, at
the Second Closing Date) by wire transfer of immediately available funds to
the order of the Company. Payment for the Shares to be sold by the Selling
Stockholders shall be made at the First Closing Date by wire transfer of
immediately available funds to the order of the Custodian.
It is understood that the Representatives have been authorized,
for their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Shares and any Option Shares the Underwriters have agreed to purchase.
Xxxxxxxxx Xxxxxxxx, individually and not as Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Shares
to be purchased by any Underwriter whose funds shall not have been received
by the First Closing Date or the Second Closing Date, as the case may be, for
the account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all
stock transfer taxes, stamp duties and other similar taxes, if any, payable
upon the sale or delivery of the Shares to be sold by such Selling
Stockholder to the several Underwriters, or otherwise in connection with the
performance of such Selling Stockholder's obligations hereunder and (ii) the
Custodian is authorized to deduct for such payment any such amounts from the
proceeds to such Selling Stockholder hereunder and to hold such amounts for
the account of such Selling Stockholder with the Custodian under the Custody
Agreement.
17
(f) DELIVERY OF THE SHARES. The Company and the Selling
Stockholders shall deliver, or cause to be delivered a credit representing
the Firm Shares to an account or accounts at The Depository Trust Company as
designated by the Representatives for the accounts of the Representatives and
the several Underwriters at the First Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the amount of
the purchase price therefor. The Company shall also deliver, or cause to be
delivered a credit representing the Option Shares to an account or accounts
at The Depository Trust Company as designated by the Representatives for the
accounts of the Representatives and the several Underwriters at the First
Closing Date or the Second Closing Date, as the case may be, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. Time shall be of the essence, and
delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriters.
(g) DELIVERY OF PROSPECTUS TO THE UNDERWRITERS. Not later than
12:00 noon on the second business day following the date the Shares are
released by the Underwriters for sale to the public, the Company shall
deliver or cause to be delivered copies of the Prospectus in such quantities
and at such places as the Representatives shall request.
SECTION 3. Covenants of the Company and the Selling Stockholders.
A. COVENANTS OF THE COMPANY. The Company further covenants and
agrees with each Underwriter as follows:
(a) REGISTRATION STATEMENT MATTERS. The Company will, (i) use its
best efforts to cause the Registration Statement to become effective or, if
the procedure in Rule 430A of the Securities Act is followed, to prepare and
timely file with the Commission under Rule 424(b) under the Securities Act a
Prospectus in a form approved by the Representatives containing information
previously omitted at the time of effectiveness of the Registration Statement
in reliance on Rule 430A of the Securities Act and (ii) not file any
amendment to the Registration Statement or supplement to the Prospectus of
which the Representatives shall not previously have been advised and
furnished with a copy or to which the Representatives shall have reasonably
objected in writing or which is not in compliance with the Securities Act. If
the Company elects to rely on Rule 462(b) under the Securities Act, the
Company shall file a Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) under the Securities Act prior to the time
confirmations are sent or given, as specified by Rule 462(b)(2) under the
Securities Act, and shall pay the applicable fees in accordance with Rule 111
under the Securities Act.
18
(b) SECURITIES ACT COMPLIANCE. The Company will advise the
Representatives promptly (i) when the Registration Statement or any
post-effective amendment thereto shall have become effective, (ii) of receipt
of any comments from the Commission, (iii) of any request of the Commission
for amendment of the Registration Statement or for supplement to the
Prospectus or for any additional information and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose. The Company will use its best efforts to
prevent the issuance of any such stop order preventing or suspending the use
of the Prospectus and to obtain as soon as possible the lifting thereof, if
issued.
(c) BLUE SKY COMPLIANCE. The Company will cooperate with the
Representatives and counsel for the Underwriters in endeavoring to qualify
the Shares for sale under the securities laws of such jurisdictions (both
national and foreign) as the Representatives may reasonably have designated
in writing and will make such applications, file such documents, and furnish
such information as may be reasonably required for that purpose, provided the
Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction where it is not
now so qualified or required to file such a consent. The Company will, from
time to time, prepare and file such statements, reports and other documents,
as are or may be required to continue such qualifications in effect for so
long a period as the Representatives may reasonably request for distribution
of the Shares.
(d) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER
SECURITIES ACT MATTERS. The Company will comply with the Securities Act and
the Exchange Act, and the rules and regulations of the Commission thereunder,
so as to permit the completion of the distribution of the Shares as
contemplated in this Agreement and the Prospectus. If during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Representatives or counsel for
the Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances
existing at the time the Prospectus is delivered to a purchaser, not
misleading, or, if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will prepare and file
with the Commission, and furnish at its own expense to the Underwriters and
to dealers, an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with the law.
19
(e) COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS.
The Company agrees to furnish the Representatives, without charge, during the
period beginning on the date hereof and ending on the later of the First
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 (the "Prospectus Delivery Period"), as
many copies of the Prospectus and any amendments and supplements thereto
(including any documents incorporated or deemed incorporated by reference
therein) as the Representatives may request.
(f) INSURANCE. The Company shall maitain Directors and Officers
liability insurance in the minimum amount of $10 million which shall apply to
the offering contemplated hereby.
(g) NOTICE OF SUBSEQUENT EVENTS. If at any time during the ninety
(90) day period after the Registration Statement becomes effective, any
rumor, publication or event relating to or affecting the Company shall occur
as a result of which in Xxxxxxxxx Xxxxxxxx' opinion the market price of the
Shares has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or amendment of
the Prospectus), the Company will, after written notice from Xxxxxxxxx
Xxxxxxxx advising the Company to the effect set forth above, forthwith
prepare, consult with Xxxxxxxxx Xxxxxxxx concerning the substance of and
disseminate a press release or other public statement, reasonably
satisfactory to Xxxxxxxxx Xxxxxxxx, responding to or commenting on such
rumor, publication or event.
(h) USE OF PROCEEDS. The Company shall apply the net proceeds from
the sale of the Shares sold by it in the manner described under the caption
"Use of Proceeds" in the Prospectus.
(i) TRANSFER AGENT. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Shares.
(j) EARNINGS STATEMENT. The Company shall make generally available
to its security holders as soon as practicable, but in any event not later
than eighteen months after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Securities Act), an earnings statement
of the Company (which need not be audited) complying with Section 11(a) of
the Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158).
(k) PERIODIC REPORTING OBLIGATIONS. During the Prospectus Delivery
Period the Company shall file, on a timely basis, with the Commission and the
Nasdaq National Market all reports and documents required to be filed under
the Exchange Act.
20
(l) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES. The
Company will not offer, sell or contract to sell, or otherwise dispose of or
enter into any transaction which is designed to, or could be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise by the Company or
any affiliate of the Company or any person in privity with the Company or any
affiliate of the Company) directly or indirectly, or announce the offering
of, any other Common Shares or any securities convertible into, or
exchangeable for, Common Shares; provided, however, that the Company may (i)
issue and sell Common Shares pursuant to any director or employee stock
option plan, stock ownership plan or dividend reinvestment plan of the
Company in effect at the date of the Prospectus and described in the
Prospectus so long as none of those shares may be transferred and the Company
shall enter stop transfer instructions with its transfer agent and registrar
against the transfer of any such Common Shares and (ii) the Company may issue
Common Shares issuable upon the conversion of securities or the exercise of
warrants outstanding at the date of the Prospectus and described in the
Prospectus. These restrictions terminate after the close of trading of the
Shares on the 90th day of (and including) the day the Shares commenced
trading on the Nasdaq National Market (the "Lock Up Period").
(m) FUTURE REPORTS TO THE REPRESENTATIVES. During the period of
five years hereafter the Company will furnish to the Representatives (i) as
soon as practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of the
close of such fiscal year and statements of income, stockholders' equity and
cash flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form
8-K or other report filed by the Company with the Commission, the National
Association of Securities Dealers, LLC or any securities exchange; and (iii)
as soon as available, copies of any report or communication of the Company
mailed generally to holders of its capital stock.
(n) EXCHANGE ACT COMPLIANCE. During the Prospectus Delivery
Period, the Company will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Act in the manner
and within the time periods required by the Exchange Act.
B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling
Stockholder further covenants and agrees with each Underwriter:
(a) NOT TO OFFER OR SELL ADDITIONAL SECURITIES. Such Selling
Stockholder will not, during the Lock-Up Period, make a disposition of
Securities (as defined in EXHIBIT A hereto) now owned or hereafter acquired
directly by such person or with respect to which such person has or hereafter
acquires the power of disposition,
21
otherwise than (i) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction, (ii) as a
distribution to partners or shareholders of such person, provided that the
distributees thereof agree in writing to be bound by the terms of this
restriction, (iii) with respect to dispositions of Common Shares acquired on
the open market, (iv) pursuant to the Company's Employee Stock Purchase Plan,
provided such disposition is effected as provided in such Selling
Stockholder's Lock-Up Agreement with the Representatives; or (v) pursuant to
this Agreement or with the prior written consent of Xxxxxxxxx Xxxxxxxx. The
foregoing restriction has been expressly agreed to preclude the holder of the
Securities from engaging in any hedging or other transaction which is
designed to or reasonably expected to lead to or result in a disposition of
Securities during the Lock-Up Period, even if such Securities would be
disposed of by someone other than such holder. Such prohibited hedging or
other transactions would include, without limitation, any short sale (whether
or not against the box) or any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to any
Securities or with respect to any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from Securities. Furthermore, such person has also agreed and
consented to the entry of stop transfer instructions with the Company's
transfer agent against the transfer of the Securities held by such person
except in compliance with this restriction.
(b) DELIVERY OF FORMS W-9. To deliver to the Representatives prior
to the First Closing Date a properly completed and executed United States
Treasury Form W-9.
(c) NOTIFICATION OF UNTRUE STATEMENTS, ETC. If, at any time prior
to the date on which the distribution of the Common Shares as contemplated
herein and in the Prospectus has been completed, as determined by the
Representatives, such Selling Stockholder has knowledge of the occurrence of
any event as a result of which the Prospectus or the Registration Statement,
in each case 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 light of the circumstances under which they
were made, not misleading, such Selling Stockholder will promptly notify the
Company and the Representatives.
SECTION 4. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Firm
Shares as provided herein on the First Closing Date and, with respect to the
Option Shares, the Second Closing Date, shall be subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Stockholders set forth in Section 1 Sections 1(A) and 1(B) hereof as of the
date hereof and as of the First Closing Date as though then made and, with
respect to the Option Shares, as of the Second Closing Date as though then
made, to the timely performance by the
22
Company and the Selling Stockholders of their respective covenants and other
obligations hereunder, and to each of the following additional conditions:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER; NO
OBJECTION FROM THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, LLC. The
Registration Statement shall have become effective prior to the execution of
this Agreement, or at such later date as shall be consented to in writing by
Xxxxxxxxx Xxxxxxxx; and no stop order suspending the effectiveness thereof
shall have been issued and no proceedings for that purpose shall have been
initiated or, to the knowledge of the Company, any Selling Stockholders or
any Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
the satisfaction of Underwriters' Counsel; and the National Association of
Securities Dealers, LLC shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(b) CORPORATE PROCEEDINGS. All corporate proceedings and other
legal matters in connection with this Agreement, the form of Registration
Statement and the Prospectus, and the registration, authorization, issue,
sale and delivery of the Shares, shall have been reasonably satisfactory to
Underwriters' Counsel, and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable them
to pass upon the matters referred to in this Section.
(c) NO MATERIAL ADVERSE CHANGE. Subsequent to the execution and
delivery of this Agreement and prior to the First Closing Date, or the Second
Closing Date, as the case may be, there shall not have been any Material
Adverse Change in the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise from that set forth in the
Registration Statement or Prospectus, which, in Xxxxxxxxx Xxxxxxxx' sole
judgment, is material and adverse and that makes it, in Xxxxxxxxx Xxxxxxxx'
sole judgment, impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Prospectus.
(d) OPINION OF COUNSEL FOR THE COMPANY. Xxxxxxxxx Xxxxxxxx shall
have received on the First Closing Date, or the Second Closing Date, as the
case may be, an opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation counsel for the Company substantially in the form of EXHIBIT B
attached hereto, dated the First Closing Date, or the Second Closing Date,
addressed to the Underwriters and with reproduced copies or signed
counterparts thereof for each of the Underwriters.
Counsel rendering the opinion contained in EXHIBIT B may rely as to
questions of law not involving the laws of the United States or the State of
California and
23
Delaware upon opinions of local counsel, and as to questions of fact upon
representations or certificates of officers of the Company, the Selling
Stockholders or officers of the Selling Stockholders (when the Selling
Stockholder is not a natural person), and of government officials, in which
case their opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or inaccuracy in any such opinion,
representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of
the Underwriters, and to Underwriters' Counsel.
(e) OPINION OF INTELLECTUAL PROPERTY COUNSEL FOR THE COMPANY.
Xxxxxxxxx Xxxxxxxx shall have received on the First Closing Date, or the
Second Closing Date, as the case may be, an opinion of Skjerven, Morrill,
XxxXxxxxxx, Xxxxxxxx & Xxxxx LLP, intellectual property counsel for the
Company in form reasonably satisfactory to Xxxxxxxxx Xxxxxxxx
(f) OPINION OF COUNSEL FOR THE UNDERWRITERS. Xxxxxxxxx Xxxxxxxx
shall have received on the First Closing Date or the Second Closing Date, as
the case may be, an opinion of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP,
substantially in the form of EXHIBIT C hereto. The Company shall have
furnished to such counsel such documents as they may have requested for the
purpose of enabling them to pass upon such matters.
(g) ACCOUNTANTS' COMFORT LETTER. Xxxxxxxxx Xxxxxxxx shall have
received on the First Closing Date and on the Second Closing Date, as the
case may be, a letter from PricewaterhouseCoopers LLP addressed to the
Underwriters, dated the First Closing Date or the Second Closing Date, as the
case may be, confirming that they are independent certified public
accountants with respect to the Company within the meaning of the Securities
Act and the applicable published Rules and Regulations and based upon the
procedures described in such letter delivered to Xxxxxxxxx Xxxxxxxx
concurrently with the execution of this Agreement (herein called the
"Original Letter"), but carried out to a date not more than four (4) business
days prior to the First Closing Date or the Second Closing Date, as the case
may be, (i) confirming, to the extent true, that the statements and
conclusions set forth in the Original Letter are accurate as of the First
Closing Date or the Second Closing Date, as the case may be, and (ii) setting
forth any revisions and additions to the statements and conclusions set forth
in the Original Letter which are necessary to reflect any changes in the
facts described in the Original Letter since the date of such letter, or to
reflect the availability of more recent financial statements, data or
information. The letter shall not disclose any change in the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries considered as one enterprise
from that set forth in the Registration Statement or Prospectus, which, in
Xxxxxxxxx Xxxxxxxx' sole judgment, is material and adverse and that makes it,
in Xxxxxxxxx Xxxxxxxx' sole judgment, impracticable or inadvisable to proceed
with the public
24
offering of the Shares as contemplated by the Prospectus. The Original
Letter from PricewaterhouseCoopers LLP shall be addressed to or for the use
of the Underwriters in form and substance satisfactory to the Underwriters
and shall (i) represent, to the extent true, that they are independent
certified public accountants with respect to the Company within the meaning
of the Securities Act and the applicable published Rules and Regulations,
(ii) set forth their opinion with respect to their examination of the
consolidated balance sheet of the Company as of December 31, 1999, 1998 and
1997 and related consolidated statements of operations, stockholders' equity,
and cash flows for the twelve (12) months ended December 31, 1999, 1998, and
1997, and (iii) address other matters agreed upon by PricewaterhouseCoopers
LLP and you. In addition, Xxxxxxxxx Xxxxxxxx shall have received from
PricewaterhouseCoopers LLP a letter addressed to the Company and made
available to Xxxxxxxxx Xxxxxxxx for the use of the Underwriters stating that
their review of the Company's system of internal accounting controls, to the
extent they deemed necessary in establishing the scope of their examination
of the Company's consolidated financial statements as of December 31, 1999,
did not disclose any weaknesses in internal controls that they considered to
be material weaknesses.
(h) OFFICERS' CERTIFICATE. Xxxxxxxxx Xxxxxxxx shall have received
on the First Closing Date and the Second Closing Date, as the case may be, a
certificate of the Company, dated the First Closing Date or the Second
Closing Date, as the case may be, signed by the Chief Executive Officer and
Chief Financial Officer of the Company, to the effect that, and Xxxxxxxxx
Xxxxxxxx shall be satisfied that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the First Closing
Date or the Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the First Closing Date
or the Second Closing Date, as the case may be;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Securities Act;
(iii) When the Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate, the
Registration Statement and the Prospectus, and any amendments or
supplements thereto contained all material information required to be
included therein by the Securities Act and the applicable rules and
regulations of the Commission thereunder, and in all material respects
conformed to the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder, the Registration
Statement and the Prospectus, and any amendments or supplements thereto,
did not and does not include any
25
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and, since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in an amended or supplemented Prospectus which has not been so
set forth; and
(iv) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been
(a) any material adverse change in the condition (financial or
otherwise), earnings, operations, business or business prospects of the
Company and its subsidiaries considered as one enterprise, (b) any
transaction that is material to the Company and its subsidiaries
considered as one enterprise, except transactions entered into in the
ordinary course of business, (c) any obligation, direct or contingent,
that is material to the Company and its subsidiaries considered as one
enterprise, incurred by the Company or its subsidiaries, except
obligations incurred in the ordinary course of business, (d) any change
in the capital stock or outstanding indebtedness of the Company or any of
its subsidiaries that is material to the Company and its subsidiaries
considered as one enterprise, (e) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company or any of
its subsidiaries, or (f) any loss or damage (whether or not insured) to
the property of the Company or any of its subsidiaries which has been
sustained or will have been sustained which has a material adverse effect
on the condition (financial or otherwise), earnings, operations, business
or business prospects of the Company and its subsidiaries considered as
one enterprise.
(i) LOCK-UP AGREEMENT FROM CERTAIN STOCKHOLDERS OF THE COMPANY. The
Company shall have obtained and delivered to Xxxxxxxxx Xxxxxxxx an agreement
substantially in the form of EXHIBIT A attached hereto from each officer and
director of the Company, each Selling Stockholder, [and each beneficial owner of
one or more percent of the outstanding issued share capital of the Company.]
(j) OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS. Xxxxxxxxx
Xxxxxxxx shall have received on the First Closing Date and the Second Closing
Date, as the case may be, the opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation, counsel for the Selling Stockholders substantially in
the form of EXHIBIT D attached hereto, dated as of such Closing Date, addressed
to the Underwriters and with reproduced copies or signed counterparts thereof
for each of the Underwriters.
In rendering such opinion, such counsel may rely as to questions of law
not involving the laws of the United States or State of Delaware upon opinions
of local counsel and as to questions of fact upon representations or
certificates of the Selling Stockholders or officers of the Selling Stockholders
and of governmental officials, in which case their opinion is to state that they
are so relying and that
26
they have no knowledge of any material misstatement or inaccuracy of any
material misstatement or inaccuracy in any such opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of
the Underwriters, and to Underwriters' Counsel.
(k) SELLING STOCKHOLDERS' CERTIFICATE. On each of the First Closing
Date and the Second Closing Date, as the case may be, the Representatives shall
received a written certificate executed by the Attorney-in-Fact of each Selling
Stockholder, dated as of such Closing Date, to the effect that:
(i) the representations, warranties and covenants of such Selling
Stockholder set forth in Section 1(B) of this Agreement are true and
correct with the same force and effect as though expressly made by such
Selling Stockholder on and as of such Closing Date; and
(ii) such Selling Stockholder has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at
or prior to such Closing Date.
(l) SELLING STOCKHOLDERS' DOCUMENTS. At least three business days
prior to the date hereof, the Company and the Selling Stockholders shall have
furnished for review by the Representatives copies of the Powers of Attorney and
Custody Agreement executed by each of the Selling Stockholders and such further
information, certificates and documents as the Representatives may reasonably
request.
(m) STOCK EXCHANGE LISTING. The Shares shall have been approved for
inclusion on the Nasdaq National Market, subject only to official notice of
issuance.
(n) COMPLIANCE WITH PROSPECTUS DELIVERY REQUIREMENTS. The Company
shall have complied with the provisions of Sections 2(g) and 3(e) hereof with
respect to the furnishing of Prospectuses.
(o) Additional Documents. On or before each of the First Closing Date
and the Second Closing Date, as the case may be, the Representatives and counsel
for the Underwriters shall have received such information, documents and
opinions as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Shares as contemplated herein, or in
order to evidence the accuracy of any of the representations and warranties, or
the satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 4 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Stockholders at any
time on or prior to the First Closing Date and, with respect to the Option
Shares, at any time prior to
27
the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 5 (Payment of
Expenses), Section 6 (Reimbursement of Underwriters' Expenses), Section 7
(Indemnification and Contribution) and Section 10 (Representations and
Indemnities to Survive Delivery) shall at all times be effective and shall
survive such termination.
SECTION 5. PAYMENT OF EXPENSES. The Company agrees to pay all
costs, fees and expenses incurred in connection with the performance of its
obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the
issuance and delivery of the Common Shares (including all printing and
engraving costs), (ii) all fees and expenses of the registrar and transfer
agent of the Common Stock, (iii) all necessary issue, transfer and other
stamp taxes in connection with the issuance and sale of the Shares to the
Underwriters, (iv) all fees and expenses of the Company's counsel,
independent public or certified public accountants and other advisors, (v)
all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement (including
financial statements, exhibits, schedules, consents and certificates of
experts), each preliminary prospectus and the Prospectus, and all amendments
and supplements thereto, and this Agreement, (vi) all filing fees, attorneys'
fees and expenses incurred by the Company or the Underwriters in connection
with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Shares for offer and
sale under the state securities or blue sky laws or the provincial securities
laws of Canada or any other country, and, if requested by the Underwriters,
preparing and printing a "Blue Sky Survey", an "International Blue Sky
Survey" or other memorandum, and any supplements thereto, advising the
Underwriters of such qualifications, registrations and exemptions, (vii) the
filing fees incident to, and the reasonable fees and expenses of counsel for
the Underwriters in connection with, the National Association of Securities
Dealers, LLC review and approval of the Underwriters' participation in the
offering and distribution of the Common Shares, (viii) the fees and expenses
associated with including the Common Shares on the Nasdaq National Market,
(ix) all costs and expenses incident to the travel and accommodation of the
Company's employees on the "roadshow" (x) all other fees, costs and expenses
referred to in Item 13 of Part II of the Registration Statement and (xi) fees
and expenses of the Custodian. Except as provided in this Section 5, Section
6, and Section 7 hereof, the Underwriters shall pay their own expenses,
including the fees and disbursements of their counsel.
Each Selling Stockholder further agrees with each Underwriter to
pay (directly or by reimbursement) all fees and expenses incident to the
performance of its obligations under this Agreement which are not otherwise
specifically provided for herein, including but not limited to (i) fees and
expenses of counsel and other
28
advisors for such Selling Stockholder, and (ii) taxes incident to the sale
and delivery of the Common Shares to be sold by such Selling Stockholder to
the Underwriters hereunder (which taxes, if any, may be deducted by the
Custodian under the provisions of Section 2 of this Agreement).
This Section 5 shall not affect or modify any separate, valid
agreement relating to the allocation of payment of expenses between the
Company, on the one hand, and the Selling Stockholders, on the other hand.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this
Agreement is terminated by the Representatives pursuant to Section 4, Section
9 or Section 15 or if the sale to the Underwriters of the Shares on the First
Closing Date is not consummated because of any refusal, inability or failure
on the part of the Company or the Selling Stockholders to perform any
material agreement herein or to comply with any material provision hereof,
the Company agrees to reimburse the Representatives and the other
Underwriters (or such Underwriters as have terminated this Agreement with
respect to themselves), severally, upon demand for all out-of-pocket expenses
that shall have been reasonably incurred by the Representatives and the
Underwriters in connection with the proposed purchase and the offering and
sale of the Shares, including but not limited to fees and disbursements of
counsel, printing expenses, travel and accommodation expenses, postage,
facsimile and telephone charges.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION OF THE UNDERWRITERS.
(1) The Company agrees to indemnify and hold harmless each
Underwriter, its officers and employees, and each person, if any, who
controls any Underwriter within the meaning of the Securities Act and the
Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Underwriter or such controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company, which consent shall not be unreasonably withheld),
insofar as such loss, claim, damage, liability or expense (or actions in
respect thereof as contemplated below) arises out of or is based (i) upon 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 430A 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) upon any untrue statement or alleged untrue
statement of a
29
material fact contained in any 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; or (iii) in whole or in part upon any inaccuracy in the
representations and warranties of the Company contained herein; or (iv) in
whole or in part upon any failure of the Company to perform its obligations
hereunder or under law; (v) any untrue statement or alleged untrue statement
of any material fact contained in any audio or visual materials provided by
the Company or based upon written information furnished by or on behalf of
the Company including, without limitation, slides, videos, films or tape
recordings, used in connection with the marketing of the Shares, including
without limitation, statements communicated to securities analysts employed
by the Underwriters; or (vi) any act or failure to act or any alleged act or
failure to act by any Underwriter in connection with, or relating in any
manner to, the Shares or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon any matter covered by clause (i), (ii),
(iii) (iv), or (v) above, provided that the Company shall not be liable under
this clause (vi) to the extent that a court of competent jurisdiction shall
have determined by a final judgment that such loss, claim, damage, liability
or action resulted directly from any such acts or failures to act undertaken
or omitted to be taken by such Underwriter through its bad faith or willful
misconduct; and to reimburse each Underwriter and each such controlling
person for any and all expenses (including the fees and disbursements of
counsel chosen by Xxxxxxxxx Xxxxxxxx) 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 written
information furnished to the Company by the Representatives expressly for use
in the Registration Statement, any preliminary prospecus or the Prospectus
(or any amendment or supplement thereto); and provided, further, that with
respect to any preliminary prospectus, the foregoing indemnity agreement
shall not inure to the benefit of any Underwriter from whom the person
asserting any loss, claim, damage, liability or expense purchased Shares, or
any person controlling such Underwriter, if copies of the Prospectus were
timely delivered to the Underwriters pursuant to Section 2 and a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or
on behalf of such Underwriter to such person, if required by law so to have
been delivered, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage, liability or
expense. The indemnity agreement set forth in this Section 7(a) shall be in
addition to any liabilities that the Company may otherwise
30
have.
(2) Each of the Selling Stockholders, severally and not
jointly, agree to indemnify and hold harmless each Underwriter, its officers
and employees, and each person, if any, who controls any Underwriter within
the meaning of the Securities Act and the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which such Underwriter
or such controlling person may become subject, under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company, which consent
shall not be unreasonably withheld), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based (i) upon 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 430A 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) upon any
untrue statement or alleged untrue statement of a material fact contained in
any 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 the case of
subparagraphs (i) and (ii) of this Section 7(a)(2) 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 or such Underwriter by such
Selling Stockholder, directly or through such Selling Stockholder'
representatives, specifically for use in the preparation thereof; or (iii) in
whole or in part upon any inaccuracy in the representations and warranties of
such Selling Stockholder contained herein; or (iv) in whole or in part upon
any failure of such Selling Stockholder to perform their respective
obligations hereunder or under law; or (v) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Shares or the offering contemplated hereby,
and which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon any matter covered by clause
(i), (ii), (iii) or (iv) above, provided that such Selling Stockholder shall
not be liable under this clause (v) to the extent that a court of competent
jurisdiction shall have determined by a final judgment that such loss, claim,
damage, liability or action resulted directly from any such acts or failures
to act undertaken or omitted to be taken by such Underwriter through its bad
faith or willful misconduct; and to reimburse each Underwriter and each such
controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by Xxxxxxxxx Xxxxxxxx) as such expenses are
reasonably incurred by such Underwriter or such controlling person in
connection with investigating, defending,
31
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 written information furnished to such
Selling Stockholder by the Representatives expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and provided, further, tht with respect to
any preliminary prospectus, the foregoing indemnity agreement shall not inure
to the benefit of any Underwriter from whom the person asserting any loss,
claim, damage, liability or expense purchased Shares, or any person
controlling such Underwriter, if copies of the Prospectus were timely
delivered to the Underwriter pursuant to Section 2 and a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or
on behalf of such Underwriter to such person, if required by law so to have
been delivered, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage, liability or
expense. The indemnity agreement set forth in this Section 7(a) shall be in
addition to any liabilities that such Selling Stockholder may otherwise have;
and PROVIDED, FURTHER, that the liability of each Selling Stockholder under
the foregoing indemnity agreement shall be limited to an amount equal to the
initial public offering price of the Shares sold by such Selling Stockholder,
less the underwriting discount, as set forth on the front cover page of the
Prospectus.
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS, OFFICERS AND
SELLING STOCKHOLDERS. 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, the Selling Stockholders and
each person, if any, who controls the Company or any Selling Stockholder within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer, Selling Stockholder or controlling person may become subject,
under the Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or arises out of or is 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, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or
32
alleged omission was made in the Registration Statement, any preliminary
prospectus, the Prospectus (or any amendment or supplement thereto), in
reliance upon and in conformity with written information furnished to the
Company and the Selling Stockholders by the Representatives expressly for use
therein; and to reimburse the Company, or any such director, officer, Selling
Stockholder or controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer, the Selling
Stockholder or controlling person in connection with investigating,
defending, settling, compromising or paing any such loss, claim, damage,
liability, expense or action. The indemnity agreement set forth in this
Section 7(b) shall be in addition to any liabilities that each Underwriter
may otherwise have.
(c) INFORMATION PROVIDED BY THE UNDERWRITERS. Each of the Company
and the Selling Stockholders and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act, hereby
acknowledges that the only information that the Underwriters have furnished
to the Company expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) are the statements set forth in the table in the first paragraph and
the second paragraph under the caption "Underwriting" in the Prospectus; and
the Underwriters confirm that such statements are correct.
(d) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES. 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 omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in
this Section 7 or to the extent it is not prejudiced as a proximate result of
such failure. 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 reasonably
satisfactory to such indemnified party; provided, however, 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 which
are different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to
33
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 next preceding
sentence (it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel (together with
local counsel), approved by the indemnifying party (Xxxxxxxxx Xxxxxxxx in the
case of Section 7(b) and Section 8), representing the indemnified parties who
are parties to such action), (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, or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party,
in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.
(e) SETTLEMENTS. The indemnifying party under this Section 7 shall
not be liable for any settlement of any proceeding effected without its
written consent, which consent shall not be unreasonably withheld, but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
7(d) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. 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 includes (i) 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.
34
(f) CONTRIBUTION. If the indemnification provided for in this
Section 7 is unavailable to or insufficient to hold harmless an indemnified
party under Section 7(a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) then
each indemnifying party shall contribute to the aggregate amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect the relative benefits received by such party on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of such party 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, (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations. 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 on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 7(f) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section
7(f). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 7(f) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (f), (i) no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Shares purchased by such
Underwriter and (ii) no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 7(f) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(g) TIMING OF ANY PAYMENTS OF INDEMNIFICATION. Any losses, claims,
damages, liabilities or expenses for which an indemnified party is entitled
to indemnification or contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such losses, claims, damages,
35
liabilities or expenses are incurred, but in all cases, no later than
forty-five (45) days of invoice to the indemnifying party.
(h) SURVIVAL. The indemnity and contribution agreements contained
in this Section 7 and the representation and warranties set forth in this
Agreement shall remain operative and in full force and effect, regardless of
(i) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers or any
persons controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor
to any Underwriter, or to the Company, its directors or officers, any Selling
Stockholder or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
(i) ACKNOWLEDGEMENTS OF PARTIES. The parties to this Agreement
hereby acknowledge that they are sophisticated business persons who were
represented by counsel during the negotiations regarding the provisions
hereof including, without limitation, the provisions of this Section 7, and
are fully informed regarding said provisions. They further acknowledge that
the provisions of this Section 7 fairly allocate the risks in light of the
ability of the parties to investigate the Company and its business in order
to assure that adequate disclosure is made in the Registration Statement and
Prospectus as required by the Securities Act and the Exchange Act.
SECTION 8. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If,
on the First Closing Date or the Second Closing Date, as the case may be, any
one or more of the several Underwriters shall fail or refuse to purchase
Shares that it or they have agreed to purchase hereunder on such date, and
the aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of
the aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the
number of Firm Shares set forth opposite their respective names on SCHEDULE A
bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on
the First Closing Date or the Second Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares and
the aggregate number of Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Shares to be purchased on such date,
and arrangements satisfactory to the Representatives and the Company for the
purchase of such Shares are not made within 48 hours after such default, this
Agreement shall terminate without liability of any party to any other party
except
36
that the provisions of Section 5, and Section 7 shall at all times be
effective and shall survive such termination. In any such case either the
Representatives or the Company shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, but in no event
for longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be
deemed to include any person substituted for a defaulting Underwriter under
this Section 8. Any action taken under this Section 8 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 9. TERMINATION OF THIS AGREEMENT. Prior to the First
Closing Date, this Agreement may be terminated by the Representatives by
notice given to the Company and the Selling Stockholders if (a) at any time
after the execution and delivery of this Agreement and prior to the First
Closing Date (i) trading or quotation in any of the Company's securities
shall have been suspended or limited by the Commission or by the Nasdaq Stock
Market, or trading in securities generally on either the Nasdaq Stock Market
or the New York Stock Exchange shall have been suspended or limited, or
minimum or maximum prices shall have been generally established on any of
such stock exchanges by the Commission or the National Association of
Securities Dealers, LLC; (ii) a general banking moratorium shall have been
declared by any of federal, New York, Delaware or California authorities;
(iii) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the
United States or international financial markets, or any substantial change
or development involving a prospective change in United States' or
international political, financial or economic conditions, as in the judgment
of the Representatives is material and adverse and makes it impracticable or
inadvisable to market the Common Shares in the manner and on the terms
contemplated in the Prospectus or to enforce contracts for the sale of
securities; (iv) in the judgment of the Representatives there shall have
occurred any Material Adverse Change; or (v) the Company shall have sustained
a loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Representatives may interfere materially
with the conduct of the business and operations of the Company regardless of
whether or not such loss shall have been insured or (b) in the case of any of
the events specified 9(a)(i)(v), such event singly or together with any other
event, makes it, in the judgement of Xxxxxxxxx Xxxxxxxx, impracticable or
inadvisable to market the Common Shares in the manner and on the terms
contemplated in the Prospectus. Any termination pursuant to this Section 9
shall be without liability on the part of (x) the Company or the Selling
Stockholders to any Underwriter, except that the Company and the Selling
Stockholders shall be obligated to reimburse the expenses of the
Representatives and the Underwriters
37
pursuant to Sections 5 and 6 hereof, (y) any Underwriter to the Company or
any person controlling the Company or the Selling Stockholders, or (z) of any
party hereto to any other party except that the provisions of Section 7 shall
at all times be effective and shall survive such termination.
SECTION 10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties and other
statements of the Company or any person controlling the Company, of its
officers, of the Selling Stockholders 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 made by or on behalf of any
Underwriter or the Company or any of its or their partners, officers or
directors or any controlling person, or the Selling Stockholders, as the case
may be, and will survive delivery of and payment for the Shares sold
hereunder and any termination of this Agreement.
SECTION 11. NOTICES. All communications hereunder shall be in
writing and shall be mailed, hand delivered or telecopied and confirmed to
the parties hereto as follows:
If to the Representatives:
c/o FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
If to the Company:
QuickLogic Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: E. Xxxxxx Xxxx
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxx
38
If to the Selling Stockholders:
[ ]
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
SECTION 12. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 8 hereof, and to the benefit of the employees, officers
and directors and controlling persons referred to in Section 7, and to their
respective successors, and no other person will have any right or obligation
hereunder. The term "successors" shall not include any purchaser of the
Shares as such from any of the Underwriters merely by reason of such purchase.
SECTION 13. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
SECTION 14. GOVERNING LAW PROVISIONS.
(a) GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the internal laws of the state of New York
applicable to agreements made and to be performed in such state.
(b) CONSENT TO JURISDICTION. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the City and County of San Francisco or
the courts of the State of California in each case located in the City and
County of San Francisco (collectively, the "Specified Courts"), and each
party irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court (a "Related Judgment"), as to which such jurisdiction is non-exclusive)
of such courts in any such suit, action or proceeding. Service of any
process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any suit, action or
other proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit,
action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that
any such suit, action or other
39
proceeding brought in any such court has been brought in an inconvenient
forum. Each party not located in the United States irrevocably appoints CT
Corporation System, which currently maintains a San Francisco office at 00
Xxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America,
as its agent to receive service of process or other legal summons for
purposes of any such suit, action or proceeding that may be instituted in any
state or federal court in the City and County of San Francisco.
(c) WAIVER OF IMMUNITY. With respect to any Related Proceeding,
each party irrevocably waives, to the fullest extent permitted by applicable
law, all immunity (whether on the basis of sovereignty or otherwise) from
jurisdiction, service of process, attachment (both before and after judgment)
and execution to which it might otherwise be entitled in the Specified
Courts, and with respect to any Related Judgment, each party waives any such
immunity in the Specified Courts or any other court of competent
jurisdiction, and will not raise or claim or cause to be pleaded any such
immunity at or in respect of any such Related Proceeding or Related Judgment,
including, without limitation, any immunity pursuant to the United States
Foreign Sovereign Immunities Act of 1976, as amended.
SECTION 15. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS TO
SELL AND DELIVER COMMON SHARES. If one or more of the Selling Stockholders
shall fail to sell and deliver to the Underwriters the Shares to be sold and
delivered by such Selling Stockholders at the First Closing Date pursuant to
this Agreement, then the Underwriters may at their option, by written notice
from the Representatives to the Company and such Selling Stockholders, either
(i) terminate this Agreement without any liability on the part of any
Underwriter or, except as provided in Sections 5, 6, and 7 hereof, the
Company or the Selling Stockholders, or (ii) purchase the shares which the
Company and the other Selling Shareholders have agreed to sell and deliver in
accordance with the terms hereof. If the Selling Stockholders shall fail to
sell and deliver to the Underwriters the Shares to be sold and delivered by
such Selling Stockholders pursuant to this Agreement at the First Closing
Date, then the Underwriters shall have the right, by written notice to the
Company and the Selling Stockholders, to postpone the First Closing Date, but
in no event for longer than seven days in order that the required changes, if
any, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.
SECTION 16. GENERAL PROVISIONS. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may
be executed in two or more counterparts, each one of which shall be an
original, with the same effect as
40
if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to
benefit. The Section headings herein are for the convenience of the parties
only and shall not affect the construction or interpretation of this
Agreement.
[The remainder of this page has been intentionally left blank.]
41
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Custodian the enclosed
copies hereof, whereupon this instrument, along with all counterparts hereof,
shall become a binding agreement in accordance with its terms.
Very truly yours,
QUICKLOGIC CORPORATION
By: ___________________________________
[Title]
_________________
By: ___________________________________
Attorney-in-fact for the Selling
Stockholders named in SCHEDULE B hereto
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives as of the date first above written.
FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
BEAR, XXXXXXX & CO. INC.
X.X. XXXXXX SECURITIES INC.
SOUNDVIEW TECHNOLOGY GROUP, INC.
On their behalf and on behalf of each of the several underwriters named in
SCHEDULE A hereto.
BY FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
By:_________________________________
Authorized Signatory
42
SCHEDULE A
Number of Firm
Shares To be
Underwriters Purchased
------------ ---------
Total...........................
S-A
SCHEDULE B
Number of Maximum
Firm Shares Number
to be Sold of Option Shares
Selling Stockholders to be Sold
....................................
S-B
Exhibit A
EMPLOYEE
90-DAY LOCK-UP AGREEMENT
QUICKLOGIC CORPORATION
0000 XXXXXXX XXXXX
XXXXXXXXX, XXXXXXXXXX 00000
March 14, 0000
XxxxxXxxxxx Xxxxxxxxx Xxxxxxxx Inc.
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Bear, Xxxxxxx & Co., Inc.
Soundview Technology Group, Inc.
As representatives of the Several Underwriters
c/o FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: QuickLogic Corporation, a Delaware corporation (the "Company")
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of
certain shares of Common Stock of the Company ("Common Stock") or securities
convertible into or exchangeable or exercisable for Common Stock. The
Company proposes to carry out a public offering of Common Stock (the
"Offering") for which you will act as the representatives (the
"Representatives") of the underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company
by, among other things, raising additional capital for its operations. The
undersigned acknowledges that you and the other underwriters are relying on
the representations and agreements of the undersigned contained in this
letter in carrying out the Offering and in entering into underwriting
arrangements (the "Underwriting Arrangements") with the Company with respect
to the Offering.
In consideration of the foregoing, the undersigned hereby
agrees that the undersigned will not offer to sell, contract to sell, or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to
(collectively, a "Disposition") any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities convertible
into or exchangeable for shares of Common Stock (collectively, "Securities")
now owned or hereafter acquired directly by such person or with respect to
which such person has or hereafter acquires the power of disposition,
otherwise than (i) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction, (ii) as a
distribution to partners or shareholders of such person, provided that the
distributees thereof agree in writing to be bound by the terms of this
restriction, (iii) with respect to sales or purchases of Common Stock
acquired on the open market, (iv) with respect to sales or purchases of
Common Stock acquired pursuant to the Company's 1999 Employee Stock Purchase
Plan, provided that such sale or purchase is
effected throught FleetBoston Xxxxxxxxx Xxxxxxxx Inc.or (v) with the prior
written consent of FleetBoston Xxxxxxxxx Xxxxxxxx Inc. The foregoing
restrictions will terminate after the close of trading of the Common Stock on
the 90th day of (and including) the day the Common Stock commenced trading on
the Nasdaq National Market (the "Lock-Up Period"). The foregoing restriction
has been expressly agreed to preclude the holder of the Securities from
engaging in any hedging or other transaction which is designed to or
reasonably expected to lead to or result in a Disposition of Securities
during the Lock-up Period, even if such Securities would be disposed of by
someone other than such holder. Such prohibited hedging or other transactions
would include, without limitation, any short sale (whether or not against the
box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index)
that included, relates to or derives any significant part of its value from
Securities. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of shares of Common Stock or Securities held by the undersigned
except in compliance with the foregoing restrictions.
This Employee Lock-Up Agreement is irrevocable and will be
binding on the undersigned and the respective successors, heirs, personal
representatives, and assigns of the undersigned. In the event the Offering
has not occurred on or before May 15, 2000 this Employee Lock-Up Agreement
shall be of no further force or effect.
Dated ________________________________
PRINT OR TYPE NAME
- OF STOCKHOLDER
_____________________________
SIGNATURE(S)
_____________________________
_____________________________ (1)
Signature(s)
_________________________________________
Title (if signing as agent or fiduciary)
PRINT NAME(S) AND ADDRESS:
_________________________________________
_________________________________________
_________________________________________
--------------------------
(1) To be signed in EXACTLY the same manner as the shares are registered.
NON-EMPLOYEE
90-DAY LOCK-UP AGREEMENT
QUICKLOGIC CORPORATION
0000 XXXXXXX XXXXX
XXXXXXXXX, XXXXXXXXXX 00000
March 14, 0000
XxxxxXxxxxx Xxxxxxxxx Xxxxxxxx Inc.
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Bear, Xxxxxxx & Co., Inc.
Soundview Technology Group, Inc.
As representatives of the Several Underwriters
c/o FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: QuickLogic Corporation, a Delaware corporation (the "Company")
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of
certain shares of Common Stock of the Company ("Common Stock") or securities
convertible into or exchangeable or exercisable for Common Stock. The
Company proposes to carry out a public offering of Common Stock (the
"Offering") for which you will act as the representatives (the
"Representatives") of the underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company
by, among other things, raising additional capital for its operations. The
undersigned acknowledges that you and the other underwriters are relying on
the representations and agreements of the undersigned contained in this
letter in carrying out the Offering and in entering into underwriting
arrangements (the "Underwriting Arrangements") with the Company with respect
to the Offering.
In consideration of the foregoing, the undersigned hereby
agrees that the undersigned will not offer to sell, contract to sell, or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to
(collectively, a "Disposition") any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities convertible
into or exchangeable for shares of Common Stock (collectively, "Securities")
now owned or hereafter acquired directly by such person or with respect to
which such person has or hereafter acquires the power of disposition,
otherwise than (i) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction, (ii) as a
distribution to partners or shareholders of such person, provided that the
distributees thereof agree in writing to be bound by the terms of this
restriction, (iii) with respect to sales or purchases of Common Stock
acquired on the open market, (iv) with respect to sales or purchases of
Common Stock acquired with respect to sales of Common Stock in the Offering
pursuant to the Underwriting Arrangements or (v) with the prior written
consent of FleetBoston Xxxxxxxxx Xxxxxxxx Inc. The foregoing restrictions
will terminate after the close of trading of the Common Stock on the 90th day
of (and including) the day the Common Stock commenced trading on the Nasdaq
National Market
A-1
(the "Lock-Up Period"). The foregoing restriction has been expressly agreed
to preclude the holder of the Securities from engaging in any hedging or
other transaction which is designed to or reasonably expected to lead to or
result in a Disposition of Securities during the Lock-up Period, even if such
Securities would be disposed of by someone other than such holder. Such
prohibited hedging or other transactions would include, without limitation,
any short sale (whether or not against the box) or any purchase, sale or
grant of any right (including, without limitation, any put or call option)
with respect to any Securities or with respect to any security (other than a
broad-based market basket or index) that included, relates to or derives any
significant part of its value from Securities. The undersigned also agrees
and consents to the entry of stop transfer instructions with the Company's
transfer agent and registrar against the transfer of shares of Common Stock
or Securities held by the undersigned except in compliance with the foregoing
restrictions.
This Non-Employee Lock-Up Agreement is irrevocable and will be
binding on the undersigned and the respective successors, heirs, personal
representatives, and assigns of the undersigned. In the event the Offering has
not occurred on or before May 15, 2000 this Non-Employee Lock-Up Agreement shall
be of no further force or effect.
Dated ________________________________
PRINT OR TYPE NAME
- OF STOCKHOLDER
_____________________________
SIGNATURE(S)
_____________________________
_____________________________ 2
Signature(s)
_________________________________________
Title (if signing as agent or fiduciary)
PRINT NAME(S) AND ADDRESS:
_________________________________________
_________________________________________
_________________________________________
--------------------------
(2) To be signed in EXACTLY the same manner as the shares are registered.
2
EXHIBIT B
MATTERS TO BE COVERED IN THE OPINION OF COMPANY COUNSEL
(i) The Company and each Significant Subsidiary (as that term
is defined in Regulation S-X of the Securities Act) has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation;
(ii) The Company and each Significant Subsidiary has the
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectus;
(iii) The Company and each Significant Subsidiary is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction, if any, in which the ownership or
leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified or
be in good standing would not have a Material Adverse Effect. To
such counsel's knowledge, the Company does not own or control,
directly or indirectly, any corporation, association or other
entity other than QuickLogic International, Inc., a wholly-owned
subsidiary;
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus as of the dates stated
therein, the issued and outstanding shares of capital stock of the
Company (including the Selling Stockholders Shares) outstanding
prior to the issuance of the Shares have been duly and validly
issued and are fully paid and nonassessable, and, to such
counsel's knowledge, will not have been issued in violation of or
subject to any preemptive right arising under the Certificate of
Incorporation or Delaware General Corporation Law, right of first
refusal or other similar right other than any registration rights
described in Opinion (xix) hereof;
(v) All issued and outstanding shares of capital stock of each
Significant Subsidiary of the Company have been duly authorized
and validly issued and are fully paid and nonassessable, and, to
such counsel's knowledge, have not been issued in violation of or
subject to any preemptive right, co-sale right, registration
right, right of first refusal or other similar right other similar
right other than any registration rights described in Opinion
(xix) hereof;
(vi) The Firm Shares or the Option Shares, as the case may be,
to be issued by the Company pursuant to the terms of the
Underwriting Agreement have been duly authorized and, upon
issuance and delivery
C-1
against payment therefor in accordance with the terms of the
Underwriting Agreement, will be duly and validly issued and fully
paid and nonassessable, and, to such counsel's knowledge, will not
have been issued in violation of or subject to any preemptive
right, co-sale right, registration right, right of first refusal or
other similar right other than any registration rights described in
Opinion (xix) hereof.
(vii) The Company has the corporate power and authority to enter
into the Underwriting Agreement and to issue, sell and deliver to
the Underwriters the Shares to be issued and sold by it
thereunder;
(viii) The Underwriting 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, assuming
due authorization, execution and delivery by the Underwriters, is
a valid and binding agreement of the Company, enforceable in
accordance with its terms, except as rights to indemnification
thereunder may be limited by applicable law and except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally or by general equitable
principles whether relief is sought in a proceeding at law or in
equity;
(ix) The Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Securities Act;
(x) The Firm Shares or the Option Shares have been validly
registered under the Securities Act and the Rules and Regulations
of the Exchange Act and the applicable rules and regulations of
the Commission thereunder;
(xi) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial
statements (including supporting schedules) and financial data
derived therefrom as to which such counsel need express no
opinion), as of the effective date of the Registration Statement,
complied as to form in all material respects with the requirements
of the Securities Act and the applicable Rules and Regulations;
(xii) The information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such
2
counsel and is a fair summary of such matters and conclusions; and
the form of certificate evidencing the Common Stock and filed as
an exhibit to the Registration Statement complied in all material
respects with Delaware law;
(xiii) The description in the Registration Statement and the
Prospectus of the charter and bylaws of the Company and of
statutes are accurate and fairly present the information required
to be presented by the Securities Act;
(xiv) To such counsel's knowledge, there are no agreements,
contracts, leases or documents to which the Company is a party of
a character required to be described or referred to in the
Registration Statement or Prospectus or to be filed as an exhibit
to the Registration Statement which are not described or referred
to therein or filed as required;
(xv) The performance of the Underwriting Agreement and the
consummation of the transactions herein contemplated (other than
performance of the Company's indemnification obligations
hereunder, concerning which no opinion need be expressed) will not
(a) result in any violation of the Company's charter or bylaws or
(b) to such counsel's knowledge, result in a material breach or
violation of any of the terms and provisions of, or constitute a
default under, any bond, debenture, note or other evidence of
indebtedness, or any lease, contract, indenture, mortgage, deed of
trust, loan agreement, joint venture or other agreement or
instrument known to such counsel to which the Company is a party
or by which its properties are bound, or of any applicable
statute, rule or regulation known to such counsel or, to such
counsel's knowledge, of any order, writ or decree of any court,
government or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries, or over any of their
properties or operations;
(xvi) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or
body having jurisdiction over the Company or any of its
subsidiaries, or over any of their properties or operations is
necessary in connection with the consummation by the Company of
the transactions herein contemplated, except (i) such as have been
obtained under the Securities Act, (ii) such as may be required
under state or other securities or Blue Sky laws in connection
with the purchase and the distribution of the Shares by the
Underwriters, (iii) such as may be required by the National
Association of Securities Dealers, LLC and (iv)
3
such as may be required under the federal or provincial laws of Canada
or other countries or territories outside the United States;
(xvii) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company
or any of its subsidiaries of a character required to be disclosed
in the Registration Statement or the Prospectus by the Securities
Act, other than those described therein;
(xviii) To such counsel's knowledge, neither the Company nor any
of its subsidiaries is presently (a) in material violation of its
respective charter or bylaws, or (b) in material breach of any
applicable statute, rule or regulation known to such counsel or,
to such counsel's knowledge, any order, writ or decree of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries, or over any of their
properties or operations; and
(xix) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders 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 rights known to such counsel to
registration of such shares of Common Stock or other securities,
because of the filing of the Registration Statement by the Company
have, with respect to the offering contemplated thereby, waived
such rights, had such rights waived, or such rights have expired
by reason of lapse of time following notification of the Company's
intent to file the Registration Statement or have included
securities in the Registration Statement pursuant to the exercise
of and in full satisfaction of such rights.
(xx) The Company is not and, after giving effect to the offering
and the sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Underwriters, Underwriters' Counsel and the independent
certified public accountants of the Company, at which such conferences the
contents of the Registration Statement and 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 leads
them to believe that, at the time the
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Registration Statement became effective and at all times subsequent thereto
up to and on the First Closing Date or Second Closing Date, as the case may
be, the Registration Statement and any amendment or supplement thereto (other
than the financial statements including supporting schedules and other
financial and statistical information derived therefrom, as to which such
counsel need express no comment) 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 First
Closing Date or the Second Closing Date, as the case may be, the Registration
Statement, the Prospectus and any amendment or supplement thereto (except as
aforesaid) contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
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EXHIBIT C
MATTERS TO BE COVERED IN THE OPINION OF UNDERWRITERS' COUNSEL
(i) The Shares to be issued by the Company have been duly
authorized and, upon issuance and delivery and payment therefor in
accordance with the terms of the Underwriting Agreement, will be
validly issued, fully paid and non-assessable.
(ii) The Registration Statement complied as to form in all
material respects with the requirements of the Securities Act; the
Registration Statement has become effective under the Securities
Act and, to such counsel's knowledge, no stop order proceedings
with respect thereto have been instituted or threatened or are
pending under the Act.
(iii) The 8-A Registration Statement complied as to form in all
material respects with the requirements of the Exchange Act; the
8-A Registration Statement has become effective under the Exchange
Act; and the Shares have been validly registered under the
Securities Act and the Rules and Regulations of the Exchange Act
and the applicable rules and regulations of the Commission
thereunder;
(iv) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
Such counsel shall state that such counsel has reviewed the opinions
addressed to the Underwriters from
[list each set of counsel that has provided an opinion], each dated the date
hereof, and furnished to Xxxxxxxxx Xxxxxxxx in accordance with the provisions
of the Underwriting Agreement. Such opinions appear on their face to be
appropriately responsive to the requirements of the Underwriting Agreement.
In addition, such counsel shall state that such counsel has participated
in conferences with officials and other representatives of the Company, the
Underwriters, Underwriters' Counsel and the independent certified public
accountants of the Company, at which such conferences the contents of the
Registration Statement and 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 leads them to believe that,
at the time the Registration Statement became effective and at all times
subsequent thereto up to and on the First Closing Date or Second Closing
Date, as the case may be, the Registration Statement and any amendment or
supplement thereto (other than the financial statements including supporting
schedules and other financial and statistical information derived therefrom,
as to which such counsel need express no comment) contained any untrue
statement of a material fact or omitted to state a
D-1
material fact required to be stated therein or necessary to make the
statements therein not misleading, or at the First Closing Date or the Second
Closing Date, as the case may be, the Registration Statement, the Prospectus
and any amendment or supplement thereto (except as aforesaid) contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
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EXHIBIT D
MATTERS TO BE COVERED IN THE OPINION OF SELLING STOCKHOLDERS COUNSEL
(i) The Underwriting Agreement has been duly authorized,
executed and delivered by or on behalf of, and is a valid and
binding agreement of, such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification
thereunder may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles.
(ii) The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations
under, the Underwriting Agreement and its Custody Agreement and
its Power of Attorney will not contravene or conflict with, result
in a breach of, or constitute a default under, the charter or by-
laws of such Selling Stockholder, or, to such counsel's knowledge,
violate, result in a breach of or constitute a default under the
terms of any other agreement or instrument to which such Selling
Stockholder is a party or by which it is bound, or any judgement,
order or decree applicable to such Selling Stockholder of any
court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over such Selling Stockholder.
(iii) The Selling Stockholders has good and valid title to all of
the Common Shares which may be sold by such Selling Stockholder
under the Underwriting Agreement and has the legal right and
power, and all authorization and approvals required under its
charter and by-laws, to enter into the Underwriting Agreement and
its Custody Agreement and its Power of Attorney, to sell, transfer
and deliver all of the Common Shares which may be sold by such
Selling Stockholder under the Underwriting Agreement and to comply
with its other obligations under the Underwriting Agreement, its
Custody Agreement and its Power of Attorney.
(iv) Each of the Custody Agreement and Power of Attorney of such
Selling Stockholder has been duly authorized, executed and
delivered by such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder, enforceable in accordance
with its terms, except as rights to indemnification thereunder may
be limited by applicable law and except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles.
(v) Assuming that the Underwriters purchase the Shares which
are sold by the Selling Stockholders pursuant to the Underwriting
Agreement for value, in good faith and without notice of any
adverse claims, the delivery of such Shares pursuant to the
Underwriting Agreement will pass good and valid title to such
Shares, free and clear of any security interest, mortgage, pledge,
lieu encumbrance or other claim.
(vi) To such counsel's knowledge, no consent, approval,
authorization or other order of, or registration or filing with,
any court or governmental authority or agency, is required for the
consummation by the Selling Stockholders of the transactions
contemplated in the Underwriting Agreement, except as required
under the Securities Act, applicable state securities or blue sky
laws, and from the National Association of Securities Dealers,
LLC.
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