1
EXHIBIT 1.1
O2WIRELESS SOLUTIONS, INC.
______ SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
______________, 2000
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX XXXXXX PARTNERS LLC
c/o Chase Securities Inc.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
o2wireless Solutions, Inc., a Georgia corporation (herein called the
Company), proposes to issue and sell _____ shares of its authorized but unissued
Common Stock, $.0001 par value (herein called the Common Stock), and the
stockholders of the Company named in Schedule II hereto (herein collectively
called the Selling Securityholders) propose to sell an aggregate of _____ shares
of Common Stock of the Company (said shares of Common Stock being called the
Underwritten Stock). The Company proposes to grant to the Underwriters (as
hereinafter defined) an option to purchase up to an aggregate of _____
additional shares of Common Stock (herein called the Option Stock and with the
Underwritten Stock herein collectively called the Stock). The Common Stock is
more fully described in the Registration Statement and the Prospectus
hereinafter mentioned.
The Company and the Selling Securityholders severally hereby confirm
the agreements made with respect to the purchase of the Stock by the several
underwriters, for whom you are acting, named in Schedule I hereto (herein
collectively called the Underwriters, which term shall also include any
underwriter purchasing Stock pursuant to Section 3(b) hereof). You represent and
warrant that you have been authorized by each of the other Underwriters to enter
into this Agreement on its behalf and to act for it in the manner herein
provided.
1. REGISTRATION STATEMENT. The Company has filed with the
Securities and Exchange Commission (herein called the Commission) a registration
statement on Form S-1 (No. 333-36678), including the related preliminary
prospectus, for the registration under the Securities Act of 1933, as amended
(herein called the Securities Act) of the Stock. Copies of such registration
statement and of each amendment thereto, if any, including the related
preliminary prospectus (meeting the requirements of Rule 430A of the rules and
regulations of the Commission) heretofore filed by the Company with the
Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean
such registration statement, including all exhibits and financial statements,
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, in the form in which it became effective, and
any registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a Rule
462(b) registration statement), and, in the event of any amendment thereto after
the effective date of such registration statement (herein called the Effective
Date), shall also mean (from and after the effectiveness of such amendment) such
registration statement as so amended (including any Rule 462(b) registration
statement). The term Prospectus as used in this Agreement shall mean the
prospectus relating to the Stock first filed with the Commission pursuant to
Rule 424(b) and Rule 430A (or if no such filing is required, as included in the
Registration Statement) and, in the event of any supplement or amendment to such
prospectus after the Effective Date, shall also mean (from and after the filing
with the Commission of such supplement or the effectiveness of such amendment)
such prospectus as
----------------
(1) Plus an option to purchase from the Company up to ______ additional
shares to cover over-allotments as provided below.
2
so supplemented or amended. The term Preliminary Prospectus as used in this
Agreement shall mean each preliminary prospectus included in such registration
statement prior to the time it becomes effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SECURITYHOLDERS.
(a) The Company hereby represents and warrants as follows:
(i) Each of the Company and its subsidiaries has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
full corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement and the
Prospectus and as being conducted, and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which the
character of the property owned or leased or the nature of the business
transacted by it makes qualification necessary (except where the
failure to be so qualified would not have a material adverse effect on
the business, properties, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole (a "Material
Adverse Effect")).
(ii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any material adverse change in the business, properties, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in the
ordinary course of business, other than as set forth in the
Registration Statement and the Prospectus, and since such dates, except
in the ordinary course of business, neither the Company nor any of its
subsidiaries has entered into any material transaction not referred to
in the Registration Statement and the Prospectus.
(iii) The Registration Statement and the Prospectus comply,
and on the Closing Date (as hereinafter defined) and any later date on
which Option Stock is to be purchased, the Prospectus will comply, in
all material respects, with the provisions of the Securities Act and
the rules and regulations of the Commission thereunder; on the
Effective Date, the Registration Statement did not contain any untrue
statement of a material fact and did not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date the
Prospectus did not and, on the Closing Date and any later date on which
Option Stock is to be purchased, will not contain any untrue statement
of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that
none of the representations and warranties in this subparagraph (iii)
shall apply to statements in, or omissions from, the Registration
Statement or the Prospectus made in reliance upon and in conformity
with information herein or otherwise furnished in writing to the
Company by or on behalf of the Underwriters for use in the Registration
Statement or the Prospectus.
(iv) The Company has authorized, issued and outstanding
capital stock as set forth under the heading "Capitalization" in the
Prospectus (except for subsequent issuances, if any, pursuant to
reservations or agreements referred to in the Prospectus); the issued
and outstanding shares of Common Stock (including the outstanding
shares of the Stock) of the Company conform to the description thereof
in the Prospectus and have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance with
all applicable federal and state securities laws and regulations; and
on the Closing Date no stockholders of the Company will have any
preemptive or similar rights with respect to any shares of capital
stock of the Company.
(v) Prior to the Closing Date the Stock to be issued and
sold by the Company, and the Stock to be sold by the Selling
Securityholders, will be authorized for listing by the Nasdaq National
Market upon official notice of issuance. The form of certificate
evidencing the Stock
2
3
complies in all material respects with the applicable requirements of
law, the Company's charter and bylaws and the Nasdaq National Market.
(vi) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission. Each
Preliminary Prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant
to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act, and did not contain an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that none of the representations and warranties set forth in
this subparagraph (vi) shall apply to statements in, or omissions from,
any Preliminary Prospectus made in reliance upon and in conformity with
information herein or otherwise furnished in writing to the Company by
or on behalf of the Underwriters for use in such Preliminary
Prospectus.
(vii) There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale
or liens granted or issued by the Company or any of its subsidiaries
relating to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of the Company or any of its
subsidiaries, except as disclosed in the Registration Statement and the
Prospectus.
(viii) The Stock has been duly authorized for issuance and
sale pursuant to this Agreement and, when issued and delivered to the
Underwriters against payment therefor as provided in this Agreement,
will be validly issued, fully paid and non-assessable and will conform
to the description thereof contained in the Registration Statement and
the Prospectus, and the issuance of the Stock will not be subject to
any preemptive or similar rights. No further approval or authority of
the stockholders or the Board of Directors of the Company is or will be
required for the transfer and sale of the Stock to be sold by the
Selling Securityholders or for the issuance and sale of the Stock by
the Company as contemplated herein.
(ix) Neither the Company nor any of its subsidiaries is in
violation of its respective charter, bylaws or other organizational
documents or in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or their respective property is
bound, except where such default would not have a Material Adverse
Effect.
(x) None of the execution, delivery or performance of
this Agreement by the Company, the compliance by the Company with any
provision hereof or the consummation of the transactions contemplated
hereby or by the Registration Statement and the Prospectus will (A)
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except
such as have been obtained and such as may be required under the
securities or Blue Sky laws of the various states and the rules and
regulations of the NASD), (B) conflict with or violate the charter,
bylaws or other organizational documents of the Company or any of its
subsidiaries or constitute a material breach of any of the terms or
provisions of, or a default under, any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective property is bound, (C)
violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental or
regulatory body or agency having jurisdiction over the Company, any of
its subsidiaries or their respective property or (D) result in the
suspension, termination or revocation of any authorization, consent or
approval of or declaration, filing or registration with any
governmental or regulatory body or agency having jurisdiction over the
Company or any of its subsidiaries (any "Authorization") or any other
impairment of the rights of the holder of any such Authorization.
(xi) No Authorization or other action by, or notice to or
filing with, any court, governmental authority, regulatory body or
other person is required for the execution, delivery or perfomance of
this Agreement, the compliance by the Company with the provisions
hereof or the consummation of the transactions contemplated hereby or
by the Registration Statement and the Prospectus, except such as have
been obtained and such as may be required under state securities or
3
4
Blue Sky laws and the rules and regulations of the NASD in connection
with the offer, sale and distribution of the Stock by the Underwriters.
(xii) There are no legal or governmental proceedings
pending or overtly threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their respective
property is or could be subject that are required to be described in
the Registration Statement or the Prospectus and are not so described;
nor are there any statutes, rules, regulations, laws, orders, decrees,
judgments, contracts, instruments or other documents or agreements that
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not so described or filed as required. Without limiting the
generality of the foregoing sentence, nothing has come to the attention
of the Company to lead it to believe that any legal or governmental
proceedings will be instituted against it any or its subsidiaries and,
to the best knowledge of the Company, there exists no basis for any
legal or governmental proceedings to be instituted against it or any or
its subsidiaries.
(xiii) There are no costs or liabilities (contingent or
otherwise) associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any Authorization, any related constraints on operating activities
and any potential liabilities to third parties) or ERISA which would,
singly or in the aggregate, have a material adverse effect on the
business, properties, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole.
(xiv) This Agreement has been duly authorized, executed and
delivered by the Company.
(xv) KPMG LLP are independent public accountants with
respect to the Company and its subsidiaries as required by the
Securities Act.
(xvi) The consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto), together with related schedules and notes, present
fairly the consolidated financial position, results of operations and
changes in financial position of the Company and its subsidiaries on
the basis stated therein at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, except as disclosed therein; all adjustments necessary for a
fair presentation of results for such periods have been made; the
selected financial information included in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) present
fairly the information shown therein and have been compiled on a basis
consistent with the financial statements presented therein; the
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with generally accepted accounting
principles the information required to be stated therein; and the other
financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented
and prepared on a basis consistent with such financial statements and
the books and records of the Company. No other financial statements,
supporting schedules or other financial information (whether pro forma
financial statements or otherwise) are required to be included in the
Registration Statement or the Prospectus. As of the date of the
Prospectus, the Company is not engaged in substantive discussions with
any third party with respect to, or obligated to complete, any
acquisitions for which disclosure of pro forma financial information in
the Prospectus is required by the Securities Act.
(xvii) The Company is not and, after giving effect to the
offering and sale of the Stock 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.
(xviii) Except as disclosed in the Registration Statement and
the Prospectus, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to
include any securities of the Company in any registration statement of
the Company. Neither the filing of the Registration Statement nor the
offering or sale of the Stock as contemplated by this Agreement gives
rise to any rights for or relating to the registration of any
securities of the Company, except for such rights which have
4
5
been waived or satisfied by the inclusion of shares of Common Stock in
the offering of Stock contemplated hereby.
(xix) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is
material to the business of the Company and its subsidiaries, in each
case free and clear of all liens, encumbrances, equities, security
interests, defects, adverse interests and claims whatsoever, except
such as are described in the Prospectus or such as do not materially
affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries, in
each case except as described in the Prospectus.
(xx) The Company and its subsidiaries own or possess, or
can acquire on reasonable terms, all patents, patent rights, licenses,
inventions, domain names, computer programs, computer code,
communications protocols, copyrights, other software, know-how
(including, without limitation, trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (hereinafter
called Intellectual Property) currently employed by them in connection
with the business now operated by them except (A) where the failure to
own or possess or otherwise be able to acquire such Intellectual
Property would not, singly or in the aggregate, have a material adverse
effect on the business, properties, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, or
(B) as disclosed in the Registration Statement and the Prospectus.
There are no legal or governmental proceedings pending or threatened
relating to any Intellectual Property that are required to be described
in the Registration Statement or the Prospectus and are not so
described; there are no contracts or other documents relating to any
Intellectual Property required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement or the Prospectus that are not so filed or described as
required. The expiration of any Intellectual Property owned or employed
by the Company will not, singly or in the aggregate, have a material
adverse effect on the business, properties, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole.
(xxi) Neither the Company nor any of its subsidiaries is
infringing or otherwise violating any Intellectual Property of others
or has received any notice of infringement of or conflict with asserted
rights of others with respect to any Intellectual Property, except for
any such infringement, violation or conflict which (A) would not,
singly or in the aggregate, have a material adverse effect on the
business, properties, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole, or (B) is disclosed
in the Registration Statement and the Prospectus. There are no legal or
governmental proceedings pending or threatened relating to any
Intellectual Property which, singly or in the aggregate, would have a
material adverse effect on the business, properties, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole.
(xxii) The Company and each of its subsidiaries are insured
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; and neither the Company nor any
of its subsidiaries (A) has received notice from any insurer or agent
of such insurer that substantial capital improvements or other material
expenditures will have to be made in order to continue such insurance
or (B) has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers at a cost that would not,
singly or in the aggregate, have a material adverse effect on the
business, properties, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole.
(xxiii) No relationship, direct or indirect, exists between
or among the Company or any of its subsidiaries on the one hand, and
the directors, officers, stockholders, customers or suppliers of the
Company or any of its subsidiaries on the other hand, which is required
by the Securities Act to be described in the Registration Statement or
the Prospectus which is not so described.
(xxiv) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as
5
6
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (C) access to assets is permitted only in accordance
with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(xxv) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been
filed, other than those filings being contested in good faith, and all
material taxes, including, without limitation, withholding taxes,
penalties and interest, assessments, fees and other charges due
pursuant to such returns or pursuant to any assessment received by the
Company or any of its subsidiaries have been paid, other than those
being contested in good faith and for which adequate reserves have been
provided.
(xxvi) The Company and its subsidiaries have complied and
are in compliance with all foreign, federal, state and local statutes,
executive orders, proclamations, regulations, rules, directives,
decrees, ordinances and similar provisions having the force or effect
of law and all judicial and administrative orders, rulings,
determinations and common law concerning the importation of
merchandise, the export or reexport of products, services and
technology, and the terms and conduct of international transactions
applicable to the Company and its subsidiaries in connection with the
conduct of the business of the Company and its subsidiaries (including,
without limitation, as the same relates to record keeping requirements)
(herein called International Trade Laws and Regulations), except for
such non-compliance which, singly or in the aggregate, would not have a
material adverse effect on the business, financial condition or results
of operations of the Company and its subsidiaries, taken as a whole; to
the best knowledge of the Company, neither the Company nor any of its
subsidiaries has made or provided any false statement or omission to
any agency of any federal, state or local government, purchasers of
products, or foreign government or foreign agency, in connection with
the exportation of merchandise (including, without limitation, with
respect to export licenses, exceptions and other export authorizations
and any filings required for or related to exportation of any item),
the importation of merchandise or other approvals required by a foreign
government or agency or any other requirement relating to any
International Trade Laws and Regulations.
(xxvii) The Company has not offered, or caused the
Underwriters to offer, any Stock to any person (herein called a
Participant) pursuant to the Directed Share Program (as defined below)
with the intent to unlawfully influence (A) a customer or supplier of
the Company or any of its subsidiaries to alter the customer's or
supplier's level or type of business with the Company or any of its
subsidiaries or (B) a trade journalist or publication to write or
publish favorable information about the Company, any of its
subsidiaries or their products. As used herein, Directed Share Program
means the offer and sale of Stock described in the twelfth paragraph
under the caption "Plan of Distribution" in the Prospectus.
(xxviii) All sales of the Company's securities prior to the
date hereof were at all relevant times duly registered under the
Securities Act and applicable foreign securities laws and state
securities or Blue Sky laws or were exempt from the registration
requirements of the Securities Act and applicable foreign and state
securities laws, or if such securities were not registered or exempt in
compliance with the Securities Act and applicable foreign and state
securities laws, any private rights of action for rescission or damages
arising from the failure to register any such securities are time
barred by applicable statutes of limitations or equitable principles,
including laches.
(xxix) The Registration Statement, the Prospectus and any
Preliminary Prospectus comply, and any further amendments or
supplements thereto will comply, in all material respects, with any
applicable laws or regulations of foreign jurisdictions in which the
Prospectus or any Preliminary Prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share
Program, and no authorization, approval, consent, license, order,
registration or qualification of or with any government, governmental
instrumentality or court, other than such as have been obtained, is
necessary under the securities laws and regulations of foreign
jurisdictions in which the Stock to be sold pursuant to the Directed
Share Program (herein called the Directed Shares) is offered outside
the United States.
(b) Each of the Selling Securityholders, severally and not
jointly, hereby represents and warrants as follows:
6
7
(i) Such Selling Securityholder has good and valid title
to all the shares of Stock to be sold by such Selling Securityholder
hereunder, free and clear of all liens, encumbrances, equities,
security interests and claims whatsoever, with full right and authority
to deliver the same hereunder, subject, in the case of each Selling
Securityholder, to the rights of ____________, as Custodian (herein
called the Custodian), and that upon the delivery of and payment for
such shares of the Stock hereunder, the several Underwriters will
receive good and valid title thereto, free and clear of all liens,
encumbrances, equities, security interests and claims whatsoever.
(ii) Certificates in negotiable form for the shares of the
Stock to be sold by such Selling Securityholder have been placed in
custody under a Custody Agreement for delivery under this Agreement
with the Custodian; such Selling Securityholder specifically agrees
that the shares of the Stock represented by the certificates so held in
custody for such Selling Securityholder are subject to the interests of
the several Underwriters and the Company, that the arrangements made by
such Selling Securityholder for such custody, including the Power of
Attorney provided for in such Custody Agreement, are to that extent
irrevocable, and that the obligations of such Selling Securityholder
shall not be terminated by any act of such Selling Securityholder or by
operation of law, whether by the death or incapacity of such Selling
Securityholder (or, in the case of a Selling Securityholder that is not
an individual, the dissolution or liquidation of such Selling
Securityholder) or the occurrence of any other event; if any such
death, incapacity, dissolution, liquidation or other such event should
occur before the delivery of such shares of the Stock hereunder,
certificates for such shares of the Stock shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement
as if such death, incapacity, dissolution, liquidation or other event
had not occurred, regardless of whether the Custodian shall have
received notice of such death, incapacity, dissolution, liquidation or
other event.
(iii) Such Selling Securityholder has reviewed the
Registration Statement and Prospectus and, although such Selling
Securityholder has not independently verified the accuracy or
completeness of all the information contained therein, nothing has come
to the attention of such Selling Securityholder that would lead such
Selling Securityholder to believe that on the Effective Date, any
Closing Date, or any later date on which Option Stock is to be
purchased, neither the Registration Statement nor the Prospectus (or
any amendment or supplement thereto) contains any untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, in each case to the extent, but only to the extent, that
such untrue statement or omission was made in the Registration
Statement or Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to
the Company by such Selling Securityholder pertaining to such Selling
Securityholder, as such, expressly for use therein.
(iv) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Securityholder.
7
8
(v) The Custody Agreement and the Power of Attorney
entered into by such Selling Securityholder have been duly authorized,
executed and delivered by such Selling Securityholder, and such Custody
Agreement and Power of Attorney are valid and binding on such Selling
Securityholder, enforceable in accordance with their terms.
(vi) None of the execution, delivery or performance of
this Agreement, such Custody Agreement or such Power of Attorney, the
compliance such Selling Securityholder with the provisions hereof or
thereof or the consummation of the transactions contemplated hereby or
thereby will (A) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or
agency (except such as have been obtained and such as may be required
under the securities or Blue Sky laws of the various states), (B)
conflict with or violate the charter, bylaws or other organizational
documents of such Selling Securityholder or constitute a material
breach of any of the terms or provisions of, or a default under, any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to such Selling Securityholder, if such
Selling Securityholder is not an individual, or (C) violate or conflict
with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having
jurisdiction over such Selling Securityholder or any of its property.
(vii) Each certificate signed by or on behalf of such
Selling Securityholder and delivered to the Underwriters or counsel for
the Underwriters shall be deemed to be a representation and warranty by
such Selling Securityholder to the Underwriters as to the matters
covered thereby.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject
to the terms and conditions herein set forth, the Company agrees to issue and
sell _____ shares of the Underwritten Stock to the several Underwriters, each
Selling Securityholder agrees to sell to the several Underwriters the number of
shares of the Underwritten Stock set forth in Schedule II opposite the number of
such Selling Securityholder, and each of the Underwriters agrees to purchase
from the Company and the Selling Securityholders the respective aggregate number
of shares of Underwritten Stock set forth opposite its name in Schedule I. The
price at which such shares of Underwritten Stock shall be sold by the Company
and purchased by the several Underwriters shall be $_____ per share. The
obligation of each Underwriter to the Company and each of the Selling
Securityholders shall be to purchase from the Company and the Selling
Securityholders that number of shares of the Underwritten Stock which represents
the same proportion of the total number of shares of the Underwritten Stock to
be sold by each of the Company and the Selling Securityholders pursuant to this
Agreement as the number of shares of the Underwritten Stock set forth opposite
the name of such Underwriter in Schedule I hereto represents of the total number
of shares of the Underwritten Stock to be purchased by all Underwriters pursuant
to this Agreement, as adjusted by you in such manner as you deem advisable to
avoid fractional shares. In making this Agreement, each Underwriter is
contracting severally and not jointly; except as provided in paragraphs (b) and
(c) of this Section 3, the agreement of each Underwriter is to purchase only the
respective number of shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail
or refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company or the Selling Securityholders shall
immediately give notice thereof to you, and the non-defaulting Underwriters
shall have the right within 24 hours after the receipt by you of such notice to
purchase, or procure one or more other Underwriters to purchase, in such
proportions as may be agreed upon between you and such purchasing Underwriter or
Underwriters and upon the terms herein set forth, all or any part of the shares
of the Stock which such defaulting Underwriter or Underwriters agreed to
8
9
purchase. If the non-defaulting Underwriters fail so to make such arrangements
with respect to all such shares and portion, the number of shares of the Stock
which each non-defaulting Underwriter is otherwise obligated to purchase under
this Agreement shall be automatically increased on a pro rata basis to absorb
the remaining shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase; provided, however, that the non-defaulting
Underwriters shall not be obligated to purchase the shares and portion which the
defaulting Underwriter or Underwriters agreed to purchase if the aggregate
number of such shares of the Stock exceeds 10% of the total number of shares of
the Stock which all Underwriters agreed to purchase hereunder. If the total
number of shares of the Stock which the defaulting Underwriter or Underwriters
agreed to purchase shall not be purchased or absorbed in accordance with the two
preceding sentences, the Company and the Selling Securityholders, shall have the
right, within 24 hours next succeeding the 24-hour period above referred to, to
make arrangements with other underwriters or purchasers satisfactory to you for
purchase of such shares and portion on the terms herein set forth. In any such
case, either you or the Company shall have the right to postpone the Closing
Date determined as provided in Section 5 hereof for not more than seven business
days after the date originally fixed as the Closing Date pursuant to said
Section 5 in order that any necessary changes in the Registration Statement, the
Prospectus or any other documents or arrangements may be made. If neither the
non-defaulting Underwriters nor the Company and the Selling Securityholders
shall make arrangements within the 24-hour periods stated above for the purchase
of all the shares of the Stock which the defaulting Underwriter or Underwriters
agreed to purchase hereunder, this Agreement shall be terminated without further
act or deed and without any liability on the part of the Company or the Selling
Securityholders to any non-defaulting Underwriter and without any liability on
the part of any non-defaulting Underwriter to the Company or the Selling
Securityholders. Nothing in this paragraph (b), and no action taken hereunder,
shall relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase, severally and
not jointly, up to _____ shares in the aggregate of the Option Stock from the
Company at the same price per share as the Underwriters shall pay for the
Underwritten Stock. Said option may be exercised only to cover over-allotments
in the sale of the Underwritten Stock by the Underwriters and may be exercised
in whole or in part at any time (but not more than once) on or before the
thirtieth day after the date of this Agreement upon written or telegraphic
notice by you to the Company setting forth the aggregate number of shares of the
Option Stock as to which the several Underwriters are exercising the option.
Delivery of certificates for the shares of Option Stock, and payment therefor,
shall be made as provided in Section 5 hereof. The number of shares of Option
Stock to be sold by each Seller (as defined below) shall be equal to the number
set forth opposite the name of such Seller on Schedule III hereto or, if the
Underwriters exercise such option for less than the full number of shares of
Option Stock available under such option, the number of shares of Option Stock
to be sold by each Seller shall be equal to (a) the aggregate number of shares
for which the option shall have been exercised, multipled by (b) a fraction, the
numerator of which is the number of shares set forth opposite the name of such
Seller on Schedule III hereto, and the denominator of which is the total number
of shares of Option Stock set forth in the first sentence of this Section 3(c).
As used in the preceding sentence, Seller shall mean the Company and each
Selling Securityholder. The number of shares of the Option Stock to be purchased
by each Underwriter shall be the same percentage of the total number of shares
of the Option Stock to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Stock, as adjusted by you in such
manner as you deem advisable to avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters
of the Stock to be purchased by them shall be as set forth in the Prospectus.
The Underwriters may from time to time change the public offering price after
the closing of the initial public offering and increase or decrease the
concessions and discounts to dealers as they may determine.
(b) The information set forth under "Underwriting" in the
Registration Statement, any Preliminary Prospectus and the Prospectus relating
to the Stock filed by the Company (insofar as such information relates to the
Underwriters) constitutes the only information furnished by the Underwriters to
the Company for inclusion in the Registration Statement, any Preliminary
Prospectus, and the Prospectus, and you on behalf of the respective Underwriters
represent and warrant to the Company that the statements made therein are
correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
9
10
(a) Delivery of certificates for the shares of the Underwritten
Stock and the Option Stock (if the option granted by Section 3(c) hereof shall
have been exercised not later than 7:00 A.M., San Francisco time, on the date
two business days preceding the Closing Date), and payment therefor, shall be
made at the office of Xxxxxx & Bird LLP, 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000-0000, at 7:00 a.m., San Francisco time, on the fourth business day
after the date of this Agreement, or at such time on such other day, not later
than seven full business days after such fourth business day, as shall be agreed
upon in writing by the Company, the Selling Securityholders and you. The date
and hour of such delivery and payment (which may be postponed as provided in
Section 3(b) hereof) are herein called the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be
exercised after 7:00 a.m., San Francisco time, on the date two business days
preceding the Closing Date, delivery of certificates for the shares of Option
Stock, and payment therefor, shall be made at the office of Xxxxxx & Bird LLP,
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000-0000, at 7:00 a.m., San
Francisco time, on the third business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made
to the Company or its order, and payment for the Stock purchased from the
Selling Securityholders shall be made to the Custodian, for the account of the
Selling Securityholders, in each case by wire transfer in immediately available
funds, instructions for which will be provided by the Company or Selling
Securityholders, where applicable, no later than three days prior to the Closing
Date. Such payment shall be made upon delivery of certificates for the Stock to
you for the respective accounts of the several Underwriters against receipt
therefor signed by you. Certificates for the Stock to be delivered to you shall
be registered in such name or names and shall be in such denominations as you
may request at least two business days before the Closing Date, in the case of
Underwritten Stock, and at least one business day prior to the purchase thereof,
in the case of the Option Stock. Such certificates will be made available to the
Underwriters for inspection, checking and packaging at the offices of Lewco
Securities Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the business day
prior to the Closing Date or, in the case of the Option Stock, by 3:00 p.m., New
York time, on the business day preceding the date of purchase.
6. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING
SECURITYHOLDERS. The Company covenants and agrees as follows:
(a) The Company will (i) prepare and timely file with the
Commission under Rule 424(b) a Prospectus containing information
previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430A and (ii) not file any amendment to
the Registration Statement or supplement to the Prospectus of which you
shall not previously have been advised and furnished with a copy or to
which you shall have reasonably objected in writing or which is not in
compliance in all material respects with the Securities Act or the
rules and regulations of the Commission.
(b) The Company will promptly notify each Underwriter in
the event of (i) the request by the Commission for amendment of the
Registration Statement or for supplement to the Prospectus or for any
additional information, (ii) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, (iii)
the institution or notice of intended institution of any action or
proceeding for that purpose, (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction, or (v) the receipt by it of notice
of the initiation or threatening of any proceeding for such purpose.
The Company will make every reasonable effort to prevent the issuance
of such a stop order and, if such an order shall at any time be issued,
to obtain the withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date,
deliver to you a signed copy of the Registration Statement as
originally filed and of each amendment thereto filed prior to the time
the Registration Statement becomes effective and, promptly upon the
filing thereof, a signed copy of each post-effective amendment, if any,
to the Registration Statement (together with, in each case, all
exhibits thereto unless previously furnished to you) and will also
deliver to you, for distribution to the Underwriters, a sufficient
number of additional conformed copies of each of
10
11
the foregoing (but without exhibits) so that one copy of each may be
distributed to each Underwriter, (ii) as promptly as possible deliver
to you and send to the several Underwriters, at such office or offices
as you may designate, as many copies of the Prospectus as you may
reasonably request, and (iii) thereafter from time to time during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, likewise send to the Underwriters as many
additional copies of the Prospectus and as many copies of any
supplement to the Prospectus and of any amended prospectus, filed by
the Company with the Commission, as you may reasonably request for the
purposes contemplated by the Securities Act.
(d) If at any time during the period in which a
prospectus is required by law to be delivered by an Underwriter or
dealer any event relating to or affecting the Company, or of which the
Company shall be advised in writing by you, shall occur as a result of
which it is necessary, in the opinion of counsel for the Company and of
counsel for the Underwriters, to supplement or amend the Prospectus in
order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser of
the Stock, the Company will forthwith prepare and file with the
Commission a supplement to the Prospectus or an amended prospectus so
that the Prospectus as so supplemented or amended will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time such Prospectus is delivered to such
purchaser, not misleading. If, after the initial public offering of the
Stock by the Underwriters and during such period, the Underwriters
shall propose to vary the terms of offering thereof by reason of
changes in general market conditions or otherwise, you will advise the
Company in writing of the proposed variation, and, if in the opinion
either of counsel for the Company or of counsel for the Underwriters
such proposed variation requires that the Prospectus be supplemented or
amended, the Company will forthwith prepare and file with the
Commission a supplement to the Prospectus or an amended prospectus
setting forth such variation. The Company authorizes the Underwriters
and all dealers to whom any of the Stock may be sold by the several
Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock in accordance
with the applicable provisions of the Securities Act and the applicable
rules and regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the
Company will submit to you, for your information, a copy of any
post-effective amendment to the Registration Statement and any
supplement to the Prospectus or any amended prospectus proposed to be
filed.
(f) The Company will cooperate, when and as requested by
you, in the qualification of the Stock for offer and sale under the
securities or blue sky laws of such jurisdictions as you may designate
and, during the period in which a prospectus is required by law to be
delivered by an Underwriter or dealer, in keeping such qualifications
in good standing under said securities or blue sky laws; provided,
however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. 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 you may reasonably request for
distribution of the Stock.
(g) During a period of five years commencing with the
date hereof, the Company will furnish to you, and to each Underwriter
who may so request in writing, copies of all periodic and special
reports furnished to stockholders of the Company and of all
information, documents and reports filed with the Commission (including
any information required by Rule 463 of the Commission under the
Securities Act).
(h) Not later than the 45th day following the end of the
fiscal quarter first occurring after the first anniversary of the
Effective Date, the Company will make generally available to its
security holders an earnings statement in accordance with Section 11(a)
of the Securities Act and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses
incident to the performance of its and the Selling Securityholders'
obligations under this Agreement, including all costs and expenses
incident to (i) the preparation, printing and filing with the
Commission and the National Association of Securities Dealers, Inc.
(herein referred to as the NASD) of the Registration Statement, any
Preliminary Prospectus and the Prospectus, (ii) the furnishing to the
Underwriters of copies of any Preliminary Prospectus and of the several
documents required by paragraph (c) of this Section 6 to be so
furnished, (iii) the printing of this Agreement and related documents
delivered to the Underwriters, (iv) the
11
12
preparation, printing and filing of all supplements and amendments to
the Prospectus referred to in paragraph (d) of this Section 6, (v) the
furnishing to you and the Underwriters of the reports and information
referred to in paragraph (g) of this Section 6 and (vi) the printing
and issuance of stock certificates, including the transfer agent's
fees, and (vii) any transfer taxes.
(j) The Company agrees to reimburse you, for the account
of the several Underwriters, for blue sky fees and related
disbursements (including counsel fees and disbursements and cost of
printing memoranda for the Underwriters) paid by or for the account of
the Underwriters or their counsel in qualifying the Stock under state
securities or blue sky laws and in the review of the offering by the
NASD.
(k) The provisions of paragraphs (i) and (j) of this
Section are intended to relieve the Underwriters from the payment of
the expenses and costs which the Company hereby agrees to pay and shall
not affect any agreement which the Company and the Selling
Securityholders may make, or may have made, for the sharing of any such
expenses and costs.
(l) The Company hereby agrees that, without the prior
written consent of Chase Securities Inc. on behalf of the Underwriters,
the Company will not, for a period of 180 days following the
commencement of the public offering of the Stock by the Underwriters,
directly or indirectly, (i) sell, offer, contract to sell, make any
short sale, pledge, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any shares of Common Stock
or any securities convertible into or exchangeable or exercisable for
or any rights to purchase or acquire Common Stock or (ii) enter into
any swap or other agreement that transfers, in whole or in part, any of
the economic consequences or ownership of Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled
by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Stock to
be sold to the Underwriters pursuant to this Agreement, (B) shares of
Common Stock issued by the Company upon the exercise of options granted
under the stock option plans of the Company (the "Option Plans") or
upon the exercise of warrants outstanding as of the date hereof, all as
described under the caption "Capitalization" in the Preliminary
Prospectus, and (C) options to purchase Common Stock granted under the
Option Plans.
(m) If at any time during the 25-day period after the
Registration Statement becomes effective any rumor, publication or
event relating to or affecting the Company shall occur as a result of
which in your opinion the market price for the Stock has been or is
likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after written notice from you advising
the Company to the effect set forth above, forthwith prepare, consult
with you concerning the substance of, and disseminate a press release
or other public statement, reasonably satisfactory to you and the
Company, responding to or commenting on such rumor, publication or
event.
(n) The Company is familiar with the Investment Company
Act of 1940, as amended, and has in the past conducted its affairs, and
will in the future conduct its affairs, in such a manner to ensure that
the Company was not and will not be an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
Each Selling Securityholder covenants and agrees to enter into and
deliver a lock-up agreement in a form requested by Chase Securities, Inc., which
will prohibit such Selling Stockholder from, without the prior written consent
of Chase Securities, Inc. on behalf of the Underwriters, for a period of 180
days following the commencement of the public offering of the Stock by the
Underwriters, directly or indirectly, (i) selling, offering, contracting to
sell, making any short sale, pledging, selling any option or contract to
purchase, purchasing any option or contract to sell, granting any option, right
or warrant to purchase or otherwise transferring or disposing of any shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for or any rights to purchase or acquire Common Stock or (ii) entering into any
swap or other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Stock to be sold to the Underwriters pursuant to this
Agreement, (B) shares of Common
12
13
Stock issued by the Company upon the exercise of options granted under the
Option Plans or upon the exercise of warrants outstanding as of the date hereof,
all as described under the caption "Capitalization" in the Preliminary
Prospectus, and (C) options to purchase Common Stock granted under the Option
Plans.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (f) of this Section 7,
the Company and the Selling Securityholders severally and not jointly agree to
indemnify and hold harmless each Underwriter and each person (including each
partner or officer thereof) who controls any Underwriter within the meaning of
Section 15 of the Securities Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Securities Act, the Securities Exchange
Act of 1934, as amended (herein called the Exchange Act), or the common law or
otherwise, and the Company and the Selling Securityholders jointly and severally
agree to reimburse each such Underwriter and controlling person for any legal or
other expenses (including, except as otherwise hereinafter provided, reasonable
fees and disbursements of counsel) incurred by the respective indemnified
parties in connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any Rule 462(b) registration
statement) or any post-effective amendment thereto (including any Rule 462(b)
registration statement), or 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, or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) or the omission or alleged omission
to state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that (1) the indemnity agreements of the Company
and the Selling Securityholders contained in this paragraph (a) shall not apply
to any such losses, claims, damages, liabilities or expenses if such statement
or omission was made in reliance upon and in conformity with information
furnished as herein stated or otherwise furnished in writing to the Company by
or on behalf of any Underwriter for use in any Preliminary Prospectus or the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto, (2) the indemnity agreement contained in this paragraph (a)
with respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless the failure is the result of noncompliance by
the Company with paragraph (c) of Section 6 hereof, and (3) each Selling
Securityholder shall only be liable under this paragraph with respect to
information pertaining to such Selling Securityholder furnished by or on behalf
of such Selling Securityholder expressly for use in any Preliminary Prospectus
or the Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto. The indemnity agreements of the Company and the Selling
Securityholders contained in this paragraph (a) and the representations and
warranties of the Company and the Selling Securityholders contained in Section 2
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its officers who signs the Registration Statement
on his own behalf or pursuant to a power of attorney, each of its directors,
each other Underwriter and each person (including each partner or officer
thereof) who controls the Company or any such other Underwriter within the
meaning of Section 15 of the Securities Act, and the Selling Securityholders
from and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified parties or any of them may become subject
under the Securities Act, the Exchange Act, or the common law or otherwise and
to reimburse each of them for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement) or the
omission
13
14
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading or (ii) any
untrue statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished as herein stated or otherwise
furnished in writing to the Company by or on behalf of such indemnifying
Underwriter for use in the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto. The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a)
and (b) of this Section 7 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the Notice) of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
such indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of such indemnity agreement. Any indemnifying party shall be entitled at its own
expense to participate in the defense of any action, suit or proceeding against,
or investigation or inquiry of, an indemnified party. Any indemnifying party
shall be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the Notice of Defense) to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or parties
shall be entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified party
or parties and (ii) in any event, the indemnified party or parties shall be
entitled to have counsel chosen by such indemnified party or parties participate
in, but not conduct, the defense. If, within a reasonable time after receipt of
the Notice, an indemnifying party gives a Notice of Defense and the counsel
chosen by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs (a) through (c) of this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding,
except that (A) the indemnifying party or parties shall bear the legal and other
expenses incurred in connection with the conduct of the defense as referred to
in clause (i) of the proviso to the preceding sentence and (B) the indemnifying
party or parties shall bear such other expenses as it or they have authorized to
be incurred by the indemnified party or parties. If, within a reasonable time
after receipt of the Notice, no Notice of Defense has been given, the
indemnifying party or parties shall be responsible for any legal or other
expenses incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Securityholders on the one hand and the Underwriters on
the other shall be
14
15
deemed to be in the same respective proportions as the total net proceeds from
the offering of the Stock received by the Company and the Selling
Securityholders and the total underwriting discount received by the
Underwriters, as set forth in the table on the cover page of the Prospectus,
bear to the aggregate public offering price of the Stock. 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 each indemnifying party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be 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 into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount
that in the aggregate exceeds the total public offering price of the Stock
purchased by such Underwriter less the aggregate amount of damages that such
Underwriter has been required to pay. 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 paragraph
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) Neither, on one hand, the Company or the Selling
Securityholders nor, on the other hand, the Underwriters or any of them
individually will, without the prior written consent of the other, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not such other party or any person who controls
such other party within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of such other party and each such controlling person from
all liability arising out of such claim, action, suit or proceeding.
(f) The liability of each Selling Securityholder under the
indemnity, contribution and reimbursement agreements contained in the provisions
of this Section 7 and Section 11 hereof shall be limited to an amount equal to
the initial public offering price of the stock sold by such Selling
Securityholder to the Underwriters less the underwriting discount paid to the
Underwriters. The Company and the Selling Securityholders may agree, as among
themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
8. TERMINATION. This Agreement may be terminated by you at any
time prior to the Closing Date by giving written notice to the Company and the
Selling Securityholders if after the date of this Agreement trading in the
Common Stock shall have been suspended, or if there shall have occurred (i) the
engagement in hostilities or an escalation of major hostilities by the United
States or the declaration of war or a national emergency by the United States on
or after the date hereof, (ii) any outbreak of hostilities or other national or
international calamity or crisis or change in any general, financial, economic
or political conditions of the United States or its financial markets if the
effect of such outbreak, calamity, crisis or change in the general, financial,
economic or political conditions in the United States or its financial markets
would, in the Underwriters' reasonable judgment, make the offering or delivery
of the Stock impracticable or inadvisable, (iii) suspension of trading in
securities generally or a material adverse decline in value of securities
generally on the New York Stock Exchange, the American Stock Exchange, or The
Nasdaq Stock Market, or limitations on prices (other than limitations on hours
or numbers of days of trading) for securities on either such exchange or system,
(iv) the enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of, or commencement of any proceeding
or investigation by, any court, legislative body, agency or other
15
16
governmental authority which in the Underwriters' reasonable opinion materially
and adversely affects or will materially or adversely affect the business or
operations of the Company, (v) declaration of a banking moratorium by either
federal or New York State authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in the Underwriters' reasonable opinion has a material
adverse effect on the securities markets in the United States. If this Agreement
shall be terminated pursuant to this Section 8, there shall be no liability of
the Company or the Selling Securityholders to the Underwriters and no liability
of the Underwriters to the Company or the Selling Securityholders; provided,
however, that in the event of any such termination the Company and the Selling
Securityholders agree to indemnify and hold harmless the Underwriters from all
costs or expenses incident to the performance of the obligations of the Company
and the Selling Securityholders under this Agreement, including all costs and
expenses referred to in paragraphs (i) and (j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Stock shall be subject to
the performance by the Company and by the Selling Securityholders of all their
respective obligations to be performed hereunder at or prior to the Closing Date
or any later date on which Option Stock is to be purchased, as the case may be,
and to the following further conditions:
(a) The Registration Statement shall have become
effective; and no stop order suspending the effectiveness thereof shall
have been issued and no proceedings therefor shall be pending or
threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock
hereunder and the validity and form of the certificates representing
the Stock, all corporate proceedings and other legal matters incident
to the foregoing, and the form of the Registration Statement and of the
Prospectus (except as to the financial statements contained therein),
shall have been approved at or prior to the Closing Date by Xxxxxx &
Bird LLP, counsel for the Underwriters.
(c) You shall have received from Xxxxx, Xxxxxxxx &
Xxxxxxx, LLP, counsel for the Company and certain of the Selling
Securityholders, and from ______________, counsel for the other Selling
Securityholders, opinions, addressed to the Underwriters and dated the
Closing Date, covering the matters set forth in Annex A and Annex B
hereto, and if Option Stock is purchased at any date after the Closing
Date, additional opinions from each such counsel, addressed to the
Underwriters and dated such later date, confirming that the statements
expressed as of the Closing Date in such opinions remain valid as of
such later date.
(d) You shall be satisfied that (i) as of the Effective
Date, the statements made in the Registration Statement and the
Prospectus were true and correct and neither the Registration Statement
nor the Prospectus omitted to state any material fact required to be
stated therein or necessary in order to make the statements therein,
respectively, not misleading, (ii) since the Effective Date, no event
has occurred which should have been set forth in a supplement or
amendment to the Prospectus which has not been set forth in such a
supplement or amendment, (iii) since the respective dates as of which
information is given in the Registration Statement in the form in which
it originally became effective and the Prospectus contained therein,
there has not been any material adverse change or any development
involving a prospective material adverse change in or affecting the
business, properties, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, and,
since such dates, except in the ordinary course of business, neither
the Company nor any of its subsidiaries has entered into any material
transaction not referred to in the Registration Statement in the form
in which it originally became effective and the Prospectus contained
therein, (iv) neither the Company nor any of its subsidiaries has any
material contingent obligations which are not disclosed in the
Registration Statement and the Prospectus, (v) there are not any
pending or known threatened legal proceedings to which the Company or
any of its subsidiaries is a party or of which property of the Company
or any of its subsidiaries is the subject which are material and which
are not disclosed in the Registration Statement and the Prospectus,
(vi) there are not any franchises, contracts, leases or other documents
which are required to be described in the Registration Statement or
filed as exhibits to the Registration Statement which have not been
described or filed as required, and (vii) the representations and
warranties of the Company herein are true and correct in all material
respects as of the Closing Date or any later date on which Option Stock
is to be purchased, as the case may be.
16
17
(e) You shall have received on the Closing Date and on
any later date on which Option Stock is purchased a certificate, dated
the Closing Date or such later date, as the case may be, and signed by
the President and the Chief Financial Officer of the Company, stating
that the respective signers of said certificate have carefully examined
the Registration Statement in the form in which it originally became
effective and the Prospectus contained therein and any supplements or
amendments thereto, and that to the best of their knowledge the
statements included in clauses (i) through (vii) of paragraph (d) of
this Section 9 are true and correct.
(f) You shall have received from KPMG LLP, a letter or
letters, addressed to the Underwriters and dated the Closing Date and
any later date on which Option Stock is purchased, confirming that they
are independent public accountants with respect to the Company within
the meaning of the Securities Act and the applicable published rules
and regulations thereunder and based upon the procedures described in
their letter delivered to you concurrently with the execution of this
Agreement (herein called the Original Letter), but carried out to a
date not more than three business days prior to the Closing Date or
such later date on which Option Stock is purchased (i) confirming, to
the extent true, that the statements and conclusions set forth in the
Original Letter are accurate as of the Closing Date or such later 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 the Original Letter or to reflect
the availability of more recent financial statements, data or
information. The letters shall not disclose any change, or any
development involving a prospective change, in or affecting the
business or properties of the Company or any of its subsidiaries which,
in your reasonable judgment, makes it impractical or inadvisable to
proceed with the public offering of the Stock or the purchase of the
Option Stock as contemplated by the Prospectus.
(g) You shall have received from KPMG LLP a letter
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 financial
statements as at December 31, 1999, did not disclose any weakness in
internal controls that they considered to be material weaknesses.
(h) You shall have been furnished evidence in usual
written or telegraphic form from the appropriate authorities of the
several jurisdictions, or other evidence satisfactory to you, of the
qualification referred to in paragraph (f) of Section 6 hereof.
(i) Prior to the Closing Date, the Stock to be issued and
sold by the Company shall have been duly authorized for listing by the
Nasdaq National Market upon official notice of issuance.
(j) On or prior to the Closing Date, you shall have
received from all of the Company's directors, officers, and
stockholders who own more than 5% of the Common Stock of the Company,
agreements, in form reasonably satisfactory to Chase Securities Inc.,
stating that without the prior written consent of Chase Securities Inc.
on behalf of the Underwriters, such person or entity will not, for a
period of 180 days following the commencement of the public offering of
the Stock by the Underwriters, directly or indirectly, (i) sell, offer,
contract to sell, make any short sale, pledge, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible
into or exchangeable or exercisable for or any rights to purchase or
acquire Common Stock or (ii) enter into any swap or other agreement
that transfers, in whole or in part, any of the economic consequences
or ownership of Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Xxxxxx & Bird LLP, counsel for the Underwriters, shall
be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and to the Selling Securityholders. Any such termination shall be
without liability of the Company or the Selling Securityholders to the
Underwriters
17
18
and without liability of the Underwriters to the Company or the Selling
Securityholders; provided, however, that (i) in the event of such termination,
the Company and the Selling Securityholders agree to indemnify and hold harmless
the Underwriters from all costs or expenses incident to the performance of the
obligations of the Company and the Selling Securityholders under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
material default on the part of the Company or the Selling Securityholders to
perform any agreement herein, to fulfill any of the material conditions herein,
or to comply with any material provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the transactions contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY AND THE SELLING
SECURITYHOLDERS. The obligation of the Company and the Selling Securityholders
to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company and the Selling
Securityholders by giving notice to you. Any such termination shall be without
liability of the Company and the Selling Securityholders to the Underwriters and
without liability of the Underwriters to the Company or the Selling
Securityholders; provided, however, that in the event of any such termination
the Company agrees to indemnify and hold harmless the Underwriters from all
costs or expenses incident to the performance of the obligations of the Company
and the Selling Securityholders under this Agreement, including all costs and
expenses referred to in paragraphs (i) and (j) of Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to their other
obligations under Section 7 of this Agreement (and subject, in the case of a
Selling Securityholder, to the provisions of paragraph (f) of Section 7), the
Company and the Selling Securityholders (but only to the extent of their
liability as provided in Section 7(a)), hereby severally and not jointly agree
to reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 and the possibility that such payments might later be held
to be improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company, the Selling Securityholders and the several
Underwriters and, with respect to the provisions of Section 7 hereof, the
several parties (in addition to the Company, the Selling Securityholders and the
several Underwriters) indemnified under the provisions of said Section 7, and
their respective personal representatives, successors and assigns. Nothing in
this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser, of
any of the Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all
communications hereunder shall be in writing or by telegraph and, if to the
Underwriters, shall be mailed, telegraphed or delivered to Chase Securities
Inc., Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:_____________,
with copies to Chase Securities Inc. 0000 Xxxxxxxxx Xxxx, N.E., Xxxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxx, Attention:____________ and Xxxxxx & Bird LLP, 0000
Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000-0000, Attention: J. Xxxxxxx
Xxxxxx, Esq.; and if to the Company, shall be mailed, telegraphed or delivered
to it at its office, 000 Xxxxxxxxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000,
Attention: Chief Executive Officer, with a copy to Xxxxx, Xxxxxxxx & Xxxxxxx,
LLP, 0000 Xxxxxxxxx Xxxxxx, X.X. Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Attention:
Xxxxx X. Xxxxxxxx, Esq.; and if to the Selling Securityholders, shall be mailed,
telegraphed or delivered to the Selling Securityholders in care of the Company
at the Company's address referred to above in this Section 13. All notices given
by telegraph shall be promptly confirmed by letter.
14. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall
18
19
remain in full force and effect regardless of (a) any termination of this
Agreement, (b) any investigation made by or on behalf of any Underwriter or
controlling person thereof, or by or on behalf of the Company or the Selling
Securityholders or their respective directors or officers, and (c) delivery and
payment for the Stock under this Agreement; provided, however, that if this
Agreement is terminated prior to the Closing Date, the provisions of paragraphs
(g), (l) and (m) of Section 6 hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
19
20
Please sign and return to the Company and to the Selling
Securityholders in care of the Company the enclosed duplicates of this letter,
whereupon this letter will become a binding agreement among the Company, the
Selling Securityholders and the several Underwriters in accordance with its
terms.
Very truly yours,
O2WIRELESS SOLUTIONS, INC.
By:
-------------------------------------
Name:
Title:
THE SELLING SECURITYHOLDERS NAMED
IN SCHEDULE II HERETO, ACTING
SEVERALLY:
By:
-------------------------------------
Name:
------------------------------
Title: Attorney-in-Fact
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX XXXXXX PARTNERS LLC
By: Chase Securities Inc.
By:
----------------------------------
Name:
-------------------------
Title: Managing Director
Acting on behalf of the several
Underwriters, including themselves, named
in Schedule I hereto.
20
21
SCHEDULE I
UNDERWRITERS
NUMBER OF SHARES
UNDERWRITERS TO BE PURCHASED
------------ ----------------
Chase Securities Inc...........................................
Credit Suisse First Boston Corporation.........................
Xxxxxx Xxxxxx Partners LLC.....................................
Total........................................ ==========
22
SCHEDULE II
SELLING SECURITYHOLDERS
NAME AND ADDRESS OF NUMBER OF SHARES
SELLING SECURITYHOLDERS TO BE SOLD
----------------------- ----------------
Total......................................... ==========
23
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF
XXXXX, XXXXXXXX & XXXXXXX, LLP
COUNSEL FOR THE COMPANY
AND CERTAIN SELLING SECURITYHOLDERS
(i) Each of the Company and its subsidiaries has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, and
to such counsel's knowledge, is duly qualified as a foreign corporation
and in good standing in each state of the United States of America in
which its ownership or leasing of property requires such qualification
(except where the failure to be so qualified would not have a material
adverse effect on the business, properties, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole), and has full corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement; all the issued and outstanding capital stock of each of the
subsidiaries of the Company has been duly authorized and validly issued
and is fully paid and nonassessable, and to such counsel's knowledge,
no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into
shares of capital stock or ownership interests in such subsidiaries are
outstanding;
(ii) the authorized capital stock of the Company consists
of _____ shares of Class A Convertible Preferred Stock, of which there
are outstanding _____ shares, _____ shares of serial preferred stock,
of which there are _____ outstanding shares, and _____ shares of Common
Stock, $.0001 par value, of which there are outstanding _____ shares
(including the Underwritten Stock [plus the number of shares of Option
Stock issued on the date hereof)]; all necessary corporate proceedings
have been taken validly to authorize such authorized capital stock; all
of the outstanding shares of such capital stock (including the
Underwritten Stock and the shares of Option Stock issued, if any) have
been duly and validly issued and are fully paid and nonassessable; any
Option Stock purchased after the Closing Date, when issued and
delivered to and paid for by the Underwriters as provided in the
Underwriting Agreement, will have been duly and validly issued and be
fully paid and nonassessable; and no preemptive rights of, or rights of
refusal in favor of, stockholders exist with respect to the Stock, or
the issue and sale thereof, pursuant to the Certificate of
Incorporation or Bylaws of the Company and, to the knowledge of such
counsel, there are no contractual preemptive rights, rights of first
refusal or rights of co-sale which exist with respect to the Stock
being sold by the Selling Securityholders or the issue and sale of the
Stock that have not been waived;
(iii) the Registration Statement has become effective under
the Securities Act and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement
or suspending or preventing the use of the Prospectus is in effect and
no proceedings for that purpose have been instituted or are pending or
contemplated by the Commission;
(iv) the Registration Statement and the Prospectus (except
as to the financial statements and schedules and other financial data
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
Securities Act and with the rules and regulations of the Commission
thereunder;
(v) such counsel have no reason to believe that the
Registration Statement (except as to the financial statements and
schedules and other financial data contained therein, as to which such
counsel need not express any opinion or belief) at the Effective Date
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 that the Prospectus (except as to
the financial statements and schedules and other financial data
contained therein, as to which such counsel need not express any
opinion or belief) as of its date or at the Closing Date (or any later
date on which Option Stock is purchased), contained or contains any
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(vi) the information required to be set forth in the
Registration Statement in answer to Items 9, 10 (insofar as it relates
to such counsel) and 11(c) of Form S-1 is to such
1
24
counsel's knowledge, accurately and adequately set forth therein in all
material respects or no response is required with respect to such
Items, and the description of the Company's stock option plans and the
options granted and which may be granted thereunder and the options
granted otherwise than under such plans set forth in the Prospectus
accurately and fairly presents in all material respects the information
required to be shown with respect to said plans and options to the
extent required by the Securities Act and the rules and regulations of
the Commission thereunder;
(vii) to the knowledge of such counsel there are no
franchises, contracts, leases, documents or legal proceedings, pending
or threatened, which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement, which are not described and filed as required;
(viii) the Company has the corporate power and authority to
enter into the Underwriting Agreement and to issue, sell and deliver to
the Underwriters the Stock to be issued and sold by it thereunder. The
Underwriting Agreement had been duly authorized by all necessary
corporate action on the part of the Company and the Underwriting
Agreement has been duly authorized, executed and delivered by the
Company;
(ix) the Underwriting Agreement has been duly executed and
delivered by or on behalf of the Selling Securityholders named in
Exhibit A attached hereto and the Custody Agreement between such
Selling Securityholders and ___________________________, as Custodian,
and the Power of Attorney referred to in such Custody Agreement have
been duly executed and delivered by such Selling Securityholders;
(x) to such counsel's knowledge, the Custody Agreement
entered into by, and the Power of Attorney given by, each Selling
Securityholder named in Exhibit A attached hereto is valid and binding
on such Selling Securityholder, enforceable in accordance with their
terms;
(xi) to such counsel's knowledge, each Selling Shareholder
named in Exhibit A attached hereto has full right, power and authority
to enter into and to perform its obligations under the Underwriting
Agreement and to sell, transfer, assign and deliver the Stock to be
sold by such Selling Shareholder thereunder;
(xii) the issue and sale by the Company of the shares of
Stock sold by the Company as contemplated by the Underwriting Agreement
will not conflict with, or result in a breach of, the respective
Certificate of Incorporation or Bylaws of the Company or of any of its
subsidiaries or any agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or any
applicable law or regulation, or so far as is known to such counsel,
any order, writ, injunction or decree, of any governmental body, court
or governmental instrumentality;
(xiii) all holders of securities of the Company having
rights to require the registration of shares of Common Stock, or of
other securities, which are exercisable because of the filing of the
Registration Statement by the Company have waived such rights or such
rights have been satisfied or expired by reason of lapse of time
following notification of the Company's intent to file the Registration
Statement;
(xiv) to such counsel's knowledge, good and valid title to
the shares of Stock sold by the Selling Securityholders named in
Exhibit A under the Underwriting Agreement, free and clear of all
liens, encumbrances, equities, security interests and claims, has been
transferred to the Underwriters who have severally purchased such
shares of Stock under the Underwriting Agreement, assuming for the
purpose of this opinion that the Underwriters purchased the same in
good faith without notice of any adverse claims; and
(xv) no consent, approval, authorization or order of any
governmental agency or body, or to such counsel's knowledge of any
court, is required for the consummation of the transactions
contemplated in the Underwriting Agreement, except such as have been
obtained under the Securities Act and such as may be required under
state securities or blue sky laws [(AS TO WHICH SUCH COUNSEL EXPRESSES
NO OPINION)]in connection with the purchase and distribution of the
Stock by the Underwriters;
2
25
(xvi) the Stock issued and sold by the Company and the
Stock sold by the Selling Securityholders has been duly authorized for
quotation on the Nasdaq National Market upon official notice of
issuance.
Counsel rendering the foregoing opinions may rely as to questions of
law not involving the laws of the United States or the State of Georgia, upon
opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to the
representatives of the several Underwriters and to counsel for the Underwriters
and the foregoing opinion shall also state that counsel knows of no reason the
Underwriters are not entitled to rely upon the opinions of such local counsel.
In addition to the matters set forth above, counsel rendering the
foregoing opinions shall also include a statement to the effect that nothing has
come to the attention of such counsel that leads them to believe that: (a) the
Registration Statement (except as to the financial statements and schedules and
other financial data contained therein, as to which such counsel need not
express any opinion or belief) at the Effective Date 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 (b)
that the Prospectus (except as to the financial statements and schedules and
other financial data contained therein, as to which such counsel need not
express any opinion or belief) as of its date or at the Closing Date (or any
later date on which Option Stock is purchased), contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
In rendering the foregoing opinions, the use of expressions such as "to
such counsel's knowledge" or "known to such counsel," or expressions of similar
import, with reference to matters of fact indicates that the current actual
conscious knowledge of the attorneys within the firm actively engaged in the
representation of the Company is not inconsistent with that portion of the
opinion which such phrase qualifies after a reasonable investigation of such
matters by such attorneys.
In rendering the foregoing opinions, such counsel may rely as to
certain matters of fact on certificates and affidavits of officers of the
Company, and certificates, correspondence and telegrams from, and telephone
conversations with, certain public officials. References made to the term "in
good standing" shall mean that such counsel has obtained a certificate from the
secretary of state in the jurisdiction in question to the effect that such
corporation is in existence and has paid all fees and taxes required of it under
the business corporation statute of such jurisdiction.
With respect to the opinions contained in paragraph (i) respecting the
subsidiaries of the Company, insofar as they apply to any subsidiary of the
Company organized under the laws of any jurisdiction other than the states of
Georgia and Delaware, such opinions may be given based solely on such counsel's
review of the statutory provisions of the business corporation statutes of the
relevant jurisdiction, as reported in standard compilations of state business
corporation statutes.
In rendering the opinion contained in paragraph (vi) above, such
counsel shall not be required to make an independent search of the court dockets
of any jurisdiction.
3
