EXHIBIT 1.1
ROGUE WAVE SOFTWARE, INC.
2,000,000 SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
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August , 1997
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XXXXXXXXX & XXXXX LLC
XXXXXXX, XXXXXX & XXXXXXXXX, L.L.C.
XXXXX & COMPANY
As Representatives of the Several
Underwriters Named on Schedule I hereto
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Rogue Wave Software, Inc., a Delaware corporation (herein called the
Company), proposes to issue and sell 205,000 shares of its authorized but
unissued Common Stock, $.001 par value, and certain stockholders of the
Company named in Schedule II hereto propose to sell an aggregate of 1,795,000
shares of Common Stock, $.001 par value, of the Company (herein called the
Common Stock) (said 2,000,000 shares of Common Stock being herein called the
Underwritten Stock). The Company and certain of the stockholders of the
Company named in Schedule II hereto (said stockholders, together with the
stockholders selling the Underwritten Stock, herein collectively called the
Selling Securityholders) propose to grant to the Underwriters (as hereinafter
defined) an option to purchase up to 300,000 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.
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(1) Plus an option to purchase from the Company and certain of the Selling
Securityholders of up to 300,000 additional shares to cover over-allotments.
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- ), including the related
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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 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
(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
condition (financial or otherwise), earnings, operations, business or
business prospects of the
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Company and its subsidiaries, taken as a whole). The execution and
delivery of the Agreement and Plan of Merger dated as of November 20, 1996
(herein called the Merger Agreement) between Rogue Wave Software, Inc., an
Oregon corporation (herein called the Oregon Corporation), and the Company,
which effected the reincorporation of the Oregon Corporation under the laws
of the State of Delaware on November 21, 1996, was duly authorized by all
necessary corporate action on the part of each of the Oregon Corporation
and the Company. Each of the Oregon Corporation and the Company had all
corporate power and authority to execute and deliver the Merger Agreement,
to file the Merger Agreement with the Secretary of State of Oregon and the
Secretary of State of Delaware and to consummate the reincorporation
contemplated by the Merger Agreement, and the Merger Agreement, at the time
of execution and filing, constituted a valid and binding obligation of each
of the Oregon Corporation and the Company, enforceable in accordance with
its terms. The Company does not own or control, directly or indirectly,
any corporation, association or other entity other than Inmark Development
Corporation, a California corporation (hereinafter called Inmark) and Rogue
Wave Software GmbH, a German corporation.
(ii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any materially adverse change in the business, properties, financial
condition or results of operations of the Company and of 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.
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(iv) The Company's outstanding capital stock has been validly
authorized, is fully paid and nonassessable, was issued in compliance with
the registration and qualification provisions of applicable federal and
state securities laws and was issued free of any preemptive right, right of
first refusal or similar right. The Stock is duly and validly authorized,
is (or, in the case of shares of the Stock to be sold by the Company, will
be, when issued and sold to the Underwriters as provided herein) duly and
validly issued, fully paid and nonassessable and conforms to the
description thereof in the Prospectus. No further approval or authority of
the stockholders or the Board of Directors of the Company will be required
for the transfer and sale of the Stock to be sold by the Selling
Securityholders or the issuance and sale of the Stock as contemplated
herein. No preemptive right, or right of first refusal in favor of
stockholders, exists with respect to the Stock, or the issue and sale
thereof, pursuant to the Certificate of Incorporation or Bylaws of the
Company, and there is no contractual preemptive right, right of first
refusal, right of co-sale or similar right which exists and has not been
waived with respect to the Stock being sold by the Selling Securityholders
or the issue and sale of the Stock.
(v) The Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
Prospectus is in effect and, to the Company's knowledge after inquiry, no
proceeding for that purpose has been instituted or is contemplated by the
Commission.
(vi) This Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Representatives, constitutes a valid and binding
obligation of the Company enforceable in accordance with its terms,
except as rights to indemnity or contribution may be limited by federal
or state securities laws and except as enforcement (A) may be limited by
the effect of bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting the rights of creditors generally, (B) is subject to general
principles of equity and similar principles, including, without
limitation, concepts of materiality, reasonableness, unconscionability,
good faith and fair dealing and the possible unavailability of specific
performance, injunctive relief or other equitable remedies, regardless of
whether considered in a proceeding in equity or at law or (C) is subject
to the effect of public policy.
(vii) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, and
the issue and sale by the Company of the shares of Stock to be sold by the
Company as provided herein will not conflict with, or result in a breach
of, the Certificate of Incorporation or Bylaws of the Company or any
material agreement or instrument to which the Company is a party or any
applicable law or regulation, or any judgment, order, writ, injunction or
decree, of any jurisdiction, court or governmental instrumentality.
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(viii) All holders of securities of the Company having rights to
the registration of shares of Common Stock, or other securities, because
of the filing of the Registration Statement by the Company have waived
such rights or such rights have expired by reason of lapse of time
following notification of the Company's intent to file the Registration
Statement.
(ix) The "lock-up" agreements between you and all of the
Company's executive officers and directors and certain larger stockholders
and optionees whose options will vest, in whole or in part, prior to the
date that is 90 days following the Effective Date, delivered to you before
the date hereof, shall be in full force and effect on the Closing Date.
(x) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as have been (or will before
the Closing Date have been) obtained under the Securities Act and such as
may be required under state securities or blue sky laws in connection with
the purchase and distribution of the Stock by the Underwriters.
(xi) The Company has timely filed all necessary federal, state
and foreign income and franchise tax returns and has paid all taxes shown
thereon as due, and there is no tax deficiency that has been or, to the
Company's knowledge, might be asserted against the Company or any of its
subsidiaries that could have a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries, taken as a whole; and all
tax liabilities are adequately provided for on the books of the Company.
(xii) To the Company's knowledge, no labor disturbance by the
employees of the Company exists or is imminent; and the Company is not
aware of any existing or imminent labor disturbance by the employees of
any of its principal value added resellers, subcontractors, original
equipment manufacturers, authorized dealers or international distributors
that might be expected to result in a material adverse change in the
condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries, taken as a
whole. No collective bargaining agreement exists with any of the
Company's employees and, to the Company's knowledge, no such agreement is
imminent.
(xiii) The consolidated financial statements, including the
notes thereto, and supporting schedules included in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its Subsidiaries as of the dates indicated and the results of
its operations for the periods specified; except as otherwise stated in the
Registration Statement, said consolidated financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included in
the Registration Statement
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present fairly the information required to be stated therein. Such
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved, are correct and complete, and are in accordance with
the books and records of the Company in all material respects. The
unaudited pro forma combined financial information (including the related
notes and supporting schedules) contained in the Prospectus complies as to
form in all material respects to the accounting requirements of the
Securities Act and the rules and regulations of the Commission thereunder,
and management of the Company believes that the assumptions underlying the
pro forma adjustments are reasonable. All necessary pro forma adjustments
have been properly applied to the historical amounts in the compilation of
the information and such information presents fairly with respect to the
respective combined entities presented therein the financial position,
results of operations, and other information purported to be shown therein
at the respective dates and for the respective periods specified on a
basis consistent with the audited financial statements included in the
Registration Statement and Prospectus. No other financial statements are
required by Form S-1 or otherwise to be included in the Registration
Statement or Prospectus.
(xiv) Except as set forth in the Registration Statement, the
Company has good and marketable title to all the properties and assets
reflected as owned by it in the financial statements (or elsewhere in the
Prospectus), free and clear of all liens, mortgages, pledges, charges or
encumbrances of any kind except (A) those, if any, reflected in the
financial statements (or elsewhere in the Prospectus), or (B) those which
are not material in amount and do not materially adversely affect the use
made and proposed to be made of such property by the Company. The Company
holds its leased properties under valid and binding leases and licenses,
with such exceptions as are not materially significant in relation to the
business of the Company, and enjoys peaceful and undisturbed possession
under all such leases and licenses. Except as disclosed in the
Prospectus, the Company owns or leases all such properties as are
necessary to its operations as now conducted or as proposed to be
conducted.
(xv) Neither the Company, any of its subsidiaries nor,
to the Company's knowledge, any other party is in violation or breach
of, or in default with respect to, complying with any material provision
of any contract, agreement, instrument, lease, license, arrangement or
understanding which is material to the Company, and each such contract,
agreement, instrument, lease, license, arrangement and understanding is in
full force and is the legal, valid and binding obligation of the Company
and, to the Company's knowledge, the other parties thereto and is
enforceable against the Company and, to the Company's knowledge, against
the other parties thereto in accordance with its terms. The Company
enjoys peaceful and undisturbed possession under all leases and licenses
under which it is operating. The Company is not in violation or breach
of, or in default with respect to, any term of its Certificate of
Incorporation or Bylaws.
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(xvi) To the Company's knowledge, the Company is not infringing
or otherwise violating any patent, copyright, trade secret, trademark,
service xxxx, trade name, technology, know-how or other proprietary
information or material of others. The Company has not received any
notice of infringement or conflict with (and the Company knows of no
conflict or infringement with) asserted rights of others with respect to
any patents, copyrights, trademarks, service marks, trade names, technology
or know-how, which could have a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries, taken as a whole.
(xvii) The Company owns or possesses sufficient licenses or other
rights to use all patents, copyrights, trade secrets, trademarks, service
marks, trade names, technology, know-how or other proprietary information
or materials necessary to conduct the business now being conducted by the
Company as described in the Prospectus.
(xviii) The Company (A) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
(herein called Environmental Laws), (B) has received all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and (C) is in compliance
with all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, havea material adverse
effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries,
taken as a whole.
(xix) Except as described in the Registration Statement, there
is no legal or governmental proceeding pending or threatened to which
the Company or any of its subsidiaries is a party or to which any of the
properties of the Company is subject that is required to be described in
the Registration Statement or the Prospectus and is not so described, nor
is there any statute, regulation, contract or other document that is
required to be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement that is not
described or filed.
(xx) The Company has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made
all declarations and filings with, all governmental authorities, to own,
lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, except to the extent
that the failure to obtain or file such would not have a material adverse
effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries, taken
as a whole.
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(xxi) The Common Stock has been approved for listing on the
National Association of Securities Dealers Automated Quotation (Nasdaq)
National Market. The Company has duly filed a Nasdaq National Market
Notification Form for Listing of Additional Shares and a Form 10-C with
respect to the sale and issuance of the Stock in accordance with the rules
and regulations of the National Association of Securities Dealers, Inc.
(herein called the NASD).
(xxii) The Company has not distributed and will not distribute
prior to the Closing Date any offering material in connection with the
offering and sale of the Shares other than the Preliminary Prospectus,
the Prospectus, the Registration Statement and the other materials
permitted by the Securities Act.
(xxiii) The Company maintains insurance of the types and
in the amounts generally deemed adequate for its business, including,
but not limited to, insurance covering real and personal
property owned or leased by the Company and its subsidiaries against
theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and
effect. The Company has not been refused any insurance coverage sought
or applied for; and the Company has no reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not
materially and adversely affect the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and
its subsidiaries, taken as a whole.
(xxiv) Neither the Company nor any of its subsidiaries has
at any time during the last five (5) years in any jurisdiction (A) made
any unlawful contribution to any candidate for office, or failed to
disclose fully any contribution in violation of law, or (B) made any
payment to any governmental officer or official, or other person charged
with similar public or quasi-public duties other than payments required or
permitted by the laws of the United States.
(xxv) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company to or for the benefit of any of
the officers or directors of the Company or any of the members of the
families of any of them, except as disclosed in the Registration Statement
and the Prospectus.
(xxvi) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba.
(xxvii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A) transactions
are executed in accordance with management's general or specific
authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with
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generally accepted accounting principles and to maintain accountability
for assets; (C) access to its assets is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to differences.
(xxviii) The Company has duly filed on a timely basis with
the Commission all reports, registration statements and other documents
required by the Securities Act, the Exchange Act, or the rules and
regulations of the Commission promulgated pursuant to the Securities Act
or Exchange Act. All of such reports, registration statements and other
documents, when they were filed with the Commission, conformed in all
material respects to the requirements of the Securities Act, the Exchange
Act or the rules and regulations of the Commission promulgated pursuant to
the Securities Act or Exchange Act, as appropriate. None of such reports,
registration statements or other documents, at the time of their filing
with the Commission, contained an 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.
(xxix) The accountants, KPMG Peat Marwick LLP, who have
certified or shall certify the financial statements included in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) are independent public accountants with respect to the Company
within the meaning of the Securities Act.
(xxx) In connection with the sale by the Company of shares of
its Common Stock pursuant to the Underwriting Agreement dated November 21,
1996 among the Company, the selling stockholders named therein and the
underwriters named therein, the Company applied the net proceeds received
by it from the sale of such shares substantially as described in the
registration statement on Form SB-2 (No. 333-13517).
(xxxi) The Company is not now, and upon the Closing Date, and
after application of the net proceeds from the offering as described in
the Prospectus, will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
(b) Each of the Selling Securityholders, severally and not
jointly, hereby represents and warrants as follows:
(i) Such Selling Securityholder has good and
marketable 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 ChaseMellon Shareholder
Services, L.L.C., 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 marketable title
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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, the
Registration Statement contained any untrue statement of a material fact
or omitted 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 contained and, on the Closing Date
and any later date on which Option Stock is to be purchased, contains
any untrue statement of a material fact or omitted or omits 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.
(iv) All information furnished in writing by or on behalf of
such Selling Securityholder for use in the Registration Statement and
Prospectus is, and on the Closing Date will be, true, correct, and
complete, and does not, and on the Closing Date will not, contain any
untrue statement of a material fact or omit to state any material fact
necessary to make such information not misleading.
(v) The sale of the Stock by such Selling Securityholder
pursuant hereto is not prompted by any adverse information concerning the
Company which is not set forth in the Registration Statement and
Prospectus.
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(vi) The execution and delivery by such Selling Securityholder
of, and the performance by such Selling Securityholder of its obligations
under, this Agreement, the custody agreement signed by such Selling
Securityholder and the Custodian, relating to the deposit of the Stock
to be sold by such Selling Securityholder (herein called the Custody
Agreement) and the power of attorney appointing certain individuals as
such Selling Securityholder's attorneys-in-fact to the extent set forth
therein, relating to the transactions contemplated hereby and by the
Registration Statement (herein called the Power of Attorney) will not
contravene any provision of applicable law, or the certificate or articles
of incorporation or by-laws of such Selling Securityholder (if such Selling
Securityholder is a corporation), or any agreement or other instrument
binding upon such Selling Securityholder or any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over such Selling Securityholder, and no consent, approval, authorization
or order of or qualification with any court or governmental body or agency
is required for the performance by such Selling Securityholder of its
obligations under this Agreement, the Custody Agreement or the Power of
Attorney of such Selling Securityholder, except such as may be required
under the Securities Act or by the securities or blue sky laws of various
states in connection with the offer and sale of the Stock by the
Underwriters.
(vii) Such Selling Securityholder has, and on the
Closing Date will have, the legal right and power, and all authorization
and approval required by law, to enter into this Agreement, the Custody
Agreement and the Power of Attorney and to sell, transfer and deliver in
the manner provided in this Agreement the shares of Stock to be sold by
such Selling Securityholder.
(viii) Each of this Agreement, the Custody Agreement and the
Power of Attorney has been duly authorized, executed and delivered by or on
behalf of such Selling Securityholder and, assuming due authorization,
execution and delivery by the other parties thereto, constitutes a valid
and binding obligation of such Selling Securityholder enforceable in
accordance with its terms, except as rights to indemnity or contribution
may be limited by federal or state securities laws and except as
enforcement (i) may be limited by the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium, fraudulent conveyance and other
similar laws relating to or affecting the rights of creditors generally,
(ii) is subject to general principles of equity and similar principles,
including, without limitation, concepts of materiality, reasonableness,
unconscionability, good faith and fair dealing and the possible
unavailability of specific performance, injunctive relief or other
equitable remedies, regardless of whether considered in a proceeding in
equity or at law or (iii) is subject to the effect of public policy.
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 205,000 shares of the Underwritten Stock to the several
Underwriters, each Selling Securityholder agrees to sell to the
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several Underwriters the number of shares of the Underwritten Stock set
forth in Schedule II opposite the name 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 the Selling Securityholders and purchased by the several
Underwriters shall be $ per share. The obligation of each
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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 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 and the Selling Securityholders 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
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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 and certain of the Selling
Securityholders grant an option to the several Underwriters to
purchase, severally and not jointly, up to 300,000 shares in the
aggregate of the Option Stock from the Company and certain of the
Selling Securityholders 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 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 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 public offering and increase or
decrease the concessions and discounts to dealers as they may
determine.
(b) The information set forth in the last paragraph on the
front cover page and 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 and do not omit
any material fact required to be stated therein or necessary to make
the statements therein not misleading.
5. DELIVERY OF AND PAYMENT FOR THE STOCK
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(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
Godward LLP, 3000 Sand Hill Road, Xxxx. 0, Xxxxx 000, Xxxxx Xxxx,
Xxxxxxxxxx 00000, at 7:00 a.m., San Francisco time, on the fourth2
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 Godward LLP, 3000 Sand Hill Road, Xxxx. 0, Xxxxx 000,
Xxxxx Xxxx, Xxxxxxxxxx 00000, 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 one or more
certified or official bank check or checks in next day funds (and the
Company and the Selling Securityholders agree not to deposit any such
check in the bank on which drawn until the day following the date of
its delivery to the Company or the Custodian, as the case may be).
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 one business day
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.
It is understood that you, individually and not on behalf of
the Underwriters, may (but shall not be obligated to) make payment to the
Company and the Selling Securityholders for shares to be purchased by any
Underwriter whose check shall not have been received by you on the Closing
Date or any later date on which Option Stock is purchased for the account of
--------------------------
(2) This assumes that the transaction will be priced after the close of market
and that T+4 will apply to the transaction. If the pricing took place
beforeor during market hours (which will generally not be the case), the
closingwould be three business days after pricing.
-14-
such Underwriter. Any such payment by you shall not relieve such Underwriter
from any of its obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING
SECURITYHOLDERS. Each of the Company and, with respect to paragraphs
(i), (j), (k), (l) and (m) only, the Selling Securityholders,
respectively, 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 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 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
-15-
necessary, in the opinion of counsel for the Company or 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 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.
(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.
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(i) The Company and the Selling Securityholders jointly and
severally agree to pay all costs and expenses incident to the performance of
its obligations under this Agreement, including all costs and expenses
incident to (i) the preparation, printing and filing with the Commission and
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 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. Each of the Selling Securityholders
will pay any transfer taxes incident to the transfer to the Underwriters of
the Shares of Stock being sold by such Selling Securityholder.
(j) The Company and the Selling Securityholders jointly and
severally agree 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 and the Selling Securityholders hereby agree 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 Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, the Company
will not, for a period of 90 days following the commencement of the public
offering of the Stock by the Underwriters, directly or indirectly, sell,
offer, contract to sell, transfer the economic risk of ownership in, make any
short sale, pledge or otherwise 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, whether any such transaction 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 that are currently
outstanding under the stock option plans of the Company (the "Option Plans"),
all as described in footnote (2) to the table under the caption
"Capitalization" in the Preliminary Prospectus, (C) options to purchase
Common Stock granted under the Option Plans, PROVIDED THAT, without the prior
written consent of Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, such
additional options shall not be transferable during such 90-day period, or
(D) shares of Common Stock pursuant to a strategic acquisition, so long as
(1) such shares may not be sold by the holder thereof during the 90-day
period, (2) the purchase price for such shares is not less than the fair
market value of the Common Stock, and
-17-
(3) such sale would not result in the purchaser owning more than ten percent
of the Company's outstanding Common Stock.
(m) The Selling Securityholders agree that, without the prior
written consent of Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, the
Selling Securityholders will not, for a period of 90 days following the
commencement of the public offering of the Stock by the Underwriters,
directly or indirectly, sell, offer, contract to sell, transfer the economic
risk of ownership in, make any short sale, pledge or otherwise 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, whether
any such transaction is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not
apply to the Stock to be sold to the Underwriters pursuant to this Agreement.
(n) If at any time during the 90-day period after the Registration
Statement becomes effective any person who is subject to any of the "lock-up"
agreements between you and all of the Company's executive officers and
directors and substantially all of the Company's major stockholders and
optionees whose options will vest, in whole or in part, prior to the date
that is 90 days following the Effective Date, delivered to you before the
date hereof and the "lock-up" provisions imposed in connection with the
Inmark Option Plan, the Inmark Merger and the Investors Rights Agreement, the
Company will use its best efforts to enforce such "lock-up" agreements and
provisions, including but not limited to instructing its legal counsel to
refuse to issue an opinion of counsel in order to restrict the transfer of
such shares prior to the expiration of such 90-day period.
(o) 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
and, to the extent deemed advisable by counsel to the Company, forthwith
prepare, consult with you concerning the substance of, and disseminate a
press release or other public statement, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
7. INDEMNIFICATION AND CONTRIBUTION
(a) (i) Subject to the provisions of paragraph (f) of this
Section 7, the Company and the Selling Securityholders jointly and severally
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
-18-
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)(i) 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)(i) 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 of Menlo Ventures VI and Menlo Entrepreneurs Fund VI, L.P. shall be
liable under this paragraph only with respect to facts that would constitute
a breach of any representation or warranty of such Selling Securityholder set
forth in Section 2(b) (i), (ii), (vii) and (viii) hereof.
(ii) The indemnity agreements of the Company and the Selling
Securityholders contained in paragraph (a)(i) of this Section 7 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, each person (including each partner or
officer thereof) who controls the Company or any such other
-19-
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 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)(i) 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
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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)(i) of this Section 7 or under paragraph (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)(i) of this Section 7 or in paragraph (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 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
-21-
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 in excess of the underwriting discount
applicable to the Stock purchased by such Underwriter. 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 the Company nor the Selling Securityholders, without
the prior written consent of each Underwriter, will 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 Underwriter or any person who controls such
Underwriter 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 Underwriter 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 respective net proceeds received by each such Selling
Securityholder from the sale to the Underwriters of the Stock in the public
offering. 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.
-22-
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 economic or
political conditions if the effect of such outbreak, calamity, crisis or
change in economic or political conditions in the financial markets of the
United States would, in the Underwriters' reasonable judgment, make the
offering or delivery of the Stock impracticable, (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, 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 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 of all its 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 Fenwick & West LLP, counsel for
the Underwriters.
-23-
(c) You shall have received from Xxxxxx Godward LLP, counsel for
the Company and the Selling Securityholders, an opinion, addressed to the
Underwriters and dated the Closing Date, covering the matters set forth in
Annex A 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
filed as exhibits to the Registration Statement which have not been filed as
required, (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, and (viii)
there has not been any material change in the market for securities in
general or in political, financial or economic conditions from those
reasonably foreseeable as to render it impracticable in your reasonable
judgment to make a public offering of the Stock, or a material adverse change
in market levels for securities in general (or those of companies in
particular) or financial or economic conditions which render it inadvisable
to proceed.
(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 the statements
included in clauses (i) through (vii) of paragraph (d) of this Section 9 are
true and correct.
-24-
(f) You shall have received from KPMG Peat Marwick 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 sole 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 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.
(h) 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.
(i) On or prior to the Closing Date, you shall have received from
all of the Company's executive officers and directors and substantially all
of the Company's major stockholders and optionees whose options will vest, in
whole or in part, prior to the date that is 90 days following the Effective
Date, "lock-up" agreements, in form reasonably satisfactory to Xxxxxxxxx &
Xxxxx LLC, stating that without the prior written consent of Xxxxxxxxx &
Xxxxx LLC on behalf of the Underwriters, such person or entity will not, for
a period of 90 days following the commencement of the public offering of the
Stock by the Underwriters, directly or indirectly, sell, offer, contract to
sell, transfer the economic risk of ownership in, make any short sale, pledge
or otherwise 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, whether any such transaction is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to the Stock to be sold by the Selling
Securityholders to the Underwriters pursuant to this Agreement.
(j) Prior to the Closing Date, the Company shall have furnished to
the Underwriters such further information, certificates and documents as the
Underwriters may reasonably request.
-25-
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 Fenwick & West 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 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 jointly and
severally 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 refusal,
inability or failure on the part of the Company or the Selling
Securityholders to perform any agreement herein, to fulfill any of the
conditions herein, or to comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse
the Underwriters severally upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the 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 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.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its 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 hereby jointly and severally 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
-26-
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 Xxxxxxxxx & Xxxxx LLC, Xxx Xxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attn.: Xxxxxxxx X. Xxxxxx (with a
copy to the General Counsel); and if to the Company or the Selling
Securityholders, shall be mailed, telegraphed or delivered to the Company or
the Selling Securityholders at the Company's office, 000 XX 00xx Xxxxxx,
Xxxxxxxxx, XX 00000 Attn.: Xxxxxx Xxxxxx, Ph.D. (with a copy to Xxxxxx
Godward LLP). 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 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), (h), (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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-27-
Please sign and return to the Company and the Selling Securityholders
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,
ROGUE WAVE SOFTWARE, INC.
By:
----------------------------------
Xxxxxx Xxxxxx, President
SELLING SECURITYHOLDERS:
----------------------------------------
Xxxxxx X. Xxxxxxx, Xx., Attorney-in-Fact
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
XXXXXXX, XXXXXX & XXXXXXXXX, L.L.C.
XXXXX & COMPANY
By Xxxxxxxxx & Xxxxx LLC
By:
------------------------------
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
-28-
SCHEDULE I
UNDERWRITERS
NUMBER OF
SHARES
TO BE
UNDERWRITERS PURCHASED
------------ ---------
Xxxxxxxxx & Xxxxx LLC ....................................
Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C. ......................
Xxxxx & Company ..........................................
---------
TOTAL ............................................... 2,000,000
---------
---------
SCHEDULE II
SELLING SECURITYHOLDERS
NUMBER OF NUMBER OF
SHARES OF SHARES OF
UNDERWRITTEN OPTION
STOCK TO BE STOCK TO BE
NAME OF SELLING SECURITYHOLDER SOLD SOLD
------------------------------ ---- ----
Xxx Xxxxxxxx 560,000 --
Menlo Ventures VI 525,708 --
El Dorado III, L.P. 285,155 --
Xxxxxx Love 150,000 --
Xxxxxx Xxxxxx 145,190 25,000
Xxxxx Xxxxxxx 45,000 100,000
Xxxxx Xxxxxxxxx 20,000 30,000
Xxxxxx X. Xxxxxxx, Xx. 20,000 --
Xxxxxxx Xxxxxx 20,000 --
El Dorado Technology IV, LP 9,565 --
Menlo Entrepreneurs Fund VI, L.P. 9,102 --
El Dorado C & L Fund L.P. 5,280 --
--------- -------
Total 1,795,000 155,000
--------- -------
--------- -------
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF XXXXXX GODWARD LLP
COUNSEL FOR THE COMPANY AND THE 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, is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which its ownership
or leasing of property makes qualification necessary except for such
jurisdictions in which the failure to be so qualified would not have a
material adverse effect on the financial condition, earnings, operations or
business 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
is owned of record, to the best of such counsel's knowledge, by the Company
free and clear of all liens, encumbrances and security interests, and to the
knowledge of such counsel, 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 execution and delivery of the Agreement and Plan of Merger
dated as of November 20, 1996 (herein called the Merger Agreement) between
Rogue Wave Software, Inc., an Oregon corporation (herein called the Oregon
Corporation), and the Company, which effected the reincorporation of the
Oregon Corporation under the laws of the State of Delaware on November 21,
1996, was duly authorized by all necessary corporate action on the part of
each of the Oregon Corporation and the Company. Each of the Oregon
Corporation and the Company had all corporate power and authority to execute
and deliver the Merger Agreement, to file the Merger Agreement with the
Secretary of State of Oregon and the Secretary of State of Delaware and to
consummate the reincorporation contemplated by the Merger Agreement, and the
Merger Agreement at the time of execution and filing constituted a valid and
binding obligation of each of the Oregon Corporation and the Company,
enforceable in accordance with its terms, except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws affecting creditors' rights, and subject to
general equity principles and to limitations on availability of equitable
relief, including specific performance;
(iii) upon the closing of the sale of the Underwritten Stock, the
authorized capital stock of the Company consists of 5,000,000 shares of
Preferred Stock, of which there are no shares outstanding, and 35,000,000
shares of Common Stock, $0.001 par value, of which there are outstanding
[_________] shares (including the Underwritten Stock [AND THE OPTION STOCK]
issued on the closing date); proper 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 on the closing date) have been duly and
validly issued and are 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,
A-1
pursuant to the Certificate of Incorporation or Bylaws of the Company and, to
the knowledge of such counsel, there are no contractual preemptive rights
that have not been waived, rights of first refusal or rights of co-sale which
exist with respect to the Stock being sold by the Selling Securityholders
pursuant to any agreement to which the Company is a party or the issue and
sale of the Stock by the Company;
(iv) the Registration Statement has become effective under the
Securities Act and, to the knowledge of such counsel, 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 threatened by the Commission;
(v) 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;
(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, to such counsel's best knowledge, accurately and
adequately set forth therein in all material respects to the extent required
by the Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (the "Rules") 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 set forth in the
Prospectus accurately and fairly presents the information required to be
shown with respect to said plans and options to the extent required by the
Securities Act and the Rules;
(vii) such counsel does not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion
of such counsel are of a character 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 by the
Securities Act and the Rules;
(viii) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(ix) (A) the Underwriting Agreement has been duly executed and delivered
by or on behalf of each of the Selling Securityholders; (B) the Custody
Agreement between such Selling Securityholders and Chemical Mellon
Shareholder Services LLC, as Custodian, and the Power of Attorney referred to
in such Custody Agreement have been duly executed and delivered by the
several Selling Securityholders; (C) the Custody Agreement entered into by,
and the Power of Attorney given by, such Selling Securityholder is valid and
binding on such Selling Securityholder; and (D) each Selling Securityholder
who is not an individual has full legal right and authority to enter into the
Underwriting Agreement and to sell, transfer and deliver in the manner
provided in the Underwriting Agreement the shares of Stock sold by such
Selling Securityholder hereunder, and each Selling Securityholder who is an
individual is the holder of
A-2
record of the shares of Stock sold by such Selling Securityholder hereunder,
except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors' rights, and subject to general equity principles and to
limitations on availability of equitable relief, including specific
performance;
(x) the issue and sale by the Company of the shares of Stock sold by
the Company as contemplated by the Underwriting Agreement do not conflict
with, or result in a breach of, the Certificate of Incorporation or Bylaws of
the Company or any agreement or instrument filed as an exhibit to the
Registration Statement to which the Company is a party or any applicable law
or regulation (other than as may be required under state securities or blue
sky laws), or so far as is known to such counsel, any order, writ, injunction
or decree, of any jurisdiction, court or governmental instrumentality binding
upon the Company;
(xi) to the best of such counsel's knowledge, all holders of securities
of the Company having rights to the registration of shares of Common Stock,
or other securities, because of the filing of the Registration Statement by
the Company have waived such rights or such rights have expired by reason of
lapse of time following notification of the Company's intent to file the
Registration Statement;
(xii) good and marketable title to the shares of Stock sold by the
Selling Securityholders under the Underwriting Agreement, free and clear of
all liens, encumbrances, equities, security interests and claims (other than
any liens, encumbrances, equities, security interests and claims that result
from actions taken against the Underwriters), has been transferred to the
Underwriters who have severally purchased such shares of Stock for the
purchase price under the Underwriting Agreement, assuming for the purpose of
this opinion that the Underwriters purchased the same in good faith without
any notice of any liens, encumbrances, equities, security interests or
adverse claims;
(xiii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company
or, to the best of such counsel's knowledge, the Selling Securityholders of
the offer and sale of the Stock 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 in connection with the
purchase and distribution of the Stock by the Underwriters; and
(xiv) the Company is not now, and upon the Closing Date, and after
application of the net proceeds from the offering as described in the
Prospectus, will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
In addition to the matters set forth above, counsel rendering the
foregoing opinion shall also include a statement to the effect that nothing
has come to the attention of such counsel that leads such counsel to believe
that the Registration Statement (except as to the financial statements and
schedules and other financial and statistical data contained or incorporated
by reference 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
A-3
required to be stated therein or necessary to make the statements therein not
misleading, that the Prospectus (except as to the financial statements and
schedules and other financial and statistical data contained or incorporated
by reference 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 making such statements, such counsel may
state that such counsel's negative assurance is based upon such counsel's
participation in the preparation of the Registration Statement and
Prospectus, and any amendments or supplements thereto, and its review and
discussion of the contents thereof, but is without independent check or
verification.
A-4
