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EXHIBIT 1.1
DATUM INC.
1,700,000 Shares(1)
COMMON STOCK
UNDERWRITING AGREEMENT
_____ __, 0000
XXXXXXXXX & XXXXX LLC
XXXXXXXXXXX & CO., INC.
XXX XXXXXX & COMPANY
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Datum Inc., a Delaware corporation (herein called the
Company), proposes to issue and sell 1,000,000 shares of its authorized but
unissued Common Stock, $0.25 par value (herein called the Common Stock), and
the stockholders of the Company named in Schedule II hereto (herein
collectively called the Selling Stockholders) propose to sell an aggregate of
700,000 shares of Common Stock of the Company (said 1,700,000 shares of Common
Stock being herein called the Underwritten Stock). The Company and Efratom
Holding, Inc., a Selling Stockholder ("Efratom"), propose to grant to the
Underwriters (as hereinafter defined) an option to purchase up to an aggregate
of 255,000 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 Stockholders severally hereby
confirm the agreements made with respect to the purchase of the Stock by the
several underwriters, for whom you are acting, named in Schedule I hereto
(herein collectively called the Underwriters, which term shall also include any
underwriter purchasing Stock pursuant to Section 3(b) hereof). You represent
and warrant that you have been authorized by each of the other Underwriters to
enter into this Agreement on its behalf and to act for it in the manner herein
provided.
1. REGISTRATION STATEMENT. The Company has filed with
the Securities and Exchange Commission (herein called the Commission) a
registration statement on Form S-2 (No. 333-_____), including the related
preliminary prospectus, for the registration under the Securities Act of 1933,
as amended (herein called the Securities Act), of the Stock.
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(1) Plus an option to purchase from the Company and Efratom Holding, Inc.,
a Selling Stockholder, up to 255,000 additional shares to cover over-
allotments.
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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 documents incorporated by
reference therein, 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, including the documents incorporated by reference therein,
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,
including the documents incorporated by reference therein, included in such
registration statement prior to the time it becomes effective.
The Registration Statement has been declared effective under
the Securities Act, and no post-effective amendment to the Registration
Statement has been filed as of the date of this Agreement. The Company has
caused to be delivered to you copies of each Preliminary Prospectus and has
consented to the use of such copies for the purposes permitted by the
Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SELLING STOCKHOLDERS.
(a) The Company hereby represents and warrants as
follows:
(i) The Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Delaware, has full corporate power and authority to
own or lease its properties and conduct its business as described in the
Registration Statement and the Prospectus and as being conducted, and is duly
qualified as a foreign corporation and in good standing in all jurisdictions in
which the character of the property owned or leased or the nature of the
business transacted by it makes qualification necessary (except where the
failure to be so qualified would not have a material adverse effect on the
business, properties, condition (financial or otherwise) or results of
operations or prospects of the Company and its subsidiaries taken as whole (a
"Material Adverse Effect")).
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(ii) The Company owns all of the shares
of capital stock of each subsidiary of the Company, and each of the Company's
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.
(iii) 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 or prospects of the Company and
its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, other than as set forth in the Registration
Statement and the Prospectus, and since such dates, except in the ordinary
course of business, neither the Company nor any of its subsidiaries has entered
into any material transaction not referred to in the Registration Statement and
the Prospectus.
(iv) The Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus relating
to the proposed offering of the Stock nor instituted or, to the best knowledge
of the Company, after due inquiry, threatened instituting proceedings for that
purpose. 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 Securities Exchange Act of 1934,
as amended (herein called the "Exchange 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 (iv) 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.
(v) The Stock is duly and validly
authorized, is (or, in the case of shares of the Stock to be sold by the
Company and The Prudential Insurance Company of America, a Selling Stockholder,
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 issuance and
sale of the Stock as contemplated
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herein. The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus. The shares of
Common Stock outstanding prior to the issuance of the Underwritten Stock and,
if any, the Option Stock have been duly authorized and are validly issued,
fully paid and non-assessable.
(vi) Prior to the Closing Date, the Stock
to be issued and sold by the Company will be authorized for listing on the
Nasdaq National Market (herein called "NNM") upon official notice of issuance.
(vii) Except as specifically disclosed in
the Registration Statement, the Company does not have outstanding any options
to purchase, or any preemptive rights, or other rights to subscribe or to
purchase or rights of co-sale, any securities or obligations convertible into,
or any contracts or commitments to issue or sell or register for sale, shares
of its capital stock or any such options, rights, convertible securities or
obligations.
(viii) The consolidated financial
statements of the Company, together with related notes and schedules as set
forth in the Registration Statement ("Financial Statements"), present fairly
the financial position and the results of operations of the Company and its
subsidiaries, taken as a whole, at the indicated dates and for the indicated
periods. The Financial Statements have been prepared in accordance with
generally accepted accounting principles, consistently applied through the
period involved, and all adjustments necessary for a fair presentation of
results for such periods have been made. The selected and summary financial
data and the tables set forth under "Results of Operations" and "Quarterly
Results of Operations" in the Management's Discussion and Analysis of Financial
Condition and Results of Operations section, included in the Registration
Statement, present fairly the information shown therein and have been compiled
on a basis consistent with the Financial Statements presented in the
Registration Statement.
(ix) Neither the Company nor any of its
subsidiaries is in violation or default under any provision of its charter
documents or bylaws, as currently in effect, or any indenture, license,
mortgage, lease, franchise, permit, deed of trust or other agreement or
instrument to which such corporation is a party or by which such corporation or
any of its properties is bound or may be affected, except where such violation
or default would not have a Material Adverse Effect.
(x) The Company has full legal right,
power and authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the part of
the Company, enforceable in accordance with its terms, except as rights to
indemnity and contribution hereunder may be limited by applicable laws and
except as the enforcement hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally, or by general equitable principles. The execution
and performance of this Agreement and the consummation of the transactions
herein contemplated do not and will not: (i) conflict with, or result in a
breach of, or violation of, any of the terms or provisions of, or constitute,
either by itself or upon notice or the
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passage of time or both, a default under, any indenture, license, mortgage,
lease, franchise, permit, deed of trust or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which any such
corporation or any of its properties is bound or may be affected, except where
such breach, violation or default would not have a Material Adverse Effect,
(ii) violate any of the provisions of the charter documents or bylaws of any
such corporation, except where such violation would not have a Material Adverse
Effect, or (iii) violate any material order, judgment, statute, rule or
regulation applicable to any such corporation or of any regulatory,
administrative or governmental body or agency having jurisdiction over any such
corporation or any of its properties, except where such violation would not
have a Material Adverse Effect.
(xi) Except as disclosed in the
Prospectus, there is not any pending or, to the Company's knowledge, threatened
action, suit, claim or proceeding against the Company or any of its
subsidiaries or any of their respective officers or any of their properties,
assets or rights before any court or governmental agency or body or otherwise
which (i) might have a Material Adverse Effect, or (ii) might prevent
consummation of the transactions contemplated hereby or (iii) is required to be
disclosed in the Registration Statement; and there are no contracts or
documents of the Company or any of its subsidiaries that are required to be
described in the Prospectus or to be filed as exhibits to the Registration
Statement which have not been fairly and accurately described in all material
respects in the Prospectus or filed as exhibits to the Registration Statement
as the case may be. The contracts so described in the Prospectus are in full
force and effect on the date hereof; and neither the Company nor any of its
subsidiaries nor, to the Company's knowledge any other party, is in breach of
or default under any of such contracts.
(xii) Except as disclosed in the
Prospectus, the Company owns or possesses adequate rights to use all patents,
patent rights, inventions, trade secrets, know-how, trademarks, service marks,
trade names and copyrights described or referred to in the Prospectus as owned
or used by it or which are necessary for the conduct of its businesses as
described in the Prospectus; the Company has not received any notice of, and
the Company has no knowledge of, any infringement of or conflict with asserted
rights of others with respect to any patent, patent rights, inventions, trade
secrets, know-how, trademarks, service marks, trade names or copyrights which,
singly or in the aggregate, might reasonably have a Material Adverse Effect.
(xiii) The Company has not taken and will
not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Common Stock to facilitate the sale or resale of the Stock.
(xiv) Except as set forth in the
Prospectus, the Company and each of its subsidiaries has all permits, licenses,
approvals and registrations required to be issued under applicable federal,
state and local laws, statutes and regulations relating to the protection of
human health, safety, the environment and natural resources ("Environmental
Laws") with respect to its business as conducted and as proposed to be
conducted in the Prospectus and is in substantial compliance with the terms and
conditions thereunder except where failure to have
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such permits, licenses, approvals and registrations, or to be in compliance
thereunder would not have a Material Adverse Effect. Except as set forth in
the Prospectus, the Company and each of its subsidiaries is in substantial
compliance with and there are no past or present conditions, activities,
actions or plans which may prevent substantial compliance with, any current or
past law related to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling, or the release, emission or discharge
of any hazardous substance or hazardous waste ("Hazardous Substance Issues") or
any regulations, plans, judgments, injunctions or notices promulgated or
approved thereunder which may give rise to any liability of the Company or its
subsidiaries or otherwise form the basis of any ongoing or threatened claims,
actions, demands, suits, proceedings, hearings, studies or investigations
against or relating to the Company or its subsidiaries, the property owned or
leased by the Company or its subsidiaries that are based on or related to any
Hazardous Substance Issues except for such non-compliance which would not have
a Material Adverse Effect.
(xv) Except as set forth in the
Prospectus, there has been no material disposal, release or threatened release
of any hazardous substance or hazardous waste on, from or under the property
owned or leased currently or in the past by the Company, its subsidiaries or
any predecessor, other than those authorized by permit under federal, state and
local laws except such as would not have a Material Adverse Effect. For
purposes of this Agreement, the terms "disposal," "release," "hazardous
substance" and "hazardous waste" shall have the definitions assigned thereto
under federal, state and local laws applicable to the Company, its
subsidiaries, the Company's or any subsidiary's assets and the property owned
or leased by the Company, including without limitation the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
42 U.S.C. Section 9601 et seq., as amended, and any regulations promulgated
thereto.
(xvi) Except as set forth in the
Prospectus, no disposal or release of a hazardous substance or hazardous waste
has come to be located on or beneath and remain located on or beneath any of
the real property owned or leased currently or in the past by the Company, any
subsidiary or any predecessor or upon which any of the property owned or leased
currently or in the past by the Company, any subsidiary or any predecessor are,
or have been, held or maintained except such as would not have a Material
Adverse Effect.
(xvii) Except as set forth in the
Prospectus, the Company and its subsidiaries have no knowledge of the possible
or actual presence, disposal, release or threatened release of any hazardous
substance or hazardous waste on or under any adjacent properties to the any
property owned or leased currently or in the past by the Company, any
subsidiary or any predecessor except such as would not have a Material Adverse
Effect.
(b) Each of the Selling Stockholders severally
and not jointly hereby represents and warrants as follows:
(i) Such Selling Stockholder has, or
will have upon delivery to the Underwriters good and marketable title to all
the shares of Stock to be sold by such Selling Stockholder hereunder, free and
clear of all liens, encumbrances, equities, security interests and
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claims whatsoever, with full right and authority to deliver the same hereunder,
subject, in the case of each Selling Stockholder, to the rights of any
custodian pursuant to a custody agreement (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 thereto, free
and clear of all liens, encumbrances, equities, security interests and claims
whatsoever.
(ii) Such Selling Stockholder has duly
authorized (if applicable), executed and delivered, in the form heretofore
furnished to the Underwriters, a Custody Agreement and Power of Attorney (the
"Custody Agreement and Power of Attorney") appointing Xxxxx X. Xxxxxxx and
Xxxxx X. Xxxxx as attorneys-in-fact (collectively, the "Attorneys" and
individually, an "Attorney") and appointing Xxxxx Xxxxxx Shareholder Services
as Custodian; the Custody Agreement and Power of Attorney (if applicable)
constitutes a valid and binding agreement on the part of such Selling
Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles; and each of
such Selling Stockholder's Attorneys, acting alone, is authorized to execute
and deliver this Agreement and the certificate referred to in Section 9(k)
hereof on behalf of such Selling Stockholder, to determine the purchase price
to be paid by the several Underwriters to such Selling Stockholder as provided
in Section 3 hereof, to authorize the delivery of the shares of Stock to be
sold by such Selling Stockholder under this Agreement and to duly endorse (in
blank or otherwise) the certificate or certificates representing such Stock or
a stock power or powers with respect thereto, to accept payment therefor, and
otherwise to act on behalf of such Selling Stockholder in connection with this
Agreement.
(iii) All consents, approvals,
authorizations and orders required for the execution and delivery by such
Selling Stockholder of the Power of Attorney and the Custody Agreement (if
applicable), the execution and delivery by or on behalf of such Selling
Stockholder of this Agreement and the sale and delivery of the shares of Stock
to be sold by such Selling Stockholder under this Agreement (other than, at the
time of the execution hereof (if the Registration Statement has not yet been
declared effective by the Commission), the issuance of the order of the
Commission declaring the Registration Statement effective and such consents,
approvals, authorizations or orders as may be necessary under state or other
securities or Blue Sky laws) have been obtained and are in full force and
effect; such Selling Stockholder, if other than a natural person, has been duly
organized and is validly existing in good standing under the laws of the
jurisdiction of its organization as the type of entity that it purports to be;
and such Selling Stockholder has full legal right, power and authority to enter
into and perform its obligations under this Agreement and such Power of
Attorney and Custody Agreement (if applicable), and to sell, assign, transfer
and deliver the Stock to be sold by such Selling Stockholder under this
Agreement.
(iv) Certificates in negotiable form for
the shares of the Stock to be sold by such Selling Stockholder have been placed
in custody under a Custody Agreement and Power of Attorney for delivery under
this Agreement with the Custodian (if applicable); provided, however, that in
the case of shares to be sold pursuant hereto upon exercise of a
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warrant to purchase Common Stock such Selling Stockholder shall have deposited
with their legal counsel irrevocable instructions to exercise such warrant (the
"Irrevocable Instructions"); such Selling Stockholder specifically agrees that
the shares of the Stock represented by the certificates so held in custody for
such Selling Stockholder, or the shares of the Stock to be issued upon exercise
of the warrant, as the case may be, are subject to the interests of the several
Underwriters and the Company, that the arrangements made by such Selling
Stockholder for such custody, or the arrangements made for such exercise,
including the Power of Attorney provided for in such Custody Agreement and
Power of Attorney, or the Irrevocable Instructions, are to that extent
irrevocable, and that the obligations of such Selling Stockholder shall not be
terminated by any act of such Selling Stockholder or by operation of law,
whether by the death or incapacity of such Selling Stockholder (or, in the case
of a Selling Stockholder that is not an individual, the dissolution or
liquidation of such Selling Stockholder) 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.
(v) Each Selling Stockholder has
reviewed the Registration Statement and Prospectus and, although such Selling
Stockholder has not independently verified the accuracy or completeness of all
the information contained therein, nothing has come to the attention of such
Selling Stockholder that would lead such Selling Stockholder to believe that
(A) 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 (B) on the Effective Date the Prospectus contained and, on the
Closing Date, 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.
(vi) All information furnished by or on
behalf of such Selling Stockholder relating to such Selling Stockholder and the
shares of Stock to be sold by such Selling Stockholder pursuant hereto that is
contained in the representations and warranties of such Selling Stockholder in
such Selling Stockholder's Custody Agreement and Power of Attorney (if
applicable) or set forth in the Registration Statement or the Prospectus is,
and at the time the Registration Statement became or becomes, as the case may
be, effective and at all times subsequent thereto up to and on the Closing
Date, was or will be, true, correct and complete, and does not, and at the time
the Registration Statement became or becomes, as the case may be, effective and
at all times subsequent thereto up to and on the Closing Date (hereinafter
defined) will not, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make such
information not misleading.
(vii) Such Selling Stockholder will review
the Prospectus and will comply with all agreements and satisfy all conditions
on its part to be complied with or satisfied pursuant to this Agreement on or
prior to the Closing Date and will advise one of its
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Attorneys and Xxxxxxxxx & Xxxxx LLC prior to the Closing Date if any statement
to be made on behalf of such Selling Stockholder in the certificate
contemplated by Section 9(k) would be inaccurate if made as of the Closing
Date.
(viii) Such Selling Stockholder has not
taken and will not take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Stock.
(ix) Such Selling Stockholder does not
have, or has waived prior to the date hereof, any preemptive right, co-sale
right or right of first refusal or other similar right to purchase any of the
Stock that are to be sold by the Company or any of the other Selling
Stockholders to the Underwriters pursuant to this Agreement; such Selling
Stockholder does not have, or has waived prior to the date hereof, any
registration right or other similar right to participate in the offering made
by the Prospectus, other than such rights of participation as have been
satisfied by the participation of such Selling Stockholder in the transactions
to which this Agreement relates in accordance with the terms of this Agreement;
and such Selling Stockholder does not own any warrants, options or similar
rights to acquire, and does not have any right or arrangement to acquire, any
capital stock, rights, warrants, options or other securities from the Company,
other than those described in the Registration Statement and the Prospectus and
any document incorporated therein by reference.
(x) Such Selling Stockholder has not
distributed and will not distribute any prospectus or other offering material
in connection with the offering and sale of the Stock.
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 1,000,000 shares of the Underwritten Stock to
the several Underwriters, each Selling Stockholder agrees to sell to the
several Underwriters the number of shares of the Underwritten Stock set forth
in Schedule II opposite the name of such Selling Stockholder, and each of the
Underwriters agrees to purchase from the Company and the Selling Stockholders
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 Stockholders
and purchased by the several Underwriters shall be $___ per share. The
obligation of each Underwriter to the Company and each of the Selling
Stockholders shall be to purchase from the Company and the Selling Stockholders
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 Stockholders 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
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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
Stockholders 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 Stockholders 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 Stockholders shall have the
right to postpone the Closing Date determined as provided in Section 5 hereof
for not more than seven business days after the date originally fixed as the
Closing Date pursuant to said Section 5 in order that any necessary changes in
the Registration Statement, the Prospectus or any other documents or
arrangements may be made. If neither the non-defaulting Underwriters nor the
Company and the Selling Stockholders 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 Stockholders to any non-
defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company or the Selling Stockholders. 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 Efratom grant an option to the
several Underwriters to purchase, severally and not jointly, up to 255,000
shares of the Option Stock at the same price per share as the Underwriters
shall pay for the Underwritten Stock. Each such option may be exercised only
to cover over-allotments in the
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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 initial public offering by
the Underwriters of the Stock to be purchased by them shall be as set forth in
the Prospectus. The Underwriters may from time to time change the public
offering price after the closing of the initial public offering and increase or
decrease the concessions and discounts to dealers as they may determine.
(b) The information set forth 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.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(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 Stradling, Yocca, Xxxxxxx & Xxxxx, 000
Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx Xxxxx, Xxxxxxxxxx, at 7:00 a.m., San
Francisco time, on the [fourth] business day after the date of this Agreement,
or at such time on such other day, not later than seven full business days
after such fourth business day, as shall be agreed upon in writing by the
Company, the Selling Stockholders 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
Stradling, Yocca, Xxxxxxx & Xxxxx, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx Xxxxx, Xxxxxxxxxx, at 7:00 a.m., San Francisco time, on the third
business day after the exercise of such option.
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(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 Stockholders shall be made to the Custodian, for the
account of the Selling Stockholders, in each case by one or more certified or
official bank check or checks in same day funds. 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 Stockholders 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 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
STOCKHOLDERS. Each of the Company and the Selling Stockholders 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 and the Selling
Stockholders 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.
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(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 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 initial public offering of the Stock
by the Underwriters and during such period, the Underwriters shall propose to
vary the terms of offering thereof by reason of changes in general market
conditions or otherwise, you will advise the Company in writing of the proposed
variation, and, if in the opinion either of counsel for the Company or of
counsel for the Underwriters such proposed variation requires that the
Prospectus be supplemented or amended, the Company will forthwith prepare and
file with the Commission a supplement to the Prospectus or an amended
prospectus setting forth such variation. The Company authorizes the
Underwriters and all dealers to whom any of the Stock may be sold by the
several Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
(e) Prior to the filing thereof with the
Commission, the Company will submit to you, for your information, a copy of any
post-effective amendment to the Registration Statement and any supplement to
the Prospectus or any amended prospectus proposed to be filed.
(f) The Company will cooperate, when and as
requested by you, in the qualification of the Stock for offer and sale under
the securities or blue sky laws of such jurisdictions as you may designate and,
during the period in which a prospectus is required by
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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.
(i) The Company and the Selling Stockholders
jointly and severally agree to pay all costs and expenses incident to the
performance of their respective obligations under this Agreement, including all
costs and expenses incident to (i) the preparation, printing and filing with
the Commission and the National Association of Securities Dealers, Inc.
("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. The Selling Stockholders will pay any transfer taxes
incident to the transfer to the Underwriters of the shares the Stock being sold
by the Selling Stockholders.
(j) The Company agrees to reimburse you, for the
account of the several Underwriters, for blue sky fees and related
disbursements (including counsel fees and disbursements and cost of printing
memoranda for the Underwriters) paid by or for the account of the Underwriters
or their counsel in qualifying the Stock under state securities or blue sky
laws and in the review of the offering by the NASD.
(k) The provisions of paragraphs (i) and (j) of
this Section are intended to relieve the Underwriters from the payment of the
expenses and costs which the Company and the Selling Stockholders hereby agree
to pay and shall not affect any agreement which the Company and the Selling
Stockholders may make, or may have made, for the sharing of any such expenses
and costs.
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(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,
(i) sell, offer, contract to sell, make any short sale, pledge, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of any
shares of Common Stock or any securities convertible into or exchangeable or
exercisable for or any rights to purchase or acquire Common Stock or (ii) enter
into any swap or other agreement that transfers, in whole or in part, any of
the economic consequences or ownership of Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Stock to be sold to the Underwriters
pursuant to this Agreement, (B) shares of Common Stock issued by the Company
upon the exercise of options granted under the stock option plans of the
Company (the "Option Plans"), all as described in footnote (1) to the table
under the caption "Capitalization" in the Preliminary Prospectus, and (C)
options to purchase Common Stock granted under the Option Plans.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (f) of
this Section 7, the Company and the Selling Stockholders 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
Stockholders jointly and severally agree to reimburse each such Underwriter and
controlling person for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that (1) the indemnity agreements of the Company and the
Selling Stockholders contained in this paragraph (a) shall not apply to any
such losses, claims, damages, liabilities or expenses if such statement or
omission was made in reliance upon and in conformity with
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information furnished as herein stated or otherwise furnished in writing to the
Company by or on behalf of any Underwriter for use in any Preliminary
Prospectus or the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto, (2) the indemnity agreement contained
in this paragraph (a) with respect to any Preliminary Prospectus shall not
inure to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages, liabilities or expenses purchased the Stock which is
the subject thereof (or to the benefit of any person controlling such
Underwriter) if at or prior to the written confirmation of the sale of such
Stock a copy of the Prospectus (or the Prospectus as amended or supplemented)
was not sent or delivered to such person and the untrue statement or omission
of a material fact contained in such Preliminary Prospectus was corrected in
the Prospectus (or the Prospectus as amended or supplemented) unless the
failure is the result of noncompliance by the Company with paragraph (c) of
Section 6 hereof, and (3) each Selling Stockholder shall only be liable under
this paragraph with respect to (A) information pertaining to such Selling
Stockholder furnished by or on behalf of such Selling Stockholder expressly for
use in any Preliminary Prospectus or the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto or (B) facts
that would constitute a breach of any representation or warranty of such
Selling Stockholder set forth in Section 2(b) hereof. The indemnity agreements
of the Company and the Selling Stockholders contained in this paragraph (a) and
the representations and warranties of the Company and the Selling Stockholders
contained in Section 2 hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any indemnified
party and shall survive the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to
indemnify and hold harmless the Company, each of its officers who signs the
Registration Statement on his own behalf or pursuant to a power of attorney,
each of its directors, each other Underwriter and each person (including each
partner or officer thereof) who controls the Company or any such other
Underwriter within the meaning of Section 15 of the Securities Act, and the
Selling Stockholders 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
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otherwise furnished in writing to the Company by or on behalf of such
indemnifying Underwriter for use in the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto. The indemnity
agreement of each Underwriter contained in this paragraph (b) shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any indemnified party and shall survive the delivery of and
payment for the Stock.
(c) Each party indemnified under the provision of
paragraphs (a) and (b) of this Section 7 agrees that, upon the service of a
summons or other initial legal process upon it in any action or suit instituted
against it or upon its receipt of written notification of the commencement of
any investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the Notice) of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
such indemnifying party or parties of any such service or notification shall
not relieve such indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution or otherwise than on
account of such indemnity agreement. Any indemnifying party shall be entitled
at its own expense to participate in the defense of any action, suit or
proceeding against, or investigation or inquiry of, an indemnified party. Any
indemnifying party shall be entitled, if it so elects within a reasonable time
after receipt of the Notice by giving written notice (herein called the Notice
of Defense) to the indemnified party, to assume (alone or in conjunction with
any other indemnifying party or parties) the entire defense of such action,
suit, investigation, inquiry or proceeding, in which event such defense shall
be conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or
parties shall be entitled to conduct the defense to the extent reasonably
determined by such counsel to be necessary to protect the interests of the
indemnified party or parties and (ii) in any event, the indemnified party or
parties shall be entitled to have counsel chosen by such indemnified party or
parties participate in, but not conduct, the defense. If, within a reasonable
time after receipt of the Notice, an indemnifying party gives a Notice of
Defense and the counsel chosen by the indemnifying party or parties is
reasonably satisfactory to the indemnified party or parties, the indemnifying
party or parties will not be liable under paragraphs (a) through (c) of this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party or parties in connection with the defense of the action,
suit, investigation, inquiry or proceeding, except that (A) the indemnifying
party or parties shall bear the legal and other expenses incurred in connection
with the conduct of the defense as referred to in clause (i) of the proviso to
the
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preceding sentence and (B) the indemnifying party or parties shall bear such
other expenses as it or they have authorized to be incurred by the indemnified
party or parties. If, within a reasonable time after receipt of the Notice, no
Notice of Defense has been given, the indemnifying party or parties shall be
responsible for any legal or other expenses incurred by the indemnified party
or parties in connection with the defense of the action, suit, investigation,
inquiry or proceeding.
(d) If the indemnification provided for in this Section 7
is unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders 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 Stockholders and the total underwriting discount received by the
Underwriters, as set forth in the table on the cover page of the Prospectus,
bear to the aggregate public offering price of the Stock. Relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by each indemnifying
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this
paragraph (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities, or actions in respect thereof, referred
to in the first sentence of this paragraph (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigation, preparing to defend or defending against any
action or claim which is the subject of this paragraph (d) to the extent such
indemnified party would be entitled to indemnification for such legal or other
expenses under paragraph 7(c). 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.
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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
Stockholders will, without the prior written consent of each Underwriter,
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 Stockholder
under the indemnity and reimbursement agreements contained in the provisions of
this Section 7 and Section 11 hereof shall be limited to an amount equal to the
initial public offering price of the stock sold by such Selling Stockholder to
the Underwriters. The Company and the Selling Stockholders may agree, as among
themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
8. TERMINATION. This Agreement may be terminated by you
at any time prior to the Closing Date by giving written notice to the Company
and the Selling Stockholders 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, or The Nasdaq Stock Market, or
limitations on prices (other than limitations on hours or numbers of days of
trading) for securities on either such exchange or system, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of, or commencement of any proceeding or
investigation by, any court, legislative body, agency or other 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
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terminated pursuant to this Section 8, there shall be no liability of the
Company or the Selling Stockholders to the Underwriters and no liability of the
Underwriters to the Company or the Selling Stockholders; provided, however,
that in the event of any such termination the Company and the Selling
Stockholders 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 Stockholders under this Agreement, including all costs and
expenses referred to in paragraphs (i) and (j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The
obligations of the several Underwriters to purchase and pay for the Stock shall
be subject to the performance by the Company and by the Selling Stockholders of
all their respective obligations to be performed hereunder at or prior to the
Closing Date or any later date on which Option Stock is to be purchased, as the
case may be, and to the following further conditions:
(a) The Registration Statement shall have become
effective; and no stop order suspending the effectiveness thereof shall have
been issued and no proceedings therefor shall be pending or threatened by the
Commission.
(b) The legality and sufficiency of the sale of
the Stock hereunder and the validity and form of the certificates representing
the Stock, all corporate proceedings and other legal matters incident to the
foregoing, and the form of the Registration Statement and of the Prospectus
(except as to the financial statements contained therein), shall have been
approved at or prior to the Closing Date by Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx
Xxxxxxxx & Xxxxxxxxx, LLP, counsel for the Underwriters.
(c) You shall have received from Stradling,
Yocca, Xxxxxxx & Xxxxx, counsel for the Company and the Selling Stockholders,
an opinion addressed to the Underwriters covering the matters set forth in
Annex A hereto and from environmental counsel for the Company and each dated
the Closing Date, an opinion addressed to the Underwriters regarding certain
environmental matters involving the Company's subsidiary, Austron, Inc.
reasonably satisfactory to counsel to the Underwriters 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
20
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ordinary course of business, the Company does not have/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.
(f) You shall have received from Price Waterhouse
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.
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(g) You shall have received from Price Waterhouse
LLP a letter stating that their review of the Company's system of internal
accounting controls, to the extent they deemed necessary in establishing the
scope of their examination of the Company's financial statements as at December
31, 1996, did not disclose any weakness in internal controls that they
considered to be material weaknesses.
(h) You shall have been furnished evidence in
usual written or telegraphic form from the appropriate authorities of the
several jurisdictions, or other evidence satisfactory to you, of the
qualification referred to in paragraph (f) of Section 6 hereof.
(i) Prior to the Closing Date, the Stock to be
issued and sold by the Company shall have been duly authorized for listing by
the Nasdaq National Market upon official notice of issuance.
(j) On or prior to the Closing Date, you shall
have received from all directors, officers, and beneficial holders of more than
5% of the outstanding Common Stock 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, (i) sell, offer,
contract to sell, make any short sale, pledge, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any shares of Common
Stock or any securities convertible into or exchangeable or exercisable for or
any rights to purchase or acquire Common Stock or (ii) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise.
(k) You shall be satisfied that, and you shall
have received a certificate, dated the Closing Date, or any later date on which
Option stock are to be purchased, as the case may be, from the Attorneys for
each Selling Stockholder to the effect that, as of the Closing Date, or any
later date on which Option stock are to be purchased, as the case may be, they
have not been informed that:
(i) The representations and warranties
made by such Selling Stockholder herein are not true or correct in any material
respect on the Closing Date or on any later date on which Option stock are to
be purchased, as the case may be; or
(ii) Such Selling Stockholder has not
complied with any obligation or satisfied any condition which is required to be
performed or satisfied on the part of such Selling Stockholder at or prior to
the Closing Date or any later date on which Option stock are to be purchased,
as the case may be.
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
22
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if Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, 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 Stockholders. Any such termination
shall be without liability of the Company or the Selling Stockholders to the
Underwriters and without liability of the Underwriters to the Company or the
Selling Stockholders; provided, however, that (i) in the event of such
termination, the Company and the Selling Stockholders 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 Stockholders
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 Stockholders 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 realonable
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 STOCKHOLDERS. The obligation of the Company and the Selling
Stockholders 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 Stockholders by giving notice to you. Any such termination shall be
without liability of the Company and the Selling Stockholders to the
Underwriters and without liability of the Underwriters to the Company or the
Selling Stockholders; provided, however, that in the event of any such
termination the Company and the Selling Stockholders 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 Stockholders 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 Stockholder, to the provisions of paragraph (f) of Section
7), (i) the Company and agrees 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 proceding arising out of or based upon any
23
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statement or omission, or any alleged statement or omission, described in
paragraph (a) Section 7 of this Agreement, and subject to clause (3) thereof,
and (ii) the Selling Shareholders hereby 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, omission, or any proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 and the possibility that such payments might later be held
to be improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This
Agreement shall inure to the benefit of the Company, the Selling Stockholders
and the several Underwriters and, with respect to the provisions of Section 7
hereof, the several parties (in addition to the Company, the Selling
Stockholders 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 facsimile and, if to the
Underwriters, shall be mailed, sent by facsimile or delivered to Xxxxxxxxx &
Xxxxx LLC, Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000; and if to the
Company, shall be mailed, , sent by facsimile or delivered to it at its office,
0000 Xxxxxx Xxx, Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx,
President and Chief Executive Officer; and if to the Selling Stockholders,
shall be mailed, , sent by facsimile or delivered to the Selling Stockholders
in care of Xxxxx X. Xxxxxxx or Xxxxx X. Xxxxx at Datum Inc., 0000 Xxxxxx Xxx,
Xxxxxx, Xxxxxxxxxx 00000. All notices given by facsimile 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 Stockholders 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) and (l) 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.
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Please sign and return to the Company and to the Selling
Stockholders in care of the Company the enclosed duplicates of this letter,
whereupon this letter will become a binding agreement among the Company, the
Selling Stockholders and the several Underwriters in accordance with its terms.
Very truly yours,
DATUM INC.
By:
------------------------------------
Xxxxx X. Xxxxxxx
President and Chief Executive Officer
SELLING STOCKHOLDERS:
EFRATOM HOLDING, INC.
By
-------------------------------------
Name
-----------------------------------
Title
----------------------------------
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By
-------------------------------------
Name
-----------------------------------
Title
----------------------------------
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
XXXXXXXXXXX & CO., INC.
XXX XXXXXX & COMPANY
By Xxxxxxxxx & Xxxxx LLC
By
-----------------------
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
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SCHEDULE I
UNDERWRITERS
NUMBER OF
SHARES TO BE
UNDERWRITERS PURCHASED
------------ ------------
Xxxxxxxxx & Xxxxx LLC . . . . . . . . . . . . . . .
Xxxxxxxxxxx & Co. Inc. . . . . . . . . . . . . . .
Xxx Xxxxxx & Company . . . . . . . . . . . . . . .
-----------
Total . . . . . . . . . . . . . .
===========
S-1
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SCHEDULE II
SELLING STOCKHOLDERS
NUMBER OF
SHARES TO BE
NAME AND ADDRESS OF SELLING STOCKHOLDERS SOLD
---------------------------------------- -----------
Efratom Holding, Inc.
00 Xxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
The Prudential Insurance Company of America
Prudential Xxxxx
Xxxxxx, XX 00000-0000
Total . . . . . . . . . . .
===========
S-2
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ANNEX A
Matters to be Covered in the Opinion of
Stradling, Yocca, Xxxxxxx & Xxxxx
Counsel for the Company
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, is duly qualified as a foreign corporation and in good standing in
___________, ____________, and _____________, and is so qualified and in good
standing in each jurisdiction in which, to its knowledge, the ownership or
leasing of property requires such qualification (except where the failure to be
so qualified would not have a material adverse effect on the business,
properties, condition (financial or otherwise) or results of operations or
prospects of the Company and its subsidiaries taken as whole and has full
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement;
(ii) The Company owns of record, and to our knowledge owns
beneficially all of the outstanding shares of capital stock of each subsidiary
of the Company, and each subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation;
(iii) The authorized capital stock of the Company consists
of __________ shares of Preferred Stock, $__ par value, none of which are
issued and outstanding, and ___________ shares of Common Stock, $__ par value,
of which there are issued and outstanding of record __________ shares
(including the Underwritten Stock plus the number of shares of Option Stock
issued on the date hereof); 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 plus the number
of shares of Option Stock issued on the date hereof) have been duly and validly
issued and are fully paid and nonassessable; any Option Stock purchased on or
after the Closing Date, when issued and delivered to and paid for by the
Underwriters as provided in the Underwriting Agreement, will have been duly and
validly issued and be fully paid and nonassessable; no preemptive rights or
rights of refusal exist with respect to the Stock, or the issue and sale
thereof, pursuant to the Restated Certificate of Incorporation or Bylaws of the
Company; and, to the best of such counsel's knowledge, there are no contractual
preemptive rights, rights of first refusal or rights of co-sale which exist
with respect to the issue and sale of the Stock by the Company or the sale of
Stock by the Selling Stockholders that have not been waived. Except as
disclosed in the Registration Statement, to the best of such counsel's
knowledge the Company does not have outstanding any options to purchase, or any
other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell shares of
its capital stock or any such options, rights, convertible securities or
obligations;
(iv) The Registration Statement has become effective under
the Securities Act and, to the best of such counsel's knowledge after due
inquiry, no stop order suspending the effectiveness of the Registration
Statement or suspending or preventing the use of the Prospectus
A-1
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is in effect and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission. Any required filing of the Prospectus
and any supplement thereto pursuant to Rule 424(b) of the Rules and Regulations
has been made in the manner within the time period required by such Rule
424(b).
(v) The Registration Statement at the Effective Date and
the Prospectus and each amendment and supplement thereto (except as to the
financial statements and schedules and other financial data contained therein
and matters related to patents, as to which such counsel need express no
opinion) complied as to form in all material respects with the requirements of
the Securities Act, the Exchange 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 and 10 (insofar as Item 10 relates
to the beneficial ownership of shares of Common Stock of the Company by
partners of such counsel) of Form S-2 is, to the best of such counsel's
knowledge, accurately and adequately set forth therein in all material respects
or no response is required with respect to such Items; and to such counsel's
knowledge, the description of the Company's stock option plans and the options
granted and which may be granted thereunder set forth or incorporated by
reference 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 and regulations of the Commission
thereunder;
(vii) To the best of such counsel's knowledge, there are no
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 or filed as
required, as the case may be; such franchises, contracts, leases, documents and
legal proceedings as are summarized in the Registration Statement or the
Prospectus fairly and correctly present the information disclosed with respect
thereto in all material aspects;
(viii) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(ix) The Underwriting Agreement has been duly executed and
delivered by or on behalf of the Selling Stockholders; and the Custody
Agreement and Power of Attorney between the Selling Stockholders and the
Custodian as defined in the Custody Agreement and Power of Attorney, and the
Power of Attorney referred to in such Custody Agreement and Power of Attorney
have been duly executed and delivered by or on behalf of each of the Selling
Stockholders;
(x) The issue and sale by the Company of the shares of
Stock sold by the Company as contemplated by the Underwriting Agreement will
not conflict with, or result in a breach of, the Restated Certificate of
Incorporation or Bylaws of the Company or any material agreement or instrument
known to such counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any of their assets
are bound or any applicable law or regulation, or so far as is known to such
counsel, any order, writ,
A-2
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injunction or decree, of any jurisdiction, court or governmental
instrumentality to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or any of their assets are
bound;
(xi) To 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 are set forth in the Prospectus under the heading "Principal and
Selling Stockholders" or 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) No consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation of the
transactions contemplated in the Underwriting Agreement, except such as have
been obtained under the Securities Act and such as may be required under state
securities or blue sky laws or under the rules of the National Association of
Securities Dealers, Inc. in connection with the purchase and distribution of
the Stock by the Underwriters.
(xiii) The Stock to be sold under the Agreement to the
Underwriters is duly authorized for quotation on the Nasdaq National Market.
(xiv) Good and marketable title to the shares of Stock sold
by the Selling Stockholders under the Underwriting Agreement, free and clear of
all liens, encumbrances, equities, security interest and claims, has been
transferred to the Underwriters who have severally purchased such shares of
Stock under the Underwriting Agreement, assuming for the purpose of this
opinion that the Underwriters purchased the same in good faith without notice
of any adverse claims; and
(xv) Based insofar as factual matters with respect to the
Stock to be sold by the Selling Stockholders are concerned solely upon
representations of the Selling Stockholders, the accuracy of which such counsel
have no reason to question, no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation of the
transactions contemplated in the Underwriting Agreement, except such as have
been obtained under the Securities Act and such as may be required under state
securities or blue sky laws in connection with the purchase and distribution of
the Stock by the Underwriters.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States or of the State of Delaware,
upon opinions of local counsel satisfactory in form and scope to counsel for
the Underwriters. Copies of any opinions so relied upon shall be delivered to
the Representatives and to counsel for the Underwriters and the foregoing
opinion shall also state that counsel knows of no reason the Underwriters are
not entitled to rely upon the opinions of such local counsel.
In addition to the matters set forth above, counsel rendering the
foregoing opinion shall also include a statement to the effect that nothing has
come to the attention of such counsel that
A-3
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leads them 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 required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus (except as to the financial statements and schedules and
other financial 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 as under which they were
made, not misleading.
A-4
