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EXHIBIT 1.1
AVISTAR COMMUNICATIONS CORPORATION
3,600,000 SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
August ___, 2000
CHASE SECURITIES INC.
UBS WARBURG LLC
WIT SOUNDVIEW CORPORATION
c/o Chase Securities Inc.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Avistar Communications Corporation, a Delaware corporation (collectively
with its predecessors, herein called the "Company"), proposes to issue and sell
3,600,000 shares of its authorized but unissued common stock, $0.001 par value
(herein called the "Common Stock"). Said shares of Common Stock are herein
called the "Underwritten Stock." The Company proposes to grant to the
Underwriters (as hereinafter defined) an option to purchase up to 540,000
additional shares of Common Stock to cover over-allotments (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 hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters 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), for whom you
are acting as the "Representatives." You represent and warrant that you have
been authorized by each of the other Underwriters to enter into this Agreement
on its behalf and to act for it in the manner herein provided.
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(1) Plus an option to purchase from the Company up to 540,000 additional shares
solely to cover over-allotments.
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1. REGISTRATION STATEMENT. The Company has filed with the Securities and
Exchange Commission (herein called the "Commission") a registration statement on
Form S-1 (File No. 333-39008), including the related preliminary prospectus, for
the registration under the Securities Act of 1933, as amended (herein called the
"Securities Act") of the Stock. Copies of such registration statement and of
each amendment thereto, including the related preliminary prospectus (meeting
the requirements of Rule 430A of the rules and regulations of the Commission
(herein called "Rule 430A")) 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, all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a "Rule
462(b) registration statement"), and, in the event of any amendment thereto
after the effective date of such registration statement (herein called the
"Effective Date"), shall also mean (from and after the effectiveness of such
amendment) such registration statement as so amended (including any Rule 462(b)
registration statement). The term Prospectus as used in this Agreement shall
mean the prospectus relating to the Stock first filed with the Commission
pursuant to Rule 424(b) and Rule 430A (or if no such filing is required, as
included in the Registration Statement) and, in the event of any supplement or
amendment to such prospectus after the Effective Date, shall also mean (from and
after the filing with the Commission of such supplement or the effectiveness of
such amendment) such prospectus as so supplemented or amended. The term
Preliminary Prospectus as used in this Agreement shall mean each preliminary
prospectus included in such registration statement prior to the time it becomes
effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants as follows:
(a) Each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and authority to own
or lease its properties and conduct its business as described in the
Registration Statement and the Prospectus and as being conducted, and is duly
qualified as a foreign corporation and in good standing in all jurisdictions in
which the character of the property owned or leased or the nature of the
business transacted by it makes qualification necessary, except where the
failure to be so qualified would not have, either individually or in the
aggregate, a material adverse effect on the business, properties, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole (herein called a "Material Adverse Effect").
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(b) All of the outstanding capital stock of each subsidiary of the
Company is owned, directly or indirectly, by the Company, free and clear of any
security interest, claim, lien, limitation on voting rights or encumbrance; and
all such securities have been duly authorized and validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive or similar
rights. The only subsidiaries of the Company are the subsidiaries listed in Note
1 to the combined financial statements included in the Registration Statement
and the Prospectus.
(c) Other than as set forth in or expressly contemplated by the
Registration Statement and the Prospectus, since the respective dates as of
which information is given therein, (i) there has not occurred any Material
Adverse Effect, whether or not arising from transactions in the ordinary course
of business; (ii) there has not been any change in the capital stock (other than
the exercise of stock options or warrants and grants under the employee stock
plans as described in the Prospectus) or, except for transactions under the
Company's existing line of credit, short-term or long-term debt of the Company,
whether or not arising from transactions in the ordinary course of business;
(iii) except in the ordinary course of business, neither the Company nor any of
its subsidiaries has entered into any material transaction; (iv) neither the
Company, nor any of its subsidiaries shall have incurred any liabilities or
obligations, direct or contingent, that are material, either individually or in
the aggregate, to the Company and its subsidiaries, taken as a whole, and that
are required to be disclosed on the latest balance sheet or notes thereto
included in the Prospectus in accordance with generally accepted accounting
principles and are not so disclosed; (v) there has been no dividend or
distribution of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, any of its subsidiaries on
any class of capital stock or repurchase or redemption by the Company or any of
its subsidiaries of any class of capital stock; (vi) there has been no capital
expenditure or commitment by the Company or any of its subsidiaries exceeding
$100,000, either individually or in the aggregate except in the ordinary course
of business as generally contemplated by the Prospectus; (vii) there has been no
change in accounting methods or practices (including any change in depreciation
or amortization policies or rates) by the Company or any of its subsidiaries;
(viii) there has been no revaluation by the Company or any of its subsidiaries
of any of their assets; (ix) other than in the ordinary course of business,
there has been no increase in the salary or other compensation payable or to
become payable by the Company or any of its subsidiaries to any of their
officers, directors, employees or advisors, nor any declaration, payment or
commitment or obligation of any kind for the payment by the Company or any of
its subsidiaries of a bonus or other additional salary or compensation to any
such person; (x) there has been no amendment or termination of any material
contract, agreement or license to which the Company or any subsidiary is a party
or by which it is bound; (xi) there has been no waiver or release of any
material right or claim of the Company or any subsidiary, including any
write-off or other compromise of any material account receivable of the Company
or any subsidiary; and (xii) there has been no change in pricing or royalties
set or charged by the Company or any subsidiary to their respective customers or
licensees or in pricing or royalties set or charged by persons who have licensed
rights regarding any Intellectual Property (as hereinafter defined) to the
Company or any of its subsidiaries.
(d) The Registration Statement and the Prospectus comply, and on the
Closing Date (as hereinafter defined) and the Option Closing Date (as
hereinafter defined), as the case may be, the Prospectus will comply, in all
material respects, with the provisions of the Securities Act and
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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 the Option
Closing Date, as the case may be, 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 (d) 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.
(e) No action has been taken and no statute, rule, regulation or order
has been enacted, adopted or issued by any governmental agency that prevents the
issuance or sale of the Stock or prevents or suspends the use of the Prospectus;
no injunction, restraining order or order of any nature by a federal, state or
foreign court of competent jurisdiction has been issued that prevents the
issuance of the Stock, prevents or suspends the sale of the Stock in any
jurisdiction or could adversely affect the consummation of the transactions
contemplated by this Agreement or the Prospectus; and every request from any
securities authority or agency of any jurisdiction for additional information
has been compiled with in the all material respects.
(f) The outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable; the
Stock is duly and validly authorized and will be, when issued and sold to the
Underwriters as provided herein, duly and validly issued, fully paid and
non-assessable; and no preemptive, co-sale, registration right, right of first
refusal or other similar right of stockholders exists with respect to any of the
Stock or will exist as a result of the issue and sale thereof which has not been
waived or set forth in the Registration Statement. 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 hereby. Except
as described in the Registration Statement and the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to any other registration
statement filed by the Company under the Securities Act. Except as described in
the Registration Statement and the Prospectus, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale or liens related to or entitling any person to purchase or
otherwise to acquire any shares of the capital stock of, or other ownership
interest in, the Company.
(g) The information set forth under the heading "Capitalization" in the
Prospectus is true and correct in all material respects. All of the Stock
conforms in all material respects to the description thereof contained in the
Registration Statement. The form of certificates for the Stock conforms to the
legal requirements of the State of Delaware.
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(h) The financial statements of the Company, together with the related
notes and schedules set forth in the Registration Statement, present fairly, in
all material respects, the financial position and the results of operations and
cash flows of the Company and its subsidiaries on a combined or consolidated
basis, as described in the Prospectus, at the indicated dates and for the
indicated periods. Such financial statements and related schedules have been
prepared in accordance with generally accepted principles of accounting,
consistently applied throughout the periods involved, and all adjustments
necessary for a fair presentation of results for such periods have been made.
The financial data set forth in the Prospectus under the headings "Prospectus
Summary -- Summary Financial Data," "Capitalization" and "Selected Financial
Data" present fairly, in all material respects, the information set forth
therein on a basis consistent with that of the audited financial statements of
the Company and its subsidiaries on a combined basis (or with respect to the
balance sheet data as of March 31, 2000, on a consolidated basis) included in
the Prospectus.
(i) Xxxxxx Xxxxxxxx LLP, who have certified certain of the financial
statements filed with the Commission as part of the Registration Statement, are
independent public accountants as required by the Securities Act and the rules
and regulations of the Commission thereunder.
(j) There is no action, suit, claim, proceeding or investigation before
or brought by any court or government agency or body, domestic or foreign,
pending or, to the knowledge of the Company or any of its subsidiaries,
threatened against the Company or any of its subsidiaries or any of their
respective directors, officers or properties, which is required to be disclosed
in the Registration Statement and is not so disclosed or which would reasonably
be expected to result, either individually or in the aggregate, in any Material
Adverse Effect or which would reasonably be expected to materially and adversely
affect the consummation of the transactions contemplated hereby.
(k) There are no agreements, employee stock plans, contracts, leases or
documents of the Company or any of its subsidiaries of a character required to
be described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement by the Securities Act or the rules and
regulations of the Commission thereunder which have not been accurately
described in all material respects or filed as required.
(l) Each of the Company and its subsidiaries has good and marketable
title to all of the properties and assets owned by them as reflected in the
financial statements filed with the Commission as part of the Registration
Statement, free and clear of any lien, mortgage, pledge, charge or encumbrance
of any kind except those: (i) reflected in such financial statements; (ii)
described in the Registration Statement; or (iii) that do not, individually or
in the aggregate, materially and adversely affect the value of such property or
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries. All leases to which the Company or any of
its subsidiaries is a party are valid and binding obligations of the Company or
its subsidiaries, respectively, and no default by the Company or any of its
subsidiaries has occurred or is continuing thereunder which could reasonably be
expected to result in a Material Adverse Effect; and the Company and its
subsidiaries enjoy peaceful and undisturbed possession under all such material
leases to which they are a party as lessee.
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(m) Each of the Company and, to the extent applicable, its subsidiaries
has timely filed all federal, state, local and foreign income tax returns, as
the case may be, which have been required to be filed and has paid all taxes
required by said returns and all assessments received by it to the extent that
such taxes have become due and are not being contested in good faith except
where the failure to file such returns and pay such taxes would not have, either
individually or in the aggregate, a Material Adverse Effect. All tax liabilities
(including those being contested in good faith) for the periods covered by the
financial statements of the Company and its subsidiaries on a combined basis
included in the Registration Statement have in all material respects been
adequately accounted for or described in such financial statements. The Company
has in all material respects made adequate charges, accruals and reserves in the
financial statements of the Company and its subsidiaries on a combined or
consolidated basis included in the Prospectus in respect of all federal, state
and foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of its subsidiaries has not been finally
determined.
(n) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby, including, without limitation,
the corporate power and authority to issue, sell and deliver the Stock as
provided herein and the power to effect the "Use of Proceeds" as described in
the Prospectus.
(o) This Agreement has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company, enforceable
against it in accordance with its terms except insofar as indemnification and
contribution provisions may be limited by applicable law or equitable principles
and except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally or by general equitable principles.
(p) Neither the Company nor any of its subsidiaries is, nor with the
giving of notice or lapse of time or both will be, (i) in violation of its
certificate of incorporation or bylaws or equivalent organizational documents,
(ii) in default under an agreement, mortgage, lease, contract, indenture or
other instrument or obligation to which it is a party or by which it, or any of
its properties, is bound or subject or (iii) in violation of any federal, state,
local or foreign law, statute, ordinance, rule, regulation, requirement,
judgment or court decree applicable to the Company, its subsidiaries or any of
their assets or properties (whether owned or leased) other than, in the case of
clause (ii) and (iii), any default or violation that would not reasonably be
expected to result, either individually or in the aggregate, in a Material
Adverse Effect or interfere with or materially adversely affect the sale of the
Stock pursuant hereto.
(q) None of (i) the execution, delivery or performance by the Company of
this Agreement, (ii) the issuance or sale of the Stock, (iii) the consummation
by the Company of the transactions contemplated hereby and (iv) the
reincorporation of the Company in Delaware, the contribution of all the capital
stock of Collaboration Properties, Inc. ("CPI") and VCT, Inc. ("VCT") to the
Company, the merger of CPI and VCT, the contribution of the Company's assets to
its operating subsidiary, Avistar Systems Corporation, and the licensing of
CPI's intellectual property portfolio to the Company (collectively, the
"Reorganization") violate, conflict with or
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constitute a breach of any of the terms or provisions of, or a default (or an
event that with notice or the lapse of time, or both, would constitute a
default) under, or require consent which has not been obtained under, or result
in the imposition of a lien on any properties of the Company or any of its
subsidiaries, or an acceleration of any indebtedness of the Company or any of
its subsidiaries pursuant to (A) the certificate of incorporation, bylaws or
equivalent organizational documents of the Company or any of its subsidiaries,
(B) any bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or its subsidiaries or their properties is or may
be bound or subject, (C) any statute, rule or regulation applicable to the
Company or any of its subsidiaries or any of their assets or properties or (D)
any judgment, order or decree of any court or governmental agency or authority
having jurisdiction over the Company or any of its subsidiaries or any of their
assets or properties, except in the case of clauses (B), (C) and (D) for such
violations, conflicts, breaches, defaults, consents, impositions of liens or
accelerations that (1) would not result, either individually or in the
aggregate, in a Material Adverse Effect or (2) which are disclosed in the
Prospectus.
(r) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions hereby
contemplated (except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (herein called the "NASD") or such
additional steps as may be necessary to qualify the Stock for public offering by
the Underwriters under state securities or blue sky laws) has been obtained or
made and is in full force and effect.
(s) The Company and its subsidiaries have been and are now operating in
compliance with all federal, state, local and foreign statutes, laws,
regulations, ordinances or court decrees applicable to its businesses and
operations, except where any such non-compliance, either individually or in the
aggregate, would not have a Material Adverse Effect. No labor disturbance by the
employees of the Company or any of its subsidiaries exists or is imminent, and
neither the Company nor any of its subsidiaries is aware of any existing or
imminent labor disturbance by the employees of any of its principal suppliers,
manufacturers' representatives or international distributors that might be
expected to result, either individually or in the aggregate, in a Material
Adverse Effect. No collective bargaining agreement exists with any of the
Company's or its subsidiaries' employees and, to the best of the Company's
knowledge, no such agreement is imminent.
(u) Other than as disclosed in the Registration Statement and the
Prospectus, the Company together with its subsidiaries owns and possesses all
right, title and interest in and to, or has duly licensed from third parties, a
valid, enforceable right to use, all issued and pending patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable designs, software and other computer programs,
computer codes, proprietary or confidential information, software, systems or
procedures), trademarks, copyrights and trade names, technical data and other
information (herein collectively called "Intellectual Property") that are
necessary to conduct their businesses as described in the Registration Statement
and the Prospectus. Neither the Company nor any of its subsidiaries has
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received any notice of, and has no knowledge of, any infringement of or conflict
with any rights of the Company or any of its subsidiaries by others with respect
to any Intellectual Property which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect. Neither the Company nor any of its subsidiaries has received any
notice of, and has no knowledge of, any infringement of or conflict with any
asserted rights of others with respect to any Intellectual Property which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect; to the best of the Company's and its subsidiaries'
knowledge, none of the Intellectual Property licensed to or by the Company or
any of its subsidiaries is unenforceable or invalid; and neither the Company nor
any of its subsidiaries is aware of the granting of any patent rights to third
parties or the filing of any patent applications by third parties or any other
rights of third parties to any Intellectual Property owned by the Company and
its subsidiaries.
(v) The Company is not and, after giving effect to the offering and sale
of the Stock and the application of the net proceeds therefrom as described in
the Prospectus, will not be an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended (herein called the "Investment
Company Act") and the rules and regulations of the Commission thereunder.
(w) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(x) Each of the Company and its subsidiaries is insured by recognized,
financially sound institutions with policies in such amounts and with such
deductibles and covering such risks as are customary for similarly situated
businesses including, but not limited to, policies covering real and personal
property owned or leased by the Company or any of its subsidiaries against
theft, damage, destruction and acts of vandalism. The Company has no reason to
believe that it or any subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a Material
Adverse Effect.
(y) The statements in the Prospectus under the heading "Related Party
Transactions" set forth all existing agreements, arrangements, understandings or
transactions or proposed agreements, arrangements, understandings or
transactions between or among the Company or any of its subsidiaries, on the one
hand, and any officer, director or stockholder of the Company or with any
partner, affiliate or associate of any of the foregoing persons or entities, on
the other hand, required to be set forth or described thereunder by the
Securities Act and the rules and regulations of the Commission thereunder.
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(z) Neither the Company nor any of its subsidiaries has distributed, nor
will any of them distribute prior to the later of (i) the Closing Date or the
Option Closing Date, as the case may be, and (ii) the completion of the
distribution of the Stock, any offering material in connection with the offering
and sale of the Stock other than any Preliminary Prospectuses, the Prospectus,
the Registration Statement and other materials, if any, permitted by the
Securities Act.
(aa) The Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions contemplated hereby other
than to the Underwriters.
(bb) The minute books of the Company have been made available to the
Representatives and their counsel and contain a summary of all meetings and
actions of the directors, stockholders, audit committee, compensation committee
and any other committee of the Board of Directors of the Company, respectively,
since the date of its initial formation as a limited partnership in the State of
Nevada, and reflect all transactions referred to in such minutes accurately in
all material respects.
(cc) There are no agreements between the Company and any former officer
of the Company relating to the payment of severance or other compensation.
(dd) The Stock to be issued and sold by the Company has been authorized
for listing by the Nasdaq National Market System upon official notice of
issuance.
(ee) The Company has not taken, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of the Common Stock to facilitate the sale or resale of the
Stock.
(gg) The Reorganization of the Company in 2000 and the one-for-five
reverse stock split in July 2000 have been duly authorized by all necessary
corporate action.
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
3,600,000 shares of the Underwritten Stock to the several Underwriters, and each
of the Underwriters agrees to purchase from the Company the respective aggregate
number of shares of Underwritten Stock set forth opposite its name in Schedule
I. The price at which such shares of Underwritten Stock shall be sold by the
Company and purchased by the several Underwriters shall be $___ per share. The
obligation of each Underwriter to the Company shall be to purchase from the
Company 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 the Company 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
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manner as you deem advisable to avoid fractional shares. In making this
Agreement, each Underwriter is contracting severally and not jointly; except as
provided in paragraphs (b) and (c) of this Section 3, the agreement of each
Underwriter is to purchase only the respective number of shares of the
Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company 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,
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 which the
defaulting Underwriter or Underwriters agreed to purchase; provided, however,
that the non-defaulting Underwriters shall not be obligated to purchase the
shares 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 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 on the terms herein set forth. In any such case, either you or the
Company shall have the right to postpone the Closing Date determined as provided
in Section 5 hereof for not more than seven business days after the date
originally fixed as the Closing Date pursuant to said Section 5 in order that
any necessary changes in the Registration Statement, the Prospectus or any other
documents or arrangements may be made. If neither the non-defaulting
Underwriters nor the Company 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 to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph (b), and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, the Company
grants an option to the several Underwriters to purchase, severally and not
jointly, up to 540,000 shares in the aggregate of Option Stock from the Company
at the same price per share as the Underwriters shall pay for the Underwritten
Stock. Said option may be exercised only to cover over-allotments in the sale of
the Underwritten Stock by the Underwriters and may be exercised in whole or in
part at any time
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(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 "Underwriting" in the Registration
Statement, any Preliminary Prospectus and the Prospectus relating to the Stock
filed by the Company (insofar as such information relates to the Underwriters)
constitutes the only information furnished by the Underwriters to the Company
for inclusion in the Registration Statement, any Preliminary Prospectus, and the
Prospectus, and you on behalf of the respective Underwriters represent and
warrant to the Company that the statements made therein are correct and
complete.
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., California time, on the date two
business days preceding the Closing Date), and payment therefor, shall be made
at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx, 0000 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxx Xxxx, Xxxxxxxxxx 00000, at 7:00 a.m., California 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 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., California 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 Xxxxxxx Xxxxxxx & Xxxxxxxx,
0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxx 00000, at 7:00 a.m.,
California time, on the third business day after the exercise of such option.
The date and hour of such delivery and payment are herein called the "Option
Closing Date."
(c) Payment for the Stock purchased from the Company shall be made to
the Company or its order by wire transfer in immediately available funds. Such
payment shall be made upon delivery of certificates for the Stock to you for the
respective accounts of the several
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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 prior to the
Closing Date, in the case of Underwritten Stock and at least one business day
prior to the Option Closing Date, in the case of Option Stock. Such certificates
will be made available to the Underwriters for inspection, checking and
packaging at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 0000 Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxx 00000, on the business day prior to the Closing
Date or, in the case of the Option Stock, by 3:00 p.m., California time, on the
business day prior to the Option Closing Date.
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
for shares to be purchased by any Underwriter whose check or wire transfer shall
not have been received by you on the Closing Date or on the Option Closing Date,
as the case may be. Any such payment by you shall not relieve such Underwriter
from any of its obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees
as follows:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A and
(ii) not file any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and furnished
with a copy or to which you shall have reasonably objected in writing or which
is not in compliance with the Securities Act and the rules and regulations of
the Commission thereunder.
(b) The Company will promptly notify each Underwriter in the event of
(i) the request by the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceeding for that purpose, (iv) the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction or (v) the receipt by it of notice of the
initiation or threatening of any proceeding for such purpose. The Company will
make every reasonable effort to prevent the issuance of such a stop order and,
if such an order shall at any time be issued, to obtain the withdrawal thereof
at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you a
signed copy of the Registration Statement as originally filed and of each
amendment thereto filed prior to the time the Registration Statement becomes
effective and, promptly upon the filing thereof, a signed copy of each
post-effective amendment, if any, to the Registration Statement (together with,
in each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters, at
such office or
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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 so that it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements contained in the Prospectus in the light of the
circumstances existing at the time it is delivered to a purchaser of the Stock,
not misleading, 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 rules and regulations of the
Commission 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 in the United States as you may designate and in such
foreign jurisdictions as you and the Company shall mutually agree and, during
the period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, in keeping such qualifications in good standing under
said securities or blue sky laws; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to qualify as
a foreign corporation in any jurisdiction in which it is not so qualified. The
Company will, from time to time, prepare and file such statements, reports and
other documents as are or may be required to continue such qualifications in
effect for so long a period as you may reasonably request for distribution of
the Stock.
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(g) During a period of five years commencing with the date hereof, the
Company will furnish to you, upon request, 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 securityholders an earnings statement in
accordance with Section 11(a) of the Securities Act and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including all costs and
expenses incident to (i) the preparation, printing and filing with the
Commission and the NASD of the Registration Statement, any Preliminary
Prospectus and the Prospectus, (ii) any applicable listing or other fees, (iii)
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, (iv) the photocopying of this Agreement and related documents
delivered to the Underwriters, (v) the preparation, printing and filing of all
supplements and amendments to the Prospectus referred to in paragraph (d) of
this Section 6, (vi) the furnishing to you and the Underwriters of the reports
and information referred to in paragraph (g) of this Section 6, (vii) the
printing and issuance of stock certificates, including the transfer agent's fees
and (viii) all costs and expenses of the Underwriters (including the reasonable
fees and disbursements of counsel to the Underwriters) solely to the extent such
costs are incident to the offer and sale of shares of the Stock by the
Underwriters to directors, officers, employees and other persons having business
relationships with the Company pursuant to the Directed Share Program, as
described in Section 12, subject to receipt of reasonably satisfactory
documentation thereof.
(j) The Company agrees to reimburse you, for the account of the several
Underwriters, for blue sky fees and related disbursements (including reasonable
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, subject to receipt of an invoice from counsel and
other reasonable documentation thereof.
(k) The Company agrees that, without the prior written consent of Chase
Securities Inc. on behalf of the Underwriters, which shall not be unreasonably
withheld or delayed, the Company will not, for a period of 180 days following
the commencement of the public offering of the Stock by the Underwriters,
directly or indirectly, (i) offer, sell, 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 capital stock of the Company or any securities
exchangeable or exercisable for or convertible into or any rights to purchase or
acquire shares of capital stock of the Company or (ii) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of capital stock of the Company, 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
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otherwise. The foregoing sentence shall not apply to (A) the Stock to be sold to
the Underwriters pursuant to this Agreement, (B) the Common Stock to be issued
concurrently with the closing of this offering upon the conversion of the
Company's outstanding convertible preferred stock, (C) shares of Common Stock
issued in connection with acquisitions, (D) shares of Common Stock issued by the
Company under the 2000 Employee Stock Purchase Plan or upon the exercise of
options granted prior to the date of the Prospectus under the stock option plans
of the Company (the "Option Plans") described in the Preliminary Prospectus, and
(E) options to purchase Common Stock granted under the Option Plans, provided
that, any such options granted shall not be exercisable until 180 days after the
commencement of the public offering of the Stock by the underwriters, unless the
holders thereof shall have executed a lock-up agreement substantially in the
form of Annex D attached hereto.
(l) The Company agrees to use its reasonable best efforts to cause all
current directors, officers and holders of any shares of Common Stock (other
than those held by former employees) to furnish to you, prior to the Closing
Date, executed lock-up agreements in the form of Annex D attached hereto.
(m) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you, responding to
or commenting on such rumor, publication or event, unless in the opinion of the
Company's regular outside counsel, the dissemination of such press release or
other public statement would violate applicable securities laws.
(n) The Company shall apply the net proceeds of its sale of the Stock as
set forth in the Prospectus under the heading "Use of Proceeds."
(o) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, registrar (which may be the
same entity as the transfer agent) for its Common Stock.
7 INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees 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 (the "Exchange
Act"), or the common law or otherwise, and the Company agrees 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
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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), 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 (A) the indemnity agreements of
the Company contained in this paragraph (a) shall not apply to any such losses,
claims, damages, liabilities or expenses if such statement or omission was made
in reliance upon and in conformity with information furnished as herein stated
or otherwise furnished in writing to the Company by or on behalf of any
Underwriter for use in any Preliminary Prospectus or the Registration Statement
or the Prospectus or any such amendment thereof or supplement thereto and (B)
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. The indemnity agreements of
the Company contained in this paragraph (a) and the representations and
warranties of the Company 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, 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
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the Prospectus as part thereof and any Rule 462(b) registration statement) or
any post-effective amendment thereto (including any Rule 462(b) registration
statement) or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, if such statement or
omission was made in reliance upon and in conformity with information furnished
as herein stated or otherwise furnished in writing to the Company by or on
behalf of such indemnifying Underwriter for use in the Registration Statement or
the Prospectus or any such amendment thereof or supplement thereto. The
indemnity agreement of each Underwriter contained in this paragraph (b) shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified party and shall survive the delivery of
and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) 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 to the extent the party to
whom such Notice was not given was materially 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,
except as provided in paragraph (d) of this Section 7. 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
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parties participate in, but not conduct, the defense. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties (except to the extent an indemnified party reasonably determines that
there is an actual conflict of interest between the positions of such
indemnified party and the other indemnified parties in conducting the defense of
such action, suit, investigation, inquiry or proceeding in which case such
indemnified party shall have the right to select separate counsel to defend such
action on its behalf) and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Chase Securities
Inc., in the case of parties indemnified pursuant to paragraph (a) of this
Section 7, and by the Company, in the case of parties indemnified pursuant to
paragraph (b) of this Section 7. 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 third 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 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 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.
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The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the failure to so notify such party or parties from whom
contribution may be sought shall not relieve such party or parties from any
liability hereunder except to the extent it is, or they are, materially
prejudiced as a result thereof and in any event shall not relieve it or them
from any other liability which it or they may have otherwise than on account of
this section.
(e) The Company will not, without the prior written consent of each
Underwriter, which will not be unreasonably withheld or delayed, 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.
8 TERMINATION. This Agreement may be terminated by you at any time prior
to the Closing Date by giving written notice to the Company if after the date of
this Agreement trading in the Common Stock shall have been suspended, or if
there shall have occurred (a) 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, (b) 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, (c) suspension of trading in
securities generally or a material adverse decline in the 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,
(d) the enactment, publication, decree or other
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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, (e) declaration of a banking
moratorium by either federal or New York State authorities or (f) the taking of
any action by any federal or state government or agency in respect of its
monetary or fiscal affairs which in the Underwriters' reasonable opinion has a
material adverse effect on the securities markets in the United States. If this
Agreement shall be terminated pursuant to this Section 8, there shall be no
liability of the Company to the Underwriters and no liability of the
Underwriters to the Company; provided, however, that in the event of any such
termination the Company agrees to indemnify and hold harmless the Underwriters
from all costs or expenses incident to the performance of the obligations of the
Company under this Agreement, including all costs and expenses referred to in
paragraphs (i) and (j) of Section 6 hereof.
9 CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company of all of its obligations to be performed hereunder
at or prior to the Closing Date or the Option Closing Date, 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 Prospectus shall have been printed and copies distributed to the
Underwriters not later than 7:00 a.m., California time, on the second business
day following the date of this Agreement or at such later date and time as to
which the Underwriters may agree.
(c) 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 by Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Underwriters, acting reasonably, at or prior to the
Closing Date.
(d) You shall have received from (i) Xxxxx Xxxx LLP, special counsel for
the Company, an opinion addressed to the Underwriters and dated the Closing
Date, covering the matters set forth in Annex A hereto, (ii) Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx PC, counsel for the Company, an opinion addressed to the
Underwriters and dated the Closing Date, covering the matters set forth in Annex
B hereto and (iii) Xxxxxx Godward LLP, patent counsel for the Company, an
opinion addressed to the Underwriters and dated the Closing Date, covering the
matters set forth in Annex C hereto; and if Option Stock is purchased at any
date after the Closing Date, additional opinions from each of such counsel,
addressed to the Underwriters and dated the Option Closing Date, confirming that
the statements expressed as of the Closing Date in such opinions remain valid as
of such later date.
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(e) 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 in all material respects 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 Effect whether or not arising from transactions in the
ordinary course of business, and, since such dates, except in the ordinary
course of business, neither the Company nor any of its subsidiaries has entered
into any material transaction not referred to in the Registration Statement in
the form in which it originally became effective and the Prospectus contained
therein, (iv) neither the Company nor any of its subsidiaries has any material
contingent obligations which are not disclosed in the Registration Statement and
the Prospectus, (v) there are not any pending or known threatened legal
proceedings to which the Company or any of its subsidiaries is a party or of
which property of the Company or any of its subsidiaries is the subject which
are material and which are not disclosed in the Registration Statement and the
Prospectus, (vi) there are not any franchises, contracts, leases or other
documents which are required to be filed as exhibits to the Registration
Statement which have not been filed as required, (vii) the representations and
warranties of the Company herein are true and correct in all material respects
as of the Closing Date and the Option Closing Date, 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 with such offering
(f) You shall have received on the Closing Date and on the Option
Closing Date, as the case may be, a certificate, dated the Closing Date or
Option Closing Date, as the case may be, and signed by the Chief Executive
Officer 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 (e) of this
Section 9 are true and correct.
(g) You shall have received from Xxxxxx Xxxxxxxx LLP letters addressed
to the Underwriters and dated the date hereof, the Closing Date and the Option
Closing Date, as the case may be, in each case, in form and substance
satisfactory to the Underwriters (i) confirming that they are independent public
accountants with respect to the Company within the meaning of the Securities Act
and the rules and regulations of the Commission thereunder; (ii) containing
statements and information of the type ordinarily included in auditors' "comfort
letters" to underwriters with respect to financial statements and certain
information of the Company and its subsidiaries contained in the Registration
Statement and the Prospectus; (iii) with respect to the letters delivered on the
Closing Date or the Option Closing Date, as the case may be, based upon the
procedures described in its letter delivered to you concurrently with the
execution of this
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Agreement (herein called the "Original Letter"), but carried out to a date not
more than three business days prior to the Closing Date or the Option Closing
Date, as the case may be, (A) confirming, to the extent true, that the
statements and conclusions set forth in the Original Letter are accurate as of
the Closing Date and the Option Closing Date, as the case may be, and (B)
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; and (iv) addressing other matters agreed upon by Xxxxxx Xxxxxxxx
LLP and you. 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.
(h) You shall have received from Xxxxxx Xxxxxxxx LLP a letter addressed
to the Company and made available to you and your counsel for the use of the
Underwriters stating that their review of the Company's system of internal
accounting controls, to the extent they deemed necessary in establishing the
scope of their examination of the Company's combined financial statements as of
December 31, 1999 did not disclose any weaknesses in internal controls that they
considered to be material weaknesses.
(i) 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.
(j) 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 System upon official notice of issuance.
(k) On or prior to the Closing Date, you shall have received from all
directors, officers, and holders of any shares of Common Stock and any options
or similar rights to purchase Common Stock, executed lock-up agreements
substantially in the form of Annex D attached hereto.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the
Underwriters, acting reasonably, shall be satisfied that they comply in form and
scope in all material respects.
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. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this
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Agreement is terminated by you because of any refusal, inability or failure on
the part of the Company 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 reasonable 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,
subject to receipt of reasonably satisfactory documentation thereof.
10 CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of the
Company 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 by giving notice
to you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company 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, the Company hereby 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 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, subject to receipt of reasonably
satisfactory documentation thereof and provided that the Company shall not in
respect of legal expenses be liable for the fees and expenses of more than one
separate firm for all such Underwriters, 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 (a) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (b) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12 DIRECTED SHARE PROGRAM. It is understood that approximately 180,000
shares of the Underwritten Stock ("Directed Shares") will initially be reserved
by the Underwriters for offer and sale upon the terms and conditions set forth
in the Prospectus and in accordance with the rules and regulations of the NASD
(the "Directed Share Program") to directors, officers, employees, business
associates and related persons of the Company ("Participants") who have
heretofore delivered to you offers to purchase shares of Underwritten Stock in
form reasonably satisfactory to you, and that any allocation of such
Underwritten Stock among such persons will be made in accordance with timely
directions received by you from the Company. Except as set forth below, under no
circumstances will any Underwriter be liable to the Company or to any
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24
Participant for any action taken or omitted to be taken in good faith in
connection with such Directed Share Program. It is further understood that to
the extent that any Directed Shares are not affirmatively reconfirmed for
purchase by any Participant on or immediately after the date of this Agreement,
such Directed Shares may be offered to the public as part of the public offering
contemplated hereby.
The Company agrees to pay all costs and expenses of the Underwriters
(including the fees and disbursements of counsel to the Underwriters) solely to
the extent such costs are incident to the offer and sale of shares of the Stock
by the Underwriters pursuant to the Directed Share Program.
(a) The Company agrees to indemnify and hold harmless the
Underwriters and each person, if any, who controls each Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act (herein called the "Underwriting Entities"), from and against any and all
losses, claims, damages or liabilities (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants in
connection with the Directed Share Program, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant has agreed to purchase; or (iii) related to, arising out
of, or in connection with the Directed Share Program, including those arising
out of any violation or alleged violation of the Act or out of any rescission
right of any person in respect thereof, other than losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of the
Underwriting Entities.
(b) Upon the service of a summons or other initial legal process
upon any Underwriting Entity 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 pursuant to Section 12(a), the Underwriting Entity seeking indemnity will
promptly give Notice of such service or notification to the Company. No
indemnification provided for in Section 12(a) shall be available to any
Underwriting Entity who shall fail so to give the Notice to the Company to the
extent the Company 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 the Company of any
such service or notification shall not relieve the Company from any liability
which it may have to any such Underwriting Entity for contribution or otherwise
than on account of such indemnity agreement in Section 12(a) (except as
specifically provided in paragraph (c) of this Section 12). Any Underwriting
Entity shall be entitled at its own expense to participate in the defense of any
action, suit or proceeding against, or investigation or inquiry of, such
Underwriting Entity. The Company shall be entitled, if it so elects within a
reasonable time after receipt of the Notice by giving a Notice of Defense to any
such Underwriting Entity, to assume the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the Company, by counsel chosen by the Company and
reasonably satisfactory to such Underwriting Entity; provided, however, that (i)
if any such Underwriting Entity reasonably
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25
determines that there may be a conflict between the positions of the Company and
of any such Underwriting Entity in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such Underwriting Entity different from or in addition to those
available to the Company, then counsel for such Underwriting Entity shall be
entitled to conduct the defense to the extent reasonably determined by such
counsel to be necessary to protect the interests of such Underwriting Entity and
(ii) in any event, the Underwriting Entity shall be entitled to have counsel
chosen by such Underwriting Entity to participate in, but not conduct, the
defense. It is understood that the Company shall not, in respect of the legal
expense of any such Underwriting Entity in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such Underwriting Entities and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Chase Securities Inc. If, within a reasonable time after receipt of the Notice,
the Company gives a Notice of Defense in connection with this Section 12 and the
counsel chosen by the Company is reasonably satisfactory to the Underwriting
Entity, the Company will not be liable under this Section 12 for any legal or
other expenses subsequently incurred by any such Underwriting Entity in
connection with the defense of the action, suit, investigation, inquiry or
proceeding, except that (A) the Company shall bear the legal and other expenses
incurred in connection with the conduct of the defense as referred to in clause
(i) of the proviso to the preceding sentence and (B) the Company shall bear such
other expenses as it or they have authorized to be incurred by any such
Underwriting Entity. If, within a reasonable time after receipt of the Notice,
no Notice of Defense has been given, the Company shall be responsible for any
legal or other expenses incurred by any such Underwriting Entity in connection
with the defense of the action, suit or proceeding.
(c) If the indemnification provided for in Section 12(a) is
unavailable or insufficient to hold harmless an Underwriting Entity under
Section 12(a), then the Company, in lieu of indemnifying the Underwriting
Entity, shall contribute to the amount paid or payable by the Underwriting
Entity as a result of the losses, claims, damages or liabilities referred to in
Section 12(a): (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriting Entities
on the other hand from the offering of the Directed Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Chase Entities on the other hand 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 on the
one hand and of the Underwriting Entities on the other hand in connection with
the offering of the Directed Shares shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Directed Shares
(before deducting expenses) and the total underwriting discounts and commissions
received by the Underwriting Entities for the Directed Shares, bear to the
aggregate public offering price of the Directed Shares. Relative fault of the
Company on the one hand and the Chase Entities on the other hand shall be
determined by reference to, among other things, whether the statement, act or
omission that results in losses, claims, damages or liabilities relates to
statements, acts or omissions by the Company or by the Underwriting Entities and
the
26
26
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statements, acts or omissions.
(d) The Company and the Underwriting Entities agree that it would
not be just and equitable if contributions pursuant to Section 12(c) were
determined by pro rata allocation (even if the Underwriting Entities 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
Section 12(c). The amount paid by the Underwriting Entities as a result of the
losses, claims, damages or liabilities, or actions in respect thereof, referred
to in Section 12(c) shall be deemed to include any legal or other expenses
reasonably incurred by the Underwriting Entities in connection with the
investigating, preparing to defend or defending against any action or claim
which is the subject of Section 12(c). Notwithstanding the provisions of this
Section 12, no Underwriting Entity shall be required to contribute pursuant to
this Section 12 any amount in excess of the underwriting discount applicable to
the Directed Shares distributed to the public. 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.
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 failure to so notify such party or parties from whom
contribution may be sought shall not relieve such party or parties from any
liability hereunder except to the extent it is, or they are, materially
prejudiced as a result thereof and in any event shall not relieve it or them
from any other liability which it or they may have otherwise than on account of
this section.
(e) The indemnity and contribution provisions contained in this
Section 12 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriting Entity or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Directed Shares.
13 PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of the Company and the several Underwriters and, with respect to
the provisions of Section 7 hereof, the several parties (in addition to the
Company 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.
14 NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Chase Securities Inc., Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx
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Yao, with a copy, which shall not constitute notice, to Xxxxxxx Xxxxxxx &
Xxxxxxxx, 10 Universal City Plaza - Suite 1850, Xxxxxxxxx Xxxx, Xxxxxxxxxx
00000, Attention: Xxxxxx Xxxxxxx, Esq.; and if to the Company, shall be mailed,
telegraphed or delivered to it at its office, 000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, with a copy to
Xxxxx Xxxx LLP, 000 Xxxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000,
Attention: Xxxxxx X. Xxx, Esq. and R. Xxxxxxx Xxxx, Esq. All notices given by
telegraph shall be promptly confirmed by letter.
15 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 its 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 (k), (l) and
(m) of Section 6 hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
28
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
AVISTAR COMMUNICATIONS
CORPORATION
By ______________________________
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
CHASE SECURITIES INC.
UBS WARBURG LLC
WIT SOUNDVIEW CORPORATION
By Chase Securities Inc.
By _______________________________
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
29
SCHEDULE I
UNDERWRITERS
NUMBER OF SHARES
UNDERWRITERS TO BE PURCHASED
------------ -----------------
Chase Securities Inc. ..........................
UBS Warburg LLC.................................
Wit SoundView Corporation.......................
Total................................... _____
30
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF XXXXX XXXX LLP,
SPECIAL COUNSEL FOR THE COMPANY
(i) Each of the Company and its subsidiaries listed in Exhibit 21.2 to
the Registration Statement ("Subsidiaries") is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, and
has full corporate power and authority to own or lease its properties and
conduct its business in all material respects as described in the Prospectus;
(ii) the shares of Underwritten Stock and any shares of Option Stock
issued have been duly and validly issued and are fully paid and nonassessable;
all the issued and outstanding capital stock of each Subsidiary of the Company
is owned of record by the Company free and clear of any liens, encumbrances or
security interests identified to such counsel, and to the best of counsel's
knowledge, no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into shares of
capital stock or ownership interests are outstanding;
(iii) any Option Stock purchased after the Closing Date, when issued and
delivered to and paid for by the Underwriters as provided in the Underwriting
Agreement, will have been duly and validly issued and be fully paid and
nonassessable; and no preemptive rights of, or rights of refusal in favor of,
stockholders exist with respect to the Stock, or the issue and sale thereof,
pursuant to the Certificate of Incorporation or Bylaws of the Company and, to
the knowledge of such counsel, there are no contractual preemptive rights
identified to such counsel that have not been waived or rights of first refusal
or rights of co-sale identified to such counsel which exist with respect to the
issue and sale of the Stock;
(iv) such counsel has been advised that the Registration Statement has
become effective under the Securities Act and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the Registration
Statement or suspending or preventing the use of the Prospectus is in effect and
no proceedings for that purpose have been instituted or are pending or
contemplated by the Commission;
(v) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial data contained therein or
omitted therefrom, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the Securities Act and
the rules and regulations of the Commission thereunder;
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A-2
(vi) the information required to be set forth in the Registration
Statement in answer to Item 10 (insofar as it relates to such counsel) and 11(c)
of Form S-1 is to the best of such counsel's knowledge accurately and adequately
set forth therein in all material respects, and, to the best of such counsel's
knowledge, the description of the Company's Option Plans and the options granted
(except as to financial data contained therein relating to the number of options
outstanding and weighted average exercise price thereof) and which may be
granted thereunder accurately and fairly presents in all material respects the
information required to be shown with respect to said plans and options to the
extent required by the Securities Act and the rules and regulations of the
Commission thereunder;
(vii) such counsel does not know of any franchises, contracts, leases or
documents, which in the opinion of such counsel are of a character required to
be described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement, which are not described and filed as
required;
(viii) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(ix) none of (i) the execution, delivery or performance by the Company
of the Underwriting Agreement, (ii) the issuance and sale by the Company of the
shares of Stock sold by the Company as contemplated by the Underwriting
Agreement and (iii) the consummation by the Company of the transactions
contemplated by the Underwriting Agreement will conflict with, or result in a
breach or violation of, or constitute a default under (A) the Certificate of
Incorporation or Bylaws or equivalent organizational documents of the Company or
any of its subsidiaries, (B) any agreement, lease, contract, indenture or other
instrument or obligation filed as an exhibit to the Registration Statement to
which the Company or any of its subsidiaries is a party, (C) any law or
regulation reasonably recognized by such counsel as applicable to the Company in
transactions of this kind (provided that such counsel need not express any
opinion with regard to the blue sky laws) or (D) so far as is known to such
counsel, any order, writ, injunction or decree, of any jurisdiction, court or
governmental instrumentality applicable to the Company; except in the case of
clauses (B), (C) and (D) for such conflicts, breaches, violations or defaults
that would not result, either individually or in the aggregate, in a Material
Adverse Effect;
(x) except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body is required for the execution, delivery
and performance of the Underwriting Agreement by the Company and the
consummation by the Company of the transactions contemplated thereby;
(xi) to such counsel's knowledge, and other than as disclosed in the
Registration Statement and the Prospectus, there are no legal or governmental
proceedings pending to which
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A-3
the Company or any of its subsidiaries is a party or of which any property of
the Company or any of its subsidiaries is the subject which would reasonably be
expected to have a Material Adverse Effect; and, to such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(xii) the Stock issued and sold by the Company has been duly authorized
for listing by the Nasdaq National Market System upon official notice of
issuance;
(xiii) the information in the Prospectus under the headings "Management"
and "Material U.S. Federal Income Tax Considerations for Non-U.S. Holders of
Common Stock," to the extent that such information constitutes matters of law or
legal conclusions, and the information in the Prospectus under the heading
"Related Party Transaction," to the extent that such information constitutes
matters of law or legal conclusions or summaries of written contracts, has been
reviewed by such counsel and is an accurate summary in all material respects of
such matters, conclusions and contracts; and the form of certificate evidencing
Common Stock and filed as an exhibit to the Registration Statement complies in
all material respects with the Delaware General Corporation Law; and
(xiv) all holders of securities of the Company having rights under the
agreements set forth on an attached schedule of the Company certifying that such
schedule includes all such agreements, to the registration of shares of Common
Stock, or other securities, because of the filing of the Registration Statement
by the Company have waived such rights or such rights have expired by reason of
lapse of time following notification of the Company's intent to file the
Registration Statement.
Such counsel shall also confirm that during the preparation of the
Registration Statement and the Prospectus, such counsel has participated in
conferences with the Underwriter's representatives and counsel and with officers
and representatives of the Company, at which conferences the contents of the
Registration Statement and the Prospectus were discussed, reviewed and revised.
On the basis of the information which was developed in the course thereof,
considered in the light of such counsel's understanding of applicable law and
the experience such counsel has gained through such counsel's practice
thereunder, such counsel has no reason to believe that as of the effective date
of the Registration Statement, the Registration Statement contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that as of the date of such opinion, the Prospectus, contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
33
ANNEX B
MATTERS TO BE COVERED IN THE OPINION OF
XXXXXX XXXXXXX XXXXXXXX & XXXXXX PC,
COUNSEL FOR THE COMPANY
(i) Each of the Company and its subsidiaries listed in Exhibit 21.2 to
the Registration Statement has been duly incorporated;
(ii) the issued and outstanding capital stock of each subsidiary of the
Company has been duly authorized and validly issued and is fully paid and
nonassessable;
(iii) the authorized capital stock of the Company consists of 10 million
shares of preferred stock, $.001 par value of which there are outstanding no
shares, and 250 million shares of Common Stock, $ .001 par value, of which there
are outstanding ________ shares (including the Underwritten Stock plus the
number of shares of Underwritten Stock and any Option Stock issued on the date
hereof) and such additional number of shares, if any, as may have been issued
after the date of the Prospectus and prior to the Closing Date, pursuant to the
Company's Option Plans; proper corporate proceedings have been taken validly to
authorize such authorized capital stock; all of the outstanding shares of
capital stock of the Company (other than the Underwritten Stock and the shares
of Option Stock issued, if any) have been duly and validly issued and are fully
paid and nonassessable;
(iv) the Reorganization of the Company will not conflict with, or result
in a breach or violation of, or constitute a default under (A) the Certificate
of Incorporation or Bylaws or equivalent organizational documents of the Company
or any of its subsidiaries, (B) any law or regulation reasonably recognized by
such counsel as applicable to the Company in transactions of this kind or (C) so
far as is known to such counsel, any order, writ, injunction or decree, of any
jurisdiction, court or governmental instrumentality applicable to the Company;
except in the case of clauses (B) and (C)for such conflicts, breaches,
violations or defaults that would not result, either individually or in the
aggregate, in a Material Adverse Effect;
(v) no consent, approval, authorization or order of, or filing or
registration with, any court or governmental agency or body is required for the
Reorganization that was not obtained or made;
(vi) the information in the Prospectus under the heading "Description of
Capital Stock," to the extent that such information constitutes matters of law
or legal conclusions, has been reviewed by such counsel and is an accurate
summary in all material respects of such matters and conclusions and contains
all the information required to be set forth in the Registration Statement in
answer to Item 9 of Form S-1, in all material respects; and
34
ANNEX D
FORM OF LOCK-UP AGREEMENT
June 12, 2000
Chase Securities Inc.
UBS Warburg LLC
Wit SoundView Corporation
As Representatives of the
Several Underwriters
c/o Chase Securities Inc.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned is a stockholder of Avistar Communications Corporation (the
"Company") and wishes to facilitate the public offering (the "Offering") of
Common Stock of the Company ("Common Stock") pursuant to a Registration
Statement on Form S-1 (the "Registration Statement"), first filed with the
Securities and Exchange Commission on June 9, 2000.
In consideration of the foregoing, and in order to induce you to act as
underwriters in the Offering, the undersigned hereby irrevocably agrees that it
will not, directly or indirectly, sell, offer, contract to sell, transfer the
economic risk of ownership in, make any short sale, pledge or otherwise dispose
of any shares of Common Stock or any securities convertible into or exchangeable
or exercisable for or any other rights to purchase or acquire Common Stock,
without the prior written consent of Chase Securities Inc., provided that you
agree that such consent shall not be unreasonably withheld or delayed, for a
period of 180 days from the effective date of the Registration Statement.
Notwithstanding the foregoing, if the undersigned is an individual, he or she
may transfer any shares of Common Stock or securities convertible into or
exchangeable or exercisable for the Company's Common Stock either during his or
her lifetime or on death by will or intestacy to his or her immediate family or
to a trust the beneficiaries of which are exclusively the undersigned and/or a
member or members of his or her immediate family; provided, however, that prior
to any such transfer each transferee shall execute an agreement, substantially
to the effect of the form hereof, pursuant to which each transferee shall agree
to receive and hold such shares of Common Stock, or securities convertible into
or exchangeable or exercisable for the Common Stock, subject to the provisions
hereof, and there shall be no further transfer except in accordance with the
provisions hereof. For purposes of this paragraph, "immediate family" shall mean
spouse, parent, stepparent, grandparent, mother-in-law, father-in-law,
daughter-in-law, brother-in-law, child, stepchild, grandchild, brother or sister
of the transferor and shall include adoptive relationships.
35
D-2
In addition, notwithstanding the foregoing, the undersigned may pledge any such
shares of Common Stock or securities convertible into or exchangeable or
exercisable for the Company's Common Stock in connection with a bona fide loan
transaction in which the pledgee acknowledges in writing the undersigned's
obligations hereunder and which pledge does not permit the pledgee, directly or
indirectly, to sell, offer, contract to sell, transfer the economic risk of
ownership in, make any short sale, pledge or otherwise dispose of those shares
or any securities convertible into or exchangeable for or any other rights to
purchase or acquire such shares during such 180-day period.
Further, the undersigned may convert shares of the Company's convertible
preferred stock into shares of Common Stock and may exercise any options to
purchase Common Stock, provided, in any such case, that the shares of Common
Stock issued upon conversion or exercise shall remain subject to thisAgreement.
The undersigned hereby waives any rights of the undersigned to sell shares of
Common Stock or any other security issued by the Company pursuant to the
Registration Statement, and acknowledges and agrees that for a period of 180
days from the effective date of the Registration Statement the undersigned has
no right to require the Company to register under the Securities Act of 1933
such Common Stock or other securities issued by the Company and beneficially
owned by the undersigned.
The undersigned understands that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns. The undersigned agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of Common Stock or other securities of the Company held by
the undersigned except in compliance with this agreement.
In the event that the Offering is not completed on or before December 31, 2000,
this Agreement shall be void and of no further effect.
Very truly yours,
Dated: ________________________ ____________________________________
Signature
____________________________________
Printed Name and Title
