MACROVISION CORPORATION
1,500,000 SHARES
COMMON STOCK
UNDERWRITING AGREEMENT
June __, 0000
XXXXXXXXX & XXXXX LLC
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXX & COMPANY
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Macrovision Corporation, a Delaware corporation (herein called the
Company), proposes to issue and sell _________ shares of its authorized but
unissued Common Stock, $0.001 par value (herein called the Common Stock), and
the stockholders of the Company named in Schedule II hereto (herein
collectively called the Selling Securityholders) propose to sell an aggregate
of ____________ shares of Common Stock of the Company (said 1,500,000 shares
of Common Stock being herein called the Underwritten Stock). The Company
propose[s] to grant to the Underwriters (as hereinafter defined) an option to
purchase up to 225,000 additional shares of Common Stock (herein called the
Option Stock and with the Underwritten Stock herein collectively called the
Stock). The Common Stock is more fully described in the Registration
Statement and the Prospectus hereinafter mentioned.
The Company and the Selling Securityholders severally hereby confirm the
agreements made with respect to the purchase of the Stock by the several
underwriters, for whom you are acting, named in Schedule I hereto (herein
collectively called the Underwriters, which term shall also include any
underwriter purchasing Stock pursuant to Section 4(b) hereof). You represent
and warrant that you have been authorized by each of the other Underwriters
to enter into this Agreement on its behalf and to act for it in the manner
herein provided.
1. REGISTRATION STATEMENT. The Company has filed with the
Securities and Exchange Commission (herein called the Commission) a
registration statement on Form S-3 (No. 333-_____), including the related
preliminary prospectus, for the registration under the Securities Act of
1933, as amended (herein called the Securities Act), of the Stock. Copies of
such registration statement and of each amendment thereto, if any, including
the related preliminary prospectus (meeting the requirements of Rule 430A of
the rules and regulations of the Commission) heretofore filed by the Company
with the Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean
such registration statement, including all documents incorporated by
reference therein, all exhibits and financial statements, all information
omitted therefrom in reliance upon Rule 430A and contained in the Prospectus
referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a Rule
462(b) registration statement) and, in the event of any amendment thereto
after the effective date of such registration statement (herein called the
Effective Date), shall also mean (from and after the effectiveness of such
amendment) such registration statement as so amended (including any Rule
462(b) registration statement). The term Prospectus as used in this
Agreement shall mean the prospectus, including the documents incorporated by
reference therein, relating to the Stock first filed with the Commission
pursuant to Rule 424(b) and Rule 430A (or, if no such filing is required, as
included in the Registration Statement) and, in the event of any supplement
or amendment to such prospectus after the Effective Date, shall also mean
(from and after the filing with the Commission of such supplement or the
effectiveness of such amendment) such prospectus as so supplemented or
amended. The term Preliminary Prospectus as used in this Agreement shall
mean each preliminary prospectus, including the documents incorporated by
reference therein, included in such registration statement prior to the time
it becomes effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to
the use of such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the several Underwriters
that:
a. The Registration Statement has been prepared by the Company
in conformity with the requirements of the Securities Act, and the rules and
regulations (herein called the Rules and Regulations) of the Commission
thereunder, and has been filed with the Commission. The Company has prepared
and has filed or proposes to file prior to the effective date of such
registration statement an amendment or amendments to such registration
statement, which amendment or amendments have been or will be similarly
prepared. There have been delivered to you two signed copies of such
registration statement and amendments, together with two copies of each
exhibit filed therewith. Conformed copies of such registration statement and
amendments (but without exhibits) and of the related Preliminary Prospectus
have been delivered to you in such reasonable quantities as you have
requested for each of the Underwriters. The Company will next file with the
Commission one of the following: (i) prior to effectiveness of such
registration statement, a further amendment thereto, including the form of
final prospectus, or (ii) a final prospectus in accordance with Rules 430A
and 424(b) of the Rules and Regulations. As filed, such amendment and form
of final prospectus, or such final prospectus, shall include all Rule 430A
Information and, except to the extent that you shall agree to a modification,
shall be in all substantive respects in the form furnished to you prior to
the date and time that this Agreement was executed and delivered by the
parties hereto, or, to the extent not completed at such date and time, shall
contain only such specific additional information and other changes (beyond
that contained in the latest Preliminary Prospectus) as the Company shall
have previously advised you would be included or made therein.
b. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements of the
Securities Act and the Rules and Regulations and, as of its date, has not
included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and at the time the
Registration Statement becomes effective, and at all times subsequent thereto
up to and including each of the Closing Dates hereinafter mentioned, the
Registration Statement and the Prospectus, and any amendments or supplements
thereto, will contain all material statements and information required to be
included therein by the Securities Act and the Rules and Regulations and will
in all material respects conform to the requirements of the Securities Act
and the Rules and Regulations, and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, will include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, no representation or warranty contained in this subsection
2(b) shall be applicable to information contained in or omitted from any
Preliminary Prospectus, the Registration Statement, the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter,
directly or through the Representative, specifically for use in the
preparation thereof.
c. The Company does not own or control, directly or indirectly,
any corporation, association or other entity other than the subsidiaries listed
in Exhibit 21.01 to the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1997. The Company and each of its subsidiaries have been
duly incorporated and
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are validly existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation, with full power and authority
(corporate and other) to own and lease their properties and conduct their
respective businesses as described in the Prospectus; the Company owns all of
the outstanding capital stock of its subsidiaries free and clear of all
claims, liens, charges and encumbrances; the Company and each of its
subsidiaries are in possession of and operating in compliance with all
authorizations, licenses, permits, consents, certificates and orders material
to the conduct of their respective businesses, all of which are valid and in
full force and effect; the Company and each of its subsidiaries are duly
qualified to do business and in good standing as foreign corporations in each
jurisdiction in which the ownership or leasing of properties or the conduct
of their respective businesses requires such qualification, except for
jurisdictions in which the failure to so qualify would not have a material
adverse effect upon the Company and its subsidiaries, taken as a whole; and
no proceeding has been instituted in any such jurisdiction, revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power
and authority or qualification.
d. As of March 31, 1998, the Company had an authorized and
outstanding capital stock as set forth under the heading "Capitalization" in
the Prospectus, subject to the assumptions set forth therein; the issued and
outstanding shares of Common Stock have been duly authorized and validly
issued, are fully paid and nonassessable, have been issued in compliance with
all federal and state securities laws, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or purchase
securities, and conform in all material respects to the description thereof
contained in the Prospectus. All issued and outstanding shares of capital
stock of each subsidiary of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. Except as disclosed in or
contemplated by the Prospectus and the financial statements of the Company,
and the related notes thereto, included in the Prospectus, neither the
Company nor any subsidiary has outstanding any options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments
to issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's
stock option, stock bonus and other stock plans or arrangements, and the
options or other rights granted and exercised thereunder, set forth in the
Prospectus accurately and fairly presents the information required to be
shown with respect to such plans, arrangements, options and rights.
e. The Stock to be sold by the Company has been duly authorized
and, when issued, delivered and paid for in the manner set forth in this
Agreement, will be validly issued, fully paid and nonassessable, and will
conform in all material respects to the description thereof contained in the
Prospectus. No preemptive rights or other rights to subscribe for or
purchase exist with respect to the issuance and sale of the Stock by the
Company pursuant to this Agreement. No stockholder of the Company has any
right which has not been waived to require the Company to register the sale
of any shares owned by such stockholder under the Securities Act in the
public offering contemplated by this Agreement. No further approval or
authority of the stockholders or the Board of Directors of the Company will
be required for the transfer and sale of the Stock to be sold by the Selling
Securityholders or the issuance and sale of the Common Shares to be sold by
the Company as contemplated herein.
f. The Company has full legal right, power and authority to
enter into this Agreement and perform the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding obligation of the Company in
accordance with its terms. The making and performance of this Agreement by
the Company and the consummation of the transactions herein contemplated will
not violate any provisions of the certificate of incorporation or bylaws, or
other organizational documents, of the Company or any of its subsidiaries,
and will not conflict with, result in the breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a
default under any agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of its respective properties may be bound or affected,
any statute or any authorization, judgment, decree, order, rule or regulation
of any court or any regulatory body, administrative agency or other
governmental body applicable to the Company or any of its subsidiaries or any
of their respective properties, which breach, violation or default could have
a material adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole. No
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the consummation of the
transactions contemplated by this Agreement, except for compliance with the
Securities Act, the Securities Exchange Act of 1934, as amended
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(herein called the Exchange Act), the Blue Sky laws applicable to the public
offering of the Common Shares by the several Underwriters and the clearance
of such offering with the National Association of Securities Dealers, Inc.
(herein called the NASD).
g. KPMG Peat Marwick LLP, which has expressed its opinion with
respect to the consolidated financial statements filed with the Commission as
a part of the Registration Statement and included in the Prospectus and in
the Registration Statement, is an independent accountant as required by the
Securities Act and the Rules and Regulations. The Company maintains a system
of internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparations 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 authorizations; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
h. The consolidated financial statements of the Company and its
subsidiaries, and the related notes thereto, included in the Registration
Statement and the Prospectus present fairly in all material respects the
financial position of the Company and its subsidiaries as of the respective
dates of such financial statements, and the results of operations and changes
in financial position of the Company and its subsidiaries for the respective
periods covered thereby. Such statements and related notes have been
prepared in accordance with generally accepted accounting principles applied
on a consistent basis as certified by the independent accountant named in
subsection 2(g). No other financial statements or schedules are required to
be included in the Registration Statement. The consolidated financial data
set forth in the Prospectus under the captions "Summary Consolidated
Financial Information," "Capitalization" and "Selected Consolidated Financial
Data" fairly present in all material respects the information set forth
therein on the basis stated in the Registration Statement.
i. Except as disclosed in the Prospectus, and except as to
violations, defaults or breaches which individually or in the aggregate would
not be material to the Company and its subsidiaries, taken as a whole,
neither the Company nor any of its subsidiaries is in violation or default of
any provision of its certificate of incorporation or bylaws, or other
organizational documents, or is in breach of or default with respect to any
provision of any agreement, judgment, decree, order, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to which it
is a party or by which it or any of its properties are bound; and there does
not exist any state of facts which constitutes an event of default on the
part of the Company or any such subsidiary as defined in such documents or
which, with notice or lapse of time or both, would constitute such an event
of default.
j. There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and Regulations
which have not been described or filed as required. The contracts so
described in the Prospectus are in full force and effect on the date hereof;
and neither the Company nor any of its subsidiaries, nor to the best of the
Company's knowledge, any other party is in breach of or default under any of
such contracts.
k. Except as described in the Registration Statement and the
Prospectus, there are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge, threatened to which the
Company or any of its subsidiaries is or may be a party or of which property
owned or leased by the Company or any of its subsidiaries is or may be the
subject, or related to environmental or discrimination matters, which
actions, suits or proceedings might, individually or in the aggregate,
prevent or adversely affect the transactions contemplated by this Agreement
or result in a material adverse change in the condition (financial or
otherwise), properties, business or results of operations of the Company and
its subsidiaries, taken as a whole; and no labor disturbance by the employees
of the Company or any of its subsidiaries exists or is imminent which might
be expected to affect materially and adversely such condition, properties,
business or results of operations. Neither the Company nor any of its
subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
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l. The Company or the applicable subsidiary has good and
marketable title to all the properties and assets reflected as owned in the
financial statements hereinabove described (or elsewhere in the Prospectus),
subject to no lien, mortgage, pledge, charge or encumbrance of any kind
except (i) those, if any, reflected in such financial statements (or
elsewhere in the Prospectus), or (ii) those which are not material in amount
and do not adversely affect the use made and proposed to be made of such
property by the Company and its subsidiaries. The Company or the applicable
subsidiary holds its leased properties under valid and binding leases, with
such exceptions as are not materially significant in relation to the business
of the Company and its subsidiaries, taken as a whole. Except as disclosed
in the Prospectus, the Company owns or leases all such properties as are
necessary to its operations as now conducted or as proposed to be conducted.
m. Since the respective dates as of which information is given
in the Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) the Company and its
subsidiaries have not incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or
written agreement or other transaction which is not in the ordinary course of
business or which could result in a material reduction in the future net
income of the Company and its subsidiaries, taken as a whole; (ii) the
Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance;
(iii) the Company has not paid or declared any dividends or other
distributions with respect to its capital stock and the Company and its
subsidiaries are not in default in the payment of principal or interest on
any outstanding material debt obligations; (iv) there has not been any change
in the capital stock (other than upon the sale of the Stock hereunder) or
indebtedness material to the Company and its subsidiaries, taken as a whole
(other than in the ordinary course of business); and (v) there has not been
any material adverse change in the condition (financial or otherwise),
business, properties or results of operations of the Company and its
subsidiaries, taken as a whole.
n. The Company and its subsidiaries own all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, mask works, copyrights, licenses, inventions,
trade secrets and rights described in the Prospectus as being owned by it or
necessary to conduct their businesses as now conducted. As of the date the
Registration Statement became effective, the descriptions of the patents and
patent applications set forth in the Registration Statement and the
Prospectus under the captions "Risk Factors--Dependence on Proprietary
Technology" and "Business--Intellectual Property Rights" do not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Except as otherwise set forth in
the Registration Statement and the Prospectus, the expiration of any patent
rights, trademarks, trade names, mask works, copyrights, licenses would not
have a material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company or its subsidiaries, taken
as a whole. The Company has no knowledge of any infringement or other
violation by it or its subsidiaries of any patent rights, trademark, trade
name rights, mask works, copyrights, licenses, trade secret or other similar
rights of others, and there is no claim being made against the Company or its
subsidiaries regarding any patent, trademark, trade name, mask work,
copyright, license, trade secret or other infringement which could have a
material adverse effect on the condition (financial or otherwise), business
or results of operations of the Company and its subsidiaries, taken as a
whole.
o. The Company has not been advised, and has no reason to
believe, that either it or any of its subsidiaries is not conducting business
in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including, without
limitation, all applicable local, state and federal environmental laws and
regulations; except where failure to be so in compliance would not materially
adversely affect the condition (financial or otherwise), business or results
of operations of the Company and its subsidiaries, taken as a whole.
p. The Company and its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have paid all
taxes shown as due thereon; and the Company has no knowledge of any tax
deficiency which has been or might be asserted or threatened against the
Company or its subsidiaries which could materially and adversely affect the
business, operations or properties of the Company and its subsidiaries, taken
as a whole.
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q. The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
r. The Company has not distributed and will not distribute
prior to the First Closing Date any offering material in connection with the
offering and sale of the Stock other than the Prospectus, the Registration
Statement and the other materials permitted by the Securities Act.
s. Each of the Company and its subsidiaries maintains insurance
of the types and in the amounts generally deemed adequate for its business,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and its subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect.
t. Neither the Company nor any of its subsidiaries has at any
time during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar public
or quasi-public duties, other than payments required or permitted by the laws
of the United States or any jurisdiction thereof.
u. The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Stock.
v. The Company is eligible to use a registration statement on
Form S-3 in the registration of the Stock.
w. The documents incorporated by reference in the Prospectus
and the Registration Statement, when they were first filed with the
Commission, complied with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact required to be stated
therein or necessary to make the statement therein not misleading.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLING SECURITYHOLDERS.
a. Each of the Selling Securityholders severally represents and
warrants to, and agrees with, the several Underwriters that:
(i) Such Selling Securityholder has, and on the First
Closing Date hereinafter mentioned will have, good and marketable title to
the Stock proposed to be sold by such Selling Securityholder hereunder on
such Closing Date and full right, power and authority to enter into this
Agreement and to sell, assign, transfer and deliver such Common Shares
hereunder, free and clear of all voting trust arrangements, liens,
encumbrances, equities, security interests, restrictions and claims
whatsoever; and upon delivery of and payment for such Stock hereunder, the
Underwriters will acquire good and valid title thereto, free and clear of all
liens, encumbrances, equities, claims, restrictions, security interests,
voting trusts or other defects of title whatsoever, provided that the
Underwriters are purchasing such Stock in good faith and without notice of
any adverse claim.
(ii) Such Selling Securityholder has executed and
delivered a Power of Attorney and a Custody Agreement (hereinafter
collectively referred to as the "Securityholders Agreements") and in
connection herewith such Selling Securityholder further represents, warrants
and agrees that such Selling Securityholder has deposited in custody, under
the Securityholders Agreement, with the agent named therein (the "Agent") as
custodian, certificates in negotiable form for the Stock to be sold hereunder
by such Selling Securityholder, for the purpose of further delivery pursuant
to this Agreement. Such Selling Securityholder agrees that the Stock to be
sold by such Selling Securityholder on deposit with the Agent are subject to
the interests of the Company and the Underwriters, that the arrangements made
for such custody are to that extent irrevocable, and that the obligations of
such Selling Securityholder hereunder shall not be terminated, except as
provided in this Agreement or in the Securityholders Agreement, by any act of
such Selling Securityholder, by operation of law, by the death or incapacity
of such Selling
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Securityholder or by the occurrence of any other event. If the Selling
Securityholder should die or become incapacitated, or if any other event
should occur, before the delivery of the Stock hereunder, the documents
evidencing Stock then on deposit with the Agent shall be delivered by the
Agent in accordance with the terms and conditions of this Agreement as if
such death, incapacity or other event had not occurred, regardless of whether
or not the Agent shall have received notice thereof. This Agreement and the
Securityholders Agreement have been duly executed and delivered by or on
behalf of such Selling Securityholder and the form of such Securityholders
Agreements has been delivered to you.
(iii) The performance of this Agreement and the
Securityholders Agreements and the consummation of the transactions
contemplated hereby and by the Securityholders Agreements will not result in
a breach or violation by such Selling Securityholder of any of the terms or
provisions of, or constitute a default by such Selling Securityholder under,
any indenture, mortgage, deed of trust, trust (constructive or other), loan
agreement, lease, franchise, license or other agreement or instrument to
which such Selling Securityholder is a party or by which such Selling
Securityholder or any of its properties is bound, any statute, or any
judgment, decree, order, rule or regulation of any court or governmental
agency or body applicable to such Selling Securityholder or any of its
properties, in which such breach, violation or default would adversely affect
the ability to such Selling Securityholder to perform its obligations
pursuant to this Agreement or the Securityholders Agreements or could
otherwise have a material adverse effect on such Selling Securityholder.
(iv) Such Selling Securityholder has not taken and will
not take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Stock.
(v) Such Selling Securityholder has reviewed the
Registration Statement and Prospectus, and, although such Selling
Securityholder has not independently verified the accuracy or completeness of
the information contained therein (other than the information regarding such
Selling Securityholder and its affiliates, if any, set forth under the
captions "Management" and "Principal and Selling Securityholders"), nothing
has come to the attention of such Selling Securityholder that would lead such
Selling Securityholder to believe that (A) on the effective date thereof the
Registration Statement contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading or (B) on the date of
the Prospectus, the Prospectus contained and, on the Closing Date, contains
any untrue statement of a material fact or omitted or omits to state any
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(vi) Such Selling Securityholder's decision to sell the
Stock that may be sold by it pursuant to this Agreement is not prompted by
any adverse information regarding the Company which is not disclosed in the
Registration Statement and the Prospectus.
b. Each of the Selling Securityholders agrees with the Company and
the Underwriters not to directly or indirectly, sell, offer, contract or
grant any option to sell, make any short sale (including without limitation
any "short vs. the box"), pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of any shares of Common Stock, options or warrants to
acquire shares of Common Stock, or securities exchangeable or exercisable for
or convertible into shares of Common Stock currently or hereafter owned
either of record or beneficially (as defined in Rule 13d-3 under Exchange
Act) by the such Selling Securityholder, or publicly announce such Selling
Securityholder's intention to do any of the foregoing, for a period
commencing on the date hereof and continuing to a date 90 days after the
first date any of the Stock are released by you for sale to the public,
except that, each of the Selling Securityholders may sell or otherwise
transfer shares of Common Stock (i) pursuant to this Agreement or (ii) as a
BONA FIDE gift or gifts, provided that undersigned provides prior written
notice of such gift or gifts to you, and the donee or donees thereof agree to
be bound by the restrictions set forth herein. Each of the Selling
Securityholders also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of any of the Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except
in compliance with the foregoing restrictions.
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4. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject
to the terms and conditions herein set forth, the Company agrees to issue and
sell ________ shares of the Underwritten Stock to the several Underwriters,
each Selling Securityholder agrees to sell to the several Underwriters the
number of shares of the Underwritten Stock set forth in Schedule II opposite
the name of such Selling Securityholder, and each of the Underwriters agrees
to purchase from the Company and the Selling Securityholders the respective
aggregate number of shares of Underwritten Stock set forth opposite its name
in Schedule I. The price at which such shares of Underwritten Stock shall be
sold by the Company and the Selling Securityholders and purchased by the
several Underwriters shall be $___ per share. The obligation of each
Underwriter to the Company and each of the Selling Securityholders shall be
to purchase from the Company and the Selling Securityholders that number of
shares of the Underwritten Stock which represents the same proportion of the
total number of shares of the Underwritten Stock to be sold by each of the
Company and the Selling Securityholders pursuant to this Agreement as the
number of shares of the Underwritten Stock set forth opposite the name of
such Underwriter in Schedule I hereto represents of the total number of
shares of the Underwritten Stock to be purchased by all Underwriters pursuant
to this Agreement, as adjusted by you in such manner as you deem advisable to
avoid fractional shares. In making this Agreement, each Underwriter is
contracting severally and not jointly; except as provided in paragraphs (b)
and (c) of this Section 4, 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 9 or 10 hereof) to purchase
and pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company or the Selling Securityholders shall
immediately give notice thereof to you, and the non-defaulting Underwriters
shall have the right within 24 hours after the receipt by you of such notice
to purchase, or procure one or more other Underwriters to purchase, in such
proportions as may be agreed upon between you and such purchasing Underwriter
or Underwriters and upon the terms herein set forth, all or any part of the
shares of the Stock which such defaulting Underwriter or Underwriters agreed
to purchase. If the non-defaulting Underwriters fail so to make such
arrangements with respect to all such shares, 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 and the Selling
Securityholders shall have the right, within 24 hours next succeeding the
24-hour period above referred to, to make arrangements with other
underwriters or purchasers satisfactory to you for purchase of such shares on
the terms herein set forth. In any such case, either you or the Company and
the Selling Securityholders shall have the right to postpone the First
Closing Date determined as provided in Section 6 hereof for not more than
seven business days after the date originally fixed as the First Closing Date
pursuant to said Section 6 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. If neither the non-defaulting Underwriters nor the Company and
the Selling Securityholders shall make arrangements within the 24-hour
periods stated above for the purchase of all the shares of the Stock which
the defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall be terminated without further act or deed and without any
liability on the part of the Company or the Selling Securityholders to any
non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company or the Selling Securityholders.
Nothing in this paragraph (b), and no action taken hereunder, shall relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth,
The Company grants an option to the several Underwriters to purchase,
severally and not jointly, up to 225,000 shares in the aggregate of the
Option Stock from the Company at the same price per share as the Underwriters
shall pay for the Underwritten Stock. Said option may be exercised only to
cover over- allotments in the sale of the Underwritten Stock by the
Underwriters and may be exercised in whole or in part at any
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time (but not more than once) on or before the thirtieth day after the date
of this Agreement upon written or telegraphic notice by you to the Company
setting forth the aggregate number of shares of the Option Stock as to which
the several Underwriters are exercising the option. Delivery of certificates
for the shares of Option Stock, and payment therefor, shall be made as
provided in Section 6 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.
5. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of
the Stock to be purchased by them shall be as set forth in the Prospectus.
The Underwriters may from time to time change the public offering price after
the closing of the initial public offering and increase or decrease the
concessions and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the front
cover page, the final paragraphs on the inside front cover, and under
"Underwriting" in the Registration Statement, any Preliminary Prospectus and
the Prospectus relating to the Stock filed by the Company (insofar as such
information relates to the Underwriters) constitutes the only information
furnished by the Underwriters to the Company for inclusion in the
Registration Statement, any Preliminary Prospectus, and the Prospectus, and
you on behalf of the respective Underwriters represent and warrant to the
Company that the statements made therein are correct.
6. 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 4(c) hereof
shall have been exercised not later than 7:00 A.M., San Francisco time, on
the date two business days preceding the First Closing Date), and payment
therefor, shall be made at the office of Fenwick & West LLP, Two Palo Alto
Square, Palo Alto, California, at 7:00 a.m., San Francisco time, on the
fourth business day after the date of this Agreement, or at such time on such
other day, not later than seven full business days after such fourth business
day, as shall be agreed upon in writing by the Company, the Selling
Securityholders and you. The date and hour of such delivery and payment are
herein called the First Closing Date.
(b) If the option granted by Section 4(c) hereof shall be exercised
after 7:00 a.m., San Francisco time, on the date two business days preceding
the First Closing Date, delivery of certificates for the shares of Option
Stock, and payment therefor, shall be made at the office of Fenwick &West
LLP, Two Palo Alto Square, Palo Alto, California at 7:00 a.m., San Francisco
time, on the third business day after the exercise of such option. The date
and hour of such delivery of such Option Stock and payment therefor are
herein called the Second Closing Date.
(c) Payment for the Stock purchased from the Company shall be made
to the Company or its order, and payment for the Stock purchased from the
Selling Securityholders shall be made to the Custodian, for the account of
the Selling Securityholders, in each case by one or more certified or
official bank check or checks in same day funds or by wire transfer to an
account. Such payment shall be made upon delivery of certificates for the
Stock to you for the respective accounts of the several Underwriters against
receipt therefor signed by you. Certificates for the Stock to be delivered
to you shall be registered in such name or names and shall be in such
denominations as you may request at least one business day before the First
Closing Date, in the case of Underwritten Stock, and at least one business
day prior to the Second Closing Date, in the case of the Option Stock. The
First Closing Date and Second Closing Date are collectively referred to
herein as the "Closing Dates." Such certificates will be made available to
the Underwriters for inspection, checking and packaging at the offices of
Lewco Securities Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the
business day prior to the Closing Dates or, in the case of the Option Stock,
by 3:00 p.m., New York time, on the business day preceding the date of
purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
and the Selling Securityholders for shares to be purchased by any Underwriter
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whose check shall not have been received by you on the First Closing Date or
the Second Closing Date, as the case may be. Any such payment by you shall
not relieve such Underwriter from any of its obligations hereunder.
7. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING
SECURITYHOLDERS. Each of the Company and the Selling Securityholders
respectively covenants and agrees as follows, as applicable:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at
the time of effectiveness of the Registration Statement in reliance on Rule
430A and (ii) not file any amendment to the Registration Statement or
supplement to the Prospectus of which you shall not previously have been
advised and furnished with a copy or to which you shall have reasonably
objected in writing or which is not in compliance with the Securities Act or
the rules and regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the event
of (i) the request by the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, (ii) the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement, (iii) the institution or
notice of intended institution of any action or proceeding for that purpose,
(iv) the receipt by the Company of any notification with respect to the
suspension of the qualification of the Stock for sale in any jurisdiction, or
(v) the receipt by it of notice of the initiation or threatening of any
proceeding for such purpose. The Company will make every reasonable effort
to prevent the issuance of such a stop order and, if such an order shall at
any time be issued, to obtain the withdrawal thereof at the earliest possible
moment.
(c) The Company will (i) on or before the First Closing Date,
deliver to you a signed copy of the Registration Statement as originally
filed and of each amendment thereto filed prior to the time the Registration
Statement becomes effective and, promptly upon the filing thereof, a signed
copy of each post-effective amendment, if any, to the Registration Statement
(together with, in each case, all exhibits thereto unless previously
furnished to you) and will also deliver to you, for distribution to the
Underwriters, a sufficient number of additional conformed copies of each of
the foregoing (but without exhibits) so that one copy of each may be
distributed to each Underwriter, (ii) as promptly as possible deliver to you
and send to the several Underwriters, at such office or offices as you may
designate, as many copies of the Prospectus as you may reasonably request,
and (iii) thereafter from time to time during the period in which a
prospectus is required by law to be delivered by an Underwriter or dealer,
likewise send to the Underwriters as many additional copies of the Prospectus
and as many copies of any supplement to the Prospectus and of any amended
prospectus, filed by the Company with the Commission, as you may reasonably
request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer any event
relating to or affecting the Company, or of which the Company shall be
advised in writing by you, shall occur as a result of which it is necessary,
in the opinion of counsel for the Company or of counsel for the Underwriters,
to supplement or amend the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser of the Stock, the Company will forthwith prepare and
file with the Commission a supplement to the Prospectus or an amended
prospectus so that the Prospectus as so supplemented or amended will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time such Prospectus is delivered to such
purchaser, not misleading. If, after the initial public offering of the
Stock by the Underwriters and during such period, the Underwriters shall
propose to vary the terms of offering thereof by reason of changes in general
market conditions or otherwise, you will advise the Company in writing of the
proposed variation, and, if in the opinion either of counsel for the Company
or of counsel for the Underwriters such proposed variation requires that the
Prospectus be supplemented or amended, the Company will forthwith prepare and
file with the Commission a supplement to the Prospectus or an amended
prospectus setting forth such variation. The Company authorizes the
Underwriters and all dealers to whom any of the Stock may be sold by the
several Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
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(e) Prior to the filing thereof with the Commission, the Company
will submit to you, for your information, a copy of any post-effective
amendment to the Registration Statement and any supplement to the Prospectus
or any amended prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue
sky laws of such jurisdictions as you may designate and, during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, in keeping such qualifications in good standing under said securities
or blue sky laws; PROVIDED, HOWEVER, that the Company shall not be obligated
to file any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. The Company
will, from time to time, prepare and file such statements, reports, and other
documents as are or may be required to continue such qualifications in effect
for so long a period as you may reasonably request for distribution of the
Stock.
(g) During a period of five years commencing with the date hereof,
the Company will furnish to you, and to each Underwriter who may so request
in writing, copies of all periodic and special reports furnished to
stockholders of the Company and of all information, documents and reports
filed with the Commission.
(h) Not later than the 45th day following the end of the fiscal
quarter first occurring after the first anniversary of the Effective Date,
the Company will make generally available to its security holders an earnings
statement in accordance with Section 11(a) of the Securities Act and Rule 158
thereunder.
(i) The Company and, unless otherwise paid by the Company, the
Selling Securityholders jointly and severally agree to pay all costs and
expenses incident to the performance of their obligations under this
Agreement (without obligating the Selling Securityholders with respect to the
obligations of the Company under Section 8), including all costs and expenses
incident to (i) the preparation, printing and filing with the Commission and
the NASD of the Registration Statement, any Preliminary Prospectus and the
Prospectus, (ii) the furnishing to the Underwriters of copies of any
Preliminary Prospectus and of the several documents required by paragraph
(c) of this Section 7 to be so furnished, (iii) the printing of this
Agreement and related documents delivered to the Underwriters, (iv) the
preparation, printing and filing of all supplements and amendments to the
Prospectus referred to in paragraph (d) of this Section 7, (v) the furnishing
to you and the Underwriters of the reports and information referred to in
paragraph (g) of this Section 7 and (vi) the printing and issuance of stock
certificates, including the transfer agent's fees. The Underwriters may deem
the Company to be the primary obligor with respect to all costs, fees and
expenses to be paid by the Company and by the Selling Stockholders. Except
as provided in this Section 7, Section 8 and Section 10(e) hereof, the
Underwriters shall pay all of their own expenses, including the fees and
disbursements of their counsel (excluding those relating to qualification,
registration or exemption under the blue sky laws and the blue sky memoranda
referred to in Section 7(j). The Selling Stockholders will pay (directly or
by reimbursement) all fees and expenses incident to the performance of their
obligations under this Agreement which are not otherwise specifically
provided for herein, including but not limited to (i) any fees and expenses
of counsel for any Selling Stockholders other than Fenwick & West LLP and
Wise & Xxxxxxx LLP and (ii) all expenses and taxes incident to the sale and
delivery of the Stock to be sold by such Selling Stockholders to the
Underwriters hereunder.
(j) The Company and the Selling Securityholders jointly and
severally agree to reimburse you, for the account of the several
Underwriters, for blue sky fees and related disbursements (including counsel
fees and disbursements and cost of printing memoranda for the Underwriters)
paid by or for the account of the Underwriters or their counsel in qualifying
the Stock under state securities or blue sky laws and in the review of the
offering by the NASD.
(k) The provisions of paragraphs (i) and (j) of this Section are
intended to relieve the Underwriters from the payment of the expenses and
costs which the Company and the Selling Securityholders hereby agree to pay
and shall not affect any agreement which the Company and the Selling
Securityholders may make, or may have made, for the sharing of any such
expenses and costs.
(l) The Company hereby agrees that, without the prior written
consent of Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, the Company
will not, for a period of 90 days following the commencement of the public
offering of the Stock by the Underwriters, directly or indirectly, (i) sell,
offer, contract to sell, make any short sale, pledge, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of any
shares of Common Stock or any securities convertible into or exchangeable or
exercisable for or any rights to purchase or acquire Common Stock or (ii)
enter into any swap or other agreement that transfers, in whole or in part,
any of the economic consequences or ownership of Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (i) the Company's issuance of (A) the
Stock to be sold to the Underwriters pursuant to this Agreement, (B) issuance
of Common Stock upon the exercise
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of warrants and stock options that are presently outstanding and described as
such in the Prospectus or which may be issued hereafter under the option
plans described in the Registration Statement and the Prospectus and (C)
grant of options pursuant to the option plans described in the Registration
Statement and the Prospectus, (ii) the Company's issuance of Common Stock
under the employee stock purchase plan described in the Registration
Statement and the Prospectus, and (iii) the Company's issuance of shares of
Common Stock in an acquisition of another corporation or entity provided that
(1) such shares represent less than 20% of the Company's then outstanding
shares of Common Stock and (2) the individuals or entities to whom such
shares are issued agree that such shares may not be resold during the 90 days
following the first date that any of the shares of Common Stock are released
by the Underwriters for sale to the public.
(m) The Company agrees to use its best efforts to cause all
directors and officers of the Company to agree that, without the prior
written consent of Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, such
person or entity will not, for a period of 90 days following the commencement
of the public offering of the Stock by the Underwriters, directly or
indirectly, (i) sell, offer, contract to sell, make any short sale, pledge,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any rights to purchase or acquire Common
Stock or (ii) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences or ownership of Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise.
8. INDEMNIFICATION.
(a) The Company, Xxxx X. Xxxx and Xxxxxxx X. Krepick (each of
Messrs Xxxx and Krepick may be referred to herein as an "Indemnifying
Securityholder" and collectively they may be referred to as the "Indemnifying
Securityholders"), severally and not jointly, agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Securities Act against any losses,
claims, damages, liabilities or expenses, joint or several, to which such
Underwriter or such controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company and a majority in interest of the Indemnifying Securityholders)
insofar as such losses, claims, damages, liabilities or expenses (or actions
in respect thereof as contemplated below) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state in any of them a material fact required
to be stated therein or necessary to make the statements in any of them not
misleading, or arise out of or are based in whole or in part, in the case of
the Company, on any inaccuracy in the representations and warranties of the
Company contained herein or any failure of the Company to perform its
obligations hereunder or under law or, in the case of an Indemnifying
Securityholder, on any inaccuracy in the representations or warranties of
such Indemnifying Securityholder contained herein or any failure of such
Indemnifying Securityholder to perform its obligations hereunder or under
law; and will reimburse each Underwriter and each such controlling person for
any legal and other expenses as such expenses are reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that neither the Company nor
an Indemnifying Securityholder will be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with the information furnished to the Company pursuant
to Section 5(b) hereof; and provided further that, with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
Preliminary Prospectus, the indemnity agreement contained in this subsection
(a) shall not inure to the benefit of any Underwriter from whom the person
asserting any such loss, claim, damage or liability purchased Stock (or to
the benefit of any such person controlling such Underwriter) to the extent
that any such loss, claim, damage, liability or expense of such Underwriter
or controlling person results from the fact that a copy of the Prospectus was
not sent or given to such person at or prior to the written confirmation of
the sale of such Stock to such person as required by the Securities Act, and
if the untrue
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statement or omission concerned has been corrected in the Prospectus, unless
such failure is the result of noncompliance by the Company with Section 7(c)
hereof. Notwithstanding the foregoing, the Indemnifying Securityholders
shall not be required to provide indemnification pursuant to this Section
8(a) unless the Underwriter or controlling person seeking indemnification
shall have first made a written demand for payment to the Company with
respect to any losses, claims, damages, liabilities or expenses for which the
Company and the Indemnifying Securityholders are required to indemnify the
Underwriters pursuant to this Section 8(a) and the Company shall have failed
to make such demanded payment within one hundred twenty (120) days after
receipt thereof. The Company and the Indemnifying Securityholders may agree,
as among themselves and without limiting the rights of the Underwriters under
this Agreement, as to their respective amounts of such liability for which
they each shall be responsible. In addition to its other obligations under
this Section 8(a), the Company and the Indemnifying Securityholders,
severally and not jointly, agree that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged
statement or omission, or any inaccuracy in the representations and
warranties of the Company (in the case of the Company) or an Indemnifying
Securityholder (in the case of such Indemnifying Securityholder) herein or
failure to perform its obligations hereunder, all as described in this
Section 8(a) and subject to the limitations set forth in this Section 8(a),
they will reimburse each Underwriter on a quarterly basis for all reasonable
legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety
and enforceability of the Company's or the Indemnifying Securityholders'
obligation to reimburse each Underwriter for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Company or the Indemnifying Securityholders
as applicable, together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of
the highest credit standing) announced from time to time by Bank of America
NT&SA, San Francisco, California (the "Prime Rate"). Any such interim
reimbursement payments which are not made to an Underwriter within 30 days of
a request for reimbursement, shall bear interest at the Prime Rate from, in
the case of the Company, the date of such request and, in the case of the
Indemnifying Securityholders, one hundred twenty (120) days after the date of
such request. This indemnity agreement will be in addition to any liability
which the Company or the Indemnifying Securityholders may otherwise have.
(b) Each of the Selling Securityholders other than the Indemnifying
Securityholders, severally and not jointly, agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Securities Act against any losses,
claims, damages, liabilities or expenses, joint or several, to which such
Underwriter or such controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Selling Securityholders holding a majority of the Stock being sold by the
Selling Securityholders other than the Indemnifying Securityholders pursuant
to this Agreement), insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of
or are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state in any of
them a material fact required to be stated therein or necessary to make the
statements in any of them not misleading in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto in reliance upon and in conformity with information furnished by such
Selling Securityholder, or (ii) arise out of or are based in whole or in
part, on any inaccuracy in the representations or warranties of such Selling
Securityholder contained herein or any failure of such Selling Securityholder
to perform its obligations hereunder or under law; and will reimburse each
Underwriter and each such controlling person for any legal and other expenses
as such expenses are reasonably incurred by such Underwriter or such
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that, with respect to any untrue statement or
omission or alleged untrue statement or omission made in any Preliminary
Prospectus, the indemnity agreement contained in this subsection (b) shall
not inure to the benefit of any Underwriter from whom the person asserting
any such loss, claim, damage or liability purchased Stock (or to the benefit
of any such person controlling such Underwriter) to the extent that any such
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loss, claim, damage, liability or expense of such Underwriter or controlling
person results from the fact that a copy of the Prospectus was not sent or
given to such person at or prior to the written confirmation of the sale of
such Stock to such person as required by the Securities Act, and if the
untrue statement or omission concerned has been corrected in the Prospectus,
unless such failure is the result of noncompliance by the Company with
Section 7(c) hereof. In addition to its other obligations under this Section
8(b), each Selling Securityholder other than the Indemnifying
Securityholders, severally and not jointly, agrees that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any such statement or omission,
or any alleged statement or omission, or any inaccuracy in the
representations and warranties of any Selling Securityholder (in the case of
such Selling Securityholder) herein or failure to perform its obligations
hereunder, all as described in this Section 8(b) and subject to the
limitations set forth in this Section 8(b), they will reimburse each
Underwriter on a quarterly basis for all reasonable legal or other expenses
incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Selling Securityholder's obligation to reimburse each Underwriter for
such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that
any such interim reimbursement payment is so held to have been improper, each
Underwriter shall promptly return it to the Selling Securityholders, as
applicable, together with interest, compounded daily, determined on the basis
of the Prime Rate. Any such interim reimbursement payments which are not
made to an Underwriter within 30 days of a request for reimbursement, shall
bear interest at the Prime Rate from the date of such request. This
indemnity agreement will be in addition to any liability which the Selling
Securityholders may otherwise have.
(c) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement, the Selling Securityholders and each person, if any,
who controls the Company or any Selling Securityholder within the meaning of
the Securities Act, against any losses, claims, damages, liabilities or
expenses, joint or several, to which the Company, or any such director,
officer, Selling Securityholder or controlling person may become subject,
under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with the information furnished to
the Company pursuant to Section 5(b) hereof; and will reimburse the Company,
or any such director, officer, Selling Securityholder or controlling person
for any legal and other expenses as such expenses are reasonably incurred by
the Company, or any such director, officer, Selling Securityholder or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. In addition to its other obligations under this Section 8(c), each
Underwriter severally agrees that, as an interim measure during the pendency
of 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 this Section 8(c) which relates to information
furnished to the Company pursuant to Section 5(b) hereof, it will reimburse
the Company (and, to the extent applicable, each officer, director, Selling
Securityholder or controlling person) on a quarterly basis for all reasonable
legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety
and enforceability of the Underwriters' obligation to reimburse the Company
(and, to the extent applicable, each officer, director, Selling
Securityholder or controlling person) for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Company (and, to the extent
applicable, each officer, director, Selling Securityholder or controlling
person) shall promptly return it to the Underwriters together with interest,
compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company (and, to the
extent applicable, each officer, director, controlling person or Selling
Securityholder) within
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30 days of a request for reimbursement, shall bear interest at the Prime Rate
from the date of such request. This indemnity agreement will be in addition
to any liability which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying
party under this Section, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party for contribution or otherwise than under the indemnity agreement
contained in this Section or to the extent that it is not prejudiced as a
proximate result of such failure. In case any such action is brought against
any indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be entitled
to participate in, and, to the extent that it may wish, jointly with all
other indemnifying parties similarly notified, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be a conflict between the positions of
the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and
to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel,
approved by the Representatives in the case of paragraph (a) or (b),
representing the indemnified parties who are parties to such action) or (ii)
the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action, in each
of which cases the reasonable fees and expenses of counsel shall be at the
expense of the indemnifying party.
(e) If the indemnification provided for in this Section 8 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Securityholders, on the one
hand, and the Underwriters, on the other hand, 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 the Company and the Selling Securityholders, on the one hand, and the
Underwriters, on the other hand, in connection with the statements or
omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The respective relative
benefits received by the Company and the Selling Securityholders, on the one
hand, and the Underwriters, on the other hand, shall be deemed to be in the
same proportion, in the case of the Company and the Selling Securityholders,
as the total price paid to the Company and to the Selling Securityholders,
respectively, for the Stock sold by them to the Underwriters (net of
underwriting commissions but before deducting expenses), and in the case of
the Underwriters as the underwriting commissions received by them bears to
the total of such amounts paid to the Company and to the Selling
Securityholders and received by the Underwriters as underwriting commissions.
The relative fault of the Company and the Selling Securityholders, on the
one hand, and the Underwriters, on the other hand, 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 or the inaccurate or the alleged inaccurate representation
and/or warranty relates to information supplied by the Company, the Selling
Securityholders or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall
be deemed to include, subject to the limitations set
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forth in subparagraph (d) of this Section 8, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating
or defending any action or claim. The provisions set forth in subparagraph
(d) of this Section 8 with respect to notice of commencement of any action
shall apply if a claim for contribution is to be made under this subparagraph
(e); provided, however, that no additional notice shall be required with
respect to any action for which notice has been given under subparagraph (d)
for purposes of indemnification. The Company, the Selling Securityholders
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined solely by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount of the
total underwriting commissions received by such Underwriter in connection
with the Stock underwritten by it and distributed to the public. No person
guilty of fraudulent misrepresentation (within the meaning of Section 8(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 8 are several in
proportion to their respective underwriting commitments and not joint.
(f) It is agreed that any controversy arising out of the operation
of the interim reimbursement arrangements set forth in Sections 8(a), 8(b)
and 8(c) hereof, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled by
arbitration conducted under the provisions of the Constitution and Rules of
the Board of Governors of the New York Stock Exchange, Inc. or pursuant to
the Code of Arbitration Procedure of the NASD. Any such arbitration must be
commenced by service of a written demand for arbitration or written notice of
intention to arbitrate, therein electing the arbitration tribunal. In the
event that the party demanding arbitration does not make such designation of
an arbitration tribunal in such demand or notice, then the party responding
to said demand or notice is authorized to do so. Such an arbitration would
be limited to the operation of the interim reimbursement provisions contained
in Sections 8(a), 8(b) and 8(c) hereof and would not resolve the ultimate
propriety or enforceability of the obligation to reimburse expenses which is
created by the provisions of such Sections 8(a), 8(b) and 8(c) hereof.
(g) The liability of a Selling Securityholder for a breach of a
representation or warranty set forth in Section 3 hereof or pursuant to the
indemnity, contribution, reimbursement and other provisions of this Section 8
shall be limited to an amount equal to the product obtained by multiplying
the number of shares sold by such Selling Securityholder pursuant to this
Agreement by the price set forth in Section 4(a) above.
9. TERMINATION. This Agreement may be terminated by you at any time
prior to the First Closing Date by giving written notice to the Company and
the Selling Securityholders if after the date of this Agreement trading in
the Common Stock shall have been suspended, or if there shall have occurred
(i) the engagement in hostilities or an escalation of major hostilities by
the United States or the declaration of war or a national emergency by the
United States on or after the date hereof, (ii) any outbreak of hostilities
or other national or international calamity or crisis or change in economic
or political conditions if the effect of such outbreak, calamity, crisis or
change in economic or political conditions in the financial markets of the
United States would, in the Underwriters' reasonable judgment, make the
offering or delivery of the Stock impracticable, (iii) suspension of trading
in securities generally or a material adverse decline in value of securities
generally on the New York Stock Exchange, the American Stock Exchange, or The
Nasdaq Stock Market, or limitations on prices (other than limitations on
hours or numbers of days of trading) for securities on either such exchange
or system, (iv) the enactment, publication, decree or other promulgation of
any federal or state statute, regulation, rule or order of, or commencement
of any proceeding or investigation by, any court, legislative body, agency or
other governmental authority which in the Underwriters' reasonable opinion
materially and adversely affects or will materially or adversely affect the
business or operations of the Company, (v) declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking
of any action by any federal, state or local government or agency in respect
of its monetary or fiscal affairs which in the Underwriters' reasonable
opinion has a material adverse effect on the securities markets in the United
States. If this Agreement shall be terminated pursuant to this Section 9,
there shall be no liability of the Company or the Selling Securityholders to
the Underwriters and no liability of the Underwriters to the Company or the
Selling Securityholders; PROVIDED, HOWEVER, that in the event of any such
termination the Company and the Selling Securityholders agree to indemnify
and hold harmless the Underwriters from all costs or expenses incident to the
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performance of the obligations of the Company and the Selling Securityholders
under this Agreement, including all costs and expenses referred to in
paragraphs (i) and (j) of Section 7 hereof.
10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to
the performance by the Company and by the Selling Securityholders of all
their respective obligations to be performed hereunder at or prior to the
Closing Date or any later date on which Option Stock is to be purchased, as
the case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective; and no
stop order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder
and the validity and form of the certificates representing the Stock, all
corporate proceedings and other legal matters incident to the foregoing, and
the form of the Registration Statement and of the Prospectus (except as to
the financial statements contained therein), shall have been approved at or
prior to the First Closing Date by Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.,
counsel for the Underwriters.
(c) There shall have been furnished to you, as Representatives of
the Underwriters, on each Closing Date, in form and substance reasonably
satisfactory to you, except as otherwise expressly provided below:
(i) An opinion of Wise & Xxxxxxx LLP, counsel for the
Company, addressed to the Underwriters and dated the First Closing Date, or
the Second Closing Date, as the case may be, to the effect that:
(1) 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 its jurisdiction of incorporation, is duly
qualified to do business as a foreign corporation and is in good
standing in all other jurisdictions where the ownership or leasing of
properties or the conduct of its business requires such qualification,
except for jurisdictions in which the failure to so qualify would not
have a material adverse effect on the Company and its subsidiaries, and
has full corporate power and authority to own its properties and conduct
its business as described in the Registration Statement;
(2) The authorized, issued and outstanding capital
stock of the Company is as set forth under the caption "Capitalization"
in the Prospectus; all necessary and proper corporate proceedings have
been taken in order to authorize validly such authorized Common Stock;
all outstanding shares of Common Stock (including the Underwritten Stock
and any Option Stock) have been duly and validly issued, are fully paid
and nonassessable, were issued in compliance with federal and state
securities laws, to such counsel's knowledge were not issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase any securities and conform in all material
respects to the description thereof contained in the Prospectus; without
limiting the foregoing, to such counsel's knowledge there are no
preemptive or other rights to subscribe for or purchase any of the Stock
to be sold by the Company hereunder;
(3) All of the issued and outstanding shares of the
Company's subsidiaries have been duly and validly authorized and issued,
are fully paid and nonassessable and are owned beneficially by the
Company free and clear of all liens, encumbrances, equities, claims,
security interests, voting trusts or other defects of title whatsoever;
(4) The certificates evidencing the Stock to be
delivered hereunder are in due and proper form under Delaware law, and
when duly countersigned by the Company's transfer agent and registrar,
and delivered to you or upon your order against payment of the agreed
consideration therefor in accordance with the provisions of this
Agreement, the Stock represented thereby will be duly authorized and
validly issued, fully paid and nonassessable, will not have been issued
in violation of or subject to any preemptive rights or other rights
known to such counsel to subscribe for or purchase securities and will
conform in all respects to the description thereof contained in the
Prospectus;
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(5) Except as disclosed in or specifically
contemplated by the Prospectus, to such counsel's knowledge, there are
no outstanding options, warrants or other rights calling for the
issuance of, and no commitments, plans or arrangements to issue, any
shares of capital stock of the Company or any security convertible into
or exchangeable for capital stock of the Company;
(6) The documents incorporated by reference in the
Registration Statement and the Prospectus (except for the financial
statements included therein and the financial data derived therefrom, as
to which such counsel need express no opinion) when they became
effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder.
(7) The execution and performance of this Agreement
and the consummation of the transactions herein contemplated will not
conflict with, result in the breach of, or constitute, either by itself
or upon notice or the passage of time or both, a default under, any
agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries or any of its or their property may be bound or
affected which is material to the Company and its subsidiaries, or
violate any of the provisions of the certificate of incorporation or
bylaws, or other organizational documents, of the Company or any of its
subsidiaries or, so far as is known to such counsel, violate any
statute, judgment, decree, order, rule or regulation of any court or
governmental body having jurisdiction over the Company or any of its
subsidiaries or any of its or their property;
(8) Neither the Company nor any subsidiary is in
violation of its certificate of incorporation or bylaws, or other
organizational documents, or to such counsel's knowledge, in breach of
or default with respect to any provision of any agreement, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other
instrument known to such counsel to which the Company or any such
subsidiary is a party or by which it or any of its properties may be
bound or affected, except where such default would not materially
adversely affect the Company and its subsidiaries;
(9) To such counsel's knowledge, no holders of
securities of the Company have rights which have not been waived or
satisfied to the registration of shares of Common Stock or other
securities, because of the filing of the Registration Statement by the
Company or the offering contemplated hereby;
(10) The information set forth in the Prospectus
under the captions "Risk Factors - Effect of Anti-Takeover Provisions,"
"Risk Factors - Shares Eligible for Future Sale," "Capitalization,"
"Business - Intellectual Property Rights" and "Principal and Selling
Securityholders," insofar as such information relates to issuances of
securities of the Company or purports to summarize provisions of any
contract, plan or law, fairly describes such issuances or provisions.
In rendering such opinion, such counsel may rely as to matters of local
law or the laws of a state other than California or the corporate law of the
State of Delaware, on opinions of local counsel, and as to matters of fact,
on certificates of officers of the Company and of governmental officials,
without verification except as specified, in which case their opinion is to
state that they are so doing and that the Underwriters and their counsel are
justified in relying on such opinions or certificates. Such counsel shall
also include a statement to the effect that nothing has come to such
counsel's attention that would lead such counsel to believe that either at
the effective date of the Registration Statement or at the applicable Closing
Date the Registration Statement or the Prospectus, or any such amendment or
supplement, 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 not misleading.
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(ii) An opinion of Fenwick & West LLP, special counsel to the
Company and the Selling Securityholders (other than Selling Securityholder
Pacific Media), addressed to the Underwriters and dated the First Closing
Date, or the Second Closing Date, as the case may be, to the effect that:
(1) The Company is eligible to use a registration
statement on Form S-3 for the registration of the Stock; the
Registration Statement has become effective under the Securities Act,
and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated by the Commission; any
required filing of the Prospectus and any supplement thereto pursuant to
Rule 424(b) of the Rules and Regulations has been made in the manner and
within the time period required by such Rule 424(b);
(2) The Registration Statement, the Prospectus and
each amendment or supplement thereto (except for the documents
incorporated by reference therein the financial statements included
therein and the financial data derived 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;
(3) To such counsel's knowledge, there are no
franchises, leases, contracts, agreements or documents of a character
required to be disclosed in the Registration Statement or Prospectus or
to be filed as exhibits to the Registration Statement which are not
disclosed or filed, as required;
(4) To such counsel's knowledge, there are no legal
or governmental actions, suits or proceedings pending or threatened
against the Company which are required to be described in the Prospectus
which are not described as required;
(5) The Company has full right, power and authority
to enter into this Agreement and to sell and deliver the Stock to be
sold by it to the several Underwriters; this Agreement has been duly and
validly authorized by all necessary corporate action by the Company, has
been duly and validly executed and delivered by and on behalf of the
Company, and is a valid and binding agreement of the Company in
accordance with its terms, except as enforceability may be limited by
general equitable principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and
except as to those provisions relating to indemnity or contribution for
liabilities arising under the Securities Act as to which no opinion need
be expressed; and no approval, authorization, order, consent,
registration, filing, qualification, license or permit of or with any
court, regulatory, administrative or other governmental body is required
for the execution and delivery of this Agreement by the Company or the
performance by the Company of its obligations pursuant to this
Agreement, except such as have been obtained and are in full force and
effect under the Securities Act and such as may be required under
applicable Blue Sky laws in connection with the purchase and
distribution of the Stock by the Underwriters and the clearance of such
offering with the NASD;
(6) To such counsel's knowledge, (a) this Agreement
and the Securityholders Agreements have been duly authorized, executed
and delivered by or on behalf of each of the Selling Securityholders
(other than Pacific Media) and (b) the Agent has been duly and validly
authorized to act as the custodian of the Stock to be sold by each such
Selling Securityholder; and (c) the performance by the Selling
Securityholders (other than Pacific Media) of their respective
obligations pursuant to this Agreement and the Securityholders
Agreements will not result in a breach of, or constitute a default
under, any material indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease, franchise, license or
other agreement or instrument known to such counsel to which any of the
Selling Securityholders (other than Pacific Media) is a party or by
which any of the Selling Securityholders (other than Pacific Media) or
any of their properties may be bound, or violate any statute, judgment,
decree, order, rule or regulation known to such counsel of any court or
governmental body having jurisdiction over any of the Selling
Securityholders (other than Pacific Media) or any of their properties if
such breach or violation would adversely affect a Selling
Securityholder's ability to perform such Selling Securityholder's
obligations pursuant to this Agreement or the Securityholders
Agreements; and to such counsel's knowledge, no
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approval, authorization, order or consent of any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreements or the Securityholders
Agreement or the consummation by the Selling Securityholders (other than
Pacific Media) of the transactions contemplated by this Agreement,
except such as have been obtained and are in full force and effect under
the Securities Act and such as may be required under applicable Blue Sky
laws in connection with the purchase and distribution of the Stock by
the Underwriters and the clearance of such offering with the NASD;
(7) To such counsel's knowledge, the Selling
Securityholders (other than Pacific Media) have full right, power and
authority to enter into this Agreement and the Securityholders
Agreements and to sell, transfer and deliver the Stock to be sold on
such Closing Date by such Selling Securityholders hereunder and upon
delivery of and payment for the Stock to be sold by the Selling
Securityholders (other than Pacific Media) as provided in this Agreement
and upon registration of such Stock in the names of the Underwriters (or
their nominees) in the stock records of the Company, the Underwriters
will be the owners of such Stock, free and clear of any adverse claim,
provided that the Underwriters are purchasing such Stock in good faith
and without notice of any adverse claim; and
(8) To such counsel's knowledge, this Agreement and
the Securityholders Agreements are valid and binding agreements of each
of the Selling Securityholders (other than Pacific Media) in accordance
with their terms except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and except with
respect to those provisions relating to indemnities or contributions for
liabilities under the Securities Act, as to which no opinion need be
expressed.
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States, of the State of California or
the corporate laws of the State of Delaware upon opinions of local or foreign
counsel satisfactory in form and scope to counsel for the Underwriters.
Copies of any opinions so relied upon shall be delivered to the
Representatives and to counsel for the Underwriters and the foregoing opinion
shall also state that counsel knows of no reason the Underwriters are not
entitled to rely upon the opinions of such local counsel. Counsel may base
the opinions set forth in paragraphs (6)-(8) above solely upon the
representations and warranties contained in this Agreement, or
Securityholders Agreements executed by each Selling Securityholder, provided
that such counsel confirms that it has no reason to believe that such
representations or warranties are materially inaccurate.
In addition to the matters set forth above, counsel rendering the
foregoing opinion shall also include a statement to the effect that, although
it has not independently verified the accuracy or completeness of the
statements in the Registration Statement and the Prospectus, nothing has come
to the attention of such counsel that causes it to believe that the
Registration Statement (except as to the financial statements and the
financial data derived therefrom, as to which such counsel need not express
any opinion or belief) at the Effective Date contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that
the Prospectus (except as to the financial statements and the financial data
derived therefrom, as to which such counsel need not express any opinion or
belief) at the Effective Date contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus (except as to the financial statements and the financial data
derived therefrom, as to which such counsel need not express any opinion or
belief) as of its date or at the First Closing Date or Second Closing Date,
as the case may be, contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make
the statement therein, in the light of the circumstances under which they
were made, not misleading. With respect to such statement, counsel may state
that its belief is based upon the procedures set forth therein, but is
without independent check or verification.
(iii) An opinion of Xxxxxx Xxxxxxxxx, Esq., counsel to Pacific
Media, addressed to the Underwriters and dated the First Closing Date to the
effect that:
(1) To such counsel's knowledge, (a) this Agreement
and the Securityholders Agreement have been duly authorized, executed
and delivered by or on behalf of Pacific Media and (b) the Agent has
been duly and validly authorized to act as the custodian of the Stock to
be sold by Pacific Media;
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and the performance by Pacific Media of its obligations pursuant to this
Agreement and the Securityholders Agreement will not result in a breach
of, or constitute a default under, any material indenture, mortgage,
deed of trust, trust (constructive or other), loan agreement, lease,
franchise, license or other agreement or instrument known to such
counsel to which Pacific Media is a party or by which Pacific Media or
any of its properties may be bound, or violate any statute, judgment,
decree, order, rule or regulation known to such counsel of any court or
governmental body having jurisdiction over Pacific Media or any of its
properties if such breach or violation would adversely affect a Pacific
Media's ability to perform such Pacific Media's obligations pursuant to
this Agreement or the Securityholders Agreement; and to such counsel's
knowledge, no approval, authorization, order or consent of any court,
regulatory body, administrative agency or other governmental body is
required for the execution and delivery of this Agreement or the
Securityholders Agreement or the consummation by the Pacific Media of
the transactions contemplated by this Agreement, except such as have
been obtained and are in full force and effect under the Securities Act
and such as may be required under the rules of the NASD and applicable
Blue Sky laws;
(2) To such counsel's knowledge, Pacific Media has
full right, power and authority to enter into this Agreement and the
Securityholders Agreement and to sell, transfer and deliver the Common
Shares to be sold on such Closing Date by Pacific Media hereunder and
upon delivery of and payment for the Stock to be sold by Pacific Media
as provided in this Agreement and upon registration of such Stock in the
names of the Underwriters (or their nominees) in the stock records of
the Company, the Underwriters will be the owners of such Stock, free and
clear of any adverse claim, provided that the Underwriters are
purchasing such Stock in good faith and without notice of any adverse
claim; and
(3) To such counsel's knowledge, this Agreement and
the Securityholders Agreement are valid and binding agreements of
Pacific Media in accordance with their terms except as enforceability
may be limited by general equitable principles, bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally and except with respect to those provisions relating to
indemnities or contributions for liabilities under the Securities Act,
as to which no opinion need be expressed.
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States, of the State of California or the
corporate laws of the State of Delaware upon opinions of local or foreign
counsel satisfactory in form and scope to counsel for the Underwriters. Copies
of any opinions so relied upon shall be delivered to the Representatives and to
counsel for the Underwriters and the foregoing opinion shall also state that
counsel knows of no reason the Underwriters are not entitled to rely upon the
opinions of such local counsel.
(iv) An opinion of Skjerven, Morrill, XxxXxxxxxx, Xxxxxxxx &
Xxxxx, for the Company's intellectual property counsel, addressed to the
Underwriters and dated the First Closing Date or the Second Closing Date, as
the case may be, to the effect that:
(1) To such counsel's knowledge, the Company owns
all patents, trademarks, trademark registrations, service marks, service
xxxx registrations, trade names, maskworks, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as
being owned by it or necessary for the conduct of its business, and such
counsel is not aware of any claim to the contrary or any challenge by
any other person to the ownership rights of the Company with respect to
the foregoing;
(2) No fact has come to such counsel's attention
that would lead such counsel to believe that the patents presently
issued and held by the Company are not valid and enforceable.
(3) Such counsel is not aware of any material fact
with respect to the patent applications of the Company presently on file
that (a) would preclude the issuance of patents with respect to such
applications or (b) would lead such counsel to believe that such patents
when issued would not be valid and enforceable.
(4) Such counsel is not aware of any legal actions,
claims or proceedings pending or threatened against the Company alleging
that the Company has infringed or currently is infringing or
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otherwise violating any patents rights, trademarks, service marks, trade
name rights, maskworks, copyrights, licenses, inventions, trade secrets
and similar rights owned by any other person or entity and no fact has
come to such counsel's attention that any of the Company's present or
proposed products or processes described in the Prospectus have
infringed or currently infringe any patents, trademarks, trademark
registrations, service marks, service xxxx registrations, trade names,
maskworks, copyrights, licenses, inventions, trade secrets and rights
owned by any other person or entity.
(5) Such counsel has reviewed the descriptions of
patents and patent applications under the captions "Risk Factors--
Dependence on Proprietary Technology" and "Business--Intellectual
Property Rights" in the Registration Statement and Prospectus, and, to
the extent they constitute matters of law or legal conclusions, these
descriptions are true and correct in all material respects and fairly
present the patent situation of the Company; and
(6) Nothing has come to such counsel's attention
that causes such counsel to believe that, as of the date the
Registration Statement became effective and as of the date of such
opinion, the statements set forth under the captions "Risk Factors--
Dependence on Proprietary Technology" and "Business--Intellectual
Property Rights" in the Registration Statement and Prospectus contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(v) Such opinion or opinions of Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C., counsel for the Underwriters dated the First Closing Date or the
Second Closing Date, as the case may be, with respect to the incorporation of
the Company, the sufficiency of all corporate proceedings and other legal
matters relating to this Agreement, the validity of the Stock, the
Registration Statement and the Prospectus and other related matters as you
may reasonably require, and the Company and the Selling Securityholders shall
have furnished to such counsel such documents and shall have provided to them
such papers and records as they may reasonably request for the purpose of
enabling them to pass upon such matters. In connection with such opinions,
such counsel may rely on representations or certificates of officers of the
Company and governmental officials.
(vi) A certificate of the Company executed by the Chairman of
the Board or President and the chief financial or accounting officer of the
Company, dated the First Closing Date or the Second Closing Date, as the case
may be, to the effect that:
(1) The representations and warranties of the
Company set forth in Section 2 of this Agreement are true and correct as
of the date of this Agreement and as of the First Closing Date or the
Second Closing Date, as the case may be, and the Company has complied
with all the agreements and satisfied all the conditions on its part to
be performed or satisfied on or prior to each such Closing Date;
(2) To their knowledge (a) the Commission has not
issued any order preventing or suspending the use of the Prospectus or
any Preliminary Prospectus filed as a part of the Registration Statement
or any amendment thereto; (b) no stop order suspending the effectiveness
of the Registration Statement has been issued; and (c) no proceedings
for that purpose have been instituted or are pending or contemplated
under the Securities Act;
(3) Each of the respective signers of the
certificate has carefully examined the Registration Statement and the
Prospectus; in his opinion and to the best of his knowledge, neither the
Registration Statement nor the Prospectus nor any amendment or
supplement thereto includes any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(4) Since the initial date on which the Registration
Statement was filed, no agreement, written or oral, transaction or event
has occurred which is required to be set forth in an amendment to the
Registration Statement or in a supplement to or amendment of any
prospectus which has not been disclosed in such a supplement or
amendment;
-22-
(5) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
and except as disclosed in or contemplated by the Prospectus, (a) there
has not been any material adverse change or a development involving a
material adverse change in the condition (financial or otherwise),
business, properties, results of operations or management of the Company
and its subsidiaries, taken as a whole, (b) no legal or governmental
action, suit or proceeding is pending or threatened against the Company
or any of its subsidiaries which is material to the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, or which may adversely affect the
transactions contemplated by this Agreement, (c) neither the Company nor
any of its subsidiaries has entered into any verbal or written agreement
or other transaction which is not in the ordinary course of business or
which could result in a material reduction in the future net income of
the Company and its subsidiaries, taken as a whole, or incurred any
material liability or obligation, direct, contingent or indirect, made
any change in its capital stock, made any material change in its
short-term debt or funded debt or repurchased or otherwise acquired any
of the Company's capital stock, and (d) the Company has not declared or
paid any dividend, or made any other distribution, upon its outstanding
capital stock payable to Securityholders of record on a date prior to
the First Closing Date or Second Closing Date; and
(6) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus
and except as disclosed in or contemplated by the Prospectus, the
Company and its subsidiaries have not sustained a material loss or
damage by strike, fire, flood, windstorm, accident or other calamity
(whether or not insured).
(vii) On the First Closing Date or the Second Closing Date, as
the case may be, a certificate, dated such Closing Date and addressed to you,
signed by or on behalf of each of the Selling Securityholders to the effect
that the representations and warranties of such Selling Securityholder in
Section 3 of this Agreement are true and correct, as if made at and as of the
First Closing Date or the Second Closing Date, as the case may be, and that
such Selling Securityholder has complied with all the agreements and
satisfied all the conditions on his part to be performed or satisfied prior
to the First Closing Date or the Second Closing Date, as the case may be.
(viii) You shall have received from KPMG Peat Marwick LLP, a
letter or letters, addressed to the Underwriters and dated the First Closing
Date and the Second Closing Date confirming that they are independent public
accountants with respect to the Company within the meaning of the Securities
Act and the applicable published rules and regulations thereunder and based
upon the procedures described in their letter delivered to you concurrently
with the execution of this Agreement (herein called the Original Letter), but
carried out to a date not more than three business days prior to the First
Closing Date or Second Closing Date (i) confirming, to the extent true, that
the statements and conclusions set forth in the Original Letter are accurate
as of the First Closing Date or Second Closing Date, as the case may be, and
(ii) setting forth any revisions and additions to the statements and
conclusions set forth in the Original Letter which are necessary to reflect
any changes in the facts described in the Original Letter since the date of
the Original Letter or to reflect the availability of more recent financial
statements, data or information. The letters shall not disclose any change,
or any development involving a prospective change, in or affecting the
business or properties of the Company or any of its subsidiaries which, in
your sole judgment, makes it impractical or inadvisable to proceed with the
public offering of the Stock or the purchase of the Option Stock as
contemplated by the Prospectus.
(ix) On or prior to the First Closing Date, you shall have
received from all directors, officers, and Selling Securityholders
agreements, in form reasonably satisfactory to Xxxxxxxxx & Xxxxx LLC, stating
that, without the prior written consent of Xxxxxxxxx & Xxxxx LLC on behalf of
the Underwriters, such person or entity will not, for a period of 90 days
following the commencement of the public offering of the Stock by the
Underwriters, directly or indirectly, (i) sell, offer, contract to sell, make
any short sale, pledge, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any shares of Common Stock or any securities
convertible into or exchangeable or exercisable for or any rights to purchase
or acquire Common Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part,
-23-
any of the economic consequences or ownership of Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
(x) 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 7 hereof.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably
satisfactory to you and to Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel for
the Underwriters. The Company shall furnish you with such manually signed or
conformed copies of such opinions, certificates, letters and documents as you
reasonably request. Any certificate signed by any officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the Underwriters
as to the statements made therein.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true
and correct 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 change
or any development involving a prospective material adverse change in or
affecting the business, properties, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business, and, since
such dates, except in the ordinary course of business, neither the Company
nor any of its subsidiaries has entered into any material transaction not
referred to in the Registration Statement in the form in which it originally
became effective and the Prospectus contained therein, (iv) neither the
Company nor any of its subsidiaries has any material contingent obligations
which are not disclosed in the Registration Statement and the Prospectus, (v)
there are not any pending or known threatened legal proceedings to which the
Company or any of its subsidiaries is a party or of which property of the
Company or any of its subsidiaries is the subject which are material and
which are not disclosed in the Registration Statement and the Prospectus,
(vi) there are not any franchises, contracts, leases or other documents which
are required to be filed as exhibits to the Registration Statement which have
not been filed as required, (vii) the representations and warranties of the
Company herein are true and correct in all material respects as of the First
Closing Date or the Second 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.
(e) In case any of the conditions specified in this Section 10 shall
not be fulfilled, this Agreement may be terminated by you by giving notice to
the Company and to the Selling Securityholders. Any such termination shall
be without liability of the Company or the Selling Securityholders to the
Underwriters and without liability of the Underwriters to the Company or the
Selling Securityholders; PROVIDED, HOWEVER, that (i) in the event of such
termination, the Company and the Selling Securityholders agree to indemnify
and hold harmless the Underwriters from all costs or expenses incident to the
performance of the obligations of the Company and the Selling Securityholders
under this Agreement, including all costs and expenses referred to in
paragraphs (i) and (j) of Section 7 hereof, and (ii) if this Agreement is
terminated by you because of any refusal, inability or failure on the part of
the Company or the Selling Securityholders to perform any agreement herein,
to fulfill any of the conditions herein, or to comply with any provision
hereof other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the
transactions contemplated hereby.
-24-
11. CONDITIONS OF THE OBLIGATION OF THE COMPANY AND THE SELLING
SECURITYHOLDERS. The obligation of the Company and the Selling
Securityholders to deliver the Stock shall be subject to the conditions that
(a) the Registration Statement shall have become effective and (b) no stop
order suspending the effectiveness thereof shall be in effect and no
proceedings therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 11 shall not
be fulfilled, this Agreement may be terminated by the Company and the Selling
Securityholders by giving notice to you. Any such termination shall be
without liability of the Company and the Selling Securityholders to the
Underwriters and without liability of the Underwriters to the Company or the
Selling Securityholders; PROVIDED, HOWEVER, that in the event of any such
termination the Company and the Selling Securityholders jointly and severally
agree to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company and
the Selling Securityholders under this Agreement, including all costs and
expenses referred to in paragraphs (i) and (j) of Section 7 hereof.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company, the Selling Securityholders and the
several Underwriters and, with respect to the provisions of Section 8 hereof,
the several parties (in addition to the Company, the Selling Securityholders
and the several Underwriters) indemnified under the provisions of said
Section 8, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give
to any other person, firm or corporation any legal or equitable remedy or
claim under or in respect of this Agreement or any provision herein
contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Stock from any of the
several Underwriters.
13. NOTICES. Except as otherwise provided herein, all
communications hereunder shall be in writing or by telegraph and, if to the
Underwriters, shall be mailed, telegraphed or delivered to Xxxxxxxxx & Xxxxx
LLC, Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xx.
Xxxxxxx X. Xxxxxxxx, with a copy to Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.,
at 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000-0000, Attention: Xxxxxxx X.
Xxxxx, Esq.; and if to the Company, shall be mailed, telegraphed or delivered
to it at its office, 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xx. Xxxxxx X. Xxxxxx; and if to the Selling Securityholders,
shall be mailed, telegraphed or delivered to the Selling Securityholders in
care of (i) the Company at 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xx. Xxxxxx X. Xxxxxx with a copy to Xxxxx X. Xxxxxx III, Xxxxxxx &
West LLP and (ii) Pacific Media Development, Inc., x/x Xxxxxx Xxxxxxx xx
Xxxxx, Xxxxxxx, 00, 3-chome, Xxxxxx-xxx, Xxxxxxxx-xx Xxxxxxxx 000, Xxxxx,
with a copy to Xxxxxx X. Xxxxxxxxx XX, Esq., 000 Xxxxxx Xxxxxx, Xxxxx 000,
Xxxx Xxxx, Xxxxxxxxxx 00000. All notices given by telegraph shall be
promptly confirmed by letter.
14. MISCELLANEOUS. The reimbursement and indemnification agreements
contained in this Agreement and the representations, warranties and covenants
in this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of
any Underwriter or controlling person thereof, or by or on behalf of the
Company or the Selling Securityholders or their respective directors or
officers, and (c) delivery and payment for the Stock under this Agreement;
PROVIDED, HOWEVER, that if this Agreement is terminated prior to the First
Closing Date, the provisions of paragraphs (l) and (m) of Section 7 hereof
shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
Please sign and return to the Company and to the Selling Securityholders
in care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement among the Company, the Selling
Securityholders and the several Underwriters in accordance with its terms.
Very truly yours,
MACROVISION CORPORATION
-25-
By:
---------------------------------------
Xxxx X. Xxxx, Chairman of the Board of
Directors and Chief Executive Officer
SELLING SECURITYHOLDERS:
By:
---------------------------------------
Xxxx X. Xxxx (Attorney-in-Fact)
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXX & COMPANY
By Xxxxxxxxx & Xxxxx LLC
By:
---------------------------------------
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto
-26-
SCHEDULE I
UNDERWRITERS
NUMBER OF
SHARES
TO BE
UNDERWRITERS PURCHASED
------------ ---------
Xxxxxxxxx & Xxxxx LLC............................................
NationsBanc Xxxxxxxxxx Securities LLC............................
Xxxxx & Company..................................................
Total.......................................................
- ---------
---------
SCHEDULE II
SELLING SECURITYHOLDERS
NUMBER OF
NAME [AND ADDRESS] SHARES
OF SELLING SECURITYHOLDERS TO BE SOLD
-------------------------- ----------
Total.......................................................
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