Exhibit 1.1
SERENA SOFTWARE, INC.
6,000,000 SHARES1
COMMON STOCK
UNDERWRITING AGREEMENT
___________, 0000
XXXXXXXXX & XXXXX LLC
XX Xxxxx Securities Corporation
SoundView TECHNOLOGY Group, Inc.
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Serena Software, Inc., a Delaware corporation (herein called the
Company), proposes to issue and sell 4,000,000 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 2,000,000
shares of Common Stock of the Company (said 6,000,000 shares of Common Stock
being herein called the Underwritten Stock). The Company proposes to grant to
the Underwriters (as hereinafter defined) an option to purchase up to 900,000
additional shares of Common Stock (herein called the Option Stock and with the
Underwritten Stock herein collectively called the Stock). The Common Stock is
more fully described in the Registration Statement and the Prospectus
hereinafter mentioned.
The Company and the Selling Securityholders severally hereby confirm
the agreements made with respect to the purchase of the Stock by the several
underwriters, for whom you are acting, named in Schedule I hereto (herein
collectively called the Underwriters, which term shall also include any
underwriter purchasing Stock pursuant to Section 3(b) hereof). You represent and
warrant that you have been authorized by each of the other Underwriters to enter
into this Agreement on its behalf and to act for it in the manner herein
provided.
1. REGISTRATION STATEMENT. The Company has filed with the Securities
and Exchange Commission (herein called the Commission) a registration statement
on Form S-1 (No. 333-67761), including the related preliminary prospectus, for
the registration under the Securities Act of 1933, as amended (herein called the
Securities Act) of the Stock. Copies of such registration statement and of each
amendment thereto, if any, including the related preliminary prospectus (meeting
the requirements of Rule 430A of the rules and regulations of the Commission)
heretofore filed by the Company with the Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean
such registration statement, including all exhibits and financial statements,
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, in the form in which it became effective, and
any registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a Rule
462(b) registration statement), and, in the event of any amendment thereto after
the effective date of such registration statement (herein called the Effective
Date), shall also mean (from and after the effectiveness of such amendment) such
registration statement as so amended (including any Rule 462(b) registration
statement). The term Prospectus as used in this Agreement shall mean the
prospectus relating to the Stock first filed with the Commission pursuant to
Rule 424(b) and Rule 430A (or if no such filing is required, as included in the
Registration Statement)
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1 Plus an option to purchase from the Company up to 900,000 additional
shares to cover overallotments.
and, in the event of any supplement or amendment to such prospectus after the
Effective Date, shall also mean (from and after the filing with the Commission
of such supplement or the effectiveness of such amendment) such prospectus as so
supplemented or amended. The term Preliminary Prospectus as used in this
Agreement shall mean each preliminary prospectus included in such registration
statement prior to the time it becomes effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SECURITYHOLDERS.
(a) The Company hereby represents and warrants as follows:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has full corporate power and authority to own or lease its
properties and conduct its business as described in the Registration Statement
and the Prospectus and as being conducted, and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which the character of
the property owned or leased or the nature of the business transacted by it
makes qualification necessary (except where the failure to be so qualified would
not have a material adverse effect on the business, properties, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole).
(ii) Except as disclosed in the Prospectus, the Company owns
all of the shares of capital stock of each subsidiary of the Company and each of
the Company's subsidiaries has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own or lease its
properties and conduct its business as described in the Registration Statement
and the Prospectus and as being conducted, and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which the character of
the property owned or leased or the nature of the business transacted by it
makes qualification necessary (except where the failure to be so qualified would
not have a material adverse effect on the business, properties, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole). All of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable, and are owned directly by the Company, fee and clear of all
liens, encumbrances, equities or claims.
(iii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been any
materially adverse change in the business, properties, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
other than as set forth in the Registration Statement and the Prospectus, and
since such dates, except in the ordinary course of business, neither the Company
nor any of its subsidiaries (i) has entered into any material transaction or
incurred any material liability or obligation, direct or contingent, not
referred to in the Registration Statement and the Prospectus; (ii) has purchased
any of its outstanding capital stock, or declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock (except for
repurchases of unvested Common Stock in connection with the termination of
employees or consultants pursuant to customary forms of restricted stock
purchase agreements); or (iii) has had any material change in the capital stock,
short-term debt or long-term debt of the Company and its consolidated
subsidiaries, taken as a whole, except for the grant of stock options under the
Company's equity incentive plans as described in the Prospectus and the issuance
of shares of Common Stock upon exercise of such options, and otherwise in each
case as described or specifically contemplated in the Registration Statement and
the Prospectus.
(iv) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus relating to the proposed
offering of the Stock nor instituted or, to the knowledge of the Company,
threatened instituting proceedings for that purpose. The Registration Statement
and the Prospectus comply, and on the Closing Date (as hereinafter defined) and
any later date on which Option Stock is to be purchased, the Prospectus will
comply, in all material respects, with the provisions of the Securities Act and
the rules and regulations of the Commission thereunder; on the Effective Date,
the Registration Statement did not
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contain any untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date the Prospectus did
not and, on the Closing Date and any later date on which Option Stock is to be
purchased, will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that none of the representations and warranties in this
subparagraph (iv) shall apply to statements in, or omissions from, the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information herein or otherwise furnished in writing to the Company by or
on behalf of the Underwriters for use in the Registration Statement or the
Prospectus.
(v) The Common Stock (including the Stock to be sold by the
Selling Securityholders) outstanding prior to the issuance of the Common Stock
to be sold by the Company has been duly authorized and is validly issued, fully
paid and non-assessable. Except as set forth in the Prospectus and other than
options to purchase shares of the Company's Common Stock granted to employees
pursuant to the Company's 1997 Stock Option and Incentive Plan (herein referred
to as the 1997 Plan) as described in the Prospectus, neither the Company nor any
of its subsidiaries 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. All outstanding shares of capital stock and options and other
rights to acquire capital stock have been issued in compliance with the
registration and qualification provisions of all applicable securities laws (or
applicable exemptions thereof) other than federal or state antifraud laws and
were not issued in violation of any preemptive rights, rights of first refusal
and other similar rights. The Stock to be sold by the Company has been duly
authorized, and when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar rights.
No further corporate action on the part of the stockholders or the Board of
Directors of the Company will be required for the transfer and sale of the Stock
to be sold by the Selling Securityholders or the issuance and sale of the Stock
to be sold by the Company as contemplated herein.
(vi) The authorized capital stock of the Company conforms as
to legal matters in all material respects to the description thereof contained
in the Prospectus. The form of certificates for the Stock conforms in all
material respects to the corporate law of the jurisdiction of the Company's
incorporation.
(vii) Prior to the Closing Date, the Stock to be sold by the
Selling Securityholders, and the Stock to be issued and sold by the Company,
will be authorized for listing by the Nasdaq National Market upon official
notice of issuance.
(viii) The consolidated financial statements of the Company,
together with related notes and schedules as set forth in the Registration
Statement ("Company Financial Statements"), present fairly the financial
position and the results of operations of the Company and its subsidiaries,
taken as a whole, at the indicated dates and for the indicated periods. The
consolidated financial statements of Optima Software, Inc., a wholly owned
subsidiary of the Company ("Optima"), together with related notes and schedules
as set forth in the Registration Statement ("Optima Financial Statements"),
present fairly the financial position and the results of operations of Optima
and its subsidiaries, taken as a whole, at the indicated dates and for the
indicated periods. The pro forma condensed combined consolidated financial
statements of the Company, together with related notes and schedules as set
forth in the Registration Statement ("Pro Forma Financial Statements," which
together with the Company Financial Statements and the Optima Financial
Statements, are herein collectively called the "Financial Statements"), present
fairly the financial position and the results of operations of the Company and
its subsidiaries, taken as a whole, at the indicated dates and for the indicated
periods. The Financial Statements, schedules and related notes have been
prepared in accordance with generally accepted accounting principles,
consistently applied through the period involved, except as may be otherwise
stated therein, and all adjustments necessary for a fair presentation of results
for such periods have been made.
(ix) Neither the Company nor any of its subsidiaries is in
violation or default under any provision of their respective charter documents
or bylaws, as currently in effect, or any indenture, license, mortgage, lease,
franchise, permit, deed of trust or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective properties is bound
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or may be affected, except where such violation or default would not have a
material adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries taken as a whole.
(x) The Company has full legal right, power and authority to
enter into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company and is
a valid and binding agreement on the part of the Company, enforceable in
accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited by applicable laws and except as the enforcement hereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally, or by general
equitable principles.
(xi) The execution and performance of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of, or violation of, any of the terms or
provisions of, or constitute, either by itself or upon notice or the passage of
time or both, a default under, any indenture, license, mortgage, lease,
franchise, permit, deed of trust or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective properties is bound or may be affected, or
violate any material order, judgment, statute, rule or regulation applicable to
the Company or any of its subsidiaries of any court or of any regulatory,
administrative or governmental body or agency having jurisdiction over the
Company, any of its subsidiaries or their respective properties except where
such breach, violation or default would not have a materially adverse effect on
the business, financial condition or results of operations of the Company and
its subsidiaries taken as a whole, or violate any of the provisions of the
certificate or articles of incorporation or bylaws, as applicable, each as
amended, of the Company or any of its subsidiaries.
(xii) There are no legal or governmental proceedings pending
or, to the Company's knowledge, threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or its
subsidiaries is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required. The
contracts so described in the Prospectus are in full force and effect on the
date hereof except as disclosed therein; and neither the Company nor any of its
subsidiaries nor, to the Company's knowledge any other party, is in material
breach of or default under any of such contracts.
(xiii) The Company and its subsidiaries possess all
consents, approvals, orders, certificates, authorizations and permits issued by,
and has made all declarations and filings with, all appropriate federal, state
or foreign governmental and self-regulatory authorities and all courts and other
tribunals and all required state agencies in connection with applicable
franchise laws, regulations and requirements necessary to conduct their
respective businesses and to own, lease, license and use their properties in the
manner described in the Prospectus, except to the extent that the failure to
obtain or file would not have a material adverse effect on the business,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, and neither the Company nor its subsidiaries has
received any notice of proceedings related to the revocation or modification of
any such consent, approval, order, certificate, authorization or permit that,
singly or in the aggregate, would have a material adverse effect on the
business, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(xiv) The Company and each of its subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws with
respect to its business as conducted and as proposed to be conducted in the
Registration Statement and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the business, financial condition or results of operations of
the Company or its subsidiaries, taken as a whole. To the Company's knowledge,
there are no costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related
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constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(xv) Neither the Company nor any of its subsidiaries owns
any real properties. The Company and each of its subsidiaries has good and
marketable title to all personal property that they respectively own free and
clear of all liens, encumbrances and defects except such as are described in the
Registration Statement or the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and proposed to be
made of such property by the Company or its subsidiaries; and any real property
and buildings held under lease by the Company or its subsidiaries are held under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company or its subsidiaries.
(xvi) The Company has not taken and will not take, directly
or indirectly, any action designed to cause or result in, or which constitutes
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Stock.
(xvii) The Company and each of its subsidiaries owns or
possesses adequate rights to use all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names currently employed by
them in connection with the business now operated by them, and, except as
described in the Prospectus, neither the Company nor its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would result in
any material adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company or its subsidiaries, taken as a
whole. Except as disclosed in the Prospectus, the discoveries, inventions,
products or processes of the Company and its subsidiaries referred to in the
Prospectus do not, to the knowledge of the Company, infringe or conflict with
any right or patent of any third party, or any discovery, invention, product or
process which is the subject of a patent application filed by a third party,
known to the Company, which such infringement or conflict could result in any
material adverse effect on the business, financial condition or results of
operations of the Company or its subsidiaries, taken as a whole. The expiration
of any patents, patent rights or copyrights at their respective expiration dates
will not have a material adverse effect on the business, financial condition or
results of operations of the Company or its subsidiaries, taken as a whole.
(xviii) The Company is in compliance, in all material
respects, with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
with the Company would have any liability; the Company has not incurred and does
not expect to incur liability under (i) Title IV or ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, that would cause the loss of such
qualification.
(xix) The Company is not and, after giving effect to the
offering and sale of the Stock and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(xx) There is no owner of any securities of the Company who
has any right, not effectively satisfied or waived, to require registration of
any shares of capital stock of the Company in connection with the filing of the
Registration Statement or the sale of any shares thereunder. There are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
or to require the Company to include such securities with the Stock registered
pursuant to the Registration Statement, except in each case as described in the
Prospectus.
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(xxi) The Company and its subsidiaries have complied with
all provisions of Section 517.075, Florida Statutes relating to doing business
with the Government of Cuba or with any person or affiliate located in Cuba.
(xxii) The Company and its subsidiaries maintain 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
preparation of financial statements in conformity with generally accepted
accounting principals of the United States and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(xxiii) No material labor dispute with employees of the
Company or any of its subsidiaries or franchisees exists or to the knowledge of
the Company is imminent, and, without conducting any independent investigation,
the Company has not been notified in writing of any existing, threatened or
imminent labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that 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. Except as disclosed in the Prospectus, the
employment of each officer and employee of the Company and its subsidiaries is
terminable at the will of the Company. To its knowledge, the Company and its
subsidiaries have each complied in all material respects with all applicable
state and federal equal employment opportunity laws and with other laws related
to employment. To the Company's knowledge, no employee of the Company or any of
its subsidiaries, nor any consultant or independent contractor with whom the
Company or any of its subsidiaries has contracted, is in violation of any term
of any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to
contract with, the Company because of the nature of the business to be conducted
by the Company or any of its subsidiaries; and to the Company's knowledge the
continued employment by the Company and its subsidiaries of its present
employees, and the performance of the Company's contracts with its independent
contractors, will not result in any such violation. The Company and its
subsidiaries have not received any notice alleging that any such violation has
occurred. The Company is not aware that any officer or key employee, or that any
group of key employees, intends to terminate their employment with the Company
or any of its subsidiaries, nor does the Company have a present intention to
terminate the employment of any of the foregoing.
(xxiv) The Company has not offered, or caused the
Underwriters to offer, Stock to any person by way of directed shares with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business with the
Company, or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
(xxv) To the Company's knowledge, after due investigation,
each of the Company's products will produce no logical or arithmetic
inconsistencies when dealing with dates beyond the year 1999, except where such
inconsistencies, singly or in the aggregate, would not have a material adverse
effect on the business, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole. Without limiting the foregoing,
to the Company's knowledge, the Company's services and products will not
materially impede the accurate processing of data, or cause programming or
processing errors resulting from the rollover of two-digit year values to "00"
on January 1, 2000. The foregoing does not constitute a warranty or
representation that the Company's software will be capable of recording,
storing, processing, calculating and displaying correct calendar dates based on
software supplied by any party other than the Company, or that the Company's
software will properly interact with such third party software.
(xxvi) The Company and each of its subsidiaries, taken as a
whole, are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the
business in which it is engaged, and neither the Company nor any of such
subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, in each case except as described in or
contemplated by the Prospectus.
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(xxvii) The Company's Canadian and German subsidiaries,
taken as a whole, are not material to the business, financial condition and
results of operations of the Company and neither is a "Significant Subsidiary"
as defined under Rule 1-02(w) of Regulation S-X of the Securities Act.
(b) Each of the Selling Securityholders hereby represents and
warrants as follows:
(i) Such Selling Securityholder has good and marketable
title to all the shares of Stock to be sold by such Selling Securityholder
hereunder, free and clear of all liens, encumbrances, equities, security
interests and claims whatsoever, with full right and authority to deliver the
same hereunder, subject, in the case of such Selling Securityholder, to the
rights of ChaseMellon Shareholder Services, LLC, as Custodian (herein called the
Custodian), and that upon the delivery of and payment for such shares of the
Stock hereunder, the several Underwriters will receive good and marketable title
thereto, free and clear of all liens, encumbrances, equities, security interests
and claims whatsoever.
(ii) Such Selling Securityholder has duly authorized,
executed and delivered, in the form heretofore furnished to the Underwriters, a
Custody Agreement and Power of Attorney (the "Custody Agreement and Power of
Attorney") appointing Xxxxxxx X. Xxxxx and Xxxxxx X. Xxxxxx, Xx. as
attorneys-in-fact (collectively, the "Attorneys" and individually, an
"Attorney") and appointing ChaseMellon Shareholder Services, LLC as Custodian;
the Custody Agreement and Power of Attorney constitutes a valid and binding
agreement on the part of such Selling Securityholder, enforceable in accordance
with its terms, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles; and each of such Selling Securityholder's Attorneys, acting alone,
is authorized to execute and deliver this Agreement and the certificate referred
to in Section 9(f) hereof on behalf of such Selling Securityholder, to determine
(within the limitations therein specified) the purchase price to be paid by the
several Underwriters to such Selling Securityholder as provided in Section 3
hereof, to authorize the delivery of the shares of Stock to be sold by such
Selling Securityholder under this Agreement and to duly endorse (in blank or
otherwise) the certificate or certificates representing such Stock or a stock
power or powers with respect thereto, to accept payment therefor, and otherwise
to act on behalf of such Selling Securityholder in connection with this
Agreement.
(iii) All consents, approvals, authorizations and orders
required for the execution and delivery by such Selling Securityholder of the
Custody Agreement and Power of Attorney, the execution and delivery by or on
behalf of such Selling Securityholder of this Agreement and the sale and
delivery of the shares of Stock to be sold by such Selling Securityholder under
this Agreement (other than, at the time of the execution hereof, if the
Registration Statement has not yet been declared effective by the issuance of
the order of the Commission declaring the Registration Statement effective and
such consents, approvals, authorizations or orders as may be necessary under
state or other securities or Blue Sky laws) have been obtained and are in full
force and effect; such Selling Securityholder, if other than a natural person,
has been duly organized and is validly existing in good standing under the laws
of the jurisdiction of its organization as the type of entity that it purports
to be; and such Selling Securityholder has full legal right, power and authority
to enter into and perform its obligations under this Agreement and such Custody
Agreement and Power of Attorney, and to sell, assign, transfer and deliver the
Stock to be sold by such Selling Securityholder under this Agreement.
(iv) Certificates in negotiable form for the shares of the
Stock to be sold by such Selling Securityholder have been placed in custody
under a Custody Agreement and Power of Attorney for delivery under this
Agreement with the Custodian; such Selling Securityholder specifically agrees
that the shares of the Stock represented by the certificates so held in custody
for such Selling Securityholder are subject to the interests of the several
Underwriters and the Company, that the arrangements made by such Selling
Securityholder for such custody, including the Power of Attorney provided for in
such Custody Agreement and Power of Attorney, are to that extent irrevocable,
and that the obligations of such Selling Securityholder shall not be terminated
by any act of such Selling Securityholder or by operation of law, whether by the
death or incapacity of such Selling Securityholder (or, in the case of a Selling
Securityholder that is not an individual, the dissolution or liquidation of such
Selling Securityholder) or the occurrence of any other event; if any such death,
incapacity, dissolution, liquidation or other such event should occur before the
delivery of such shares of the Stock hereunder, certificates for such shares of
the Stock shall be delivered by the Custodian in accordance with the terms and
conditions of this
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Agreement as if such death, incapacity, dissolution, liquidation or other event
had not occurred, regardless of whether the Custodian shall have received notice
of such death, incapacity, dissolution, liquidation or other event.
(v) Such Selling Securityholder will comply with all
agreements and satisfy all conditions on its part to be complied with or
satisfied pursuant to this Agreement on or prior to the Closing Date and will
advise one of its Attorneys and Xxxxxxxxx & Xxxxx LLC prior to the Closing Date
if any statement to be made on behalf of such Selling Securityholder in the
certificate contemplated by Section 9(e) would be inaccurate if made as of the
Closing Date.
(vi) Such Selling Securityholder 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.
(vii) Such Selling Securityholder does not have, or has
waived prior to the date hereof, any preemptive right, co-sale right or right of
first refusal or other similar right to purchase any of the Stock that are to be
sold by the Company to the Underwriters pursuant to this Agreement; such Selling
Securityholder does not have, or has waived prior to the date hereof, any
registration right or other similar right to participate in the offering made by
the Prospectus, other than such rights of participation as have been satisfied
by the participation of such Selling Securityholder in the transactions to which
this Agreement relates in accordance with the terms of this Agreement; and such
Selling Securityholder does not own any warrants, options or similar rights to
acquire, and does not have any right or arrangement to acquire, any capital
stock, rights, warrants, options or other securities from the Company, other
than those described in the Registration Statement and the Prospectus.
(viii) To the extent that any statements or omissions made
in the Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity with
written information furnished to the Company by such Selling Securityholder
expressly for use therein, such Preliminary Prospectus and the Registration
Statement did, and the Prospectus and any further amendments or supplements to
the Registration Statement and the Prospectus, when they become effective or are
filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act and the rules and regulations of the
Commission thereunder and will not, insofar as it relates to such Selling
Securityholder, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(ix) Such Selling Securityholder has not distributed and
will not distribute any prospectus or other offering material in connection with
the offering and sale of the Stock.
(c) Xxxxxxx X. Xxxxxx (the "Founder") hereby represents and
warrants to each Underwriter that the representations and warranties of the
Company set forth in Section 2(a)(iv) above are true and correct.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell 4,000,000 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 3,
8
the agreement of each Underwriter is to purchase only the respective number of
shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail
or refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company or the Selling Securityholders shall
immediately give notice thereof to you, and the non-defaulting Underwriters
shall have the right within 24 hours after the receipt by you of such notice to
purchase, or procure one or more other Underwriters to purchase, in such
proportions as may be agreed upon between you and such purchasing Underwriter or
Underwriters and upon the terms herein set forth, all or any part of the shares
of the Stock which such defaulting Underwriter or Underwriters agreed to
purchase. If the non-defaulting Underwriters fail so to make such arrangements
with respect to all such shares and portion, the number of shares of the Stock
which each non-defaulting Underwriter is otherwise obligated to purchase under
this Agreement shall be automatically increased on a pro rata basis to absorb
the remaining shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase; PROVIDED, HOWEVER, that the non-defaulting
Underwriters shall not be obligated to purchase the shares and portion which the
defaulting Underwriter or Underwriters agreed to purchase if the aggregate
number of such shares of the Stock exceeds 10% of the total number of shares of
the Stock which all Underwriters agreed to purchase hereunder. If the total
number of shares of the Stock which the defaulting Underwriter or Underwriters
agreed to purchase shall not be purchased or absorbed in accordance with the two
preceding sentences, the Company and the Selling Securityholders shall have the
right, within 24 hours next succeeding the 24-hour period above referred to, to
make arrangements with other underwriters or purchasers satisfactory to you for
purchase of such shares and portion on the terms herein set forth. In any such
case, either you or the Company and the Selling Securityholders shall have the
right to postpone the Closing Date determined as provided in Section 5 hereof
for not more than seven business days after the date originally fixed as the
Closing Date pursuant to said Section 5 in order that any necessary changes in
the 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 900,000 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 time (but not more than once) on or before the
thirtieth day after the date of this Agreement upon written or telegraphic
notice by you to the Company setting forth the aggregate number of shares of the
Option Stock as to which the several Underwriters are exercising the option.
Delivery of certificates for the shares of Option Stock, and payment therefor,
shall be made as provided in Section 5 hereof. The number of shares of the
Option Stock to be purchased by each Underwriter shall be the same percentage of
the total number of shares of the Option Stock to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten Stock, as
adjusted by you in such manner as you deem advisable to avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters
of the Stock to be purchased by them shall be as set forth in the Prospectus.
The Underwriters may from time to time change the public offering price after
the closing of the initial public offering and increase or decrease the
concessions and discounts to dealers as they may determine.
(b) The information set forth under "Underwriting" in the
Registration Statement, any Preliminary Prospectus and the Prospectus relating
to the Stock filed by the Company (insofar as such information
9
relates to the Underwriters) constitutes the only information furnished by the
Underwriters to the Company for inclusion in the Registration Statement, any
Preliminary Prospectus, and the Prospectus, and you on behalf of the respective
Underwriters represent and warrant to the Company that the statements made
therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten
Stock and the Option Stock (if the option granted by Section 3(c) hereof shall
have been exercised not later than 7:00 A.M., San Francisco time, on the date
two business days preceding the Closing Date), and payment therefor, shall be
made at the office of Xxxxxx Xxxxxxx, Xxxxxxxx & Xxxxxx, at 7:00 a.m., San
Francisco time, on the fourth business day after the date of this Agreement, or
at such time on such other day, not later than seven full business days after
such fourth business day, as shall be agreed upon in writing by the Company, the
Selling Securityholders and you. The date and hour of such delivery and payment
(which may be postponed as provided in Section 3(b) hereof) are herein called
the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be
exercised after 7:00 a.m., San Francisco time, on the date two business days
preceding the Closing Date, delivery of certificates for the shares of Option
Stock, and payment therefor, shall be made at the office of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, at 7:00 a.m., San Francisco time, on the third business day
after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be
made to the Company or its order, and payment for the Stock purchased from the
Selling Securityholders shall be made to the Custodian, for the account of the
Selling Securityholders, in each case by wire transfer or by one or more
certified or official bank check or checks in same day funds. Such payment shall
be made upon delivery of certificates for the Stock to you for the respective
accounts of the several Underwriters against receipt therefor signed by you.
Certificates for the Stock to be delivered to you shall be registered in such
name or names and shall be in such denominations as you may request at least one
business day before the Closing Date, in the case of Underwritten Stock, and at
least one business day prior to the purchase thereof, in the case of the Option
Stock. Such certificates will be made available to the Underwriters for
inspection, checking and packaging at the offices of Lewco Securities
Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the business day prior to
the Closing Date or, in the case of the Option Stock, by 3:00 p.m., New York
time, on the business day preceding the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
and the Selling Securityholders for shares to be purchased by any Underwriter
whose check shall not have been received by you on the Closing Date or any later
date on which Option Stock is purchased for the account of such Underwriter. Any
such payment by you shall not relieve such Underwriter from any of its
obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING
SECURITYHOLDERS. Each of the Company and the Selling Securityholders
respectively covenants and agrees as follows:
(a) The Company will (i) prepare and timely file with the
Commission under Rule 424(b) a Prospectus containing information previously
omitted at the time of effectiveness of the Registration Statement in reliance
on Rule 430A and (ii) not file any amendment to the Registration Statement or
supplement to the Prospectus of which you shall not previously have been advised
and furnished with a copy or to which you shall have reasonably objected in
writing or which is not in compliance with the Securities Act or the rules and
regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the
event of (i) the request by the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional information,
(ii) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, (iii) the institution or notice of
intended institution of any action or proceeding for that purpose, (iv) the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Stock for sale in any jurisdiction, or (v) the receipt by
it of notice of the initiation or threatening of any proceeding for such
purpose. The Company and the Selling Securityholders will make every reasonable
effort to prevent the issuance of such a
10
stop order and, if such an order shall at any time be issued, to obtain the
withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver
to you a signed copy of the Registration Statement as originally filed and of
each amendment thereto filed prior to the time the Registration Statement
becomes effective and, promptly upon the filing thereof, a signed copy of each
post-effective amendment, if any, to the Registration Statement (together with,
in each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters, at
such office or offices as you may designate, as many copies of the Prospectus as
you may reasonably request, and (iii) thereafter from time to time during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, likewise send to the Underwriters as many additional
copies of the Prospectus and as many copies of any supplement to the Prospectus
and of any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer any event relating
to or affecting the Company, or of which the Company shall be advised in writing
by you, shall occur as a result of which it is 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. The Company
authorizes the Underwriters and all dealers to whom any of the Stock may be sold
by the several Underwriters to use the Prospectus, as from time to time amended
or supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company
will submit to you, for your information, a copy of any post-effective amendment
to the Registration Statement and any supplement to the Prospectus or any
amended prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in
the qualification of the Stock for offer and sale under the securities or blue
sky laws of such jurisdictions as you may designate and, during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, in keeping such qualifications in good standing under said securities or
blue sky laws; PROVIDED, HOWEVER, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. The Company
will, from time to time, prepare and file such statements, reports, and other
documents as are or may be required to continue such qualifications in effect
for so long a period as you may reasonably request for distribution of the
Stock.
(g) During a period of three 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 agrees to pay all costs and expenses incident to
the performance of obligations under this Agreement, including all costs and
expenses incident to (i) the preparation, printing and filing with the
Commission and the National Association of Securities Dealers, Inc. ("NASD") of
the Registration Statement, any Preliminary Prospectus and the Prospectus, (ii)
the furnishing to the Underwriters of copies of any Preliminary Prospectus and
of the several documents required by paragraph (c) of this Section 6 to be so
furnished,
11
(iii) the printing of this Agreement and related documents delivered to the
Underwriters, (iv) the preparation, printing and filing of all supplements and
amendments to the Prospectus referred to in paragraph (d) of this Section 6, (v)
the furnishing to you and the Underwriters of the reports and information
referred to in paragraph (g) of this Section 6 and (vi) the printing and
issuance of stock certificates, including the transfer agent's fees. To the
extent, if at all, that any of the Selling Stockholders engage special legal
counsel to represent them in connection with this offering, the fees and
expenses of such counsel shall be borne by such Selling Stockholder.
(j) The Company agrees to reimburse you, for the account of the
several Underwriters, for blue sky fees and related disbursements (including
counsel fees and disbursements and cost of printing memoranda for the
Underwriters) paid by or for the account of the Underwriters or their counsel in
qualifying the Stock under state securities or blue sky laws and in the review
of the offering by the NASD.
(k) The Company and each of the Selling Securityholders hereby
agrees that, without the prior written consent of Xxxxxxxxx & Xxxxx LLC on
behalf of the Underwriters, the Company or such Selling Securityholder, as the
case may be, will not, for a period of 180 days following the effective date of
the Registration Statement, directly or indirectly, sell, lend, offer, contract
to sell, transfer the economic risk of ownership in, make any short sale, pledge
or otherwise dispose of any shares of Common Stock or any securities convertible
into or exchangeable or exercisable for or any other rights to purchase or
acquire Common Stock. The foregoing sentence shall not apply to (A) the Stock to
be sold to the Underwriters pursuant to this Agreement, (B) shares of Common
Stock issued by the Company upon the exercise of options granted or to be
granted under the stock option plans of the Company (the "Option Plans"), all as
described in the Preliminary Prospectus, (C) options to purchase Common Stock
granted or to be granted under the Option Plans, (D) the issuance of Common
Stock in connection with employee subscriptions under the Company's employee
stock purchase plan, and (E) in respect of any Selling Securityholder, any
transfer or disposition of Common Stock for estate planning purposes (provided
that any transferee shall agree in writing to be subject to the restrictions
contained herein).
(l) If at any time during the 25-day period after the
Registration Statement becomes effective any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in your
opinion the market price for the Stock has been or is likely to be materially
affected (regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and if the Company
determines to do so in its reasonable judgment, disseminate a press release or
other public statement, reasonably satisfactory to you, responding to or
commenting on such rumor, publication or event.
(m) The Company is familiar with the Investment Company Act of
1940, as amended, and has in the past conducted its affairs, and will in the
future conduct its affairs, in such a manner to ensure that the Company was not
and will not be an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (f) of this Section 7,
the Company and the Selling Securityholders jointly and severally agree to
indemnify and hold harmless each Underwriter and each person (including each
partner or officer thereof) who controls any Underwriter within the meaning of
Section 15 of the Securities Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Securities Act, the Exchange Act, or
the common law or otherwise, and the Company and the Selling Securityholders
jointly and severally agree to reimburse each such Underwriter and controlling
person for any legal or other expenses (including, except as otherwise
hereinafter provided, reasonable fees and disbursements of counsel) incurred by
the respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement), or the
12
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that (1) the indemnity agreements of the Company and the
Selling Securityholders contained in this paragraph (a) shall not apply to any
such losses, claims, damages, liabilities or expenses if such statement or
omission was made in reliance upon and in conformity with information furnished
as herein stated or otherwise furnished in writing to the Company by or on
behalf of any Underwriter for use in any Preliminary Prospectus or the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto, (2) the indemnity agreements contained in this paragraph (a)
with respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless the failure is the result of noncompliance by
the Company with paragraph (c) of Section 6 hereof, (3) the Founder shall only
be liable under this paragraph with respect to (A) information pertaining to the
Founder furnished by or on behalf of the Founder expressly for use in any
Preliminary Prospectus or the Registration Statement or the Prospectus or any
such amendment thereof or supplement thereto, (B) facts that would constitute a
breach of any representation or warranty of the Founder set forth in Section
2(b) hereof, and (C) facts that would constitute a breach of any representation
or warranty of such Founder set forth in Section 2(c) hereof, and (4) each of
Xxxxxx Xxxxxx, Xxxxxx Family Trust and Xxxxxxx X. Xxxxx (the "Additional Selling
Securityholders") shall only be liable under this paragraph with respect to (A)
information pertaining to such Additional Selling Securityholder furnished by or
on behalf of such Additional Selling Securityholder expressly for use in any
Preliminary Prospectus or the Registration Statement or the Prospectus or any
such amendment thereof or supplement thereto, and (B) facts that would
constitute a breach of any representation or warranty of such Additional Selling
Securityholder set forth in Section 2(b) hereof. The indemnity agreements of the
Company, the Founder and the Additional Selling Securityholders contained in
this paragraph (a) and the representations and warranties of the Company, the
Founder and the Additional Selling Securityholders contained in Section 2 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its officers who signs the Registration Statement
on his own behalf or pursuant to a power of attorney, each of its directors,
each other Underwriter and each person (including each partner or officer
thereof) who controls the Company or any such other Underwriter within the
meaning of Section 15 of the Securities Act, and the Selling Securityholders
from and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified parties or any of them may become subject
under the Securities Act, the Exchange Act, or the common law or otherwise and
to reimburse each of them for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement) or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment thereof or supplement thereto) or
the omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, if such statement or omission was made in
reliance upon and in conformity with information furnished as herein stated or
otherwise furnished in writing to the Company by or on behalf of such
indemnifying Underwriter for use in the Registration Statement or the Prospectus
or any such amendment thereof or supplement thereto. The indemnity agreement of
each Underwriter contained in this paragraph (b) shall remain operative and in
full force and
13
effect regardless of any investigation made by or on behalf of any indemnified
party and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a)
and (b) of this Section 7 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the Notice) of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
such indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of such indemnity agreement. Any indemnifying party shall be entitled at its own
expense to participate in the defense of any action, suit or proceeding against,
or investigation or inquiry of, an indemnified party. Any indemnifying party
shall be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the Notice of Defense) to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; PROVIDED, HOWEVER, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or parties
shall be entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified party
or parties and (ii) in any event, the indemnified party or parties shall be
entitled to have counsel chosen by such indemnified party or parties participate
in, but not conduct, the defense. If, within a reasonable time after receipt of
the Notice, an indemnifying party gives a Notice of Defense and the counsel
chosen by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs (a) through (c) of this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding,
except that (A) the indemnifying party or parties shall bear the legal and other
expenses incurred in connection with the conduct of the defense as referred to
in clause (i) of the proviso to the preceding sentence and (B) the indemnifying
party or parties shall bear such other expenses as it or they have authorized to
be incurred by the indemnified party or parties. If, within a reasonable time
after receipt of the Notice, no Notice of Defense has been given, the
indemnifying party or parties shall be responsible for any legal or other
expenses incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company, the Selling Securityholders and the Underwriters shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the Stock received by the Company and the Selling Securityholders and the
total underwriting discount received by the Underwriters, as set forth in the
table on the cover page of the Prospectus, bear to the aggregate public offering
price of the Stock. Relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by each indemnifying party
14
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) Neither the Company nor the Selling Securityholders will,
without the prior written consent of each Underwriter, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought hereunder
(whether or not such Underwriter or any person who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of such
Underwriter and each such controlling person from all liability arising out of
such claim, action, suit or proceeding.
(f) The liability of each Selling Securityholder under the
indemnity and reimbursement agreements contained in the provisions of this
Section 7 and Section 11 hereof shall be limited to an amount equal to the
initial public offering price of the stock sold by such Selling Securityholder
to the Underwriters. The Company and the Selling Securityholders may agree, as
among themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
(g) The term "jointly and severally" as used in the this Section
7 means that the Company's obligation is joint and several with the obligation
of each of the Selling Securityholders, but that the obligation of a Selling
Securityholder is several and not joint with the obligation of the Company or
any other Selling Securityholder.
8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company and the
Selling Securityholders if after the date of this Agreement trading in the
Common Stock shall have been suspended, or if there shall have occurred (i) the
engagement in hostilities or an escalation of major hostilities by the United
States or the declaration of war or a national emergency by the United States on
or after the date hereof, (ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic or political conditions
if the effect of such outbreak, calamity, crisis or change in economic or
political conditions in the financial markets of the United States would, in the
Underwriters' reasonable judgment, make the offering or delivery of the Stock
impracticable, (iii) suspension of trading in securities generally or a material
adverse decline in value of securities generally on the New York Stock Exchange,
the American Stock Exchange, 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'
15
reasonable opinion materially and adversely affects or will materially or
adversely affect the business or operations of the Company, (v) declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in the Underwriters' reasonable
opinion has a material adverse effect on the securities markets in the United
States. If this Agreement shall be terminated pursuant to this Section 8, there
shall be no liability of the Company or the Selling Securityholders to the
Underwriters and no liability of the Underwriters to the Company or the Selling
Securityholders; PROVIDED, HOWEVER, that in the event of any such termination
the Company and the Selling Securityholders agree to indemnify and hold harmless
the Underwriters from all costs or expenses incident to the performance of the
obligations of the Company and the Selling Securityholders under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company and by the Selling Securityholders of all their
respective obligations to be performed hereunder at or prior to the Closing Date
or any later date on which Option Stock is to be purchased, as the case may be,
and to the following further conditions:
(a) The Registration Statement shall have become effective; and
no stop order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock
hereunder and the validity and form of the certificates representing the Stock,
all corporate proceedings and other legal matters incident to the foregoing, and
the form of the Registration Statement and of the Prospectus (except as to the
financial statements contained therein), shall have been approved at or prior to
the Closing Date by Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx,
LLP, counsel for the Underwriters.
(c) You shall have received from Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C., counsel for the Company and the Selling Securityholders, an
opinion, addressed to the Underwriters and dated the Closing Date, covering the
matters set forth in Annex A hereto, and if Option Stock is purchased at any
date after the Closing Date, additional opinions from each such counsel,
addressed to the Underwriters and dated such later date, confirming that the
statements expressed as of the Closing Date in such opinions remain valid as of
such later date.
(d) You shall have received an opinion from English counsel,
special foreign counsel to the Company, to the effect that:
(i) The English subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
effect on the Company and its subsidiaries taken as a whole; and
(ii) All of the issued shares of capital stock of the
English subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable, and owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or claims.
(e) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true and
correct 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,
16
except in the ordinary course of business, neither the Company nor any of its
subsidiaries has entered into any material transaction not referred to in the
Registration Statement in the form in which it originally became effective and
the Prospectus contained therein, (iv) neither the Company nor any of its
subsidiaries has any material contingent obligations which are not disclosed in
the Registration Statement and the Prospectus, (v) there are not any pending or
known threatened legal proceedings to which the Company or any of its
subsidiaries is a party or of which property of the Company or any of its
subsidiaries is the subject which are material and which are not disclosed in
the Registration Statement and the Prospectus, (vi) there are not any
franchises, contracts, leases or other documents which are required to be filed
as exhibits to the Registration Statement which have not been filed as required,
(vii) the representations and warranties of the Company herein are true and
correct in all material respects as of the Closing Date or any later date on
which Option Stock is to be purchased, as the case may be, and (viii) there has
not been any material change in the market for securities in general or in
political, financial or economic conditions from those reasonably foreseeable as
to render it impracticable in your reasonable judgment to make a public offering
of the Stock, or a material adverse change in market levels for securities in
general (or those of companies in particular) or financial or economic
conditions which render it inadvisable to proceed.
(f) You shall have received on the Closing Date and on any later
date on which Option Stock is purchased a certificate, dated the Closing Date or
such later date, as the case may be, and signed by the President and the Chief
Financial Officer of the Company, stating that the respective signers of said
certificate have carefully examined the Registration Statement in the form in
which it originally became effective and the Prospectus contained therein and
any supplements or amendments thereto, and that the statements included in
clauses (i) through (vii) of paragraph (e) of this Section 9 are true and
correct.
(g) You shall have received an opinion from Xxxxxx Godward LLP,
special counsel to the Company, to the effect that (i) the information required
to be set forth in the Registration Statement (except as to the financial
statements and schedules and other financial and statistical data contained or
incorporated by reference therein, as to which such counsel need not express any
opinion or belief) in answer to Item 11(c) of Form S-1 is to such counsel's
knowledge accurately and adequately set forth therein in all material respects
and that such counsel has no reason to believe that the statements set forth in
the Registration Statement relating to the litigation with Compuware Corporation
under the captions "Risk Factors - Third Parties in the Future Could Assert That
Our Products Infringe Their Intellectual Property Rights, Which Could Adversely
Affect Our Business; There Could Be Potential Adverse Affects of the Pending
Compuware Claim," "Business - Intellectual Property" and "Business - Litigation"
contained, at the Effective Date, any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the information not misleading, and (ii) the information required to be set
forth in the Prospectus (except as to the financial statements and schedules and
other financial and statistical data contained or incorporated by reference
therein, as to which such counsel need not express any opinion or belief) in
answer to Item 11(c) of Form S-1 is to such counsel's knowledge accurately and
adequately set forth therein in all material respects and that such counsel has
no reason to believe that the statements set forth in the Prospectus relating to
the litigation with Compuware Corporation under the captions "Risk Factors -
Third Parties in the Future Could Assert That Our Products Infringe Their
Intellectual Property Rights, Which Could Adversely Affect Our Business; There
Could Be Potential Adverse Affects of the Pending Compuware Claim," "Business -
Intellectual Property" and "Business - Litigation" contained, as of the date of
the Prospectus or at the Closing Date (or any later date on which Option Stock
is purchased), any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the information
not misleading.
(h) You shall have received from KPMG Peat Marwick LLP, a letter
or letters, addressed to the Underwriters and dated the Closing Date and any
later date on which Option Stock is purchased, confirming that they are
independent public accountants with respect to the Company within the meaning of
the Securities Act and the applicable published rules and regulations thereunder
and based upon the procedures described in their letter delivered to you
concurrently with the execution of this Agreement (herein called the Original
Letter), but carried out to a date not more than three business days prior to
the Closing Date or such later date on which Option Stock is purchased (i)
confirming, to the extent true, that the statements and conclusions set forth in
the Original Letter are accurate as of the Closing Date or such later date, as
the case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter which are necessary
to reflect any changes in the facts described in the Original Letter since the
date of the Original Letter or to reflect the availability of more recent
financial statements, data or information. The letters shall not disclose any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company or any of its
17
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 Xxxxxxxxxx.Xxx shall have been furnished evidence
in usual written or telegraphic form from the appropriate authorities of the
several jurisdictions, or other evidence satisfactory to you, of the
qualification referred to in paragraph (f) of Section 6 hereof.
(j) Prior to the Closing Date, the Stock to be issued and sold by
the Company shall have been duly authorized for listing by the Nasdaq National
Market upon official notice of issuance.
(k) On or prior to the Closing Date, you shall have received from
all stockholders and option holders (subject to such exceptions as may be agreed
upon by Xxxxxxxxx & Xxxxx LLC) 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 180 days following the effective date of the Registration
Statement, directly or indirectly, sell, lend, offer, contract to sell, transfer
the economic risk of ownership in, make any short sale, pledge or otherwise
dispose of any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any other rights to purchase or acquire
Common Stock.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx &
Xxxxxxxxx, LLP, counsel for the Underwriters, shall be satisfied that they
comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and to the Selling 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 6 hereof, and (ii) if this Agreement is terminated by you
because of any refusal, inability or failure on the part of the Company or the
Selling Securityholders to perform any agreement herein, to fulfill any of the
conditions herein, or to comply with any provision hereof other than by reason
of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the transactions contemplated hereby; but the Company
and the Selling Securityholders shall not in any event be liable to any of the
several Underwriters for damages on account of loss of anticipated profits from
the sale by it of the Stock.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY AND THE SELLING
SECURITYHOLDERS. The obligation of the Company and the Selling Securityholders
to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company and the Selling
Securityholders by giving notice to you. Any such termination shall be
without liability of the Company and the Selling Securityholders to the
Underwriters and without liability of the Underwriters to the Company or the
Selling Securityholders; PROVIDED, HOWEVER, that in the event of any such
termination the Company agrees to indemnify and hold harmless the
Underwriters from all costs or expenses incident to the performance of the
obligations of the Company and the Selling Securityholders under this
Agreement, including all costs and expenses referred to in paragraphs (i) and
(j) of Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to their other
obligations under Section 7 of this Agreement, the Company agrees to reimburse
on a quarterly basis the Underwriters for all reasonable legal and other
expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 and the possibility that such payments
18
might later be held to be improper; PROVIDED, HOWEVER, that (i) to the extent
any such payment is ultimately held to be improper, the persons receiving such
payments shall promptly refund them and (ii) such persons shall provide to the
Company, upon request, reasonable assurances of their ability to effect any
refund, when and if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company, the Selling Securityholders and the several
Underwriters and, with respect to the provisions of Section 7 hereof, the
several parties (in addition to the Company, the Selling Securityholders and the
several Underwriters) indemnified under the provisions of said Section 7, and
their respective personal representatives, successors and assigns. Nothing in
this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser, of
any of the Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Xxxxxxxxx & Xxxxx LLC, Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000; and if to the Company, shall be mailed,
telegraphed or delivered to it at its office, 000 Xxxxxxx Xxxx., Xxxxx 000,
Xxxxxxxxxx, XX 00000, Attention: Xxxxxxx Xxxxx; and if to the Selling
Securityholders, shall be mailed, telegraphed or delivered to the Selling
Securityholders in care of Xxxxxx X. Xxxxxx, Xx. at Serena Software, Inc., 000
Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxxxxx, XX 00000. All notices given by telegraph
shall be promptly confirmed by letter.
14. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation made
by or on behalf of any Underwriter or controlling person thereof, or by or on
behalf of the Company or the Selling Securityholders or their respective
directors or officers, and (c) delivery and payment for the Stock under this
Agreement; PROVIDED, HOWEVER, that if this Agreement is terminated prior to the
Closing Date, the provisions of paragraphs (i) and (j) of Section 6 hereof shall
be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
19
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,
SERENA SOFTWARE, INC.
By
-------------------------------
Xxxxxxx X. Xxxxx
President and CEO
SELLING SECURITYHOLDERS:
Xxxxxxx X. Xxxxxx
Xxxxxx Xxxxxx
Xxxxxx Family Trust
Xxxxxxx X. Xxxxx
By
-------------------------------
Xxxxxxx X. Xxxxx, Attorney-in-Fact
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
XX XXXXX SECURITIES CORPORATION
SOUNDVIEW TECHNOLOGY GROUP, INC.
By Xxxxxxxxx & Xxxxx LLC
By
-----------------------------------
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
SCHEDULE I
UNDERWRITERS
NUMBER OF SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Xxxxxxxxx & Xxxxx LLC..................................................................
XX Xxxxx Securities Corporation........................................................
SoundView Technology Group, Inc........................................................
---------------------
Total.................................................................................. 6,000,000
S-1
SCHEDULE II
SELLING SECURITYHOLDERS
NAME OF SELLING SECURITYHOLDERS NUMBER OF SHARES
------------------------------- TO BE SOLD
----------
Xxxxxxx X. Xxxxxx 200,000
Xxxxxx Xxxxxx 500,000
Xxxxxx Family Trust 1,070,588
Xxxxxxx X. Xxxxx 229,412
---------------------
Total.................................................................................. 2,000,000
S-2
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF XXXXXX XXXXXXX XXXXXXXX & XXXXXX, P.C.
COUNSEL FOR THE COMPANY
AND THE SELLING SECURITYHOLDERS
(i) Each of the Company and Optima has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified as a foreign corporation
and in good standing in each state of the United States of America in which its
ownership or leasing of property requires such qualification (except where the
failure to be so qualified would not have a material adverse effect on the
business, properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole), and has full corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement; all the issued and outstanding capital
stock of Optima has been duly authorized and validly issued and is fully paid
and nonassessable, and is owned by the Company free and clear of all liens,
encumbrances and security interests, and to the best of such counsel's
knowledge, no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into shares of
capital stock or ownership interests in Optima are outstanding;
(ii) the authorized capital stock of the Company consists of
shares of Preferred Stock, of which there are outstanding shares,
and shares of Common Stock, $ par value, of which there are
outstanding shares (including the Underwritten Stock plus the number
of shares of Option Stock issued on the date hereof) and such additional
number of shares, if any, as may have been issued after and prior to
the Closing Date, pursuant to ; proper corporate proceedings have
been taken validly to authorize such authorized capital stock; all of the
outstanding shares of such capital stock (including the Underwritten Stock
and the shares of Option Stock issued, if any) have been duly and validly
issued and are fully paid and nonassessable; any Option Stock purchased after
the Closing Date, when issued and delivered to and paid for by the
Underwriters as provided in the Underwriting Agreement, will have been duly
and validly issued and be fully paid and nonassessable; and no preemptive
rights of, or rights of refusal in favor of, stockholders exist with respect
to the Stock, or the issue and sale thereof, pursuant to the Certificate of
Incorporation or Bylaws of the Company and, to the knowledge of such counsel,
there are no preemptive rights, rights of first refusal or rights of co-sale
with respect to the issuance of the Stock contained in any agreement to which
the Company is a party that have not been satisfied or waived.
(iii) the Registration Statement has become effective under the
Securities Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus is in effect and no proceedings for that
purpose have been instituted or are pending or contemplated by the Commission;
(iv) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the Securities Act and
with the rules and regulations of the Commission thereunder;
(v) such counsel have no reason to believe that the Registration
Statement (except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference therein,
as to which such counsel need not express any opinion or belief) at the
Effective Date contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
not express any opinion or belief) as of its date or at the Closing Date (or any
later date on which Option Stock is purchased), contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading;
A-1
(vi) the information required to be set forth in the Registration
Statement in answer to Items 9 and 10 (insofar as it relates to such counsel) of
Form S-1 is to such counsel's knowledge accurately and adequately set forth
therein in all material respects or no response is required with respect to such
Items, and the description of the Company's stock option plan and the options
granted and which may be granted thereunder and the options granted otherwise
than under such plan set forth in the Prospectus accurately and fairly presents
in all material respects the information required to be shown with respect to
said plan and options to the extent required by the Securities Act and the rules
and regulations of the Commission thereunder;
(vii) such counsel do not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion of
such counsel are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required;
(viii) the Underwriting Agreement has been duly authorized, executed
and delivered by the Company;
(ix) the Underwriting Agreement has been duly executed and delivered
by or on behalf of the Selling Securityholders and the Custody Agreement between
the Selling Securityholders and ChaseMellon Shareholder Services, LLC, as
Custodian, and the Power of Attorney referred to in such Custody Agreement have
been duly executed and delivered by the several Selling Securityholders;
(x) the issue and sale by the Company of the shares of Stock sold by
the Company as contemplated by the Underwriting Agreement will not result in a
breach of the Certificate of Incorporation or Bylaws of the Company or any of
its subsidiaries or any agreement included as an exhibit to the Registration
Statement or any applicable law or regulation known by such counsel to be
applicable to the Company, or so far as is known to such counsel, any order,
writ, injunction or decree, of any jurisdiction, court or governmental
instrumentality;
(xi) all holders of securities of the Company having rights to the
registration of shares of Common Stock, or other securities, because of the
filing of the Registration Statement by the Company have waived such rights or
such rights have expired by reason of lapse of time following notification of
the Company's intent to file the Registration Statement;
(xii) good and valid title to the shares of Stock sold by the Selling
Securityholders under the Underwriting Agreement, free and clear of all liens,
encumbrances, equities, security interests and claims, has been transferred to
the Underwriters who have severally purchased such shares of Stock under the
Underwriting Agreement, assuming for the purpose of this opinion that the
Underwriters purchased the same in good faith without notice of any adverse
claims;
(xiii) no consent, approval, authorization or order of any court or
governmental agency or body is required by the Company for the consummation of
the transactions contemplated in the Underwriting Agreement, except such as have
been obtained under the Securities Act and such as may be required under state
securities or blue sky laws in connection with the purchase and distribution of
the Stock by the Underwriters; and
(xiv) the Stock sold by the Selling Securityholders and the Stock
issued and sold by the Company will been duly authorized for listing by the
Nasdaq National Market upon official notice of issuance.
--------------------------------------------------------------------------------
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States or of the State of California,
upon opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to the
Representatives and to counsel for the Underwriters and the foregoing opinion
shall also state that counsel knows of no reason the Underwriters are not
entitled to rely upon the opinions of such local counsel.
In rendering its opinion with respect to matters concerning the
Selling Securityholders, such counsel may rely without further inquiry upon
counsel for and factual representation of the Selling Securityholders, provided
that such counsel shall also state that they know of no reason the Underwriters
are not justified in relying upon such counsel or representation.
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