1
EXHIBIT 1.1
Shares
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NEW ERA OF NETWORKS, INC.
Common Stock
UNDERWRITING AGREEMENT
, 1996
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UBS Securities LLC
Xxxxxxxxxx Securities
As Representatives of the Several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
New Era of Networks, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell _______ shares (the "Firm Shares") of its authorized
but unissued Common Stock, $.001 par value per share (the "Common Stock"), to
the several underwriters listed on Schedule A to this Agreement (collectively,
the "Underwriters"). The Company also proposes to grant to the Underwriters an
option to purchase up to ______ additional shares (the "Option Shares") of
Common Stock on the terms and for the purposes set forth in Section 3(c). The
Firm Shares and the Option Shares are hereinafter collectively referred to as
the "Shares."
The Company wishes to confirm as follows its agreements with you (the
"Representatives") and the other Underwriters on whose behalf you are acting in
connection with the several purchases by the Underwriters of the Shares.
1. REGISTRATION STATEMENT. A registration statement on Form S-1
(File No. 333- ___ including a prospectus relating to the Shares and each
amendment thereto has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. There have been delivered to you three signed copies of such
registration statement and amendments, together with three copies of each
exhibit filed therewith. Copies of such registration statement and amendments
(but without exhibits) and of the related preliminary prospectus have been
delivered to you in such reasonable quantities as you have requested for each
of the Underwriters. If such registration statement has not become effective,
a further amendment to such registration statement, including a form of final
prospectus, necessary to
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permit such registration statement to become effective will be filed promptly
by the Company with the Commission. If such registration statement has become
effective, a final prospectus containing all Rule 430A information (as
hereinafter defined) will be filed by the Company with the Commission in
accordance with Rule 424(b) of the Rules and Regulations on or before the
second business day after the date hereof (or such earlier time as may be
required by the Rules and Regulations).
The term "Registration Statement" as used in this Agreement shall mean
such registration statement (including all exhibits and financial statements
[AND ALL DOCUMENTS INCORPORATED BY REFERENCE THEREIN)] at the time such
registration statement becomes or became effective and, in the event any
post-effective amendment thereto becomes effective prior to the Closing Date
(as hereinafter defined), shall also mean such registration statement as so
amended; provided, however, that such term shall include all Rule 430A
information deemed to be included in such registration statement at the time
such registration statement becomes effective as provided by Rule 430A of the
Rules and Regulations and shall also mean any registration statement filed
pursuant to Rule 462(b) of the Rules and Regulations with respect to the
Shares. The term "Preliminary Prospectus" shall mean any preliminary
prospectus referred to in the preceding paragraph and any preliminary
prospectus included in the Registration Statement at the time it becomes
effective that omits Rule 430A information. The term "Prospectus" as used in
this Agreement shall mean the prospectus relating to the Shares in the form in
which it is first filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations or, if no filing pursuant to Rule 424(b) of the Rules and
Regulations is required, shall mean the form of final prospectus included in
the Registration Statement at the time such registration statement becomes
effective. The term "Rule 430A Information" means information with respect to
the Shares and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A of the
Rules and Regulations.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants as follows:
(a) The Company has not received, and has no notice of,
any order of the Commission preventing or suspending the use of any Preliminary
Prospectus, or instituted proceedings for that purpose, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects
to the requirements of the Act and the Rules and Regulations. When the
Registration Statement became or becomes, as the case may be, effective (the
"Effective Date") and at all times subsequent thereto up to and at the Closing
Date (as hereinafter defined), any later date on which Option Shares are to be
purchased (the "Option Closing Date") and when any post-effective amendment to
the Registration Statement becomes effective or any amendment or supplement to
the Prospectus is filed with the Commission, (i) the Registration Statement and
Prospectus, and any amendments or supplements thereto, will contain all
statements which are required to be stated therein by, and will comply with the
requirements of, the Act and the Rules and Regulations, and (ii) neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, will include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading. The foregoing representations and
warranties in this Section 2(a) do not apply to any statements or omissions
made in reliance on and in conformity
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with the information contained in the section of the Prospectus entitled
"Underwriting" (except for the _____ paragraph thereof) and the information in
the last paragraph on the front cover page of the Prospectus. The Company has
not distributed any offering material in connection with the offering or sale
of the Shares other than the Registration Statement, the Preliminary
Prospectus, the Prospectus or any other materials, if any, permitted by the
Act.
(b) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement.
The Company is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except where the
failure to so qualify would not have a material adverse effect on the business,
properties, financial condition or results of operations of the Company and
Subsidiary (as hereinafter defined) taken as a whole (a "Material Adverse
Effect"). The Company has no subsidiaries (as defined in the Rules and
Regulations) other than NEON Limited (the "Subsidiary"). The Company owns one
hundred percent (100%) of the outstanding common stock of Subsidiary. Other
than Subsidiary, the Company does not own, directly or indirectly, any shares
of stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any firm, partnership, joint venture, association
or other entity. Complete and correct copies of the certificates of
incorporation and of the bylaws of the Company and Subsidiary and all
amendments thereto have been delivered to the Representatives, and except as
set forth in the exhibits to the Registration Statement no changes therein will
be made subsequent to the date hereof and prior to the Closing Date or, if
later, the Option Closing Date. Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Registration Statement. Subsidiary is duly qualified to do business as
a foreign corporation in good standing in each jurisdiction where the ownership
or leasing of the properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not have a Material
Adverse Effect. All of the outstanding shares of capital stock of Subsidiary
have been duly authorized and validly issued, are fully paid and non-assessable
and (except as otherwise described in this Section 1(b)) are owned by the
Company subject to no security interest, other encumbrance or adverse claims.
No options, warrants or other rights to purchase, agreements or other
obligation to issue or other rights to convert any obligation into shares of
capital stock or ownership interests in the Subsidiary are outstanding.
(c) The Company has full power and authority (corporate
and otherwise) to enter into this Agreement and to 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 against the Company in accordance with its terms,
except as rights to indemnity and contribution hereunder may be limited by
applicable laws or equitable principles and except as enforcement hereof may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles. The performance of this Agreement by the Company and the
consummation by the Company of the transactions herein contemplated will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any indenture,
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mortgage, deed of trust, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company or any Subsidiary is a party or by which its
properties are bound, or (ii) the certificate of incorporation, as amended, or
bylaws of the Company or Subsidiary or (iii) any law, order, rule, regulation,
writ, injunction or decree of any court or governmental agency or body to which
the Company or any Subsidiary is subject. The Company is not required to
obtain or make (as the case may be) any consent, approval, authorization,
order, designation or filing by or with any court or regulatory, administrative
or other governmental agency or body as a requirement for the consummation by
the Company of the transactions herein contemplated, except such as may be
required under the Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or under state securities or blue sky ("Blue Sky") laws or
under the rules and regulations of the National Association of Securities
Dealers, Inc. ("NASD").
(d) There is not pending or, to the Company's knowledge,
threatened, any action, suit, claim, proceeding or investigation against the
Company or Subsidiary or any of their respective officers or any of their
respective properties, assets or rights before any court or governmental agency
or body or otherwise which might result in a Material Adverse Effect or have a
material adverse effect on the Company's properties, assets or rights, or
prevent consummation of the transactions contemplated hereby. There are no
statutes, rules, regulations, agreements, contracts, leases or documents that
are required to be described in the Prospectus, or to be filed as exhibits to
the Registration Statement by the Act or by the Rules and Regulations that have
not been accurately described in all material respects in the Prospectus or
filed as exhibits to the Registration Statement.
(e) All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right. The authorized and outstanding
capital stock of the Company conforms in all material respects to the
description thereof contained in the Registration Statement and the Prospectus
(and such description correctly states the substance of the provisions of the
instruments defining the capital stock of the Company). The Shares have been
duly authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company against payment
therefor in accordance with the terms of this Agreement, will be duly and
validly issued and fully paid and nonassessable. Except as set forth in the
Prospectus, no preemptive right, co-sale right, right of first refusal or other
similar rights of securityholders exists with respect to any of the Shares or
the issue and sale thereof other than those that have been expressly waived
prior to the date hereof. No holder of securities of the Company has the right
to cause the Company to include such holder's securities in the Registration
Statement. No further approval or authorization of any security holder, the
Board of Directors or any duly appointed committee thereof or others is
required for the issuance and sale or transfer of the Shares, except as may be
required under the Act, the Exchange Act or under state securities or Blue Sky
laws. Except as disclosed in or contemplated by the Prospectus and the
financial statements of the Company, and the related notes thereto, included in
the Prospectus the Company does not have outstanding any options or warrants 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,
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rights, convertible securities or obligations. The description of the
Company's stock option and other plans or arrangements, and the options or
other rights granted and exercised thereunder, set forth in the Prospectus
accurately and fairly presents, in all material respects, the information
required to be shown with respect to such plans, arrangements, options and
rights.
(f) Xxxxxx Xxxxxxxx LLP (the "Accountants") who have
examined the financial statements, together with the related schedules and
notes, of the Company filed with the Commission as a part of the Registration
Statement, which are included in the Prospectus, are independent public
accountants within the meaning of the Act and the Rules and Regulations. The
financial statements of the Company, together with the related schedules and
notes, forming part of the Registration Statement and the Prospectus, fairly
present the financial position and the results of operations of the Company at
the respective dates and for the respective periods to which they apply. All
financial statements, together with the related schedules and notes, filed with
the Commission as part of the Registration Statement have been prepared in
accordance with generally accepted accounting principles as in effect in the
United States consistently applied throughout the periods involved except as
may be otherwise stated in the Registration Statement. The selected and summary
financial and statistical data included in the Registration Statement present
fairly the information shown therein and have been compiled on a basis
consistent with the financial statements presented therein. No other financial
statements or schedules are required by the Act or the Rules and Regulations to
be included in the Registration Statement.
(g) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
has not been (i) any material adverse change, or any development which, in the
Company's reasonable judgment, is likely to cause a material adverse change, in
the business, properties or assets described or referred to in the Registration
Statement, or the results of operations, condition (financial or otherwise),
business or operations of the Company and Subsidiary taken as a whole, (ii) any
transaction which is material to the Company or Subsidiary, except transactions
in the ordinary course of business, (iii) any obligation, direct or contingent,
which is material to the Company and its Subsidiary taken as a whole, incurred
by the Company or Subsidiary, except obligations incurred in the ordinary
course of business, (iv) any change in the capital stock or outstanding
indebtedness of the Company or Subsidiary or (v) any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company.
Neither the Company nor its Subsidiary has any material contingent obligation
which is not disclosed in the Registration Statement.
(h) Except as set forth in the Prospectus, (i) the
Company and Subsidiary have good and marketable title to all material
properties and assets described in the Prospectus as owned by them, free and
clear of any pledge, lien, security interest, charge, encumbrance, claim,
equitable interest, or restriction, (ii) the agreements to which the Company or
the Subsidiary is a party described in the Prospectus are valid agreements,
enforceable against the Company or Subsidiary in accordance with their terms,
except as enforcement 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, to the
Company's knowledge, the other contracting party or parties thereto are not in
material breach or default under any of such agreements and (iii) the Company
and Subsidiary have valid and enforceable leases for the
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properties described in the Prospectus as leased by it, and such leases conform
in all material respects to the description thereof, if any, set forth in the
Registration Statement.
(i) The Company and Subsidiary now hold and at the
Closing Date and any later Option Closing Date, as the case may be, will hold,
all licenses, certificates, approvals and permits from all state, United
States, foreign and other regulatory authorities, including but not limited to
the United States Food and Drug Administration (the "FDA") and any foreign
regulatory authorities performing functions similar to those performed by the
FDA, that are material to the conduct of the business of the Company (as such
business is currently conducted), except for such licenses, certificates,
approvals and permits the failure of which to hold would not have a Material
Adverse Effect), all of which are valid and in full force and effect (and there
is no proceeding pending or, to the knowledge of the Company, threatened which
may cause any such license, certificate, approval or permit to be withdrawn,
canceled, suspended or not renewed). Neither the Company nor Subsidiary is in
violation of its certificate of incorporation or bylaws, or, except for
defaults or violations which would not have a Material Adverse Effect, in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any bond, debenture, note or other evidence of
indebtedness or in any contract, indenture, mortgage, loan agreement, joint
venture or other agreement or instrument to which it is a party or by which it
or any of its properties are bound, or in violation of any law, order, rule,
regulation, writ, injunction or decree of any court or governmental agency or
body, including, but not limited to, the FDA. All of the descriptions in the
Registration Statement and Prospectus of the legal and governmental proceedings
by or before the FDA or any foreign, state or local government body exercising
comparable authority are true, complete and accurate in all material respects.
(j) The Company and Subsidiary have filed on a timely
basis all necessary federal, state and foreign income, franchise and other tax
returns and has paid all taxes shown thereon as due, and the Company has no
knowledge of any tax deficiency which has been or might be asserted against the
Company or Subsidiary which might have a Material Adverse Effect. All material
tax liabilities are adequately provided for within the financial statements of
the Company.
(k) The Company and Subsidiary maintain insurance of the
types and in the amounts adequate for their business and consistent with
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering clinical trial liability,
product liability and real and personal property owned or leased against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect.
(l) Neither the Company nor Subsidiary is involved in any
labor dispute or disturbance nor, to the knowledge of the Company, is any such
dispute or disturbance threatened.
(m) Except as described in the Prospectus, the Company
and Subsidiary own or possess adequate licenses or other rights to use all
patents, patent applications, trademarks, trademark applications, service
marks, service xxxx applications, tradenames, copyrights, manufacturing
processes, formulae, trade secrets, know-how, franchises, and other material
intangible property and assets (collectively, "Intellectual Property")
necessary to the conduct of
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their businesses as conducted and as proposed to be conducted as described in
the Prospectus. The Company has no knowledge of any facts which would preclude
it from having rights to its patent applications referenced in the Prospectus.
The Company has no knowledge that it or Subsidiary lacks or will be unable to
obtain any rights or licenses to use any of the Intellectual Property necessary
to conduct the business now conducted or proposed to be conducted by it as
described in the Prospectus, except as described in the Prospectus. The
Prospectus fairly and accurately describe the Company's rights with respect to
the Intellectual Property. The Company has not received any notice of
infringement or of conflict with rights or claims of others with respect to any
Intellectual Property. The Company is not aware of any patents of others which
are infringed upon by potential products or processes referred to in the
Prospectus in such a manner as to materially and adversely affect the Company
and Subsidiary taken as a whole, except as described in the Prospectus.
(n) The Company and Subsidiary are conducting their
businesses in compliance with all of the laws, rules and regulations of the
jurisdictions in which it is conducting business, including, but not limited
to, the laws, rules and regulations administered or promulgated by the FDA
(o) The Company is not an "investment company," or a
"promoter" or "principal underwriter" for a registered investment company, as
such terms are defined in the Investment Company Act of 1940, as amended.
(p) Neither the Company nor Subsidiary has incurred any
liability for a fee, commission, or other compensation on account of the
employment of a broker or finder in connection with the transactions
contemplated by this Agreement other than the underwriting discounts and
commissions contemplated hereby.
(q) Each of the Company and Subsidiary is (i) in
compliance with any and all applicable United States, state and local
environmental laws, rules, regulations, treaties, statutes and codes
promulgated by any and all governmental authorities relating to the protection
of human health and safety, the environment or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) has received all
permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business as currently conducted, and (iii) is
in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permit licenses or other approvals would not, individually or
in the aggregate, have a Material Adverse Effect. No action, proceeding,
revocation proceeding, writ, injunction or claim is pending or threatened
relating to the Environmental Laws or to the Company's or its Subsidiaries'
activities involving Hazardous Materials. "Hazardous Materials" means any
material or substance (i) that is prohibited or regulated by any environmental
law, rule, regulation, order, treaty, statute or code promulgated by any
governmental authority, or any amendment or modification thereto, or (ii) that
has been designated or regulated by any governmental authority as radioactive,
toxic, hazardous or otherwise a danger to health, reproduction or the
environment.
(r) Neither the Company nor Subsidiary has engaged in the
generation, use, manufacture, transportation or storage of any Hazardous
Materials on any of the Company's or
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its Subsidiary's properties or former properties, except where such use,
manufacture, transportation or storage is in compliance with Environmental
Laws. No Hazardous Materials have been treated or disposed of on any of the
Company's or Subsidiary's properties or on properties formerly owned or leased
by the Company or any Subsidiary during the time of such ownership or lease,
except in compliance with Environmental Laws. No spills, discharges, releases,
deposits, emplacements, leaks or disposal of any Hazardous Materials have
occurred on or under or have emanated from any of the Company's or Subsidiary's
properties or former properties.
(s) Neither the Company nor Subsidiary has at any time
during the last five years (i) made any unlawful contribution to any candidate
for foreign office, or failed to disclose fully any contribution in violation
of law, or (ii) made any payment to any foreign, United States or state
governmental officer or official, or other person charged with similar public
of quasi-public duties, other than payments required or permitted by the laws
of the United States.
(t) The Common Stock is registered pursuant to Section
12(g) of the Exchange Act. The Shares have been duly authorized for quotation
on the National Association of Securities Dealers, Inc. Automated Quotation
System National Market System ("Nasdaq National Market"). The Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the Nasdaq National Market, nor has the Company received any
notification that the Commission or the Nasdaq National Market is contemplating
terminating such registration or listing.
(u) Neither the Company nor, to its knowledge, any of its
officers, directors or affiliates has taken, and at the Closing Date and at any
later Option Closing Date, neither the Company nor, to its knowledge, any of
its officers, directors or affiliates will have taken, directly or indirectly,
any action which has constituted, or might reasonably be expected to
constitute, the stabilization or manipulation of the price of sale or resale of
the Shares.
(v) The Company has timely and properly filed with the
Commission all reports and other documents required to have been filed by it
with the Commission pursuant to the Act and the Rules and Regulations. True
and complete copies of all such reports and other documents have been delivered
to you.
3. PURCHASE OF THE SHARES 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 the Firm Shares to the several Underwriters, and each of the
Underwriters agrees to purchase from the Company the respective aggregate
number of Firm Shares set forth opposite its name on Schedule A, plus such
additional number of Firm Shares which such Underwriter may become obligated to
purchase pursuant to Section 3(b) hereof. The price at which such Firm Shares
shall be sold by the Company and purchased by the several Underwriters shall be
$_____ per share. In making this Agreement, each Underwriter is contracting
severally and not jointly; except as provided in
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paragraphs (b) and (c) of this Section 3, the agreement of each Underwriter is
to purchase only the respective number of Firm Shares specified on Schedule A.
(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 10 hereof) to
purchase and pay for the number of Shares agreed to be purchased by such
Underwriter or Underwriters, the non-defaulting Underwriters shall have the
right within twenty four (24) hours after such default 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 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 which each non defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis (as adjusted by you in such manner
as you deem advisable to avoid fractional shares) 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
exceeds ten percent (10%) of the total number of Shares which all Underwriters
agreed to purchase hereunder. If the total number of Shares which the
defaulting Underwriter or Underwriters agreed to purchase shall not be
purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within twenty-four (24) hours next succeeding the
24-hour period referred to above, to make arrangements with other underwriters
or purchasers reasonably 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 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 the aggregate number of Shares
which the defaulting Underwriter or Underwriters agreed to purchase exceeds 10%
of the total number of Shares which all Underwriters agreed to purchase
hereunder, and if neither the non-defaulting Underwriters nor the Company shall
make arrangements within the 24-hour periods stated above for the purchase of
all the Shares which the defaulting Underwriter or Underwriters agreed to
purchase hereunder, this Agreement shall be terminated without further act or
deed and without any liability on the part of the Company to any non defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph (b), and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and
covenants herein contained, and subject to the terms and conditions herein set
forth, the Company grants an option to the several Underwriters to purchase all
or any portion of the Option Shares from the Company at the same price per
share as the Underwriters shall pay for the Firm Shares. Said option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement upon
written or telegraphic notice by you to the Company
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setting forth the aggregate number of shares of the Option Shares as to which
the several Underwriters are exercising the option. Delivery of certificates
for the shares of Option Shares, and payment therefor, shall be made as
provided in Section 5 hereof. Each Underwriter will purchase such percentage
of the Option Shares as is equal to the percentage of Firm Shares that such
Underwriter is purchasing, the exact number of shares to be 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 of the
Shares by the Underwriters 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) You, on behalf of the Underwriters, represent and
warrant that (i) the information set forth in the last paragraph on the front
cover page and paragraph ___ under the caption "Underwriting" in the
Registration Statement, any Preliminary Prospectus and the Prospectus relating
to the Shares (insofar as such information relates to the Underwriters)
constitutes the only information furnished by the Underwriters to the Company
for inclusion in the Registration Statement, any Preliminary Prospectus, and
the Prospectus, and that the statements made therein are correct and do not
omit to state any material fact required to be stated therein or necessary to
make the statements made therein in light of the circumstances under which they
were made not misleading, and (ii) the Underwriters have not distributed and
will not distribute prior to the Closing Date or on any Option Closing Date, as
the case may be, any of offering material in connection with the offering and
sale of the shares other than the Preliminary Prospectus, the Prospectus, the
Registration Statement and other materials permitted by the Act.
5. DELIVERY OF AND PAYMENT FOR THE SHARES.
(a) Delivery of certificates for the Firm Shares and the
Option Shares (if the option granted pursuant to Section 3(c) hereof shall have
been exercised not later than 11:00 a.m., Denver time, on the date at least two
business days preceding the Closing Date), and payment therefor, shall be made
at the offices of Xxxxxx Godward LLP, 0000 Xxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxx 00000 6737 (or at such other place as may be agreed upon by
the Company and you) at 7:00 a.m., Denver time (a) on the third (3rd) full
business day following the first day that Shares are traded, (b) if this
Agreement is executed and delivered after 2:30 p.m., Denver time, the fourth
(4th) full business day following the day that this Agreement is executed and
delivered or (c) at such time on such other day, not later than seven (7) full
business days following the first day that Shares are traded, as shall be
agreed upon in writing by the Company and you (the "Closing Date").
(b) If the option granted pursuant to Section 3(c) hereof
shall be exercised after 11:00 a.m., Denver time, on the date two business days
preceding the Closing Date, and on or before the 30th day after the date of
this Agreement, delivery of certificates for the Option Shares, and payment
therefor, shall be made at the offices of Xxxxxx Godward LLP, 2595 Canyon
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Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 6737 at 7:00 a.m., Denver time,
on the third (3rd) business day after the exercise of such option.
(c) Payment for the Shares purchased from the Company
shall be made to the Company or its order, by either a same day funds check or
Federal Funds wire transfer. Such payment shall be made upon delivery of
certificates for the Shares to you for the respective accounts of the several
Underwriters against receipt therefor signed by you. Certificates for the
Shares 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 three business days
before the Closing Date, in the case of Firm Shares, and at least two business
days prior to the Option Closing Date, in the case of the Option Shares. Such
certificates will be made available to the Underwriters for inspection,
checking and packaging at a location in New York, New York, designated by the
Underwriters not less than one full business day prior to the Closing Date or,
in the case of the Option Shares, by 3:00 p.m., New York time, on the business
day preceding the Option Closing Date.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later Option Closing Date. Any such
payment by you shall not relieve such Underwriter from any of its obligations
hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and
agrees as follows:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto,
to become effective as promptly as possible; it will notify you, promptly after
it shall receive notice thereof, of the time when the Registration Statement or
any subsequent amendment to the Registration Statement has become effective or
any supplement to the Prospectus has been filed. If the Company omitted
information from the Registration Statement at the time it was originally
declared effective in reliance upon Rule 430A(a), the Company will provide
evidence satisfactory to you that the Prospectus contains such information and
has been filed, within the time period prescribed, with the Commission pursuant
to subparagraph (1) or (4) of Rule 424(b) of the Rules and Regulations or as
part of a post-effective amendment to such Registration Statement as originally
declared effective which is declared effective by the Commission. If for any
reason the filing of the final form of Prospectus is required under Rule
424(b)(3) of the Rules and Regulations, it will provide evidence satisfactory
to you that the Prospectus contains such information and has been filed with
the Commission within the time period prescribed. The Company will notify you
promptly of any request by the Commission for the amending or supplementing of
the Registration Statement or the Prospectus or for additional information.
Promptly upon your request, it will prepare and file with the Commission any
amendments or supplements to the Registration Statement or Prospectus which, in
the reasonable opinion of counsel to the several Underwriters ("Underwriters'
Counsel"), may be necessary or advisable in connection with the distribution of
the Shares by the Underwriters. The Company will promptly prepare and file
with the Commission, and promptly notify you of the filing of, any amendments
or supplements to the Registration Statement or Prospectus which may
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be necessary to correct any statements or omissions, if, at any time when a
prospectus relating to the Shares is required to be delivered under the Act,
any event shall have occurred as a result of which the Prospectus or any other
prospectus relating to the Shares as then in effect would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. In case any Underwriter is required to deliver a
prospectus within the nine-month period referred to in Section 10(a)(3) of the
Act in connection with the sale of the Shares, the Company will prepare
promptly upon request, but at the expense of such Underwriter, such amendment
or amendments to the Registration Statement and such prospectus or prospectuses
as may be necessary to permit compliance with the requirements of Section
10(a)(3) of the Act. The Company will file no amendment or supplement to the
Registration Statement or Prospectus that shall not previously have been
submitted to you a reasonable time prior to the proposed filing thereof or to
which you shall reasonably object in writing or which is not in compliance with
the Act and Rules and Regulations or the provisions of this Agreement.
(b) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof of the issuance of any stop order by
the Commission suspending the effectiveness of the Registration Statement or
the use of the Prospectus or of the initiation or threat of any proceeding for
that purpose; and it will promptly use its best efforts to prevent the issuance
of any such stop order or to obtain its withdrawal at the earliest possible
moment if such stop order should be issued.
(c) The Company will cooperate with you in endeavoring to
qualify the Shares for offering and sale under the securities laws of such
jurisdictions as you may designate and to continue such qualifications in
effect for so long as may be required for purposes of the distribution of the
Shares, except that the Company shall not be required in connection therewith
or as a condition thereof to qualify as a foreign corporation, or to execute a
general consent to service of process in any jurisdiction, or to make any
undertaking with respect to the conduct of its business. In each jurisdiction
in which the Shares shall have been qualified, the Company will make and file
such statements, reports and other documents in each year as are or may be
reasonably required by the laws of such jurisdictions so as to continue such
qualifications in effect for so long a period as you may reasonably request for
distribution of the Shares, or as otherwise may be required by law.
(d) The Company will furnish to you, as soon as
available, copies of the Registration Statement (three of which will be signed
and which will include all exhibits), each Preliminary Prospectus, the
Prospectus and any amendments or supplements to such documents, including any
prospectus prepared to permit compliance with Section 10(a)(3) of the Act, all
in such quantities as you may from time to time reasonably request.
(e) The Company will make generally available to its
stockholders as soon as practicable, but in any event not later than the 45th
day following the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement, an earnings
statement (which will be in reasonable detail but need not be audited)
complying with the provisions of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations and covering a
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twelve-month period beginning after the effective date of the Registration
Statement, and will advise you in writing when such statement has been made
available.
(f) During a period of five years after the date hereof,
the Company, as soon as practicable after the end of each respective period,
will furnish to its stockholders annual reports (including financial statements
audited by independent certified public accountants) and will furnish to its
stockholders unaudited quarterly reports of operations for each of the first
three quarters of the fiscal year, and will, upon request, furnish to you and
the other several Underwriters hereunder (i) concurrently with making such
reports available to its stockholders, statements of operations of the Company
for each of the first three quarters in the form made available to the
Company's stockholders; (ii) concurrently with the furnishing thereof to its
stockholders, a balance sheet of the Company as of the end of such fiscal year,
together with statements of operations, of stockholders' equity and of cash
flow of the Company for such fiscal year, accompanied by a copy of the
certificate or report thereon of nationally recognized independent certified
public accountants; (iii) concurrently with the furnishing of such reports to
its stockholders, copies of all reports (financial or other) mailed to
stockholders; (iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, any securities
exchange or the Nasdaq National Market by the Company (except for documents for
which confidential treatment is requested); and (v) every material press
release and every material news item or article in respect of the Company or
its affairs which was generally released to stockholders or prepared for
general release by the Company. During such five-year period, if the Company
shall have any active subsidiaries, the foregoing financial statements shall be
on a consolidated basis to the extent that the accounts of the Company are
consolidated with any subsidiaries, and shall be accompanied by similar
financial statements for any significant subsidiary that is not so
consolidated.
(g) Prior to or simultaneously with the execution and
delivery of this Agreement, the Company will obtain agreement from each
beneficial owner of the Company's Common Stock listed on Schedule B to this
Agreement providing that such person will not, for a period of 180 days after
the date of the Prospectus, without the prior written consent of UBS Securities
LLC, directly or indirectly, offer to sell, sell, hypothecate, contract to
sell, grant any option to purchase, or otherwise dispose of, any shares of
Common Stock beneficially owned as of the date such lockup agreement is
executed (including, without limitation, shares of Common Stock which may be
deemed to be beneficially owned in accordance with the Rules and Regulations
and shares of Common Stock which may be issued upon exercise of a stock option
or warrant) or any securities convertible into or exercisable or exchangeable
for such Common Stock except, (a) by operation of law or (b) pursuant to a bona
fide gift to any person or other entity which agrees in writing to be bound by
this restriction. Each such person or entity shall also agree and consent to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of shares of Common Stock held by such person or entity,
except in compliance with the foregoing restriction.
(h) The Company shall not, during the 180 days following
the effective date of the Registration Statement, except with your prior
written consent as Representatives, file a registration statement covering any
of its shares of capital stock, except that one or more
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registration statements on Form S 8 may be filed at any time following the
effective date of the Registration Statement.
(i) The Company shall not, during the 180 days following
the effective date of the Registration Statement, except with your prior
written consent as Representatives, issue, sell, offer or agree to sell, grant,
distribute or otherwise dispose of, directly or indirectly, any shares of
Common Stock, or any options, rights or warrants with respect to shares of
Common Stock, or any securities convertible into or exchangeable for Common
Stock, other than (i) the sale of Shares hereunder, (ii) the grant of options
or the issuance of shares of Common Stock under the Company's stock option
plans or stock purchase plan, as the case may be, existing on the date hereof,
(iii) the issuance of shares of Common Stock upon exercise of the currently
outstanding options or warrants described in the Registration Statement.
(j) The Company will apply the net proceeds from the sale
of the Shares being sold by it in the manner set forth under the caption "Use
of Proceeds" in the Prospectus.
(k) The Company will maintain a Transfer Agent and, if
necessary under the jurisdiction of incorporation of the Company, a Registrar
(which may be the same entity as the Transfer Agent) for its Common Stock.
(l) The Company will use its best efforts to maintain
listing of its shares of Common Stock on the Nasdaq National Market.
(m) The Company is familiar with the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder, and has in
the past conducted its affairs, and will in the future conduct its affairs, in
such a manner so as to ensure that the Company was not and will not be an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder.
(n) If at any time during the 180-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
reasonable opinion the market price of the Common 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 consult with you in good faith regarding the necessity of
disseminating a press release or other public statement responding to or
commenting on such rumor, publication or event and, if the Company in its
reasonable judgment determines that such a press release or other public
statement is appropriate, the substance of any press release or other public
statement.
7. EXPENSES.
The Company agrees with each Underwriter that:
(a) The Company will pay and bear all costs, fees and
expenses in connection with the preparation, printing and filing of the
Registration Statement (including financial statements, schedules and
exhibits), Preliminary Prospectuses and the Prospectus and any
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amendments or supplements thereto; the reproduction of this Agreement, the
Master Agreement Among Underwriters, the Master Selected Dealer Agreement, the
Preliminary Blue Sky Memoranda and any Supplemental Blue Sky Memoranda and any
instruments related to any of the foregoing; the issuance and delivery of the
Shares hereunder to the several Underwriters, including transfer taxes, if any;
the cost of all stock certificates representing the Shares and Transfer Agents'
and Registrars' fees; the fees and disbursements of corporate, patent and
regulatory counsel for the Company; all fees and other charges of the Company's
independent public accountants; the cost of furnishing to the several
Underwriters copies of the Registration Statement (including appropriate
exhibits), Preliminary Prospectuses and the Prospectus, and any amendments or
supplements to any of the foregoing; NASD filing fees and expenses incident to
securing any required review and the cost of qualifying the Shares under the
laws of such jurisdictions within the United States as you may designate
(including filing fees and fees and disbursements of Underwriters' Counsel in
connection with such NASD filings and Blue Sky qualifications); listing
application fees of the Nasdaq National Market; and all other expenses directly
incurred by the Company in connection with the performance of its obligations
hereunder.
(b) If the transactions contemplated hereby are not
consummated by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed hereunder or to
fulfill any condition of the Underwriters' obligations hereunder, the Company
will, in addition to paying the expenses described in clause (a) above,
reimburse the several Underwriters for all out-of-pocket expenses (including
reasonable fees and disbursements of Underwriters' Counsel) incurred by the
Underwriters in reviewing the Registration Statement and the Prospectus and in
otherwise investigating, preparing to market or marketing the Shares. The
Company will in no event be liable to any of the several Underwriters for any
loss of anticipated profits from the sale by them of the Shares.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.
The obligations of the several Underwriters to purchase and pay for
the Shares, as provided herein, shall be subject to the accuracy, as of the
date hereof and the Closing Date and any later Option Closing Date, as the case
may be, of the representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become
effective not later than 9:00 a.m., New York City time, on the date following
the date of this Agreement, or such later time or date as shall be consented to
in writing by you. If the filing of the Prospectus, or any supplement thereto,
is required pursuant to Rule 424(b) and Rule 430A of the Rules and Regulations,
the Prospectus shall have been filed in the manner and within the time period
required by Rule 424(b) and Rule 430A of the Rules and Regulations. No stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose shall have been initiated or, to
the knowledge of the Company or any Underwriter, threatened by the Commission,
and any request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of Underwriters' Counsel.
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(b) All corporate proceedings and other legal matters in
connection with this Agreement, the form of Registration Statement and the
Prospectus, and the registration, authorization, issue, sale and delivery of
the Shares shall have been reasonably satisfactory to Underwriters' Counsel,
and such counsel shall have been furnished with such papers and information as
they may reasonably have requested to enable them to pass upon the matters
referred to in this subsection.
(c) You shall have received, at no cost to you, on the
Closing Date and on any later Option Closing Date, as the case may be, the
opinion of Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional Corporation,
corporate counsel to the Company, dated the Closing Date or such later Option
Closing Date, in the forms attached hereto on Appendix A, addressed to the
Underwriters and with reproduced copies of signed counterparts thereof for each
of the Representatives.
(d) You shall have received from Xxxxxx Godward LLP,
Underwriters' Counsel, an opinion or opinions, dated the Closing Date or on any
later Option Closing Date, as the case may be, in form and substance reasonably
satisfactory to you, with respect to the sufficiency of all corporate
proceedings undertaken by the Company and other legal matters relating to this
Agreement and the transactions contemplated hereby as you may reasonably
require, and the Company shall have furnished to such counsel such documents as
it may have reasonably requested for the purpose of enabling it to pass upon
such matters.
(e) You shall have received on the Closing Date and on
any later Option Closing Date, as the case may be, a letter from the
Accountants addressed to the Company and the Underwriters, dated the Closing
Date or such later Option Closing Date, as the case may be, confirming that it
is an independent certified public accountant with respect to the Company
within the meaning of the Act and the Rules and Regulations thereunder and
based upon the procedures described in its 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 days prior to the Closing Date or any
such later Option Closing Date, as the case may be, (i) confirming that the
statements and conclusions set forth in the Original Letter are accurate as of
the Closing Date or such later Option Closing Date, as the case may be; and
(ii) setting forth any revisions and additions to the statements and
conclusions set forth in the Original Letter that are necessary to reflect any
changes in the facts described in the Original Letter since the date of such
letter, or to reflect the availability of more recent financial statements,
data or information. The letter shall not disclose any change, or any
development involving a prospective change, in or affecting the business or
properties of the Company which, in your reasonable judgment, makes it
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus. In addition, you shall have received from
the Accountants a letter addressed to the Company and made available to you for
the use of the Underwriters stating that its review of the Company's system of
internal accounting controls, to the extent it deemed necessary in establishing
the scope of its latest examination of the Company's financial statements, did
not disclose any weaknesses in internal controls that it considered to be
material weaknesses. All such letters shall be in a form reasonably
satisfactory to the Representatives and their counsel.
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(f) You shall have received on the Closing Date and on
any later Option Closing Date, as the case may be, a certificate of the
President and the Chief Financial Officer of the Company, dated the Closing
Date or such later date, to the effect that as of such date (and you shall be
satisfied that as of such date):
(i) The representations and warranties of the
Company in this Agreement are true and correct, as if made on and as of the
Closing Date or any later Option Closing Date, as the case may be; and the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied at or prior to the Closing
Date or any later Option Closing Date, as the case may be;
(ii) The Registration Statement has become
effective under the Act and no stop order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of the Prospectus
has been issued, and no proceedings for that purpose have been instituted or
are pending or, to the best of their knowledge, threatened under the Act;
(iii) They have carefully reviewed the Registration
Statement and the Prospectus; and, when the Registration Statement became
effective and at all times subsequent thereto up to the delivery of such
certificate, the Registration Statement and the Prospectus and any amendments
or supplements thereto contained all statements and information required to be
included therein or necessary to make the statements therein not misleading;
and when the Registration Statement became effective, and at all times
subsequent thereto up to the delivery of such certificate, none of the
Registration Statement, the Prospectus or any amendment or supplement thereto
included any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; and, since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an amended
or supplemented Prospectus that has not been so set forth; and
(iv) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been (a) any material adverse change in the properties or assets
described or referred to in the Registration Statement and the Prospectus or in
the condition (financial or otherwise), operations, business or prospects of
the Company and Subsidiary, (b) any transaction which is material to the
Company and Subsidiary, except transactions entered into in the ordinary course
of business, (c) any obligation, direct or contingent, incurred by the Company
or Subsidiary, which is material to the Company and Subsidiary taken as a
whole, (d) any change in the capital stock or outstanding indebtedness of the
Company or Subsidiary which is material to the Company and Subsidiary taken as
a whole or (e) any dividend or distribution of any kind declared, paid or made
on the capital stock of the Company.
(g) The Company shall have furnished to you such further
certificates and documents as you shall reasonably request as to the accuracy
of the representations and warranties of the Company herein, as to the
performance by the Company of its obligations hereunder and as to the other
conditions concurrent and precedent to the obligations of the Underwriters
hereunder.
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(h) The Firm Shares and the Option Shares, if any, shall
have been approved for designation upon notice of issuance on the Nasdaq
National Market.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The Company will furnish you with such number of
conformed copies of such opinions, certificates, letters and documents as you
shall reasonably request.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (f) below, the
Company agrees to indemnify and hold harmless each Underwriter and each person
(including each partner or officer thereof) who controls any Underwriter within
the meaning of Section 15 of the 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 Act, the Exchange Act, or
the common law or otherwise, and the Company agrees to reimburse each such
Underwriter and controlling person for any legal or other out-of-pocket
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 462(b) registration
statement) or any post effective amendment thereto (including any 462(b)
registration statement), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus or the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that (1) the indemnity agreements of
the Company contained in this paragraph (a) shall not apply to any such losses,
claims, damages, liabilities or expenses if such statement or omission is
contained in the section of the Prospectus entitled "Underwriting" (except for
the ____ paragraph thereof) or the last paragraph of text on the cover page of
the Prospectus, and (2) the indemnity agreement contained in this paragraph (a)
with respect to any Preliminary Prospectus not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Shares 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 Shares 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 (a) of Section 6 hereof. The
indemnity agreements of the Company contained in this paragraph (a) and the
representations and warranties of the Company contained in Section 2 hereof
shall
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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
any payment for the Shares.
(b) Each Underwriter severally agrees to indemnify and
hold harmless the Company, each of its executive officers, 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 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 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 462(b)
registration statement) or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus or the Prospectus
(as amended or as supplemented if the Company shall have filed with the
Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that in the cases of clauses (i) and
(ii) above, such statement or omission is contained in the Section of the
Prospectus entitled "Underwriting" (except for the ____ paragraph thereof) or
the last paragraph on the cover page of the Prospectus. The indemnity
agreement of each Underwriter contained in this paragraph (b) shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any indemnified party and shall survive the delivery of and
payment for the Shares.
(c) Each party indemnified under the provision of
paragraphs (a) and (b) of this Section 9 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 (a "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
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of the Notice by giving written notice (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, at its or their own expense to have counsel chosen
by such indemnified party or parties participate in, but not conduct, the
defense. It is understood that the indemnifying parties shall not, in respect
of the legal defenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all of the Underwriters and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act, and (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Company, its directors, its officers who sign the Registration Statement
and each person, if any, who controls the Company within the meaning of Section
15 of the Act. 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 9 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. The
indemnifying party or parties shall not be liable for any settlement of any
proceeding effected without its or their written consent, provided such consent
has not been unreasonably withheld.
(d) If the indemnification provided for in this Section 9
is unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 9, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, 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 9 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause
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(i) above but also the relative fault of each indemnifying party in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on
the one hand, and the Underwriters, on the other, shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Shares received by the Company and the total underwriting discount received by
the Underwriters, as set forth in the table on the cover page of the
Prospectus, bear to the aggregate public offering price of the Shares.
Relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
each indemnifying party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this
paragraph (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities, or actions in respect thereof, referred
to in the first sentence of this paragraph (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigation, preparation to defend or defense 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
Shares purchased by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 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 9).
(e) The Company will not, 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 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.
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(f) The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions hereof, including without limitation
the provisions of this Section 9 and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 9
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is
made in the Registration Statement and Prospectus as required by the Act and
the Exchange Act.
10. TERMINATION. This Agreement may be terminated by you at any
time on or prior to the Closing Date or on or prior to any later Option Closing
Date, as the case may be, (i) if the Company shall have failed, refused or been
unable, at or prior to the Closing Date, or on or prior to any later Option
Closing Date, as the case may be, to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company is not fulfilled, or (ii) if
trading on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market shall have been suspended, or minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market, by such trading exchanges or by order
of the Commission or any other governmental authority having jurisdiction, or
if a banking moratorium shall have been declared by federal or New York
authorities, or (iii) if the Company shall have sustained a loss by strike,
fire, flood, accident or other calamity of such character as to have a Material
Adverse Effect regardless of whether or not such loss shall have been insured,
or (iv) if there shall have been a material adverse change in the general
political or economic conditions or financial markets in the United States as
in the judgment of the Representatives makes it inadvisable or impracticable
to proceed with the offering, sale and delivery of the Shares, or (v) if there
shall have occurred an outbreak or escalation of hostilities between the United
States and any foreign power or of any other insurrection or armed conflict
involving the United States or other national or international calamity,
hostilities or crisis or the declaration by the United States of a national
emergency which, in the judgment of the Representatives, adversely affects the
marketability of the Shares, or (vi) if since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
shall have occurred any material adverse change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, of the Company or the business affairs, management, or business
prospects of the Company, whether or not arising in the ordinary course of
business, or (vii) if any foreign, federal or state statute, regulation, rule
or order of any court or other governmental authority shall have been enacted,
published, decreed or otherwise promulgated which in the judgment of the
Representatives materially and adversely affects or will materially and
adversely affect the business or operations of the Company, or trading in the
Common Stock shall have been suspended, or (viii) there shall have occurred a
material adverse decline in the value of securities generally on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market or
(ix) action shall be taken by any foreign, federal, state or local government
or agency in respect of its monetary or fiscal affairs which, in the judgment
of the Representatives, has a material adverse effect on the securities markets
in the United States. If this Agreement shall be terminated in accordance with
this Section 10, there shall be no liability of the Company to the Underwriters
and no liability of the Underwriters to the Company; provided,
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however, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses
incident to the performance of the obligations of the Company under this
Agreement, including all costs and expenses referred to in Section 7.
If you elect to terminate this Agreement as provided in this Section
10, the Company shall be notified promptly by you by telephone, telecopy or
telegram, confirmed by letter.
11. REIMBURSEMENT OF CERTAIN EXPENSES.
(a) In addition to their other obligations under Section
9 of this Agreement, the Company hereby agrees to reimburse on a quarterly
basis the Underwriters for all reasonable legal and other expenses incurred in
connection with investigating or defending any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in paragraph (a) of
Section 9 of this Agreement, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this Section 11 and the possibility that such payments might later be held to
be improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
(b) In addition to their other obligations under Section
9 of this Agreement, the Underwriters hereby agree to reimburse on a quarterly
basis the Company 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 (b) of
Section 9 of this Agreement, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this Section 11 and the possibility that such payments might later be held to
be improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the Company shall promptly refund it and (ii)
the Company shall provide to the Underwriter, upon request, reasonable
assurances of its 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 and the several Underwriters and,
with respect to the provisions of Section 9 hereof, the several parties (in
addition to the Company and the several Underwriters) indemnified under the
provisions of said Section 9, 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 Shares 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 UBS Securities LLC,
000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xx. Xxxxxxx Xxxxxxx; and if to
the Company, shall be mailed, telegraphed or delivered
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to it at its office, 0000 Xxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000,
Attention: Xxxxxx X. Xxxx, Xx. 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 (i) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its respective directors of officers, and (ii) delivery of and payment for the
Shares under this Agreement.
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.
You will act as Representatives of the several Underwriters in all
dealings with the Company under this Agreement, and any action under or in
respect of this Agreement taken by you jointly or by UBS Securities LLC, as
Representatives, will be binding upon all of the Underwriters.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
[INTENTIONALLY LEFT BLANK]
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Please sign and return to the Company the enclosed copies of this
letter, whereupon this letter will become a binding agreement among the Company
and the several Underwriters in accordance with its terms.
Very truly yours,
NEW ERA OF NETWORKS, INC.
By:
-------------------------------------
Xxxxxx X. Xxxx, Xx.
President and Chief Executive Officer
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above written.
UBS SECURITIES LLC
By: UBS SECURITIES LLC
By:
-----------------------
Title:
XXXXXXXXXX SECURITIES
By:
-----------------------
Title:
Acting on behalf of the several
Underwriters, including themselves,
named on Schedule A hereto.
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SCHEDULE A
UNDERWRITERS
Number of Shares
Underwriters to be Purchased
------------------------------------------------------------------------------------------- ----------------
UBS Securities LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Xxxxxxxxxx Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total [ ]
===========
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SCHEDULE B
LOCK-UP AGREEMENT
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APPENDIX A
1. OPINION OF COUNSEL TO THE COMPANY
Wilson, Sonsini, Xxxxxxxx & Xxxxxx, Professional Corporation, shall
opine to the effect that:
(a) The Company has been duly organized and is validly
existing as a corporation, and is in good standing under, the laws of the State
of Delaware;
(b) The Company has the corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus; the Company is duly qualified to do business as a foreign
corporation and is in good standing in all jurisdictions in which the ownership
or leasing of its properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not have a Material
Adverse Effect;
(c) Other than Subsidiary, the Company does not own or
control, directly or indirectly, any corporation, association or other entity.
Subsidiary has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, with
full corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement. Each
Subsidiary is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction where the ownership or leasing of the properties
or the conduct of its business requires such qualification, except where the
failure to so qualify would not have a Material Adverse Effect. All of the
outstanding shares of capital stock of Subsidiary have been duly authorized and
validly issued, are fully paid and non-assessable and, except as otherwise
stated in the Registration Statement), are owned by the Company, in each case
subject to no security interest, other encumbrance or adverse claim; 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 obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding;
(d) The authorized capital stock of the Company consists
of shares of Preferred Stock, of which __________ shares are designated Series
A Preferred Stock, of which __________ shares are issued and outstanding,
__________ shares are designated Series B Preferred Stock, of which __________
shares are issued and outstanding, and __________ shares are designated Series
C Preferred Stock, of which __________ shares are issued and outstanding, and
__________ shares of Common Stock, $.001 par value, of which _________ shares
are oustanding (including the Firm Shares plus the number of Option Shares
issued on the date hereof; the authorized shares of the Company's Common Stock
have been duly authorized; the issued and outstanding shares of the Company's
capital stock have been duly authorized and validly issued and are fully paid
and nonassessable, and have not been issued in violation of any preemptive
right, co- sale right, registration right, right of first refusal or other
similar right known to such counsel;
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(e) The Shares to be issued by the Company pursuant to
this Agreement have been duly authorized and will be, upon issuance and
delivery against payment therefor in accordance with the terms hereof, validly
issued, fully paid and nonassessable, and, to our knowledge, the stockholders
of the Company do not have any preemptive right, co-sale right, registration
right, right of first refusal or other similar right, which rights have not
previously been waived, in connection with the purchase or sale of any of the
Shares;
(f) The Company has full corporate power and authority to
enter into this Agreement and to issue, sell and deliver to the Underwriters
the Firm Shares or the Option Shares, as the case may be, to be issued and sold
by it hereunder;
(g) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has been duly
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms, except as rights to
indemnity may be limited by applicable laws and public policy and except as
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors' rights, and subject to general equity principles and to limitations
on availability of equitable relief, including specific performance;
(h) The Registration Statement has become effective under
the Act and, to our knowledge, no stop order suspending the effectiveness of
the Registration Statement or suspending or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Act; any required filing of
the Prospectus and any supplement thereto pursuant to Rule 424(b) of the Rules
and Regulations has been made in the manner and within the time period required
by such Rule 424(b);
(i) The Registration Statement, all Preliminary
Prospectuses, the Prospectus, and each amendment or supplement thereto (other
than the financial statements, financial data and supporting schedules included
therein, as to which such counsel need express no opinion), comply as to form
in all material respects with the requirements of the Act and the applicable
Rules and Regulations and to our knowledge, there are no agreements, contracts,
leases or documents of a character required to be described in, or filed as an
exhibit to, the Registration Statement which are not described or filed as
required by the Act and the applicable Rules and Regulations;
(j) The terms and provisions of the capital stock of the
Company conform to the description thereof contained in the Registration
Statement and the Prospectus, and the information in the Prospectus under the
caption "Description of Capital Stock", to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by us and is correct,
and the form of certificate evidencing the Common Stock complies with the
applicable provisions of Delaware law;
(k) The statements in the Registration Statement and the
Prospectus summarizing statutes, rules and regulations, including the Delaware
corporation law and the description of the certificate of incorporation and
bylaws are accurate and fairly and correctly present the information required
to be presented by the Act or the Rules and Regulations in all material
respects; and such counsel does not know of any statutes, rules or regulations
required to
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be described in the Registration Statement or the Prospectus that are not
described or referred to therein as required;
(l) The statements under the captions "Risk Factors -
Shares Eligible for Future Sale," "Management - Employee Benefit Plans,"
"Management - Compensation Committee Interlocks and Insider Participation,"
"Certain Transactions" and "Description of Capital Stock" in the Prospectus,
insofar as such statements constitute a summary of documents referred to
therein or matters of law, are accurate summaries and fairly and correctly
present, in all material respects, the information called for with respect to
such documents and matters; provided that such counsel shall be entitled to
rely on representations of the Company with respect to certain factual matters
contained in such statements, and provided further that such counsel shall
state that nothing has come to the attention of such counsel which leads them
to believe that such representations are not true and correct in all material
respects;
(m) The information required to be set forth in the
Registration Statement in answer to Items 9, 10 (insofar as it relates to us)
and 11(c) of Form S-1 is to our knowledge accurately and adequately set forth
therein in all material respects or no response is required with respect to
such Items;
(n) The execution, delivery and performance of this
Agreement and the consummation of the transactions therein contemplated do not
and will not (a) conflict with or result in a breach of any of the terms or
provisions of or, constitute a default under, the certificate of incorporation,
as amended (the "Certificate of Incorporation"), or bylaws of the Company, any
agreement or document filed as an exhibit to the Registration Statement, or any
statute, rule or regulation applicable to the Company (except that no opinion
need to be expressed with respect to compliance with federal and state
securities laws) or (b) to our knowledge, result in the creation or imposition
of any lien or encumbrance upon any of the assets of the Company pursuant to
the terms or provisions of, or result in a breach or violation of any of the
terms or provisions of, or constitute a default or result in the acceleration
of any obligation under, any indenture, mortgage, deed of trust, loan
agreement, bond, debenture, note agreement, other evidence of indebtedness,
lease, contract or other agreement or instrument to which the Company is a
party or by which its property is bound or (c) to our knowledge, conflict with
or result in a violation or breach of, or constitute a default under, any
applicable license, authorization, approval, permit, judgment, franchise,
order, writ or decree of any court or governmental agency or body;
(o) The Company has the corporate power and authority to
own or lease all of the assets owned or leased by it and to conduct its
business, in each case as described in the Registration Statement and the
Prospectus, except where failure to have such power and authority would not
have a Material Adverse Effect, and has all licenses, permits, consents,
orders, approvals and authorizations of any federal or state government
authority that are necessary to conduct its business as described in the
Registration Statement and the Prospectus, except where failure to have such
licenses, permits, consents, orders, approvals and authorizations would not
have a Material Adverse Effect.
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(p) No authorization, approval, consent, order,
designation or declaration of or filing by or with any governmental authority
or agency is necessary in connection with the execution and delivery of this
Agreement by the Company and the consummation of the transactions therein
contemplated except such as may have been obtained under the Act and the Rules
and Regulations or such as may be required under state securities or Blue Sky
laws or by the bylaws and rules of the NASD in connection with the purchase and
distribution of the Shares by the Underwriters;
(q) The Company is not in violation of its Certificate of
Incorporation or bylaws, and to our knowledge, the Company is not in breach of
or default with respect to any provision of any agreement, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other instrument by
which it or any of its properties may be bound or affected, except where such
default would not materially adversely affect the Company and, to the best of
such counsel's knowledge, the Company is in compliance with all laws, rules,
regulations, judgments, decrees, orders and statutes of any court or
jurisdiction to which it is subject, except where noncompliance would not
materially adversely affect the Company;
(r) To our knowledge, there are no pending or threatened
actions, suits, claims, proceedings or investigations that, if successful,
would have a Material Adverse Effect or would limit, revoke, cancel, suspend,
or cause not to be renewed any existing license, certificate, registration,
approval or permit, known to us, from any state, federal, or regulatory
authority that is material to the conduct of the business of the Company as
presently conducted, or that is of a character otherwise required to be
disclosed in the Registration Statement or the Prospectus under the Act or the
applicable Rules and Regulations;
(s) To our knowledge, except as set forth in the
Registration Statement and Prospectus, no holders of shares of Common Stock or
other securities of the Company have registration rights with respect to
securities of the Company and, except as set forth in the Registration
Statement and Prospectus, all holders of securities of the Company having
registration rights with respect to shares of Common Stock or other securities
have, with respect to the offering contemplated hereby, waived such rights or
such rights have otherwise been waived or such rights have expired by reason of
lapse of time following notification of the Company's intent to file the
Registration Statement.
(t) The Company will not, upon consummation of the
transactions contemplated by this Agreement, be an "investment company," or a
"promoter" or "principal underwriter" for, a "registered investment company,"
as such terms are defined in the Investment Company Act of 1940, as amended;
In addition, counsel shall include a statement to the effect that such
counsel has participated in conferences with officials and other
representatives of the Company, the Representatives, Underwriters' Counsel and
the independent public accountants of the Company, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed, and although they have not verified the accuracy or
completeness of the statements contained in the Registration Statement or the
Prospectus, nothing has come to the attention of such counsel which caused them
to believe that, at the time the Registration
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Statement became effective the Registration Statement (except as to financial
statements, financial and statistical data and supporting schedules contained
therein, as to which such counsel need express no opinion) 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
at the Closing Date or any later Option Closing Date, as the case may be, the
Registration Statement or the Prospectus (except as aforesaid) 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, in
light of the circumstances under, which they were made, not misleading.
Counsel rendering the foregoing may rely (i) as to questions of law
not involving the laws of the State of [COLORADO], the United States or the
General Corporation Law of the State of Delaware upon opinions of local
counsel, and (ii) as to questions of fact upon representations or certificates
of officers of the Company and of governmental officials, as the case may be,
in which case its opinion is to state that it is so doing and that it has no
actual knowledge of any material misstatement or inaccuracy in such opinions,
representations or certificates, and that they believe that they and the
Underwriters are justified in relying on such opinions or certificates. Copies
of any opinion, representation or certificate so relied upon shall be delivered
to you, as Representatives of the Underwriters, and to Underwriters' Counsel.
5
