EXHIBIT 1.1
Shares
Common Stock
($0.001 Par Value)
UNDERWRITING AGREEMENT
, 2001
UNDERWRITING AGREEMENT
, 2001
UBS Warburg LLC
Xxxx Xxxxxxxx Xxxxxxx,
a division of Xxxx Xxxxxxxx Incorporated
Wit SoundView Corporation
Xxxxx, Xxxxxxxx & Xxxx, Inc.
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
HPL Technologies, Inc., a Delaware corporation (the "COMPANY"), proposes
to issue and sell to the underwriters named in SCHEDULE A annexed hereto (the
"UNDERWRITERS") an aggregate of shares (the "FIRM SHARES") of Common
Stock, $0.001 par value per share (the "COMMON STOCK"), of the Company. In
addition, solely for the purpose of covering over-allotments, the Company
proposes to grant to the Underwriters the option to purchase from the Company
up to an additional shares of Common Stock (the "ADDITIONAL SHARES"). The
Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the "SHARES." The Shares are described in the Prospectus which
is referred to below.
The Company has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively
called the "ACT"), with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-1 (File No. 333-61810)
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each thereof being herein called a "PRELIMINARY
PROSPECTUS") relating to the Shares and copies of the Registration Statement and
Prospectus (each as defined below). Except where the context otherwise requires,
the registration statement, as amended when it became effective, including all
documents filed as a part thereof, and including any information contained in a
prospectus subsequently filed with the Commission pursuant to Rule 424(b) under
the Act and deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430(A) under the Act and also including any
registration statement filed pursuant to Rule 462(b) under the Act, is herein
called the "REGISTRATION STATEMENT," and the prospectus, in the form filed by
the Company with the
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Commission pursuant to Rule 424(b) under the Act or, if no such filing is
required, the form of final prospectus included in the Registration Statement at
the time it became effective, is herein called the "PROSPECTUS." Any
registration statement filed pursuant to Rule 462(b) under the Act registering
additional shares of Common Stock included within the Shares is sometimes herein
referred to as a "RULE 462(b) REGISTRATION STATEMENT."
The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Company agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company
the aggregate number of Firm Shares set forth opposite the name of such
Underwriter in SCHEDULE A attached hereto in each case at a purchase price of
$ per share. The Company is advised by you that the Underwriters intend
(i) to make a public offering of their respective portions of the Firm Shares
as soon after the effective date of the Registration Statement as in your
judgment is advisable and (ii) initially to offer the Firm Shares upon the
terms set forth in the Prospectus. You may from time to time increase or
decrease the public offering price after the initial public offering to such
extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations
and subject to the terms and conditions herein set forth, the Underwriters
shall have the right to purchase, severally and not jointly, from the
Company, ratably in accordance with the number of Firm Shares to be purchased
by each of them, all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of
the Firm Shares, at the same purchase price per share to be paid by the
Underwriters to the Company for the Firm Shares. This option may be exercised
by you on behalf of the several Underwriters at any time (but not more than
once) on or before the thirtieth day following the date hereof, by written
notice to the Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised, and the date and
time when the Additional Shares are to be delivered (such date and time being
herein referred to herein as the "ADDITIONAL TIME OF PURCHASE"); PROVIDED,
HOWEVER, that the Additional Time of Purchase shall not be earlier than the
Time of Purchase (as defined below) nor earlier than the third business
day(1) after the date on which the option shall have been exercised nor later
than the fifth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be
-------------------
(1) As used herein "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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sold to each Underwriter shall be the number which bears the same proportion
to the aggregate number of Additional Shares being purchased as the number of
Firm Shares set forth opposite the name of such Underwriter on Schedule A
hereto bears to the total number of Firm Shares (subject, in each case, to
such adjustment as you may determine to eliminate fractional shares).
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm
Shares shall be made to the Company by Federal Funds wire transfer to a bank
account specified by the Company, against delivery of the certificates for
the Firm Shares to you through the facilities of the Depository Trust Company
(DTC) for the respective accounts of the Underwriters. Such payment and
delivery shall be made at 10:00 A.M., New York City time, on , 2001
(unless another time shall be agreed to by you and the Company or unless
postponed in accordance with the provisions of Section 8 hereof). The time at
which such payment and delivery are actually made is hereinafter sometimes
called the "TIME OF PURCHASE." Certificates for the Firm Shares shall be
delivered to you in definitive form in such names and in such denominations
as you shall specify on the second business day preceding the Time of
Purchase. For the purpose of expediting the checking of the certificates for
the Firm Shares by you, the Company agrees to make such certificates
available to you for such purpose at least one full business day preceding
the Time of Purchase.
Payment of the purchase price for the Additional Shares shall be made at
the Additional Time of Purchase in the same manner and at the same office as the
payment for the Firm Shares. Certificates for the Additional Shares shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify no later than the second business day preceding the Additional
Time of Purchase. For the purpose of expediting the checking of the certificates
for the Additional Shares by you, the Company agrees to make such certificates
available to you for such purpose at least one full business day preceding the
Additional Time of Purchase.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each of the Underwriters that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement
filed after the effectiveness of this Agreement will become effective no
later than 10:00 P.M., New York City time, on the date of this Agreement;
no stop order suspending the effectiveness of the Registration Statement is
in effect, and no proceedings for such purpose are pending before or
threatened by the Company; and a registration statement on Form 8-A has
become effective under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").
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(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness
of this Agreement), when it became effective, did not contain and, as
amended, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the
Registration Statement (other than any Rule 462(b) Registration Statement
to be filed by the Company after the effectiveness of this Agreement) and
the Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Act, and any statutes,
regulations, contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement have been so described or filed, (iii) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, such Rule 462(b) Registration Statement
and any amendments thereto, when they become effective (A) will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading and (B) will comply in all material respects with the Act
and (iv) the Prospectus does not contain and, as amended or supplemented,
if applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
PROVIDED, HOWEVER, that the Company makes no warranty or representation
with respect to any statement contained in the Registration Statement or
the Prospectus in reliance upon and in conformity with information
concerning the Underwriters and furnished in writing by or on behalf of any
Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus and that all market-related data
included in the Registration Statement or the Prospectus are based on
sources the Company believes to be reliable and accurate; 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 other materials, if any, permitted by the
Act;
(c) 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 instituting proceedings for that purpose. Each Preliminary
Prospectus filed as part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Act, complied when so filed in all material respects with the Act, and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in any
preliminary prospectus based upon
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information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein.
(d) as of the date of this Agreement and, as of the Time of Purchase
and as of the Additional Time of Purchase, as the case may be, the Company
shall have an authorized capitalization as set forth in the section of the
Registration Statement and the Prospectus entitled "Capitalization"; as of
the date of this Agreement there are _______________ shares of Common Stock
issued and outstanding and no shares of the Company's Preferred Stock,
$0.001 par value per share (the "PREFERRED STOCK") issued and outstanding;
all of the issued and outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right,
resale right, right of first refusal or similar right;
(e) 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;
(f) 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 reasonably
be expected to have a material adverse effect on 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 its Subsidiaries (as hereafter defined) taken
as a whole (a "MATERIAL ADVERSE EFFECT"). The Company has no subsidiaries
(as defined in the rules and regulations promulgated under the Act) other
than those subsidiaries listed in Exhibit 21.1 to the Registration
Statement (collectively, the "SUBSIDIARIES"); other than the Subsidiaries,
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 the Subsidiaries and all
amendments thereto have been delivered to you or your legal counsel, 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
Time of Purchase or, if later, the Additional Time of Purchase; each
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
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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 reasonably be expected to have a Material Adverse Effect; all of the
outstanding shares of capital stock of each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and non-assessable and
(except as otherwise described in this Section 3(d)) are wholly-owned by
the Company and none of such shares are subject to any security interest,
other encumbrance or adverse claims; except as described in the
Registration Statement and the Prospectus, 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.
(g) the Company and each of the Subsidiaries are duly qualified or
licensed by and are in good standing in each jurisdiction in which they
conduct their respective businesses and in which the failure, individually
or in the aggregate, to be so licensed or qualified could reasonably be
expected to have a Material Adverse Effect;
(h) neither the Company nor any of its Subsidiaries is in breach of,
or in default under (nor has any event occurred which with notice, lapse of
time, or both would result in any breach of, or constitute a default
under), its respective charter or bylaws or, except as disclosed in the
Registration Statement and the Prospectus, in the performance or observance
of any obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which any of them or any of their properties is bound where such breach or
default could reasonably be expected to have a Material Adverse Effect, and
the execution, delivery and performance of this Agreement, the issuance and
sale of the Shares and the consummation of the transactions contemplated
hereby will not conflict with, or result in any breach of or constitute a
default under (nor constitute any event which with notice, lapse of time,
or both would result in any breach of, or constitute a default under), any
provisions of the charter or bylaws, of the Company or any of its
Subsidiaries or, except as disclosed in the Registration Statement and the
Prospectus, under any provision of any license, indenture, mortgage, deed
of trust, bank loan or credit agreement or other evidence of indebtedness,
or any lease, contract or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected, or under any federal,
state, local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company or any of its Subsidiaries;
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(i) this Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except (1) that such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights, (2) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought and (3) as rights to indemnity or contribution hereunder may be
limited by federal or state securities laws;
(j) the capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and Prospectus and the certificates for the Shares
are in due and proper form and the holders of the Shares will not be
subject to personal liability solely by reason of being such holders;
(k) the Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable;
(l) no approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the issuance and
sale of the Shares or the consummation by the Company of the transactions
as contemplated hereby other than: (i) registration of the offer and sale
of the Shares under the Act; (ii) registration of the Common Stock under
the Exchange Act; (iii) any necessary qualification or registration of the
Shares under the federal and provincial laws of Canada or other foreign
jurisdiction in which the Shares are offered or sold (iv) any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters;
and (v) any necessary qualification under the rules and regulations of the
National Association of Securities Dealers, Inc. (the "NASD");
(m) no person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any shares of
capital stock of the Company upon the issue and sale of the Shares to the
Underwriters hereunder, nor does any person have preemptive rights, co-sale
rights, rights of first refusal or other rights to purchase any of the
Shares other than those that have been expressly waived prior to the date
hereof;
(n) PricewaterhouseCoopers LLP, whose reports on the consolidated
financial statements of the Company and its Subsidiaries are filed with
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the Commission as part of the Registration Statement and Prospectus, are
independent public accountants as required by the Act;
(o) each of the Company and its Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation
or rule, and has obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct its respective business,
except in each case for any licenses, authorizations consents, approvals
and filings where the failure to so obtain, make or possess, as the case
may be, such licenses, authorizations, consents, approvals and filings
would not reasonably be expected to have a Material Adverse Effect; neither
the Company nor any of its Subsidiaries is in violation of, or in default
under, any such license, authorization, consent or approval or any federal,
state, local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or any of its Subsidiaries the effect of
which could have a Material Adverse Effect;
(p) all legal or governmental proceedings, contracts, leases or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(q) except as disclosed in the Registration Statement and the
Prospectus, there are no actions, suits, claims, investigations or
proceedings pending or threatened to which the Company or any of its
Subsidiaries or any of their respective officers is a party or of which any
of their respective properties is subject at law or in equity, or before or
by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency which could reasonably be
expected to result in a judgment, decree or order having a Material Adverse
Effect or prevent consummation of the transactions contemplated hereby;
(r) the consolidated financial statements included in the Registration
Statement and the Prospectus, together with the the related notes thereto,
present fairly the consolidated financial position of the Company and its
Subsidiaries as of the dates indicated and the consolidated results of
operations and cash flows of the Company and its Subsidiaries for the
periods specified; such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved;
(s) 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 Effect, or any development which, in the Company's
reasonable judgment, is likely to cause a Material Adverse Effect, (ii) any
transaction which is
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material to the Company or its Subsidiaries taken as a whole, except
transactions in the ordinary course of business, (iii) any obligation,
direct or contingent, which is material to the Company and its
Subsidiaries taken as a whole, incurred by the Company or its Subsidiaries,
except obligations incurred in the ordinary course of business, (iv) any
change in the capital stock (other than changes resulting from transactions
completed pursuant to the Company's stock option plans or from the
exercise, conversion or exchange of options, warrants or other securities
exercisable, convertible into or exchangeable for shares of the Company's
Common Stock issued and outstanding as of March 31, 2001) or material
change in the outstanding indebtedness of the Company or its Subsidiaries
or (v) any dividend or distribution of any kind declared, paid or made on
the capital stock of the Company. Neither the Company nor any of its
Subsidiaries has any material contingent obligation which is not disclosed
in the Registration Statement.
(t) the Company has obtained the agreement of each of its directors
and officers, and certain of its security holders designated by you, not to
sell, offer to sell, contract to sell, hypothecate, grant any option to
sell or otherwise dispose of, directly or indirectly, any shares of Common
Stock or securities convertible into or exchangeable for Common Stock or
warrants or other rights to purchase Common Stock for a period of 180 days
after the date of the Prospectus without the prior written consent of UBS
Warburg LLC;
(u) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended;
(v) Neither the Company nor any of its Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants, any provisions of
the Employee Retirement Income Security Act of 1974, as amended, or any
provisions of the Foreign Corrupt Practices Act, or the rules and
regulations promulgated thereunder, except for such violations which,
singly or in the aggregate, would not have a Material Adverse Effect.
(w) the Company and each of its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that: (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded
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accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences;
(x) all material tax returns required to be filed by the Company and
each of the Subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges due pursuant to such returns or pursuant to any assessment
received by the Company or any of the Subsidiaries, have been paid, other
than those being contested in good faith and for which adequate reserves
have been provided;
(y) except as disclosed in or specifically contemplated by the
Prospectus, the Company and the Subsidiaries own or possess sufficient
rights to use all trademarks, trademark rights, trade names, service marks,
patents, patent rights, mask works, copyrights, licenses, trade secrets,
inventions, know how, and similar rights, (collectively, the "INTELLECTUAL
PROPERTY RIGHTS") to conduct their businesses as now conducted; and the
Company has no knowledge of any material infringement by it or the
Subsidiaries of any Intellectual Property Rights of others, and there is no
pending claim against the Company or its Subsidiaries regarding any
Intellectual Property Rights or other infringement which could reasonably
be expected to have a Material Adverse Effect.
(z) The Company and the Subsidiaries have taken sufficient measures to
protect and retain the confidentiality of their trade secrets and other
proprietary information. Except as otherwise disclosed in the Prospectus,
each current officer, employee and contractor of the Company and the
Subsidiaries, and each former officer, employee and contractor of the
Company and the Subsidiaries who had access to confidential information of
the Company or any Subsidiary since July 1998, has entered into and
executed an agreement to maintain the confidentiality of the proprietary
and confidential information of the Company and the Subsidiaries, and an
agreement to assign, or otherwise license or grant the right to use, to the
maximum extent permitted under applicable law ("TRANSFER AGREEMENTS"), his
or her Intellectual Property Rights developed as a result of work performed
for the Company or the Subsidiaries to the Company and/or the Subsidiaries,
each in the form delivered to you or your counsel, except to the extent
failure or failures to enter into and execute such agreements would not
reasonably be expected to have a Material Adverse Effect. The Transfer
Agreements are enforceable against such current and former officers,
employees and contractors in accordance with their terms, except that (1)
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights, and (2) the remedy of specific performance and
injunctive and other forms of equitable relief may
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be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(aa) The Company or the applicable Subsidiary has good and marketable
title to all the properties and assets reflected as owned in the financial
statements included in the Registration Statement and Prospectus, subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except (i)
those, if any, reflected in such financial statements (or elsewhere in the
Registration Statement and Prospectus), or (ii) those which are not
material in amount and do not adversely affect the use made and proposed to
be made of such property by the Company and its Subsidiaries. The Company
or the applicable Subsidiary holds its leased properties under valid and
binding leases, with such exceptions as are not materially significant in
relation to the business of the Company. Except as disclosed in the
Prospectus, the Company owns or leases all such properties used in its
operations as such operations are described in the Registration Statement.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to
maintain such qualifications in effect so long as required for the
distribution of the Shares; PROVIDED that the Company shall not be required
to qualify as a foreign corporation or to consent to the service of
process under the laws of any such state (except service of process with
respect to the offering and sale of the Shares); and to promptly advise you
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose;
(b) to prepare the Prospectus, the form and substance of which shall
be reasonably satisfactory to you, and to file the Prospectus in such form
with the Commission within the applicable period specified in Rule 424(b)
under the Act; during the period specified in Section 4(c) below, not to
file any further amendment to the Registration Statement and not to make
any amendment or supplement to the Prospectus of which you shall not
previously have been advised or to which you shall reasonably object after
being so advised; and, during such period, to prepare and file with the
Commission, promptly upon your reasonable request, any amendment to the
Registration Statement or amendment or supplement to the Prospectus which
may be necessary or advisable in connection with the distribution of the
Shares by you, and to use its best efforts to cause any such amendment to
the Registration Statement to become promptly effective; if the
Registration Statement at the time of the effectiveness of this Agreement
does not cover all of the Shares, to file a Rule 462(b)
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Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time,
on the date of this Agreement and to pay to the Commission the filing fee
for such Rule 462(b) Registration Statement at the time of the filing
thereof or to give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act.
(c) prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter
or a dealer, to furnish in New York City to each Underwriter and any dealer
as many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements
thereto after the effective date of the Registration Statement) as such
Underwriter or dealer may reasonably request; 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 prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(d) to advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus
or for additional information, (ii) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of the suspension of qualification of the Shares for offering or sale in
any jurisdiction, or the initiation of any proceeding for such purposes,
(iii) when any amendment to the Registration Statement becomes effective,
(iv) if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, when the Rule 462(b)
Registration Statement has become effective, (v) if Rule 430A under the Act
is used, when the Prospectus is filed with the Commission pursuant to Rule
424(b) under the Act (which the Company agrees to file in a timely manner
under such Rules), and (vi) of the happening of any event during the period
referred to in Section 5(e) below which makes any statement of a material
fact made in the Registration Statement or the Prospectus untrue or which
requires any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
-13-
(e) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or Prospectus or for additional information with respect thereto,
or of notice of institution of proceedings for, or the entry of a stop
order suspending the effectiveness of the Registration Statement and, if
the Commission should enter a stop order suspending the effectiveness of
the Registration Statement, to make every reasonable effort to obtain the
lifting or removal of such order as soon as possible; to advise you
promptly of any proposal to amend or supplement the Registration Statement
or Prospectus and to file no such amendment or supplement to which you
shall reasonably object in writing;
(f) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the
Commission in order to comply with the Exchange Act subsequent to the date
of the Prospectus and, for the longer of 25 days after the Effective Date
or the period during which you notify the Company delivery of a prospectus
is required in connection with the offering or sale of the shares, to
promptly notify you of such filing;
(g) upon request, to furnish to you and to each of the other
Underwriters for a period of five years from the date of this Agreement (i)
copies of any reports or other communications which the Company shall send
to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed
with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form
as may be designated by the Commission, (iii) copies of documents or
reports filed with any national securities exchange on which any class of
securities of the Company is listed, and (iv) such other information as you
may reasonably request regarding the Company or its Subsidiaries;
(h) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to
the Shares is required to be delivered under the Act which, in the judgment
of the Company, would require the making of any change in the Prospectus
then being used so that the Prospectus would not include an untrue
statement of material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they are made, not misleading, and, during such time, to prepare and
furnish, at the Company's expense, to the Underwriters promptly such
amendments or supplements to such Prospectus as may be necessary to reflect
any such change and to furnish you a copy of such proposed amendment or
supplement before filing any such amendment or supplement with the
Commission;
(i) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy
the provisions of
-14-
Section 11(a) of the Act) covering a period of twelve months beginning
after the effective date of the Registration Statement (as defined in
Rule 158(c) of the Act) as soon as is reasonably practicable after the
termination of such twelve-month period but not later than November 15,
2002;
(j) to furnish to you five conformed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto) and sufficient conformed copies of
the foregoing (other than exhibits) for distribution of a copy to each of
the other Underwriters;
(k) to furnish to you as early as practicable prior to the Time of
Purchase and the Additional Time of Purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim consolidated financial statements, if any, of the Company
and its Subsidiaries which have been read by the Company's independent
certified public accountants, as stated in their letter to be furnished
pursuant to Section 6(b) hereof;
(l) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of proceeds" in the Prospectus;
(m) to pay all costs, expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the Underwriters
except as set forth under Section 5 hereof and (iii), (iv) and (vi) below)
in connection with (i) the preparation and filing of the Registration
Statement, each Preliminary Prospectus, the Prospectus, and any amendments
or supplements thereto, and the printing and furnishing of copies of each
thereof to the Underwriters and to dealers (including costs of mailing and
shipment), (ii) the registration, issue, sale and delivery of the Shares,
(iii) the printing of this Agreement, an Agreement Among Underwriters, any
dealer agreements, any Powers of Attorney and any closing documents
(including compilations thereof) and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and (except
closing documents) to dealers (including costs of mailing and shipment),
(iv) the qualification of the Shares for offering and sale under state laws
and the determination of their eligibility for investment under state law
as aforesaid (including the legal fees and filing fees and other
disbursements of counsel for the Underwriters) and the printing and
furnishing of copies of any blue sky surveys or legal investment surveys to
the Underwriters and to dealers, (v) any listing of the Shares on any
securities exchange or qualification of the Shares for quotation on the
Nasdaq National Market ("NASDAQ") and any registration thereof under the
Exchange Act, (vi) any filing for review of the public offering of the
Shares by the NASD and (vii) the performance of the Company's other
obligations hereunder;
-15-
(n) not to (i) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii)
enter into any swap or other arrangement that transfers all or a portion of
the economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or
(ii) is to be settled by the delivery of Common Stock, or such other
securities, in cash or otherwise), except to the Underwriters pursuant to
this Agreement, for a period of 180 days after the date of the Prospectus
without the prior written consent of UBS Warburg LLC; PROVIDED, HOWEVER,
that notwithstanding the foregoing, during such period, (i) the Company may
grant stock options pursuant to the Company's existing stock option
plan(s), provided that no stock options so granted will be exercisable
before a period of 180 days after the date of the Prospectus without the
prior written consent of UBS Warburg LLC and (ii) the Company may issue
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof;
(o) not to file any registration statement with respect to any shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock for a period of 180 days after the date of
the Prospectus without the prior written consent of UBS Warburg LLC;
PROVIDED, HOWEVER, that notwithstanding the foregoing, during such period
the Company may file a registration statement on Form S-8 with respect to
the exercise of stock options heretofore granted by the Company or
available for issuance under the Company's stock option plans;
(p) not to accelerate the vesting of any of its stock options or any
other rights to acquire shares of its capital stock, such that any of such
stock options or other rights become exercisable during the period of 180
days after the date of the Prospectus, without the prior written consent of
UBS Warburg LLC; and
(q) to use its best efforts to list for quotation the Shares on NASDAQ
and to maintain the listing of the Shares on NASDAQ or a national
securities exchange for a period of three years after the date of this
Agreement.
5. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not delivered
for any reason other than the termination of this Agreement pursuant to the
first two paragraphs of Section 7 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 4(n) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of their counsel.
-16-
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof and at the Time of
Purchase (and the several obligations of the Underwriters at the Additional Time
of Purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the Time of Purchase (unless
previously waived) and at the Additional Time of Purchase, as the case may be),
the performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to you at the Time of Purchase and at
the Additional Time of Purchase, as the case may be, an opinion of Xxxxxx
Xxxxxx White & XxXxxxxxx LLP, counsel for the Company, addressed to the
Underwriters, and dated the Time of Purchase or the Additional Time of
Purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form satisfactory to Fenwick & West LLP, counsel for
the Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as herein
contemplated;
(ii) Heuristic Physics Laboratories, Inc. ("HPLI") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation with full
corporate power and authority to own, lease and operate its respective
properties and to conduct its business;
(iii) the Company and HPLI are duly qualified and are in good
standing, in each jurisdiction in which they own or lease real
property or maintain an office and in which such qualification is
necessary;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Shares have been duly authorized and, when issued and
delivered to and paid for by the Underwriters in accordance with this
Agreement, will be validly issued and will be fully paid and
non-assessable;
(vi) the Company has an authorized capitalization as set forth in
the Registration Statement and the Prospectus and an issued and
-17-
outstanding capitalization as set forth in Section 3(d) of this
Agreement as of the date hereof; the outstanding shares of capital
stock of the Company have been duly and validly authorized and issued
and are fully paid, nonassessable and free of statutory and, to such
counsel's knowledge, contractual preemptive rights, resale rights,
rights of first refusal and similar rights; the Shares when issued
will be free of statutory and, to such counsel's knowledge,
contractual preemptive rights; the certificates for the Shares are in
due and proper form and the holders of the Shares will not be subject
to personal liability solely by reason of being such holders;
(vii) all of the outstanding shares of capital stock of HPLI have
been duly authorized and validly issued, are fully paid and
non-assessable and, except as otherwise stated in the Registration
Statement, are, to such counsel's knowledge, owned by the Company
subject to no security interest, other encumbrance or adverse claim;
to such counsel's knowledge, except as otherwise disclosed in the
Registration Statement and the Prospectus, 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 HPLI are outstanding;
(viii) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof under the
caption "Description of Capital Stock" in the Registration Statement
and Prospectus;
(ix) the Registration Statement and the Prospectus (except as to
the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein, as to
which such counsel need express no opinion) as of the effective date
of the Registration Statement comply as to form in all material
respects with the requirements of the Act;
(x) the Registration Statement has become effective under the Act
and, to such counsel's knowledge, no stop order proceedings with
respect thereto are pending or threatened under the Act and any
required filing of the Prospectus and any supplement thereto pursuant
to Rule 424 under the Act has been made in the manner and within the
time period required by such Rule 424;
(xi) no approval, authorization, consent or order of or filing
with any federal or state governmental or regulatory commission,
board, body, authority or agency is required in connection with the
issuance and sale of the Shares and consummation by the Company of the
transactions as contemplated hereby other than registration of the
offer and sale of the Shares under the Act
-18-
(except such counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters);
(xii) the execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not conflict with, or result in
any breach of, or constitute a default under (nor constitute any event
which with notice, lapse of time, or both, would result in any breach
of, or constitute a default under), any provision of the charter or
bylaws of the Company or HPLI or, except as disclosed in the
Registration Statement and the Prospectus, under any provision of any
agreement or instrument which is an exhibit to the Registration
Statement, or under any federal or state law, regulation or rule known
to such counsel or, to such counsel's knowledge, any decree, judgment
or order applicable to the Company or HPLI;
(xiii) to such counsel's knowledge, neither the Company nor
any of its Subsidiaries is in violation of its charter or bylaws or
is in breach of, or, except as disclosed in the Registration
Statement and the Prospectus, in default under (nor has any event
occurred which with notice, lapse of time, or both would result in
any breach of, or constitute a default under), any provision of any
agreement or instrument which is an exhibit to the Registration
Statement or, in any material respect, under any applicable federal
or state law, regulation or rule known to such counsel or, to such
counsel's knowledge, any decree, judgment or order applicable to
the Company or any of its Subsidiaries;
(xiv) to such counsel's knowledge, there are no contracts,
licenses, agreements, leases or documents of a character which are
required to be filed as exhibits to the Registration Statement or to
be summarized or described in the Prospectus which have not been so
filed, summarized or described;
(xv) to such counsel's knowledge and except as disclosed in the
Registration Statement and the Prospectus, there are no actions,
suits, claims, investigations or proceedings pending, threatened or
contemplated to which the Company or any of its Subsidiaries is
subject or of which any of their respective properties is subject at
law or in equity or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or
agency which are required to be described in the Prospectus but are
not so described;
-19-
(xvi) the Company will not, upon consummation of the transactions
contemplated by this Agreement, be an "investment company," as such
term is defined in the Investment Company Act of 1940, as amended;
(xvii) the disclosure in the Prospectus under the captions
"Related Party Transactions," "Description of Capital Stock," and
"Shares Eligible for Future Sale," insofar as such statements
constitute a summary of law or documents referred to therein,
fairly present the information called for by Form S-1 with respect
to such law and documents; and
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company
and representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus were discussed and, although
such counsel is not passing upon and does not assume responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement or Prospectus (except as and to the
extent stated in subparagraphs (vi) and (xvii) above), on the basis of
the information which was developed in the performance of such
counsel's services (relying as to materiality upon the opinions of
officers and other representatives of the Company) and without
independent verification, no facts have come to the attention of such
counsel that causes them to believe that the Registration Statement or
any amendment thereto at the time such Registration Statement or
amendment became effective contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or that the
Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at all times up to and including the Time of
Purchase or Additional Time of Purchase, as the case may be, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and schedules and
other financial and statistical data included in the Registration
Statement or Prospectus).
In rendering such opinion, such counsel may rely as to questions
of fact upon representations or certificates of officers of the
Company, and of government officials, in which case their opinion is
to state that they are so relying and that
-20-
they have no knowledge of any material misstatement or inaccuracy in
any such opinion, representation or certificate."
(b) You shall have received from PricewaterhouseCoopers LLP, letters
dated, respectively, the date of this Agreement and the Time of Purchase
and Additional Time of Purchase, as the case may be, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in the
forms heretofore approved by UBS Warburg LLC.
(c) You shall have received at the Time of Purchase and at the
Additional Time of Purchase, as the case may be, the favorable opinion of
Fenwick & West LLP, counsel for the Underwriters, dated the Time of
Purchase or the Additional Time of Purchase, as the case may be, as to the
matters referred to in subparagraphs (iv), (v), (viii) (with respect to the
Shares only), (ix) and (x) of paragraph (a) of this Section 6.
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which
the contents of the Registration Statement and Prospectus and related
matters were discussed and, although such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus (except as to matters referred to with respect to the Shares
under subparagraph (viii) of paragraph (a) of this Section 6), on the basis
of the foregoing (relying as to materiality to a large extent upon the
opinions of officers and other representatives of the Company), no facts
have come to the attention of such counsel which lead them to believe that
the Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of its date or any supplement thereto
as of its date contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
comment with respect to the financial statements and schedules and other
financial and statistical data included in the Registration Statement or
Prospectus).
(d) You shall have received on the Closing Date an opinion, dated as
of the Closing Date, of Sierra Patent Group, Ltd. and Xxxxxx X Xxxxxxx,
each intellectual property counsel to the Company, as to the matters set
forth on SCHEDULE B
-21-
hereto, and an opinion, dated as of the Closing Date, of International
Legal Consulting, LLC, counsel for the Company, as to the matters set
forth on SCHEDULE C hereto.
(e) No amendment or supplement to the Registration Statement or
Prospectus, to which you object in writing, shall be filed prior to the
time the Registration Statement becomes effective.
(f) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York
City time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement shall have been issued; and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission. If Rule 430A under the Act is
used, the Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) under the Act, at or before 5:00 p.m., New York City time, on
the date of this Agreement, unless a later time (but not later than 5:00
p.m. New York City time, on the second full business day after the date of
this Agreement) shall be agreed to by you and the Company in writing, or by
telephone and confirmed in writing; PROVIDED, HOWEVER, that the Company and
you and any group of Underwriters, including you, who have agreed hereunder
to purchase in the aggregate at least 50% of the Firm Shares may from time
to time agree on a later date.
(g) Prior to the Time of Purchase or the Additional Time of Purchase,
as the case may be, (i) no stop order with respect to the effectiveness of
the Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto, or modifications
thereof, if any, shall not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and (iii) the Prospectus and
all amendments or supplements thereto, or modifications thereof, if any,
shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they are
made, not misleading.
(h) Between the time of execution of this Agreement and the Time of
Purchase or the Additional Time of Purchase, as the case may be, no event
has occurred which would reasonably be expected to have a Material Adverse
Effect and no transaction shall have been entered into by the Company or
any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect.
(i) The Company will, at the Time of Purchase or Additional Time of
Purchase, as the case may be, deliver to you a certificate of its Chief
Executive
-22-
Officer and its Chief Financial Officer to the effect that the
representations and warranties of the Company as set forth in this
Agreement are true and correct as of each such date, that the Company shall
perform such of its obligations under this Agreement as are to be performed
at or before the Time of Purchase and at or before the Additional Time of
Purchase, as the case may be and the conditions set forth in paragraphs (f)
and (g) of this Section 6 have been met.
(j) You shall have received signed letters, dated the date of this
Agreement, from each of the directors and officers of the Company and
certain stockholders of the Company designated by you to the effect that
such persons shall not sell, offer or agree to sell, contract to sell,
grant any option to sell or otherwise dispose of, directly or indirectly,
any shares of Common Stock of the Company or securities convertible into or
exchangeable or exercisable for Common Stock or warrants or other rights to
purchase Common Stock or any other securities of the Company that are
substantially similar to the Common Stock for a period of 180 days after
the date of the Prospectus without UBS Warburg LLC's prior written consent.
(k) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the Time of Purchase and
the Additional Time of Purchase, as the case may be, as you may reasonably
request.
(l) The Shares shall have been approved for listing on, or listing for
quotation on, the NASDAQ, subject only to notice of issuance at or prior to
the Time of Purchase or the Additional Time of Purchase, as the case may
be.
7. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall become
effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statement
and Prospectus, there has been any event which could reasonably be expected to
result in a Material Adverse Effect, which would, in your judgment or in the
judgment of such group of Underwriters, make it impracticable to market the
Shares, or if, at any time prior to the Time of Purchase or, with respect to the
purchase of any Additional Shares, the Additional Time of Purchase, as the case
may be, trading in securities on the New York Stock Exchange or the Nasdaq
National Market shall have been suspended or limitations or minimum prices shall
have been established on the New York Stock Exchange or the
-23-
Nasdaq National Market, or if a banking moratorium shall have been declared
either by the United States or New York State authorities, or if the United
States shall have declared war in accordance with its constitutional processes
or there shall have occurred any material outbreak or escalation of hostilities
or other national or international calamity or crisis of such magnitude in its
effect on the financial markets of the United States as, in your judgment or in
the judgment of such group of Underwriters, to make it impracticable to market
the Shares.
If you or any group of Underwriters elects to terminate this Agreement as
provided in this Section 7, the Company and each other Underwriter shall be
notified promptly by letter or facsimile transmission or electronic mail.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(n), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
8. INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to Sections 6 and 7, if
any Underwriter shall default in its obligation to take up and pay for the Firm
Shares to be purchased by it hereunder (otherwise than for a reason sufficient
to justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set opposite the
names of such non-defaulting Underwriters in SCHEDULE A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the Underwriters or
by the Company for a defaulting Underwriter or Underwriters in accordance with
the foregoing
-24-
provision, the Company or you shall have the right to postpone the Time of
Purchase for a period not exceeding five business days in order that any
necessary changes in the Registration Statement and Prospectus and other
documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with like effect as if such
substituted Underwriter had originally been named in Schedule A.
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 five business
day period 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, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its members, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons from and against any loss, damage, expense, liability
or claim (including the reasonable cost of investigation) which, jointly or
severally, any such Underwriter or any such person may incur under the Act,
the Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or in the Registration Statement as amended
by any post-effective amendment thereof by the Company) or in a Prospectus
(the term Prospectus for the purpose of this Section 9 being deemed to
include any Preliminary Prospectus, the Prospectus and the Prospectus as
amended or supplemented by the Company), or arises out of or is based upon
any omission or alleged omission to state a material fact required to be
stated in either such Registration Statement or Prospectus or necessary to
make the statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing by or
on behalf of any Underwriter through you to the Company expressly for use
with reference to such Underwriter in such Registration Statement or such
Prospectus or arises out of or is based upon any omission or alleged
-25-
omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus
or necessary to make such information not misleading.
If any action, suit or proceeding (together, a "PROCEEDING") is brought
against an Underwriter or any such person in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such Underwriter
or such person shall promptly notify the Company in writing of the institution
of such Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; PROVIDED, HOWEVER, that the omission
to so notify the Company shall not relieve the Company from any liability which
the Company may have to any Underwriter or any such person or otherwise unless
and to the extent the Company does not otherwise learn of such action and such
failure results in the forfeiture by the Company of substantial rights and
defenses. Such Underwriter or such person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or of such person unless (i) the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such Proceeding or (ii) the Company shall not
have, within a reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or (iii) such
indemnified party or parties shall have reasonably concluded, based on the
advice of legal counsel, that there may be defenses available to it or them
which are different from, additional to or in conflict with those available to
the Company (in which case the Company shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the Company and
paid as incurred (it being understood, however, that the Company shall not be
liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Company shall not be liable for any settlement of any
Proceeding effected without its written consent but if settled with the written
consent of the Company, the Company agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior
-26-
written consent of the indemnified party, effect any settlement of any pending
or threatened Proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or
severally, the Company or any such person may incur under the Act, the
Exchange Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use with reference to
such Underwriter in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; PROVIDED, HOWEVER, that the omission to so
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or otherwise
unless and to the extent such Underwriter does not otherwise learn of such
action and such failure results in the forfeiture by such Underwriter of
substantial rights and defenses. The Company or such person shall have the right
to employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company or such person unless (i) the
employment of such counsel shall have been authorized in writing by such
Underwriter in connection with the defense of such Proceeding or (ii) such
Underwriter shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or (iii) such indemnified party or parties shall have reasonably concluded,
based on the advice of legal counsel, that there may be defenses available to it
or
-27-
them which are different from or additional to or in conflict with those
available to such Underwriter (in which case such Underwriter shall not have the
right to direct the defense of such Proceeding on behalf of the indemnified
party or parties, but such Underwriter may employ counsel and participate in the
defense thereof but the fees and expenses of such counsel shall be at the
expense of such Underwriter), in any of which events such fees and expenses
shall be borne by such Underwriter and paid as incurred (it being understood,
however, that such Underwriter shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). No Underwriter shall be
liable for any settlement of any such Proceeding effected without the written
consent of such Underwriter, but if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless the Company
and any such person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other hand 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 (i) above but
also the relative fault of the Company on the one hand and of the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, damages, expenses, liabilities or claims, as
well as any other
-28-
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 proceeds from the
offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, bear to the
aggregate public offering price of the Shares. The relative fault of
the Company on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in subsection (c)
above. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by such Underwriter and
distributed to the public were offered to the public exceeds the amount of
any damage which such Underwriter has otherwise been required to pay by
reason of such untrue statement or alleged untrue statement or omission or
alleged omission. 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 to contribute pursuant to this Section 9 are
several in proportion to their respective underwriting commitments and not
joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter,
its partners, directors or officers or any person (including each partner,
officer or director of such person) who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by
or on behalf of the Company, its directors or officers or any person who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and shall survive any termination of this Agreement
-29-
or the issuance and delivery of the Shares. The Company and each
Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors in connection with the issuance and sale of
the Shares, or in connection with the Registration Statement or Prospectus.
10. NOTICES. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to UBS
Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention: Syndicate
Department and, if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at 0000 Xxxxxxx
Xxxxx, Xxx Xxxx, XX, 00000, Attention: President.
11. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim, counterclaim
or dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("CLAIM"), directly or indirectly, shall be governed
by, and construed in accordance with, the laws of the State of New York. The
Section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.
12. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against UBS Warburg LLC or any
indemnified party. Each of UBS Warburg LLC and the Company (on its behalf and,
to the extent permitted by applicable law, on behalf of its stockholders and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company agrees that a final judgment
in any such action, proceeding or counterclaim brought in any such court shall
be conclusive and binding upon the Company and may be enforced in any other
courts in the jurisdiction of which the Company is or may be subject, by suit
upon such judgment.
13. PARTIES AT INTEREST. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 9 hereof the controlling persons, directors and
officers referred to in such section, and their respective successors, assigns,
heirs, personal representatives and executors and administrators. No other
person, partnership, association or corporation (including a
-30-
purchaser, as such purchaser, from any of the Underwriters) shall acquire or
have any right under or by virtue of this Agreement.
14. COUNTERPARTS. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
16. MISCELLANEOUS. UBS Warburg LLC, an indirect, wholly owned subsidiary of
UBS AG, is not a bank and is separate from any affiliated bank, including any
U.S. branch or agency of UBS AG. Because UBS Warburg LLC is a separately
incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or recommended by UBS Warburg
LLC are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency, and are not otherwise an
obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending relationships with
issuers of securities underwritten or privately placed by UBS Warburg LLC. To
the extent required under the securities laws, prospectuses and other disclosure
documents for securities underwritten or privately placed by UBS Warburg LLC
will disclose the existence of any such lending relationships and whether the
proceeds of the issue will be used to repay debts owed to affiliates of UBS
Warburg LLC.
-31-
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement among the Company and the Underwriters, severally.
Very truly yours,
HPL Technologies, Inc.
By:
---------------------------------------
Name: Y. Xxxxx Xxxxxxxx
Title: President and CEO
Accepted and agreed to as of the
date first above written, on
behalf of themselves and the
other several Underwriters
named in SCHEDULE A
UBS WARBURG LLC
XXXX XXXXXXXX XXXXXXX, A DIVISION OF XXXX XXXXXXXX INCORPORATED
WIT SOUNDVIEW CORPORATION
XXXXX, XXXXXXXX & XXXX, INC.
By: UBS WARBURG LLC
By: __________________________]
Title:
By: __________________________
Title:
-32-
SCHEDULE A
NUMBER OF
UNDERWRITER FIRM SHARES
----------- -----------
UBS WARBURG LLC
XXXX XXXXXXXX XXXXXXX, A DIVISION OF XXXX XXXXXXXX INCORPORATED
WIT SOUNDVIEW CORPORATION
XXXXX, XXXXXXXX & XXXX, INC.
-----------
Total...............................
===========
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SCHEDULE B
[UNDER DISCUSSION]
-34-
SCHEDULE C
[UNDER DISCUSSION]
