1
EXHIBIT 1.1
3,800,000 Shares
Storage Dimensions, Inc.
Common Stock
UNDERWRITING AGREEMENT
_______________, 1997
XXXXX XXXXXX INC.
XXXXXXX XXXXXXXX INC
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Storage Dimensions, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell an aggregate of 2,700,000 shares of its common
stock, $0.005 par value per share, to the several Underwriters named in
Schedule II hereto (the "Underwriters") and the persons named in Schedule I
hereto (the "Selling Stockholders") propose to sell to the several Underwriters
an aggregate of 1,100,000 shares of common stock of the Company. The Company
and the Selling Stockholders are hereinafter sometimes referred to as the
"Sellers." The Company's common stock, $0.005 par value, is hereinafter
referred to as the "Common Stock," the 2,700,000 shares of Common Stock to be
issued and sold to the Underwriters by the Company and the 1,100,000 shares of
Common Stock to be sold to the Underwriters by the Selling Stockholders are
hereinafter referred to as the "Firm Shares." The Selling Stockholders also
propose to sell to the Underwriters, upon the terms and conditions set forth in
Section 2 hereof, up to an additional 570,000 shares (the "Additional Shares")
of Common Stock. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares."
The Company and the Selling Stockholders wish to confirm as
follows their respective agreements with you (the "Representatives") and the
other several Underwriters on whose behalf you are acting, in connection with
the several purchases of the Shares by the Underwriters.
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1 under the Act
(the "registration statement"), including a prospectus subject to completion
relating to the Shares.
2
The term "Registration Statement" as used in this Agreement means the
registration statement (including all financial schedules and exhibits), as
amended at the time it becomes effective, or, if the registration statement
became effective prior to the execution of this Agreement, as supplemented or
amended prior to the execution of this Agreement; provided, however, that if it
is contemplated, at the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed and must be declared
effective before the offering of the Shares may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. If an abbreviated
registration statement is prepared and filed with the Commission in accordance
with Rule 462(b) under the Act (the "Abbreviated Registration Statement"), the
term "Registration Statement" as used in this Agreement includes the
Abbreviated Registration Statement. The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement, or, if the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Act and such information is
included in a prospectus filed with the Commission pursuant to Rule 424(b)
under the Act, the term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement as supplemented
by the addition of the information contained in the prospectus filed with the
Commission pursuant to Rule 424(b). The term "Prepricing Prospectus" as used
in this Agreement means the prospectus subject to completion in the form
included in the registration statement at the time of the initial filing of the
registration statement with the Commission, as such prospectus shall have been
amended from time to time prior to the date of the Prospectus.
2. Agreements to Sell and Purchase. Subject to such adjustments
as you may determine in order to avoid fractional shares, the Company hereby
agrees, subject to all the terms and conditions set forth herein, to issue and
sell to each Underwriter and, upon the basis of the representations, warranties
and agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of $__.00 per Share (the "purchase price per share"), the number of Firm
Shares which bears the same proportion to the aggregate number of Firm Shares
to be issued and sold by the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto (or such number of
Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate
number of Firm Shares to be sold by the Company and the Selling Stockholders.
Subject to such adjustments as you may determine in order to
avoid fractional shares, each Selling Stockholder agrees, subject to all the
terms and conditions set forth herein, to sell to each Underwriter and, upon
the basis of the representations, warranties and agreements of the Company and
the Selling Stockholders herein contained and subject to all the terms and
conditions set forth herein, each Underwriter, severally and not jointly,
agrees to purchase from each Selling Stockholder at the purchase price per
share that number of Firm Shares which bears the same proportion to the number
of Firm Shares set forth opposite the name of such Selling Stockholder in
Schedule I hereto as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule II hereto (or such number of Firm Shares increased
as set forth in Section 12 hereof) bears to the aggregate number of Firm Shares
to be sold by the Company and the Selling Stockholders.
2
3
The Selling Stockholders also agree, subject to all the terms
and conditions set forth herein, to sell to the Underwriters, and, upon the
basis of the representations, warranties and agreements of the Company and the
Selling Stockholders herein contained and subject to all the terms and
conditions set forth herein, the Underwriters shall have the right to purchase
from the Selling Stockholders at the purchase price per share, pursuant to
options (the "over-allotment options") which may be exercised at any time and
from time to time prior to 5:00 P.M., New York City time, on the 30th day after
the date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday
or a holiday, on the next business day thereafter when the New York Stock
Exchange is open for trading), up to an aggregate of 570,000 Additional Shares
from the Selling Stockholders (the maximum number of Additional Shares which
each of them agrees to sell upon the exercise by the Underwriters of the
over-allotment options is set forth opposite their respective names in Schedule
I). Additional Shares may be purchased only for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. The
number of Additional Shares which the Underwriters elect to purchase upon any
exercise of the over-allotment options shall be provided by each Selling
Stockholder in proportion to the respective maximum numbers of Additional
Shares which each Selling Stockholder has agreed to sell. Upon any exercise of
the over-allotment options, each Underwriter, severally and not jointly, agrees
to purchase from each Selling Stockholder the number of Additional Shares
(subject to such adjustments as you may determine in order to avoid fractional
shares) which bears the same proportion to the number of Additional Shares to
be sold by each Selling Stockholder as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto (or such number of
Firm Shares increased as set forth in Section 12 hereof) bears to the aggregate
number of Firm Shares to be sold by the Company and the Selling Stockholders.
Certificates in transferable form for the Shares (including
any Additional Shares) which each of the Selling Stockholders agrees to sell
pursuant to this Agreement have been placed in custody with First Bank of
Boston (the "Custodian") for delivery under this Agreement pursuant to a
Custody Agreement and Power of Attorney executed by each of the Selling
Stockholders (collectively, the "Custody Agreements") appointing Xxxxx X. Eeg
and Xxxx X. Xxxxxx, Xx., as agents and attorneys-in-fact (the
"Attorneys-in-Fact"). Each Selling Stockholder agrees that (i) the Shares
represented by the certificates held in custody pursuant to the Custody
Agreement to which such Selling Stockholder is a party are subject to the
interests of the Underwriters, the Company and each other Selling Stockholder,
as set forth herein and in the Custody Agreement to which such Selling
Stockholder is a party, ii) the arrangements made by each Selling Stockholder
for such custody are, except as specifically provided in the Custody Agreement
to which such Selling Stockholder is a party, irrevocable, and (iii) the
obligations of each Selling Stockholder hereunder and under the Custody
Agreement to which such Selling Stockholder is a party shall not be terminated
by any act of such Selling Stockholder or by operation of law, whether by the
death or incapacity of such Selling Stockholder or the occurrence of any other
event. If any Selling Stockholder shall die or be incapacitated or if any
other event shall occur before the delivery of the Shares hereunder,
certificates for the Shares of such Selling Stockholder shall be delivered to
the Underwriters by the Attorneys-in-Fact in accordance with the terms and
conditions of this Agreement and the Custody Agreement to which such Selling
Stockholder is a party as if such
3
4
death or incapacity or other event had not occurred, regardless of whether or
not the Attorneys-in-Fact or any Underwriter shall have received notice of such
death, incapacity or other event. Each Attorney-in-Fact is authorized, on
behalf of each of the Selling Stockholders, to execute this Agreement and any
other documents necessary or desirable in connection with the sale of the
Shares to be sold hereunder by such Selling Stockholder, to make delivery of
the certificates for such Shares, to receive the proceeds of the sale of such
Shares, to give receipts for such proceeds, to distribute such proceeds to such
Selling Stockholder, and to take such other action as may be necessary or
desirable in connection with the transactions contemplated by this Agreement.
Each Attorney-in-Fact agrees to perform his duties under the Custody Agreement.
3. Terms of Public Offering. The Sellers have been advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, a Professional Corporation, counsel for the
Company ("Company Counsel"), located at 000 Xxxx Xxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000, at 7:00 A.M., Pacific time, on ______________, 1997 (the
"Closing Date"). The place of closing for the Firm Shares and the Closing Date
may be varied by agreement among you, the Company and the Attorneys-in-Fact.
Delivery to the Underwriters of and payment for any Additional
Shares to be purchased by the Underwriters shall be made at the aforementioned
office of Company Counsel at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from you on behalf of the Underwriters to the
Company and the Attorneys-in-Fact of the Underwriters' determination to
exercise the over-allotment options and purchase a number, specified in such
notice, of Additional Shares. The place of closing for any Additional Shares
and the Option Closing Date for such Shares may be varied by agreement among
you, the Company and the Attorneys-in-Fact.
Certificates for the Firm Shares and for any Additional Shares
to be purchased hereunder shall be registered in such names and in such
denominations as you shall request prior to 9:30 A.M., New York City time, on
the second business day preceding the Closing Date or any Option Closing Date,
as the case may be. Such certificates shall be made available to you in New
York City for inspection and packaging not later than 9:30 A.M., New York City
time, on the business day next preceding the Closing Date or the Option Closing
Date, as the case may be. The certificates evidencing the Firm Shares and any
Additional Shares to be purchased hereunder shall be delivered to you on the
Closing Date or the Option Closing Date, as the case may be, against payment of
the purchase price therefor in immediately available funds.
4
5
5. Agreements of the Company. The Company agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the Shares
may commence, the Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible and will
advise you promptly and, if requested by you, will confirm such advice in
writing, when the Registration Statement or such post-effective amendment has
become effective.
(b) The Company will advise you promptly and, if
requested by you, will confirm such advice in writing: (i) of any request by
the Commission for amendment of or a supplement to the Registration Statement,
any Prepricing Prospectus or 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 purpose; and (iii) within the period of
time referred to in paragraph (f) below, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth or
results of operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectus (as then amended or supplemented) in order to state a material fact
required by the Act or the regulations thereunder to be stated therein or
necessary in order to make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge,
three, or such other number as you may request, signed copies of the
registration statement as originally filed with the Commission and of each
amendment thereto, including financial statements and all exhibits thereto, and
will also furnish to you, without charge, such number of conformed copies of
the registration statement as originally filed and of each amendment thereto,
but without exhibits, as you may request.
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus of
which you shall not previously have been advised or to which you shall object
after being so advised or (ii) so long as, in the opinion of counsel for the
Underwriters, a Prospectus is required to be delivered in connection with sales
by any Underwriter or dealer, file any information, documents or reports
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act") without delivering a copy of such information, documents or reports to
you, as Representatives of the Underwriters, prior to or concurrently with such
filing.
5
6
(e) Prior to the execution and delivery of this
Agreement, the Company has delivered to you, without charge, in such quantities
as you have requested, copies of each form of the Prepricing Prospectus. The
Company consents to the use, in accordance with the provisions of the Act and
with the securities or Blue Sky laws of the jurisdictions in which the Shares
are offered by the several Underwriters and by dealers, prior to the date of
the Prospectus, of each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period as in
the opinion of counsel for the Underwriters a prospectus is required by the Act
to be delivered in connection with sales by any Underwriter or dealer, the
Company will expeditiously deliver to each Underwriter and each dealer, without
charge, as many copies of the Prospectus (and of any amendment or supplement
thereto) as you may request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the jurisdictions in
which the Shares are offered by the several Underwriters and by all dealers to
whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time thereafter as the Prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or dealer.
If during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriters is required to be set
forth in the Prospectus (as then amended or supplemented) or should be set
forth therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus to comply with the Act or any other law,
the Company will forthwith prepare and, subject to the provisions of paragraph
(d) above, file with the Commission an appropriate supplement or amendment
thereto, and will expeditiously furnish to the Underwriters and dealers a
reasonable number of copies thereof. In the event that the Company and you, as
Representatives of the several Underwriters, agree that the Prospectus should
be amended or supplemented, the Company, if requested by you, will promptly
issue a press release announcing or disclosing the matters to be covered by the
proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel
for the Underwriters in connection with the registration or qualification of
the Shares for offering and sale by the several Underwriters and by dealers
under the securities or Blue Sky laws of such jurisdictions as you may
designate and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject.
(h) The Company will make generally available to its
security holders a consolidated earnings statement, which need not be audited,
covering a twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15
6
7
months thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of Section ll(a)
of the Act.
(i) During the period of five years hereafter, the
Company will furnish to you (i) as soon as available, a copy of each report of
the Company mailed to stockholders or filed with the Commission, and (ii) from
time to time such other information concerning the Company as you may
reasonably request.
(j) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof (other than (i) a
termination pursuant to the second paragraph of Section 12 hereof or (ii) by
notice given by you terminating this Agreement pursuant to Section 12 or
Section 13 hereof) or if this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Company or the Selling
Stockholders to comply with the terms or fulfill any of the conditions of this
Agreement, the Company agrees to reimburse the Representatives for all
out-of-pocket expenses (including fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale
of the Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectus.
(l) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and will
advise you of the time and manner of such filing.
(m) Except as provided in this Agreement, the Company
will not sell, contract to sell or otherwise dispose of any Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or
grant any options or warrants to purchase Common Stock, for a period of 180
days after the date of the Prospectus, (other than (i) pursuant to employee
stock purchase and option plans existing on the date of this Agreement, or (ii)
upon the conversion, exercise or exchange of convertible, exercisable or
exchangeable securities outstanding as of the date of this Agreement) without
the prior written consent of Xxxxx Xxxxxx Inc.
(n) The Company has furnished or will furnish to you
"lock-up" letters, in form and substance satisfactory to you, signed by each of
its current officers and directors and each of its stockholders designated by
you.
(o) Except as stated in this Agreement and in the
Prepricing Prospectus and Prospectus, the Company has not taken, nor will it
take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
(p) The Company will use its best efforts to have the
Common Stock quoted on the Nasdaq National Market concurrently with the
effectiveness of the registration statement.
7
8
6. Agreements of the Selling Stockholders. Each of the Selling
Stockholders agrees with the several Underwriters as follows:
(a) At the Company's expense, such Selling Stockholder
will cooperate to the extent necessary to cause the registration statement or
any post-effective amendment thereto to become effective at the earliest
possible time.
(b) Such Selling Stockholder will pay all Federal and
other taxes, if any, on the transfer or sale of the Shares being sold by such
Selling Stockholder to the Underwriters.
(c) Such Selling Stockholder will do or perform all
things required to be done or performed by such Selling Stockholder prior to
the Closing Date or any Option Closing Date, as the case may be, to satisfy all
conditions precedent to the delivery of the Shares pursuant to this Agreement.
(d) Such Selling Stockholder has executed or will execute
a "lock-up" letter as provided in Section 5(n) above and will not sell,
contract to sell or otherwise dispose of any Common Stock, except for the sale
of Shares to the Underwriters pursuant to this Agreement, prior to the
expiration of 180 days after the date of the Prospectus, without the prior
written consent of Xxxxx Xxxxxx Inc.
(e) Except as stated in this Agreement and in the
Prepricing Prospectus and the Prospectus, such Selling Stockholder will not
take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares pursuant to the
distribution contemplated by this Agreement.
(f) Such Selling Stockholder will advise you promptly,
and if requested by you, will confirm such advice in writing, within the period
of time referred to in Section 5(f) hereof, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth or
results of operations or of any change in information relating to such Selling
Stockholder or the Company or any new information relating to the Company or
relating to any matter stated in the Prospectus or any amendment or supplement
thereto which comes to the attention of any officer or director of such Selling
Stockholder or any officer or director of any general partner of such Selling
Stockholder that suggests that any statement made in the Registration Statement
or the Prospectus (as then amended or supplemented, if amended or supplemented)
is or may be untrue in any material respect or that the Registration Statement
or Prospectus (as then amended or supplemented, if amended or supplemented)
omits or may omit to state a material fact or a fact necessary to be stated
therein in order to make the statements therein not misleading in any material
respect, or of the necessity to amend or supplement the Prospectus (as then
amended or supplemented, if amended or supplemented) in order to comply with
the Act or any other law.
8
9
7. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act, except that
this representation and warranty does not apply to statements in or omissions
from the registration statement or the prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Company in writing by or on behalf of any Underwriter through you expressly for
use therein. The Commission has not issued any order preventing or suspending
the use of any Prepricing Prospectus.
(b) The registration statement in the form in which it
became or becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective and the prospectus and
any supplement or amendment thereto when filed with the Commission under Rule
424(b) under the Act, complied or will comply in all material respects with the
provisions of the Act and did not or will not at any such times 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, except that this representation and warranty does not apply to
statements in or omissions from the registration statement or the prospectus
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) All the outstanding shares of Common Stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights; the Shares to
be issued and sold by the Company have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and nonassessable and free
of any preemptive or similar rights; and the capital stock of the Company
conforms to the description thereof in the registration statement and the
prospectus.
(d) The Company is a corporation duly organized and
validly existing 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
to conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered or qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and its
subsidiaries taken as a whole.
9
10
(e) The Company does not have any subsidiaries that
constitute "Significant Subsidiaries" as this term is defined in Rule 1-02 of
Regulation S-X, and all of the Company's subsidiaries together, if considered a
single entity, would not constitute such a "Significant Subsidiary."
(f) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened, against the Company or
any of its subsidiaries, or to which the Company or any of its subsidiaries, or
to which any of their respective properties, is subject, that are required to
be described in the Registration Statement or the Prospectus but are not
described as required, and there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the Act.
(g) Neither the Company nor any of its subsidiaries is in
violation of its certificate or articles of incorporation or by-laws, or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of its
subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries, or in default
in any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other instrument
to which the Company or any of its subsidiaries is a party or by which any of
them or any of their respective properties may be bound, except where such
violations or defaults, in the aggregate, would not have a material adverse
effect on the condition (financial or otherwise), business, net worth or
results of operations of the Company and its subsidiaries taken as a whole.
(h) None of the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby (A)
requires any consent, approval, authorization or other order of or registration
or filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for the
registration of the Shares under the Act and the Exchange Act which have been
or will be effected in accordance with this Agreement and compliance with the
securities or Blue Sky laws of various jurisdictions by the underwriters) or
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under, the certificate or articles of incorporation or bylaws, or
other organizational documents, of the Company or any of the Subsidiaries or
(B) conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, any material agreement, indenture, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which any of them or any of their respective properties may be bound, or
violates or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any of its
subsidiaries or any of their respective properties, or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to the terms of any
material agreement or instrument
10
11
to which any of them is a party or by which any of them may be bound or to
which any of the property or assets of any of them is subject.
(i) To the best knowledge of the Company, the
accountants, Price Waterhouse LLP, who have certified or shall certify the
financial statements included in the Registration Statement and the Prospectus
(or any amendment or supplement thereto) are independent public accountants as
required by the Act.
(j) The financial statements, together with related
schedules and notes, included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and cash flows of the Company and the
Subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed therein; and the financial,
statistical and other information and data derived therefrom included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are presented accurately in all material respects and prepared on a
basis consistent with such financial statements and the books and records of
the Company and its subsidiaries.
(k) The execution and delivery of, and the performance by
the Company of its obligations under, this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except as enforcement of rights to indemnity and contribution
hereunder may be limited by Federal or state securities laws or principles of
public policy and subject to the qualification that the enforceability of the
Company's obligations hereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally and by general equitable principles.
(l) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), neither
the Company nor any of its subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and its
subsidiaries taken as a whole, and there has not been any change in the capital
stock, or material increase in the short-term debt or long-term debt, of the
Company or any of its subsidiaries, or any material adverse change, or any
development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company and its
subsidiaries taken as a whole.
11
12
(m) Each of the Company and its subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by it, free and clear of all liens, claims, security
interests or other encumbrances, except such as are described in the
Registration Statement and the Prospectus or in a document filed as an exhibit
to the Registration Statement or the existence of which, in the aggregate,
would not have a material adverse effect on the condition (financial or
otherwise), business, net worth or results of operations of the Company and its
subsidiaries taken as a whole, and all the property described in the Prospectus
as being held under lease by each of the Company and the subsidiaries is held
by it under valid, subsisting and enforceable leases.
(n) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the distribution
of the Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the Act.
(o) The Company and each of the Subsidiaries has such
permits, licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own its respective properties and
to conduct its business in the manner described in the Prospectus, subject to
such qualifications as may be set forth in the Prospectus and except for any
permits, the lack of which, in the aggregate, would not have a material adverse
effect on the condition (financial or otherwise), business, net worth or
results of operations of the Company and its subsidiaries taken as a whole.
The Company and each of its subsidiaries has fulfilled and performed all its
material obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights
of the holder of any such permit, subject in each case to such qualification as
may be set forth in the Prospectus; and, except as described in the Prospectus,
none of such permits contains any restriction that is materially burdensome to
the Company or any of its subsidiaries.
(p) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(q) To the Company's knowledge, neither the Company nor
any of its subsidiaries nor any employee or agent of the Company or any
subsidiary has made any payment of funds of the Company or any subsidiary or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
12
13
(r) The Company and each of its Subsidiaries have filed
all tax returns required to be filed, which returns are complete and correct,
and neither the Company nor any subsidiary is in default in the payment of any
taxes which are shown to be payable on said returns or any assessments with
respect thereto.
(s) Except for such rights that have been effectively
waived on or prior to the date hereof, no holder of any security of the Company
has any right to require registration of shares of Common Stock or any other
security of the Company because of the filing of the registration statement or
consummation of the transactions contemplated by this Agreement.
(t) The Company (i) owns all patents, trademarks,
trademark registrations, service marks, service xxxx registrations, trade
names, copyrights, licenses, inventions, trade secrets and rights described in
the Prospectus as being owned by it, and (ii) owns, or is licensed or otherwise
possesses legally enforceable rights to use, all patents, trademarks, trademark
registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights that are necessary
for the conduct of its business; and the Company is not aware of any claim to
the contrary or any challenge by any other person to the rights of the Company
with respect to the foregoing.
(u) The Company is not now, and after sale of the Shares
to be sold by it hereunder and application of the net proceeds from such sale
as described in the Prospectus under the caption "Use of Proceeds" will not be,
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
(v) The Company has complied with all provisions of
Florida Statutes, Section 517.075, relating to issuers doing business with
Cuba.
8. Representations and Warranties of the Selling Stockholders.
Each Selling Stockholder severally and not jointly represents and warrants to
each Underwriter that:
(a) Such Selling Stockholder now has, and on the Closing
Date and any Option Closing Date will have, valid and marketable title to the
Shares to be sold by such Selling Stockholder, free and clear of any lien,
claim, security interest or other encumbrance, including, without limitation,
any restriction on transfer.
(b) Such Selling Stockholder now has, and on the Closing
Date and any Option Closing Date will have, full legal right, power and
authorization, and any approval required by law, to sell, assign transfer and
deliver such Shares in the manner provided in this Agreement, and upon delivery
of and payment for such Shares hereunder, the several Underwriters will acquire
valid and marketable title to such Shares free and clear of any lien, claim,
security interest, or other encumbrance.
13
14
(c) This Agreement and the Custody Agreement have been
duly authorized, executed and delivered by or on behalf of such Selling
Stockholder and are the valid and binding agreements of such Selling
Stockholder enforceable against such Selling Stockholder in accordance with
their terms, except as enforcement of rights to indemnity and contribution
hereunder and thereunder may be limited by Federal or state securities laws or
principles of public policy and subject to the qualification that the
enforceability of the such Selling Stockholder's obligations hereunder and
thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights generally and by general equitable principles.
(d) Neither the execution and delivery of this Agreement
or the Custody Agreement by or on behalf of such Selling Stockholder nor the
consummation of the transactions herein or therein contemplated by or on behalf
of such Selling Stockholder requires any consent, approval, authorization or
order of, or filing or registration with, any court, regulatory body,
administrative agency or other governmental body, agency or official (except
such as may be required under the Act or such as may be required under state
securities or Blue Sky laws governing the purchase and distribution of the
Shares) or conflicts or will conflict with or constitutes or will constitute a
breach of, or default under, or violates or will violate, any agreement,
indenture or other instrument to which such Selling Stockholder is a party or
by which such Selling Stockholder is or may be bound or to which any of such
Selling Stockholder's property or assets is subject, or any statute, law, rule,
regulation, ruling, judgment, injunction, order or decree applicable to such
Selling Stockholder or to any property or assets of such Selling Stockholder,
except such breaches, defaults or violations which, in the aggregate, would not
affect such Selling Stockholder's right and ability to perform its obligations
hereunder and thereunder.
(e) Nothing has come to the attention of any officer or
director of such Selling Stockholder or any officer or director of any general
partner of such Selling Stockholder to cause such person to believe that the
representations and warranties of the Company contained in Section 7(b) of the
Agreement are not true and correct.
(f) The representations and warranties of such Selling
Stockholder in the Custody Agreement are, and on the Closing Date and any
Option Closing Date will be, true and correct.
(g) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares, except for the lock-up
arrangements described in the Prospectus.
14
15
9. Indemnification and Contribution.
(a) The Company and each Selling Stockholder, jointly and
severally, agree to indemnify and hold harmless each of you and each other
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in
any Prepricing Prospectus or in the Registration Statement or the Prospectus or
in any amendment or supplement thereto, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to such
Underwriter furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use in connection therewith; provided,
however, that (i) the indemnification contained in this paragraph (a) with
respect to any Prepricing Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) on
account of any such loss, claim, damage, liability or expense arising from the
sale of the Shares by such Underwriter to any person if (x) a copy of the
Prospectus shall not have been delivered or sent to such person within the time
required by the Act and the regulations thereunder, and (y) the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Prepricing Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending, and (ii) in no event shall any Selling Stockholder be
liable under this Section 9 (including any liability under Section 9(d) hereof)
in an amount that exceeds the net proceeds to be received by such Selling
Stockholder from the Underwriters in the offering of the Shares.
Notwithstanding the foregoing, no Selling Stockholder shall be required to
provide indemnification pursuant to this Section 9(a) unless the Underwriter
seeking indemnification shall have first made a written demand for payment to
the Company with respect to any losses, claims, damages, liabilities or
expenses for which the Company and the Selling Stockholders are required to
indemnify the Underwriters pursuant to this Section 9(a) and the Company shall
have failed to make such demanded payment within ninety (90) days after receipt
thereof; provided, however, that, where the Company is insolvent or bankrupt,
the Underwriter seeking indemnification pursuant to this Section 9(a) may do so
directly and immediately from each Selling Stockholder without having to demand
indemnification first from the Company, and such Selling Stockholder shall be
required to provide such indemnification immediately. The foregoing indemnity
agreement shall be in addition to any liability which the Company or any
Selling Stockholder may otherwise have.
(b) If any action, suit or proceeding shall be brought
against any Underwriter or any person controlling any Underwriter in respect of
which indemnity may be sought against the Company or any Selling Stockholder,
such Underwriter or such controlling person shall promptly notify the parties
against whom indemnification is being sought, including any Selling
15
16
Stockholder against whom such Underwriter or person controlling such
Underwriter plans to seek indemnification if the Company fails to pay the
losses, claims, damages, liabilities and expenses set forth in a written demand
within ninety (90) day after receipt of such demand, as provided in paragraph
(a) above (the "indemnifying parties"). Such indemnifying parties shall assume
the defense thereof, including the employment of counsel and payment of all
fees and expenses; provided, however, that the Company shall pay all such fees
and expenses, and the Selling Stockholders, if they are indemnifying parties,
shall only pay such fees and expenses if the Company fails to do so. Such
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action, suit or proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the
indemnifying parties have agreed in writing to pay such fees and expenses, (ii)
the indemnifying parties have failed to assume the defense and employ counsel,
or (iii) the named parties to any such action, suit or proceeding (including
any impleaded parties) include both such Underwriter or such controlling person
and the indemnifying parties and such Underwriter or such controlling person
shall have been advised by its counsel that representation of such indemnified
party and any indemnifying party by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
party shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection with
any one such action, suit or proceeding or separate but substantially similar
or related actions, suits or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all such Underwriters and controlling persons,
which firm shall be designated in writing by Xxxxx Xxxxxx Inc., that the
Company shall reimburse all such fees and expenses as they are incurred, and
that the Selling Stockholders, if they are indemnifying parties, shall only
reimburse such fees and expenses if the Company fails to do so. The
indemnifying parties shall not be liable for any settlement of any such action,
suit or proceeding effected without their written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify
and hold harmless any Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement, each Selling Stockholder, and any person who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, to the same extent as the foregoing indemnity from
the Company and the Selling Stockholders to each Underwriter, but only with
respect to information relating to such Underwriter furnished in writing by or
on behalf of such Underwriter through you expressly for use in the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, any of its directors, any such officer, any
16
17
Selling Stockholder, or any such controlling person based on the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (c), such Underwriter shall have the
rights and duties given to the Company by paragraph (b) above (except that if
the Company shall have assumed the defense thereof such Underwriter shall not
be required to do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
such Underwriter's expense), and the Company, its directors, any such officer,
the Selling Stockholder, and any such controlling person shall have the rights
and duties given to the Underwriters by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which any Underwriter
may otherwise have.
(d) If the indemnification provided for in this Section 9
is unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an 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, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Stockholders 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 and the
Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page
of the Prospectus; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company, the Selling Stockholders or the Underwriters
from the offering of the Shares shall include the net proceeds (before
deducting expenses) received by the Company and the Selling Stockholders, and
the underwriting discounts and commissions received by the Underwriters, from
the sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the notes to the table on the cover page of the
Prospectus. The relative fault of the Company and the Selling Stockholders on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Stockholders on the one hand or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
17
18
(e) The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by a 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 paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (d) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim
or defending any such action, suit or proceeding. 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 of the Shares
purchased by such Underwriter exceeds the amount of damages which such
Underwriter has otherwise been required to pay. 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 the respective numbers of Firm
Shares set forth opposite their names in Schedule II hereto (or such numbers of
Firm Shares increased as set forth in Section 12 hereof) and not joint.
(f) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action, suit or 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 action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 9 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Stockholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or the Selling Stockholders or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
9.
18
19
10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the registration statement or a post-effective
amendment thereto to be declared effective before the offering of the Shares
may commence, the registration statement or such post-effective amendment shall
have become effective not later than 5:30 P.M., New York City time, on the date
hereof, or at such later date and time as shall be consented to in writing by
you, and all filings, if any, required by Rules 424 and 430A under the Act
shall have been timely made; no stop order suspending the effectiveness of the
registration statement shall have been issued and no proceeding for that
purpose shall have been instituted 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 your satisfaction.
(b) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company or the
Subsidiaries not contemplated by the Prospectus, which in your opinion, as
Representatives of the several Underwriters, would materially and adversely
affect the market for the Shares, or (ii) any event or development relating to
or involving the Company or any officer or director of the Company or any
Selling Stockholder which makes any statement made in the Prospectus untrue or
which, in the opinion of the Company and its counsel or the Underwriters and
their counsel, requires the making of any addition to or change in the
Prospectus in order to state a material fact required by the Act or any other
law to be stated therein or necessary in order to make the statements therein
not misleading, if amending or supplementing the Prospectus to reflect such
change, event or development would, in your opinion, as Representatives of the
several Underwriters, materially and adversely affect the market for the
Shares.
(c) You shall have received on the Closing Date, an
opinion of Company Counsel, dated the Closing Date and addressed to you, as
Representatives of the several Underwriters, to the effect that:
(i) The Company is a corporation duly
incorporated and validly existing 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 to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), and is
duly registered and qualified to conduct its business and is in good standing
in each jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse effect on
the condition (financial or other), business, properties, net worth or results
of operations of the Company and its subsidiaries taken as a whole;
19
20
(ii) The authorized and outstanding capital stock
of the Company is as set forth under the caption "Capitalization" in the
Prospectus; and the authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Prospectus under the caption "Description of Capital Stock";
(iii) All the shares of capital stock of the
Company outstanding prior to the issuance of the Shares to be issued and sold
by the Company hereunder have been duly authorized and validly issued, are
nonassessable, and, to such counsel's knowledge, have been fully paid;
(iv) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will be validly issued, fully paid and nonassessable and
free of any preemptive, or to the knowledge of such counsel , similar rights
that entitle or will entitle any person to acquire any such Shares to be sold
by the Company hereunder upon the issuance thereof by the Company;
(v) The form of certificates for the Shares
conforms to the requirements of the Delaware General Corporation Law;
(vi) The Registration Statement and all
post-effective amendments, if any, have become effective under the Act and, to
the knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
are pending before or, to the knowledge of such counsel, contemplated by the
Commission; and any required filing of the Prospectus pursuant to Rule 424(b)
has been made in accordance with Rule 424(b);
(vii) The Company has corporate power and authority
to enter into this Agreement and to issue, sell and deliver the Shares to be
sold by it to the Underwriters as provided herein, and this Agreement has been
duly authorized, executed and delivered by the Company and is a valid, legal
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement of rights to indemnity and
contribution hereunder may be limited by Federal or state securities laws or
principles of public policy and subject to the qualification that the
enforceability of the Company's obligations hereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights generally and by general
equitable principles;
(viii) The Company is not in violation of its
Certificate of Incorporation or bylaws, and to the knowledge of such counsel,
is not in default in the performance of any material obligation, agreement or
condition contained in any bond, debenture, note or other evidence of
indebtedness that is an exhibit to the Registration Statement, except as may be
disclosed in the Prospectus;
20
21
(ix) None of the offer, sale or delivery of the
Shares, the execution, delivery or performance of this Agreement, compliance by
the Company with the provisions hereof, or consummation by the Company of the
transactions contemplated hereby conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, the Certificate of
Incorporation or bylaws of the Company or any agreement, indenture, lease or
other instrument to which the Company is a party or by which the Company or any
of its properties is bound that is an exhibit to the Registration Statement, or
will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, nor will any such action result in
any violation of any existing law, regulation, ruling (assuming compliance with
all applicable state securities and Blue Sky laws which is the responsibility
of the Underwriters), judgment, injunction, order or decree known to such
counsel, applicable to the Company, or any of its properties;
(x) No consent, approval, authorization or other
order of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official is
required on the part of the Company (except as have been obtained under the Act
and the Exchange Act or such as may be required under state securities or Blue
Sky laws governing the purchase and distribution of the Shares) for the valid
issuance and sale of the Shares to the Underwriters as contemplated by this
Agreement;
(xi) The Registration Statement and the Prospectus
and any supplements or amendments thereto (except for the financial statements
and the notes thereto and the schedules and other financial, statistical and
other data included therein, as to which such counsel need not express any
opinion) comply as to form in all material respects with the requirements of
the Act;
(xii) To the knowledge of such counsel, (A) other
than as described or contemplated in the Prospectus (or any supplement
thereto), there are no legal or governmental proceedings pending or threatened
against the Company or any of its subsidiaries, or to which the Company or any
of the subsidiaries, or any of their property, is subject, which are required
to be described in the Registration Statement or Prospectus (or any amendment
or supplement thereto) and (B) there are no agreements, contracts, indentures,
leases or other instruments, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement that are
not described or filed as required, as the case may be;
(xiii) The statements in the Registration Statement
and Prospectus set forth under the captions "Management-Employee Stock Plans,"
"Description of Capital Stock" and "Shares Eligible for Future Sale," insofar
as they are descriptions of contracts, agreements or other legal documents, or
refer to statements of law or legal conclusions, are accurate in all material
respects and present fairly the information required to be shown; and
21
22
(xiv) Upon delivery of the Shares sold by the
Company pursuant to this Agreement and payment therefor as contemplated herein,
the Underwriters will acquire good and marketable title to such Shares free and
clear of any lien, claim, security interest, or other encumbrance, restriction
on transfer or other defect in title.
In addition, Company Counsel shall state that, although such
counsel has not undertaken, except as otherwise indicated in its opinion, to
determine independently, and does not assume any responsibility for, the
accuracy or completeness of the statements in the Registration Statement, such
counsel has participated in the preparation of the Registration Statement and
the Prospectus, including review and discussion of the contents thereof, and
nothing has come to the attention of such counsel that has caused it to believe
that the Registration Statement at the time the Registration Statement became
effective, or the Prospectus, as of its date and as of the Closing Date or the
Option Closing Date, 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 not misleading or that any
amendment or supplement to the Prospectus, as of its respective date, and as of
the Closing Date or the Option Closing Date, as the case may be, contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no belief with respect to the financial
statements and the notes thereto and the schedules and other financial,
statistical and other data included in the Registration Statement or the
Prospectus).
In rendering its opinion as aforesaid, Counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
it or the Company as to laws of any jurisdiction other than the United States
or the State of California, provided that (1) each such local counsel is
acceptable to the Representatives, (2) such reliance is expressly authorized by
each opinion so relied upon and a copy of each such opinion is delivered to the
Representatives and is, in form and substance satisfactory to them and their
counsel, and (3) counsel shall state in their opinion that they believe that
they and the Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date an
opinion of counsel for each of Xxxxxx, Xxxxx & Xxxxxxx, counsel for each of the
Selling Stockholders other than Maxtor Corporation, and Maxtor Corporation,
with each such opinion dated the Closing Date and addressed to you, as
Representatives of the several Underwriters, to the effect that:
(i) This Agreement and the Custody Agreement have
each been duly executed and delivered by or on behalf of such Selling
Stockholder and are valid and binding agreements of such Selling Stockholder
enforceable against such Selling Stockholder in accordance with their terms,
except as enforcement of rights to indemnity and contribution hereunder may be
limited by Federal or state securities laws or principles of public policy and
subject to the qualification that the enforceability of such Selling
Stockholder's obligations hereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization,
22
23
moratorium, and other laws relating to or affecting creditors' rights generally
and by general equitable principles;
(ii) Such Selling Stockholder has full legal
right, power and authorization, and any approval required by law (except as
have been obtained under the Act and the Exchange Act or such as may be
required under state securities or Blue Sky laws governing the purchase and
distribution of the Shares), to sell, assign, transfer and deliver good and
marketable title to the Shares which such Selling Stockholder has agreed to
sell pursuant to this Agreement;
(iii) The execution and delivery of this Agreement
and the Custody Agreement by such Selling Stockholder and the consummation of
the transactions contemplated hereby and thereby will not conflict with,
violate, result in a breach of or constitute a default under the terms or
provisions of any agreement, indenture, mortgage or other instrument known to
such counsel to which such Selling Stockholder is a party or by which such
Selling Stockholder or any of its assets or property is bound, or any court
order or decree known to such counsel or any law, rule, or regulation
applicable to such Selling Stockholder or to any of the property or assets of
such Selling Stockholder; and
(iv) Upon delivery of the Shares to be sold by
such Selling Stockholder pursuant to this Agreement and payment therefor as
contemplated herein the Underwriters will acquire good and valid title to such
shares free and clear of any adverse claim. In rendering such opinion, such
counsel may assume that the Underwriters are without express written notice of
any defect in the title of the Shares or any adverse claim (within the meaning
of Section 8-302 of the Uniform Commercial Code) on such Shares being purchased
from such Selling Stockholder.
(e) You shall have received on the Closing Date an
opinion of Xxxx Xxxx Xxxx and Freidenrich, A Professional Corporation, counsel
for the Underwriters, dated the Closing Date and addressed to you, as
Representatives of the several Underwriters, with respect to the matters
referred to in clauses (iv), (vi), (vii), and (xi) and in the second to last
paragraph of the foregoing section 10(c) and such other related matters as you
may request.
(f) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Price Waterhouse LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(g) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there
shall not have been any change in the capital stock of the Company nor any
material increase in the short-term or long-term debt of the Company (other
than in the ordinary course of business) from that set forth or contemplated in
the Registration Statement or the Prospectus (or any amendment or supplement
thereto); (iii) there shall not have been, since the
23
24
respective dates as of which information is given in the Registration Statement
and the Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and Prospectus (or any
amendment or supplement thereto), any material adverse change in the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Company and its Subsidiaries taken as a whole; (iv) the
Company and its Subsidiaries shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business), that
are material to the Company and its Subsidiaries, taken as a whole, other than
those reflected in or contemplated by the Registration Statement or the
Prospectus (or any amendment or supplement thereto); and (v) all the
representations and warranties of the Company contained in this Agreement shall
be true and correct on and as of the date hereof and on and as of the Closing
Date as if made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company (or such other officers as are
acceptable to you), to the effect set forth in this Section 10(g) and in
Section 10(h) hereof.
(h) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(i) All the representations and warranties of the Selling
Stockholders contained in this Agreement shall be true and correct on and as of
the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and you shall have received a certificate, dated the Closing Date
and signed by or on behalf of the Selling Stockholders to the effect set forth
in this Section 10(i) and in Section 10(j) hereof.
(j) The Selling Stockholders shall not have failed at or
prior to the Closing Date to have performed or complied with any of their
agreements herein contained and required to be performed or complied with by
them hereunder at or prior to the Closing Date.
(k) The Shares shall have been listed or approved for
listing upon notice of issuance on the Nasdaq National Market.
(l) The Sellers shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to you and your counsel.
Any certificate or document signed by any officer of the
Company or any Attorney-in-Fact or any officer or director of any Selling
Stockholder or any officer or director of any general partner of any Selling
Stockholder and delivered by the Company, an Attorney- in-Fact or a Selling
Stockholder to you, as Representatives of the Underwriters, or to counsel for
the Underwriters, shall be deemed a representation and warranty by the Company,
the Selling
24
25
Stockholders or the particular Selling Stockholder, as the case may be, to each
Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 10, except
that, if any Option Closing Date is other than the Closing Date, the
certificates, opinions and letters referred to in paragraphs (c) through (i)
shall be dated the Option Closing Date in question and the opinions called for
by paragraphs (c), (d) and (e) shall be revised to reflect the sale of
Additional Shares.
11. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by the
Sellers of their obligations hereunder: (i) the preparation, printing or
reproduction, and filing with the Commission of the registration statement
(including financial statements and exhibits thereto), each Prepricing
Prospectus, the Prospectus, and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies of the
registration statement, each Prepricing Prospectus, the Prospectus, and all
amendments or supplements to any of them as may be reasonably requested for use
in connection with the offering and sale of the Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale of
the Shares; (iv) the printing (or reproduction) and delivery of this Agreement,
the preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the registration of the Shares under the Exchange Act and
the listing of the Shares on the Nasdaq National Market; (vi) the registration
or qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the several states as provided in Section 5(g) hereof (including
the reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the Shares; and (ix)
the fees and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company and the Selling
Stockholders.
12. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the registration statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Company, by notifying you, or by you, as
25
26
Representatives of the several Underwriters, by notifying the Company and the
Selling Stockholders.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters
are obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule II hereto bears to the aggregate
number of Firm Shares set forth opposite the names of all non-defaulting
Underwriters or in such other proportion as you may specify in accordance with
Section 20 of the Master Agreement Among Underwriters of Xxxxx Xxxxxx Inc., to
purchase the Shares which such defaulting Underwriter or Underwriters are
obligated, but fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any
such Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule II hereto who, with your approval and the approval of the Company,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 12 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company or any Selling Stockholder, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Shares), as the case
may be, (i) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited, (ii) a general moratorium on commercial banking
activities in New York or California shall have been declared by either federal
or state authorities, or (iii) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis
or change in political, financial or economic conditions, the effect of which
on the financial markets of the United States is such as to make it, in your
judgment, impracticable or inadvisable to commence
26
27
or continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to enforce contracts for the
resale of the Shares by the Underwriters. Notice of such termination may be
given to the Company by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
14. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside cover page, and the statements in the first and third paragraphs under
the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 7(b) and 9 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5, 12
and 13 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of
the Company or at 0000 XxXxxxxx Xxxxxxxxx, Xxxxxxxx, XX 00000, Attention: Xxxxx
X. Eeg, President; or (ii) if to the Selling Stockholders, at Capital Partners,
Xxx Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, Attention: A. Xxxxxx
Xxxxxxx, and Maxtor Corporation, 0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx Xxxxxxx, or (iii) if to you, as Representatives of the several
Underwriters, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of
the several Underwriters, the Selling Stockholders, the Company, its directors
and officers, and the other controlling persons referred to in Section 9 hereof
and their respective successors and assigns, to the extent provided herein, and
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any Underwriter of any
of the Shares in his status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts,
this Agreement shall not become effective unless at least one counterpart
hereof shall have been executed and delivered on behalf of each party hereto.
27
28
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Stockholders and the several
Underwriters.
Very truly yours,
STORAGE DIMENSIONS, INC.
By ______________________________________
Xxxxx X. Eeg, President
Each of the Selling Stockholders named in
Schedule I hereto
By ______________________________________
Xxxxx X. Eeg, Attorney-in-Fact
By ______________________________________
Xxxx X. Xxxxxx, Xx., Attorney-in-Fact
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto.
XXXXX XXXXXX INC.
SALOMON BROTHERS INC
As Representatives of the Several Underwriters
By XXXXX XXXXXX INC.
By ______________________________________
Xxxxxxxx X. Xxxxxxx, Managing Director
28
29
SCHEDULE I
STORAGE DIMENSIONS, INC.
Number of
Selling Stockholders Number of Firm Shares Additional Shares
-------------------- --------------------- -----------------
CP Acquisition, L.P. No. 4A 409,743 212,321
CP Acquisition, L.P. No. 4B 226,520 117,379
Capital Partners, Inc. 883 458
FGS, Inc. 71,804 37,207
Maxtor Corporation 391,050 202,635
--------------- ---------------
Total 1,100,000 Total 570,000
29
30
SCHEDULE II
STORAGE DIMENSIONS, INC.
Underwriter Number of Firm Shares
----------- ---------------------
Xxxxx Xxxxxx Inc.
Salomon Brothers Inc
---------------------
Total
30
