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EXHIBIT 1.01
4,000,000
TALARIAN CORPORATION
COMMON STOCK, PAR VALUE $0.001 PER SHARE
UNDERWRITING AGREEMENT
July __, 2000
XxXXXX BROTHERS INC.
XX XXXXX SECURITIES CORP.
WIT SOUNDVIEW CORPORATION
FIDELITY CAPITAL MARKETS, A division of
National Financial Services Corporation
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Talarian Corporation, a Delaware corporation (including its predecessor
in interest, Talarian Corporation, a California corporation, the "Company"),
proposes to sell 4,000,000 shares (the "Firm Stock") of the Company's common
stock, par value $0.001 per share (the "Common Stock"). In addition, the Company
proposes to grant to the Underwriters named in Schedule 1 hereto (the
"Underwriters") an option to purchase up to an additional 600,000 shares of the
Common Stock on the terms and for the purposes set forth in Section 2(the
"Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock." This is to confirm the agreement
concerning the purchase of the Stock from the Company by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 and amendments thereto
with respect to the Stock have (i) been prepared by the Company in
conformity with the requirements of the Securities Act of 1933 (the
"Securities Act") and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act; and
a
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second registration statement on Form S-1 with respect to the Stock (i)
may also be prepared by the Company in conformity with the requirements
of the Securities Act and the Rules and Regulations and (ii) if so
prepared, will be filed with the Commission under the Securities Act
pursuant to Rule 462(b) of the Rules and Regulations on the date hereof.
Copies of the first such registration statement and the amendments to
such registration statement, together with the form of any such second
registration statement, have been delivered by the Company to you as the
representatives (the "Representatives") of the Underwriters. As used in
this Agreement, "Effective Time" means (i) with respect to the first
such registration statement, the date and the time as of which such
registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission and (ii) with
respect to any second registration statement, the date and time as of
which such second registration statement is filed with the Commission,
and "Effective Times" is the collective reference to both Effective
Times; "Effective Date" means (i) with respect to the first such
registration statement, the date of the Effective Time of such
registration statement and (ii) with respect to any second registration
statement, the date of the Effective Time of such second registration
statement, and "Effective Dates" is the collective reference to both
Effective Dates; "Preliminary Prospectus" means each prospectus included
in any such registration statement, or amendments thereof, before it
became effective under the Securities Act and any prospectus filed with
the Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations; "Primary
Registration Statement" means the first registration statement referred
to in this Section 1(a), as amended at its Effective Time, "Rule 462(b)
Registration Statement" means the second registration statement, if any,
referred to in this Section 1(a), as filed with the Commission, and
"Registration Statements" means both the Primary Registration Statement
and any Rule 462(b) Registration Statement, including in each case all
information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in accordance with
Section 5(a) hereof and deemed to be a part of the Registration
Statements as of the Effective Time of the Primary Registration
Statement pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "Prospectus" means such final prospectus, as first
filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Rules and Regulations. The Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus.
(b) The Primary Registration Statement conforms (and the Rule
462(b) Registration Statement, if any, the Prospectus and any further
amendments or supplements to the Registration Statements or the
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will conform) in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do
not and will not, as of the applicable Effective Date (as to the
Registration Statements and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain any untrue statement of a material fact or
omit to state any material fact
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required to be stated therein or necessary to make the statements
therein not misleading; provided that no representation or warranty is
made as to information contained in or omitted from the Registration
Statements or the Prospectus in reliance upon and in conformity with
written information furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as defined in Section
16) have been duly incorporated and are validly existing as corporations
in good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the business, financial condition or results of operations of the
Company and its subsidiaries taken as a whole, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged; and the Company's
subsidiary is not a "significant subsidiary", as such term is defined in
Rule 405 of the Rules and Regulations. The subsidiary of the Company
listed in Exhibit 21 to the Registration Statement constitutes the only
subsidiary of the Company required to be listed therein.
(d) The Company had on the stated date an authorized and
outstanding actual and pro forma capitalization as set forth under the
caption "Capitalization" in the Prospectus and, following the offering,
will have an authorized and outstanding pro forma as adjusted
capitalization as set forth under the caption "Capitalization" in the
Prospectus; and all of the issued shares of capital stock of the Company
were on the stated date set forth under the caption "Capitalization" in
the Prospectus and are as of the date hereof duly and validly authorized
and issued, fully paid and non-assessable, and conform in all material
respects to the description thereof contained in the Prospectus; and all
of the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) The shares of the Stock to be issued and sold by the Company to
the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and validly issued, fully paid and non-assessable; and the
Stock will conform in all material respects to the descriptions thereof
contained in the Prospectus; except as described in the Prospectus,
there are no outstanding securities convertible into or exchangeable
for, or warrants, rights or options to purchase from the Company and its
subsidiaries, or obligations of the Company and its subsidiaries to
issue, any class of capital stock of the Company or any of its
subsidiaries; and except as described in the Prospectus, there are no
restrictions on transfer or voting of any
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capital stock of the Company pursuant to the Company's Amended and
Restated Certificate of Incorporation (the "Certificate of
Incorporation") or any agreement to which the Company is a party or by
which it may be bound or to which any of its property or assets may be
subject.
(f) The Company has full right, power and authority to enter into
and perform this Agreement and to consummate the transactions
contemplated hereby and this Agreement has been duly authorized,
executed and delivered by the Company.
(g) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby
and the migratory merger to Delaware described in the Prospectus (such
actions are herein collectively called the "Merger") did not, do not and
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the
properties or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the provisions
of the Certificate of Incorporation of the Company or the charter or
by-laws or similar organizational documents of any of its subsidiaries
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties or assets; and except for
the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as
may be required under the Securities Exchange Act of 1934 (the "Exchange
Act") and applicable state securities laws, or from the National
Association of Securities Dealers (the "NASD") in connection with the
purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or governmental body is required for
the execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated hereby and the
Merger.
(h) Each of the conditions to the closing of the transactions
contemplated by (i) the Agreement and Plan of Merger, dated March 7,
2000 (the "WhiteBarn Agreement"), between the Company and WhiteBarn,
Inc., an Illinois corporation ("WhiteBarn") and (ii) the Asset Purchase
Agreement, dated as of September 30, 1999 (the "GlobalCast Agreement"),
between the Company and GlobalCast Communications, Inc., a California
corporation ("GlobalCast") has been satisfied or waived, the respective
closings under the WhiteBarn Agreement and the GlobalCast Agreement have
been consummated in accordance with the respective terms of such
agreements, and the merger of WhiteBarn with and into the Company
pursuant to the WhiteBarn Agreement has been duly consummated in
accordance with the laws of California and Illinois.
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(i) Except as described in the Registration Statement, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right (other than rights which have been
waived or satisfied) to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statements or in any securities being registered pursuant
to any other registration statement filed by the Company under the
Securities Act.
(j) Except as described in the Registration Statement, the Company
has not sold or issued any shares of Common Stock or securities
convertible into or exchangeable for, shares of Common Stock during the
six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act.
(k) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included in
the Prospectus, any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus.
(l) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statements or
included in the Prospectus present fairly the financial condition and
results of operations of the Company, WhiteBarn and GlobalCast, at the
dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
summary consolidated financial data and selected consolidated financial
data included in the Prospectus present fairly the financial information
shown therein and have been accurately extracted or derived from the
audited financial statements of the Company, WhiteBarn and GlobalCast.
The pro forma consolidated financial information included in the
Prospectus (i) is presented fairly in all material respects, (ii) has
been prepared in accordance with the Rules and Regulations with respect
to pro forma financial statements and (iii) has been properly compiled
on the bases described therein, and the assumptions used in the
preparation of the pro forma consolidated financial information included
in the Prospectus are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred
to therein.
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(m) KPMG, LLP, which has certified certain financial statements of
the Company, WhiteBarn and GlobalCast, the report of which appears in
the Prospectus and which has delivered the initial letter referred to in
Section 7(f) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(n) The Company and each of its subsidiaries do not own any real
property and have good title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and defects except
such as are described in the Prospectus or such as do not materially
affect the value of such property and do not materially interfere with
the use made and proposed to be made of such property by the Company and
its subsidiaries; and all real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries.
(o) The Company and each of its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is reasonably
adequate for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies engaged in
similar businesses in similar industries.
(p) The Company and each of its subsidiaries hold all licenses,
certificates and permits from governmental authorities which are
necessary to the conduct of their businesses, except where the failure
to have such licenses, certificates or permits, either singly or in the
aggregate, would not have a material adverse effect on the business or
financial condition of the Company.
(q) Except as described in the Registration Statement, the Company
and its subsidiaries each own or possess adequate rights to use all
patents, patent rights, trademarks, trade names, service marks, service
names, copyrights, licenses, license rights, technology, know-how
(including trade secrets and other unpatented and unpatentable
proprietary or confidential information, systems or procedures) and
other intellectual property rights ("Intellectual Property") reasonably
necessary to carry on the business of the Company and the subsidiaries
and have no reason to believe that the conduct of their respective
businesses will conflict with, and have not received notice of any claim
of conflict with, any Intellectual Property rights of others or
contractual obligations binding on the Company or any of its
subsidiaries or any of its officers, directors or employees. There are
no outstanding options, licenses or agreements of any kind relating to
the Intellectual Property of the Company or any subsidiary that are
required to be described in the Prospectus and are not described in
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all material respects. Neither the Company nor any of its subsidiaries
is a party to or bound by any options, licenses or agreements with
respect to the Intellectual Property of any other person or entity that
are required to be set forth in the Prospectus and are not described in
all material respects. Except as specifically disclosed in the
Prospectus, the Company knows of no infringement by others of
Intellectual Property owned by or licensed to the Company.
(r) The Company and each of its subsidiaries are conducting
business in compliance with all applicable laws, rules and regulations
of the jurisdictions in which they are conducting business, except where
failure to be so in compliance would not materially adversely affect the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries
taken as a whole.
(s) Neither the Company nor, to the Company's knowledge, any of its
affiliates has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation
of the price of the shares of Common Stock to facilitate the sale or
resale of the shares of Common Stock. The Company acknowledges that the
Underwriters may engage in passive market making transactions in the
shares of Common Stock on the NASDAQ National Market System in
accordance with Regulation M under the Exchange Act.
(t) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or asset of the Company
or any of its subsidiaries is the subject which would reasonably be
expected to have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries; and to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
(u) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to either of the
Registration Statements by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed as
exhibits to either of the Registration Statements as permitted by the
Rules and Regulations.
(v) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is
required to be described in the Prospectus which is not so described.
(w) No labor disturbance by the employees of the Company exists or,
to the knowledge of the Company, is imminent which would reasonably be
expected to have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, or business of
the Company and its subsidiaries taken as a whole.
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(x) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any material
liability; the Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension
plan" for which the Company would have any liability that is intended to
be qualified under Section 401(a) of the Code is so qualified in all
material respects and, to the Company's knowledge, nothing has occurred,
whether by action or by failure to act, which would reasonably be
expected to cause the loss of such qualification.
(y) Each of the Company and its subsidiaries has filed all federal,
state and local income and franchise tax returns, reports and other
information required to be filed through the date hereof and has paid
all taxes due thereon, except where such tax is being contested in good
faith, and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries which has had (nor does the Company
have any knowledge of any tax deficiency which, if determined adversely
to the Company or any of its subsidiaries, might have) a material
adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and
its subsidiaries; and no tax deficiency has been determined adversely to
the Company or any of its subsidiaries which has had (nor does the
Company have any knowledge of any tax deficiency which, if determined
adversely to the Company or any of its subsidiaries, could reasonably be
expected to have) a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries taken as a
whole.
(z) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted
any securities other than securities issued pursuant to options,
warrants or convertible securities outstanding on the date as of which
such information is given, (ii) incurred any liability or obligation,
direct or contingent, other than liabilities and obligations which were
incurred in the ordinary course of business, (iii) entered into any
transaction not in the ordinary course of business or (iv) declared or
paid any dividend on its capital stock.
(aa) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary
to permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is
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permitted only in accordance with management's authorization and the
reported accountability for its assets is compared with existing assets
at reasonable intervals.
(bb) Neither the Company nor any of its subsidiaries, nor, to the
knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any
of its subsidiaries, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the United States
Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(cc) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws or other similar governing
documents, (ii) is in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
it is a party or by which it is bound or to which any of its properties
or assets is subject or (iii) is in violation in any material respect of
any law, ordinance, governmental rule, regulation or court decree to
which it or its properties or assets is subject or has failed to obtain
any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its
properties or assets or to the conduct of its business, except, in the
case of clause (ii) and (iii) such violation or default as does not,
individually or in the aggregate, have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries
taken as a whole.
(dd) Neither the Company nor any subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission thereunder.
(ee) Neither the Company nor any of its subsidiaries has (i)
violated any material environmental statute, rule, regulation, order,
judgment, decree or permit in any jurisdiction in which the Company or
such subsidiary conducts any business or owns or holds any properties or
assets or (ii) received actual notice of any actual or potential
liability for the investigation or remediation of any disposal or
release of hazardous or toxic substance or wastes, pollutants or
contaminants, except where such violation or liability could not
reasonably be expected to have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries
taken as a whole.
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(ff) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or operations
or products of the Company or its subsidiaries have been or will be
affected by the Year 2000 Problem. As a result of such review, the
Company has no reason to believe, and does not believe, that the Year
2000 problem has had or will have a material adverse effect on the
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole or result in any material
loss or interference with the Company's business or operations. The
"Year 2000 Problem" as used herein means any significant risk that
computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1, 2000.
(gg) There are no material acquisitions of businesses or assets by
the Company or any of its subsidiaries pending, contemplated or
currently being negotiated.
(hh) None of the Company, any subsidiary of the Company or any
director or officer of the Company or of any subsidiary of the Company
is (i) a director, officer, or partner of any brokerage firm, broker or
dealer that is a member of the NASD; and each such member, an "NASD
member") or (ii) directly or indirectly, a "person associated with" a
NASD member or an "affiliate" of a NASD member, as such terms are used
in the NASD by-laws or rules.
(ii) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company or any of its subsidiaries to
or for the benefit of any of the officers or directors of the Company or
any of the members of any of them, except as disclosed in the
Prospectus.
(jj) The shares of Common Stock have been approved for quotation on
the NASDAQ National Market System, subject to official notice of
issuance.
(kk) The Company has not distributed and will not distribute prior
to the later of (i) the Delivery Date, or any date on which shares of
Option Stock are to be purchased, as the case may be, and (ii)
completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any
preliminary prospectuses, the Prospectus, the Registration Statement and
other materials, if any, permitted by the Act.
(ll) All offers and sales of the securities of the Company by the
Company prior to the offer and sale of the Stock were made in compliance
with the Securities Act and all other applicable state and federal laws
or regulations.
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2. Purchase of the Shares of Common Stock by the Underwriters. On the
basis of the representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell 4,000,000
shares of the Firm Stock to the several Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Firm Stock set opposite that Underwriter's name in Schedule 1 hereto.
In addition, the Company grants to the Underwriters an option to
purchase up to 600,000 shares of Option Stock. Such option is granted solely for
the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 4 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set opposite the names of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be $_____
per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
3. Offering of Shares by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus; provided, however, that no
Stock registered pursuant to the Rule 462(b) Registration Statement, if any,
shall be offered prior to the Effective Time thereof.
4. Delivery of and Payment for the Shares. Delivery of and payment for
the Firm Stock shall be made in New York, New York with a concurrent closing at
the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx at 0000 Xxxxxxxx, Xxxxx 000, Xxxx
Xxxx, Xxxxxxxxxx at 10:00 A.M., New York time, on [________], 2000, the fourth
full business day following the date of this Agreement, or at such other date or
place as shall be determined by agreement between the Representatives and the
Company. This date and time are sometimes referred to as the "First Delivery
Date." On the First Delivery Date, the Company shall deliver or cause to be
delivered certificates representing the Firm Stock to the Representatives for
the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire or certified or official bank check or
checks payable in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Stock shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Stock, the Company shall make the
certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York time,
on the business day prior to the First Delivery Date.
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At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of shares of Option Stock as to which the option is being
exercised, the names in which the shares of Option Stock are to be registered,
the denominations in which the shares of Option Stock are to be issued and the
date and time, as determined by the Representatives, when the shares of Option
Stock are to be delivered; provided, however, that this date and time shall not
be earlier than the First Delivery Date nor earlier than the second business day
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 date and time the shares of Option Stock are delivered are sometimes
referred to as the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date").
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York time, on the Second Delivery Date. On
the Second Delivery Date, the Company shall deliver or cause to be delivered the
certificates representing the Option Stock to the Representatives for the
account of each Underwriter against payment to or upon the order of the Company
of the purchase price by wire or certified or official bank check or checks
payable in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Option Stock shall be registered in such names and in such denominations as the
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Stock, the Company shall make the certificates representing the Option Stock
available for inspection by the Representatives in New York, New York, not later
than 2:00 P.M., New York time, on the business day prior to the Second Delivery
Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and to file such
Rule 462(b) Registration Statement with the Commission on the date
hereof; to prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than 10:00 A.M., New York time, on
the day following the execution and delivery of this Agreement; to make
no further amendment or any supplement to the Registration Statements or
to the Prospectus except as permitted herein; to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to either Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof; to advise the Representatives, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of
the Stock for offering or
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sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for
the amending or supplementing of the Registration Statements or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives a conformed
copy and to counsel for the Underwriters a signed copy of each of the
Registration Statements as originally filed with the Commission, and
each amendment thereto filed with the Commission, including all consents
and exhibits filed therewith;
(c) To deliver promptly to the Representatives in New York City
such number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration Statements
as originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement and (ii) each
Preliminary Prospectus, the Prospectus (not later than 6:00 P.M., New
York time, of the day following the execution and delivery of this
Agreement) and any amended or supplemented Prospectus (not later than
6:00 P.M., New York time, on the day following the date of such
amendment or supplement); and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the
Effective Time of the Primary Registration Statement in connection with
the offering or sale of the Stock (or any other securities relating
thereto) and if at such time any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus
in order to comply with the Securities Act, to notify the
Representatives and, upon their request, to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request
of an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales
of any of the Shares at any time nine months or more after the Effective
Time of the Primary Registration Statement, upon the request of the
Representatives but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as the Representatives may
from time to time reasonably request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Securities Act;
(d) To file promptly with the Commission any amendment to the
Registration Statements or the Prospectus or any supplement to the
Prospectus
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that may, in the reasonable judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission (i) any amendment to either
of the Registration Statements or any supplement to the Prospectus or
(ii) any Prospectus pursuant to Rule 424 of the Rules and Regulations,
to furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the
filing;
(f) As soon as practicable after the Effective Date of the Primary
Registration Statement (it being understood that the Company shall have
until at least 410 days after the end of the Company's current fiscal
quarter), to make generally available to the Company's security holders
and to deliver to the Representatives an earnings statement of the
Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date of the
Primary Registration Statement, to furnish to the Representatives at
their request copies of all materials furnished by the Company to its
shareholders and all public reports and all reports and financial
statements furnished by the Company to the principal national securities
exchange or automatic quotation system upon which the Common Stock may
be listed or quoted pursuant to requirements of or agreements with such
exchange or system or to the Commission pursuant to the Exchange Act or
any rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities laws of such domestic jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares;
provided that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(i) (i) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, (a) offer for sale, sell or contract to
sell, pledge or otherwise dispose of, or announce an offering of (or
enter into any transaction or device which is designed to, or could be
expected to, result in the disposition or purchase by any person at any
time in the future of) any shares of Common Stock or other equity
securities of the Company or any securities convertible into or
exchangeable for any shares of Common Stock or other equity securities,
or sell or grant options, rights or warrants with respect to any shares
of Common Stock or equity securities of the Company or any securities
convertible into or exchangeable for any shares of Common Stock or other
equity securities (other than (i) options or shares issued pursuant to
the share option and stock purchase
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plans described in the Prospectus and (ii) shares issued pursuant to
currently outstanding options, warrants or rights, in each case as in
effect on the date hereof, provided that the recipient of shares
pursuant to clause (i) or (ii) has executed a lock-up agreement referred
to below or such options are not exercisable in whole or in part prior
to the 180th day after the date of the Prospectus, (iii) upon prior
written notice to Xxxxxx Brothers, shares, not exceeding 20% of the
outstanding Common Stock of the Company, issued in connection with
acquisitions in which none of such shares are required to be registered
under the Securities Act prior to the 180th day after the date of the
prospectus, provided that each recipient of any such shares has executed
with respect to such shares a lock-up agreement referred to below) or
(b) enter into any swap or other derivatives transaction that transfers
to another, in whole or in part, any of the economic benefits or risks
of ownership of any shares of Common Stock or other equity securities,
whether any such transaction described in clause (a) or (b) above is to
be settled by delivery of shares of Common Stock or other equity
securities in cash or otherwise, in each case without the prior written
consent of Xxxxxx Brothers on behalf of the Underwriters; (ii) to cause
each director, executive officer, employee holding options or warrants
and shareholder (except shareholders listed on Schedule 2 hereto) of the
Company to furnish to the Representatives, prior to the First Delivery
Date, a "lock-up" letter (each, a "Lock-up Letter"), substantially in
the form of Exhibit A hereto; and (iii) to cause each shareholder listed
on Schedule 2 hereto to comply with the "lock-up" provisions to which
such shareholder is subject under its purchase or similar agreement with
the Company, which the Company represents and warrants prohibits all
such shareholders from selling any shares of capital stock of the
Company owned by such shareholder on the First Delivery Date for the
180-day "lock-up period" set forth in the Lockup-Letters; and not to
permit any such shareholder to sell or transfer any shares of capital
stock prior to the end of such 180-day lock-up period in each case
without the consent of Xxxxxx Brothers on behalf of the Underwriters,
and, in connection therewith, shall instruct the Transfer Agent not to
make any transfers of such stock for such period..
(j) Prior to the Effective Date, to apply for the listing of the
Shares on the Nasdaq National Market System and to use its best efforts
to complete that listing, subject only to official notice of issuance
and evidence of satisfactory distribution, prior to the First Delivery
Date;
(k) To apply the net proceeds from the sale of the Stock being sold
by the Company as set forth in the Prospectus;
(l) To take such steps as shall be necessary to ensure that neither
the Company nor any subsidiary shall become an "investment company"
within the meaning of such term under the Investment Company Act of 1940
and the rules and regulations of the Commission thereunder;
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(m) Between the date hereof and the First Delivery Date (both dates
inclusive), to notify and consult with the Representatives, and to cause
its subsidiaries and all other parties acting on its or their behalf to
notify and consult with the Representatives, prior to issuing any press
release or other announcement which could be material in the context of
the distribution of the Shares;
(n) In connection with the Directed Share Program, to ensure that
the Directed Shares shall be restricted to the extent required by the
NASD or pursuant to the rules of the NASD from sale, transfer,
assignment, pledge or hypothecation for a period of three months
following the Effective Dates and also to direct the transfer agent to
place stop transfer restrictions upon the Directed Shares for such
period of time; and
(o) To comply with all applicable laws and regulations in each
non-U.S. jurisdiction in which the Directed Shares are offered or sold.
6. Expenses. The Company agrees to pay the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statements and any amendments and
exhibits thereto; the costs of distributing the Registration Statements as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; the costs of reproducing and distributing this Agreement; the
costs, if any, of distributing the terms of agreement relating to the
organization of the underwriting syndicate and selling group to the members
thereof by mail, telex or other means of communication; the filing fees incident
to securing any required review by the National Association of Securities
Dealers, Inc. of the terms of sale of the Stock; any applicable listing or other
fees (including any fees incurred in listing the Stock on the NASDAQ National
Market System); the fees and expenses of qualifying the Stock under the
securities laws of the several jurisdictions as provided in Section 5(h) and of
preparing, printing and distributing a Blue Sky Memorandum (including related
reasonable fees and expenses of counsel to the Underwriters); all reasonable
costs and expenses of the Underwriters, including the fees and disbursements of
counsel for the Underwriters, incident to the offer and sale of shares of the
Stock by the Underwriters to officers, directors, employees and consultants of
the Company and their family members and to other persons having business
relationships with the Company and its subsidiaries, as described in Section 3 ;
and all other costs and expenses incident to the performance of the obligations
of the Company under this Agreement; provided that, except as provided in this
Section 6 and in Sections 8 and , the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Stock which they may sell and the expenses of advertising any offering of
the Stock made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the
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Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) The Rule 462(b) Registration Statement, if any, and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the effectiveness
of either of the Registration Statements or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated
or threatened by the Commission; and any request of the Commission for
inclusion of additional information in either of the Registration
Statements or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that either of the
Registration Statements or the Prospectus or any amendment or supplement
thereto contains any untrue statement of a fact which, in the reasonable
opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, is
material or omits to state any fact which, in the reasonable opinion of
such counsel, is material and is required to be stated therein or is
necessary to made the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Stock, the
Registration Statements and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby and
the Merger shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Company shall have furnished to
such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) Fenwick & West LLP shall have furnished to the Representatives
its written opinion, as counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, substantially to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
Delaware, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on its business,
financial condition or results of operations, and has all corporate
power and corporate authority necessary to own or hold its
properties and conduct the business described in the Prospectus;
(ii) The Company had on the stated date an authorized actual
capitalization as set forth under the caption "Capitalization" in
the Prospectus and immediately following the Offering will have the
pro
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forma and pro forma as adjusted authorized capitalization as set
forth in under the caption "Capitalization" in the Prospectus; and
all of the issued and outstanding shares of capital stock of the
Company were on the stated date set forth under the caption
"Capitalization" in the Prospectus and are as of the date hereof
duly and validly authorized and issued, fully paid and
non-assessable, and the terms of such stock and of the Stock
conform in all material respects to the description thereof
contained in the Prospectus;
(iii) The shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor
as provided herein, will be duly and validly issued, fully paid and
non-assessable;
(iv) The Company has all requisite corporate power and
corporate authority to issue, sell and deliver the Stock in
accordance with and upon the terms and conditions set forth in this
Agreement; the filing of the Registration Statement and the
Prospectus with the Commission has been duly authorized by and on
behalf of the Company; the Registration Statement has been duly
executed; and no further approval or authority of the shareholders
or the Board of Directors of the Company is required for the
issuance of the Stock;
(v) The statements made in the Prospectus under the caption
"Description of Capital Stock," insofar as they purport to
constitute summaries of the terms of the Company's Common Stock
(including the Stock), constitute accurate summaries of the terms
of such Common Stock in all material respects;
(vi) Except as described in or contemplated by the
Prospectus, there are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer
of, any shares of the Stock pursuant to the Company's charter or
by-laws or, to such counsel's knowledge, any agreement or other
instrument and, to such counsel's knowledge, no holder of any
securities of the Company or any other person has any right under
the Company's charter, contractually, or otherwise, which right has
not been satisfied or effectively waived, to cause the Company to
sell or otherwise issue to them or to permit them to underwrite the
sale of any shares of capital stock of the Company;
(vii) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no
outstanding securities of the Company convertible or exchangeable
into or evidencing the right to purchase any shares of capital
stock of the Company and there are no outstanding or authorized
options, warrants or rights of any character obligating the Company
to issue any shares of its capital stock or any
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securities convertible or exchangeable into or evidencing the right
to purchase or subscribe for any such shares;
(viii) To such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company is a party or of which any
property or asset of the Company is the subject that are required
to be disclosed therein; and, to such counsel's knowledge, no such
proceedings are overtly threatened or contemplated by governmental
authorities or overtly threatened by others;
(ix) (i) Based solely upon oral advice of the Commission's
staff, the Primary Registration Statement was declared effective
under the Securities Act as of the date and time specified in such
opinion, (ii) the Rule 462(b) Registration Statement, if any, was
filed with the Commission on the date specified therein, (iii) the
Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and Regulations specified
in such opinion on the date specified therein and, (iv) to the
knowledge of such counsel, no stop order suspending the
effectiveness of either of the Registration Statements has been
issued and no proceeding for that purpose is pending or threatened
by the Commission;
(x) The Registration Statements, as of their respective
Effective Dates, and the Prospectus, as of its date, and any
further amendments or supplements thereto, as of their respective
dates, made by the Company prior to such Delivery Date (other than
the financial statements and related notes and schedule and other
financial data contained therein, as to which such counsel need
express no opinion) complied as to form in all material respects
with the requirements of the Securities Act and the Rules and
Regulations;
(xi) The statements made in the Prospectus under the
captions "Management--Change of Control Arrangements, --Employee
Benefit Plans and Option Grants, --Indemnification of Directors and
Officers and Limitation on Liability", "Business--Strategic
Relationships", "Business--Intellectual Property and Other
Proprietary Rights," "Related Party Transactions" and "Shares
Eligible for Future Sale" insofar as they purport to constitute
non-numerical summaries of the terms of statutes, governmental
rules and regulations thereunder or contracts and other documents
constitute accurate non-numerical summaries of the terms of such
statutes, rules and regulations, contracts and other documents in
all material respects.
(xii) To such counsel's knowledge, there are no contracts or
other documents that are required to be described in the Prospectus
or filed as exhibits to the Registration Statements by the
Securities Act or by the
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Rules and Regulations that have not been described or filed as
exhibits to the Registration Statements;
(xiii) This Agreement has been duly authorized, executed and
delivered by the Company;
(xiv) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the compliance
by the Company with all of the provisions of this Agreement and the
consummation of the transactions contemplated hereby (other than
the performance by the Company of its obligations under the
indemnification and contribution provisions hereof) and pursuant to
the Merger did not and do not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under any agreement or instrument filed as an exhibit to
the Registration Statement, except as would not have a material
adverse effect on the business, financial position or results of
operations of the Company and its subsidiary taken as a whole, nor
did or do such actions result in any violation of the provisions of
the charter or by-laws of the Company (including the charter or
bylaws of Talarian Corporation, a California corporation) or any
statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over
the Company or any of its properties or assets; and, except for the
registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws or from the NASD in connection
with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency
or governmental body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby and pursuant to the Merger,
other than those that were obtained or made;
(xv) The Company is not, and will not become, as an
immediate result of the consummation of the transactions
contemplated by this Agreement, and application of the net proceeds
therefrom as described in the Prospectus, required to register as
an investment company under the Investment Company Act of 1940;
(xvi) To such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any person
granting such person (a) except as described in the Prospectus, the
right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company
owned or to be owned by such person (b) the right, other than
rights which have been waived or satisfied, to require the Company
to include such securities in the
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securities registered pursuant to the Registration Statements or
(c) except as described in the Prospectus, the right to include
such securities in any securities registered pursuant to any other
registration statement filed by the Company under the Securities
Act in the future;
(xvii) to the knowledge of such counsel, neither the Company
nor its subsidiary has received any notice of infringement of or
conflict with asserted rights of any third party that has not been
satisfied or withdrawn with respect to any patents, patent
applications, trademarks, service marks, trade names, licenses,
copyrights, technology and proprietary or other confidential
information currently employed by them in connection with their
respective businesses which, singly or in the aggregate, would
reasonably be expected to result in a material adverse change in
the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and its subsidiary
taken as a whole.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States
of America and the laws of the State of California; and (ii) rely (to
the extent such counsel deems proper and specifies in its opinion), as
to matters involving the application of the laws of other states upon
the opinion of other counsel of good standing, provided that such other
counsel is satisfactory to counsel for the Underwriters and furnishes a
copy of its opinion to the Representatives. Such counsel shall also have
furnished to the Representatives a written statement, addressed to the
Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that (x)
such counsel has acted as counsel to the Company on a regular basis, has
acted as counsel to the Company in connection with previous financing
transactions and has acted as counsel to the Company in connection with
the preparation of the Registration Statements, and (y) based on the
foregoing, no facts have come to the attention of such counsel that
cause it to believe that the Registration Statements, as of their
respective Effective Dates, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or
that the Prospectus contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
statement of belief may be qualified by a statement to the effect that
such counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statements or the Prospectus except to the extent set forth in
paragraphs (v) and (xi) above.
(e) The Representatives shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
such Delivery Date, with respect to the issuance and sale of the shares
of Stock, the Registration Statement, the Prospectus and other related
matters as the
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Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Representatives
shall have received from KPMG, LLP, a letter, in form and substance
reasonably satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as
of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(g) With respect to the letter of KPMG, LLP, referred to in the
preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (as used in this paragraph, the
"initial letter"), the Company shall have furnished to the
Representatives a letter (as used in this paragraph, the "bring-down
letter") of such accountants, addressed to the Underwriters and dated
such Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in
the Prospectus, as of a date not more than five days prior to the date
of the bring-down letter), the conclusions and findings of such firm
with respect to the financial information and other matters covered by
the initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating,
on behalf of the Company, that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct in all material respects
as of such Delivery Date; the Company has complied with all its
agreements contained herein in all material respects; and the
conditions set forth in Section 7(a) have been fulfilled;
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(ii) (A) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus or (B) since such date there has
not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders'
equity or results of operations or prospects of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; and
(iii) They have carefully examined the Registration
Statements and the Prospectus and, in their opinion (A) the
Registration Statements, as of their respective Effective Dates,
and the Prospectus, as of each of the Effective Dates, did not
include any untrue statement of a material fact and did not omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and (B) since the
Effective Date of the Primary Registration Statement, no event has
occurred which should have been set forth in a supplement or
amendment to either of the Registration Statements or the
Prospectus.
(iv) To their knowledge, no stop order suspending the
effectiveness of either of the Registration Statements or any part
thereof has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission.
(i) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus or (ii) since such date there shall not have been any change
in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Representatives, so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(j) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the
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New York Stock Exchange or the American Stock Exchange or in the Nasdaq
National Market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or
minimum prices shall have been established on any such exchange or such
market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities,
(iii) the United States shall have become engaged in hostilities, there
shall have been an escalation in hostilities involving the United States
or there shall have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) as to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the Stock
being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(k) The NASDAQ National Market System shall have approved the Stock
for inclusion, subject only to official notice of issuance and evidence
of satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, either of the
Registration Statements or the Prospectus, or in any amendment or supplement
thereto or (B) in any materials or information provided to investors by, or with
the approval of, the Company in connection with the marketing of the offering of
the Shares, including any roadshow or investor presentation made to investors by
the Company (whether in person or electronically ) ("Roadshow Materials"),
(ii) the omission or alleged omission to state in any Preliminary Prospectus,
either of the Registration Statements or the Prospectus, or in any amendment or
supplement thereto, or in any Roadshow Materials any material fact required to
be stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act, or any alleged act or failure to act, by any
Underwriter in connection with, or relating in any manner to, the Stock or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters
-24-
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covered by clause (i) or (ii) above (provided that the Company shall not be
liable in the case of any matter covered by this clause (iii) to the extent that
it is determined in a final judgement by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted directly from any such
act or failure to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or wilful misconduct), and shall reimburse each
Underwriter and each such officer, employee and controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statements or the Prospectus, or in
any such amendment or supplement, in reliance upon and in conformity with the
written information furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for inclusion therein and described in
Section 8(e); and provided further that as to any Preliminary Prospectus this
indemnity agreement shall not inure to the benefit of any Underwriter, its
officers or employees or any person controlling that Underwriter on account of
any loss, claim, damage, liability or action arising from the sale of Stock to
any person by that Underwriter if that Underwriter failed to send or give a copy
of the Prospectus, as the same may be amended or supplemented, to that person
within the time required by the Securities Act, and the untrue statement or
alleged untrue statement of any material fact or omission or alleged omission to
state a material fact in such Preliminary Prospectus was corrected in the
Prospectus, unless such failure resulted from non-compliance by the Company with
Section 5(c) The foregoing indemnity agreement is in addition to any liability
which the Company may otherwise have to any Underwriter or to any officer,
employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors and
each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus,
either of the Registration Statements or the Prospectus, or in any amendment or
supplement thereto, (ii) the omission or alleged omission to state in any
Preliminary Prospectus, either of the Registration Statements or the Prospectus,
or in any amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with the written information furnished to the
Company through the Representatives by or on behalf of that Underwriter
specifically for inclusion therein and described in Section 8(e), and shall
reimburse the Company and any such director, officer, employee or controlling
person for any legal or other expenses reasonably incurred by the Company or any
such director, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is
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in addition to any liability which any Underwriter may otherwise have to the
Company or any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8 , notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 8 If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ one counsel (and any
necessary local counsel) to represent jointly the Representatives and those
other Underwriters and their respective officers, employees and controlling
persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Underwriters against the Company under this
Section 8 if, in the reasonable judgment of the Representatives, it is advisable
for the Representatives and those Underwriters, officers, employees and
controlling persons to be jointly represented by separate counsel, and in that
event the reasonable fees and expenses of such separate counsel shall be paid by
the Company, any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties, which firm shall be designated in writing
by the Representatives, if the indemnified parties under this Section 8 consist
of any Underwriter or any of their respective officers, employees or controlling
persons, or by the Company, if the indemnified parties under this Section 8
consist of the Company or any of the Company's directors,
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officers, employees or controlling persons. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld or delayed), settle or compromise or consent
to the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld or delayed), but if
settled with its written consent or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss of liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriters on the other from the offering of the Stock
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Stock purchased under this Agreement (before deducting expenses) received by the
Company, on the one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the Stock purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the offering
of the shares of the Stock under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 8(d) shall be deemed to include, for purposes
of this Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Stock
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underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 8(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm that the statements with respect
to the public offering of the Stock set forth on the cover page of, and under
the caption "Underwriting" in, the Prospectus are correct and constitute the
only information furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statements and the
Prospectus.
9. Directed Share Program.
It is understood that approximately [_________] shares of the Firm Stock
("Directed Shares") will initially be reserved by the Underwriters for offer and
sale to officers, directors, employees and consultants of the Company and their
family members and to other persons having business relationships with the
Company and its subsidiaries ("Directed Share Participants") upon the terms and
conditions set forth in the Prospectus and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. Under no
circumstances will Xxxxxx Brothers Inc. or any Underwriter be liable to the
Company or to any Directed Share Participant for any action taken or omitted to
be taken in good faith in connection with such Directed Share Program. To the
extent that any Directed Shares are not affirmatively confirmed for purchase by
any Directed Share Participant on or immediately after the date of this
Agreement, such Directed Shares may be offered to the public upon the terms and
conditions set forth in the Prospectus.
The Company agrees to pay all fees and disbursements incurred by the
Underwriters in connection with the Directed Share Program, including counsel
fees and any stamp duties or other taxes incurred by the Underwriters in
connection with the Directed Share Program.
In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon a request in writing, to indemnify and hold
harmless Xxxxxx Brothers Inc. and the other Underwriters from and against any
loss, claim, damage, expense, liability or action which (i) arises out of, or is
based upon, any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the approval of the Company for
distribution to Directed Share Participants in connection with the Directed
Share Program or 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, (ii) arises out of the failure of any Directed Share Program
participant to pay for and accept delivery of Directed Shares that the
Participant agreed to purchase or (iii) is otherwise related to the Directed
Share Program, other than losses, claims, damages or liabilities (or expenses
relating thereto) that are finally judicially
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determined to have resulted directly from the bad faith or gross negligence of
Xxxxxx Brothers Inc.
10. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriters shall be obligated to purchase the Stock which the defaulting
Underwriter agreed but failed to purchase on such Delivery Date in the
respective proportions which the number of shares of the Firm Stock set opposite
the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears
to the total number of shares of the Firm Stock set opposite the names of all
the remaining non-defaulting Underwriters in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any of the Stock on such Delivery Date if the total number of shares
of the Stock which the defaulting Underwriter or Underwriters agreed but failed
to purchase on such date exceeds 9.09% of the total number of shares of the
Stock to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock which it agreed to purchase on such Delivery Date pursuant
to the terms of Section 2 If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the shares
of the Stock to be purchased on such Delivery Date. If the remaining
Underwriters or other underwriters satisfactory to the Representatives do not
elect to purchase the shares which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such Delivery Date, this Agreement (or, with
respect to the Second Delivery Date, the obligation of the Underwriters to
purchase, and of the Company to sell, the Option Stock) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 6 and 12 As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 10, purchases Firm Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the First Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
11. Termination.
The obligations of the Underwriters hereunder may be terminated by the
Representatives by notice given to and received by the Company prior to delivery
of and payment for the Firm Stock if, prior to that time, any of the events
described in Sections 7(i) or 7(j) shall
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have occurred or if the Underwriters shall decline to purchase the Shares for
any reason permitted under this Agreement.
12. Reimbursement of Underwriters' Expenses. If (a) the Company shall
fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition to the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled or (b) the Underwriters shall decline to purchase the Stock for
any reason permitted under this Agreement (including the termination of this
Agreement pursuant to Section 11), the Company shall reimburse the Underwriters
for the reasonable fees and expenses of their counsel and for such other
out-of-pocket expenses as shall have been incurred by them in connection with
this Agreement and the proposed purchase of the Stock, and upon demand the
Company shall pay the full amount thereof to the Representatives.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to:
XXXXXX BROTHERS INC.
Three World Financial Center
New York, New York 10285
Attention: Syndicate Department
Fax: 000-000-0000
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Primary Registration Statement, Attention: Xxxxxxx X. Xxxxxx (Fax:
000-000-0000), with a copy to Xxxxx X. Xxxxxx, Esq., Fenwick & West LLP,
Xxx Xxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxxxxxxxx, 00000;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives.
14. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Company and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the officers and
employees of each Underwriter and the person or persons, if any, who control
each
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Underwriter within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Underwriters contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Company and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 14, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
15. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriters contained in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Stock and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
16. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the NASDAQ
National Market is open for trading and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
TALARIAN CORPORATION
By:
------------------------------------
Name: Xxxx Xxxxxx
Title: Chief Executive Officer
Accepted:
XXXXXX BROTHERS INC.
XX XXXXX SECURITIES CORP.
WIT SOUNDVIEW CORPORATION
FIDELITY CAPITAL MARKETS, a division of
National Financial Services Corporation
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By: XxXXXX BROTHERS INC.
By:
-----------------------------------
Authorized Representative
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SCHEDULE 1
Number of
Underwriters Shares
------------ --------
Xxxxxx Brothers Inc. ..............................................................
XX Xxxxx Securities Corp. .........................................................
Wit Soundview Corporation
Fidelity Capital Markets, a division of
National Financial Services Corporation .........................................
--------
Total .......................................................................
========
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SCHEDULE 2
Shareholder Name
-1-
35
EXHIBIT A
[FORM OF LOCK-UP LETTER]
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
XX XXXXX SECURITIES CORPORATION
WIT SOUNDVIEW CORPORATION
FIDELITY CAPITAL MARKETS, a division of
National Financial Services Corporation
As Representatives of the several
Underwriters,
c/x Xxxxxx Brothers Inc.
Three World Financial Center
New York New York 10285
Dear Sirs:
The undersigned understands that you and certain other firms may enter
into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") providing for the
purchase by you and such other firms (the "UNDERWRITERS") of shares (the
"SHARES") of Common Stock, without par value (the "COMMON STOCK"), of Talarian
Corporation, a California corporation, (together with any successor Delaware
corporation resulting from a merger for purposes of changing the jurisdiction of
incorporation of Talarian Corporation, the "COMPANY;" and, in the event of such
merger, the term "Common Stock" shall include the common stock of such successor
corporation), and that the Underwriters would propose to reoffer the Shares to
the public (the "OFFERING").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc. ("XXXXXX BROTHERS"), on behalf of the Underwriters, the
undersigned will not, directly or indirectly, (1) offer for sale, sell, pledge,
or otherwise dispose of (or enter into any transaction or device that is
designed, or could be expected, to result in the disposition by any person at
any time in the future of) any shares of Common Stock (including, without
limitation, shares of Common Stock that may be deemed to be beneficially owned
by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and shares of Common Stock that may be issued
upon exercise of any option or warrant) or securities convertible into or
exchangeable for Common Stock owned by the undersigned on the date of execution
of this Lock-Up Letter Agreement or on the date of the closing of the Offering,
or sell or grant options, rights or warrants with respect to any such shares of
Common Stock or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or risks
of ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, for a period of 180 days after
the date of the final prospectus relating to the Offering.
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Notwithstanding the foregoing, (i) if the undersigned is an individual,
he or she may transfer any shares of Common Stock or securities convertible into
or exchangeable or exercisable for shares of Common Stock either during his or
her lifetime or upon death by will or intestacy to his or her immediate family
or to a trust if the beneficiaries of such trust are exclusively the undersigned
and/or a member or members of his or her immediate family; provided, however ,
that prior to any such transfer each transferee shall execute an agreement
substantially identical to this agreement, pursuant to which each transferee
shall agree to receive and hold such shares of Common Stock, or securities
convertible into or exchangeable or exercisable for shares of Common Stock,
subject to the provisions hereof, and there shall be no further transfer except
in accordance with the provisions hereof, (ii) if the undersigned is a
partnership, the partnership may transfer any shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock to a
partner of such partnership, to a retired partner of such partnership, or to the
estate of any such partner or retired partner, and any such partner who is an
individual may transfer such shares of Common Stock or securities convertible
into or exchangeable or exercisable for shares of Common Stock by gift, will or
intestacy to a member or members of his or her immediate family; provided,
however, that prior to any such transfer each transferee shall execute an
agreement substantially identical to this agreement, pursuant to which each
transferee shall agree to receive and hold such shares of Common Stock or
securities convertible into or exchangeable or exercisable for shares of Common
Stock subject to the provisions hereof, and there shall be no further transfer
except in accordance with the provisions hereof and (iii) if the undersigned is
a nonpublic corporation, such corporation may transfer shares of Common Stock to
an affiliated nonpublic corporation, partnership or other affiliated entity,
provided that the transferor corporation owns 50% or more of the voting power of
such transferee nonpublic corporation, partnership or other affiliated entity,
as the case may be, and may distribute shares of Common Stock to its
shareholders, who may in turn make transfers as set forth in clause (i) above;
provided, however, that prior to any such transfer each transferee shall execute
an agreement substantially identical to this agreement, pursuant to which each
transferee shall agree to receive and hold such shares of Common Stock or
securities convertible into or exchangeable or exercisable for shares of Common
Stock subject to the provisions hereof, and there shall be no further transfer
except in accordance with the provisions hereof. For purposes of this paragraph,
"immediate family" shall mean spouse, lineal descendant, father, mother,
brother, sister, father-in-law, mother-in-law, brother-in-law, sister-in-law, or
domestic partner of the transferor.
In furtherance of the foregoing, the Company and its Transfer Agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if Xxxxxx Brothers notifies the undersigned
that it does not intend to proceed with the Offering or if the Underwriting
Agreement (other than the provisions thereof which survive termination), after
it becomes effective, shall terminate or be terminated prior to payment for and
delivery of the Shares, the undersigned will be released from its obligations
under this Lock-Up Letter Agreement. This Lock-Up Letter Agreement shall expire
on August 15, 2000 if the Offering has not been consummated prior to such date
unless the Company agrees, in writing, with Xxxxxx Brothers to extend the
expiration date to a date not later than December 31, 2000.
The undersigned understands that the Company and the Underwriters
will proceed with the Offering in reliance on this Lock-Up Letter Agreement.
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37
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Lock-Up Letter Agreement and
that, upon request, the undersigned will execute any additional documents
necessary in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
*
By:
-----------------------------------
Name:
**Title:
Dated: March , 2000
* Insert name of entity if applicable
** Not applicable for individuals
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