EXHIBIT 1.1
4,000,000 SHARES*
INTEVAC, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
___, 2004
XXXXXXX & COMPANY, INC.
Xxxxx Xxxxxxx & Co.
Xxxxxx Xxxxxx Partners LLC
c/o Needham & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Intevac, Inc., a California corporation (the "Company"), proposes to
issue and sell 2,500,000 shares (the "Company Firm Shares") of the Company's
common stock, no par value (the "Common Stock"), and the shareholder of the
Company named in Schedule II hereto (the "Selling Shareholder") propose to sell
1,500,000 shares of the Common Stock (the "Selling Shareholder Firm Shares"), in
each case to you and to the several other Underwrites named in Schedule I hereto
(collectively, the "Underwriters"), for whom you are acting as Representatives
(the "Representatives"). The Selling Shareholder has also agreed to grant to you
and the other Underwriters an option (the "Selling Shareholder Option") to
purchase up to an additional 600,000 shares of Common Stock, on the terms and
for the purposes set forth in Section 1(b) ("Selling Shareholder Option
Shares"). The Company Firm Shares and the Selling Shareholder Firm Shares are
collectively referred to as the "Firm Shares." The Selling Shareholder Option
Shares are referred to herein as the "Option Shares." The Firm Shares and the
Option Shares are referred to collectively herein as the "Shares." The Selling
Shareholder Option is referred to herein as the "Option."
The Company and the Selling Shareholder confirm as follows their
respective agreements with the Representatives and the several other
Underwriters.
1. AGREEMENT TO SELL AND PURCHASE.
(a) On the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, (i) the Company agrees to issue and sell the
Company Firm Shares to the Underwriters and (ii) each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the respective
number of Company Firm Shares set forth opposite that Underwriter's name in
Schedule I hereto, at the purchase price of $______ for each Company Firm Share.
--------------------------
* Plus an option to purchase up to an additional 600,000 shares to cover
over-allotments.
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(b) On the basis of the representations, warranties and
agreements of the Selling Shareholder herein contained and subject to all the
terms and conditions of this Agreement, (i) the Selling Shareholder agrees to
issue and sell the Selling Shareholder Firm Shares to the Underwriters and (ii)
each of the Underwriters, severally and not jointly, agrees to purchase from the
Selling Shareholder the respective number of Selling Shareholder Firm Shares set
forth opposite that Underwriter's name in Schedule I hereto, at the purchase
price of $______ for each Selling Shareholder Firm Share.
(c) Subject to all the terms and conditions of this
Agreement, the Company grants the Company Option and the Selling Shareholder
grants the Selling Shareholder Option to the Underwriters to purchase, severally
and not jointly, up to the maximum number of Option Shares set forth in Schedule
II of this Agreement at the same price per share as the Underwriters shall pay
for the Firm Shares. The Option may be exercised only to cover over-allotments
in the sale of the Firm Shares by the Underwriters and may be exercised in whole
or in part, but pro rata with respect to the Company and Selling Shareholder, at
any time (but not more than once) on or before the 30th day after the date of
this Agreement upon written or telegraphic notice (the "Option Shares Notice")
by the Representatives to the Company and the Selling Shareholder no later than
12:00 noon, New York City time, at least two and no more than five business days
before the date specified for closing in the Option Shares Notice (the "Option
Closing Date"), setting forth the aggregate number of Option Shares to be
purchased and the time and date for such purchase. On the Option Closing Date,
the Company will issue and sell, and the Selling Shareholder will sell, to the
Underwriters the number of Option Shares set forth in the Option Shares Notice
with respect to the Company and Selling Shareholder, as the case may be, and
each Underwriter will purchase such percentage of the Option Shares as is equal
to the percentage of Firm Shares that such Underwriter is purchasing, as
adjusted by Xxxxxxx & Company, Inc. in such manner as they deem advisable to
avoid fractional shares.
2. DELIVERY AND PAYMENT.
Delivery of the Firm Shares shall be made to the Representatives for
the accounts of the Underwriters against payment of the purchase price by wire
transfer or certified check payable in same-day funds to the order of (i) the
Company for the Company Firm Shares to be sold by it and (ii) to the order of
the Selling Shareholder for the Selling Shareholder Firm Shares sold by it at
the office of Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, at 10:00 a.m., New York City time, on the third (or, if the purchase
price set forth in Section 1(a) hereof is determined after 4:30 p.m., New York
City time, the fourth) business day following the commencement of the offering
contemplated by this Agreement, or at such time on such other date, not later
than seven business days after the date of this Agreement, as may be agreed upon
by the Company, the Selling Shareholder and the Representatives (such date is
hereinafter referred to as the "Closing Date").
To the extent the Underwriters exercise the Option, delivery of the
Option Shares against payment by the Underwriters (in the manner specified
above) will take place at the offices specified above for the Closing Date at
the time and date (which may be the Closing Date) specified in the Option Shares
Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.
The Company shall bear the cost of original issue tax stamps and other
transfer taxes, if any, in connection with the issuance and delivery of the Firm
Shares and the Option Shares by the Company and the Selling Shareholder to the
Underwriters. The Company or the Selling Shareholder, as appropriate, will pay
and save each Underwriter and any subsequent holder of the Shares harmless from
any and all liabilities with respect to or resulting from any failure or delay
in paying federal and state stamp and other transfer taxes, if any, which may be
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payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SHAREHOLDER.
The Company and the Selling Shareholder represent, warrant and covenant
to each Underwriter that:
(a) The Company meets the requirements for use of Form
S-3 and a registration statement (Registration No. 333-________) on Form S-3
relating to the Shares, including a preliminary prospectus and such amendments
to such registration statement as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The term "preliminary prospectus" as used herein means a preliminary
prospectus, including the documents incorporated by reference therein, as
contemplated by Rule 430 or Rule 430A of the Rules and Regulations included at
any time as part of the registration statement. Copies of such registration
statement and amendments and of each related preliminary prospectus have been
delivered to the Representatives. If such registration statement has not become
effective, the Company will promptly file with the Commission a further
amendment to such registration statement, including a form of final prospectus,
necessary to permit such registration statement to become effective. If such
registration statement has become effective, a final prospectus containing
information permitted to be omitted at the time of effectiveness by Rule 430A of
the Rules and Regulations will be filed promptly by the Company with the
Commission in accordance with Rule 424(b) of the Rules and Regulations. The term
"Registration Statement" means the registration statement as amended at the time
it becomes or became effective (the "Effective Date"), including all documents
incorporated by reference therein, financial statements and all exhibits and
schedules thereto and any information deemed to be included by Rule 430A, and
includes any registration statement relating to the offering contemplated by
this Agreement and filed pursuant to Rule 462(b) of the Rules and Regulations.
The term "Prospectus" means the prospectus, including the documents incorporated
by reference therein, as first filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations or, if no such filing is required, the form of
final prospectus, including the documents incorporated by reference therein,
included in the Registration Statement at the Effective Date. Any reference
herein to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), after the Effective Date,
the date of any preliminary prospectus or the date of the Prospectus, as the
case may be, and deemed to be incorporated therein by reference.
(b) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and no stop order
suspending the effectiveness of the Registration Statement (including any
related registration statement filed pursuant to Rule 462(b) under the Act) or
any post-effective amendment thereto has been issued, and no proceeding for that
purpose has been initiated or threatened by the Commission. On the Effective
Date, the date the Prospectus is first filed with the Commission pursuant to
Rule 424(b) (if required), during the period through and including the Closing
Date and, if later, the Option Closing Date, and when any post-effective
amendment to the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, the Registration
Statement and the Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment or supplement thereto), including
the financial statements included in the Prospectus, did and will comply with
all applicable provisions of the Act and the Rules and Regulations and will
contain all statements required to be stated therein in accordance with the Act,
the Exchange Act, the rules and regulations under the Exchange Act (the
"Exchange Act Rules and Regulations") and the Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement, the
Prospectus or any such amendment or supplement thereto did or will contain an
untrue statement of a material fact or omit to state a 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. At the
Effective Date, the date the Prospectus or any amendment or supplement to the
Prospectus is filed with the Commission and at the Closing Date and, if later,
the Option Closing Date, the Prospectus did not and will not contain any untrue
statement of a material fact or omit to
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state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company and the Selling
Shareholder each acknowledges that the only information furnished in writing to
the Company by the Representatives on behalf of the Underwriters expressly for
inclusion in the Registration Statement or Prospectus or any amendments or
supplements thereto, appears under the heading "Underwriting".
(c) The documents that are incorporated by reference in
the preliminary prospectus and the Prospectus or from which information is so
incorporated by reference, when they became or become effective or were or are
filed with the Commission, as the case may be, complied or will comply in all
material respects with the requirements of the Act or the Exchange Act, as
applicable, and the Rules and Regulations or the Exchange Act Rules and
Regulations, as applicable; and any documents so filed and incorporated by
reference subsequent to the Effective Date shall, when they are filed with the
Commission, comply in all material respects with the requirements of the Act or
the Exchange Act, as applicable, and the Rules and Regulations or the Exchange
Act Rules and Regulations, as applicable.
(d) The Company does not own, and at the Closing Date
and, if later, the Option Closing Date, will not own, directly or indirectly,
any shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any corporation, firm, partnership,
joint venture, association or other entity, other than the subsidiaries listed
in Exhibit 21 to the Registration Statement (the "Subsidiaries"). The Company
and each of its Subsidiaries is, and at the Closing Date and, if later, the
Option Closing Date, will be, an entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization. The Company and each of its Subsidiaries has, and at the Closing
Date and, if later, the Option Closing Date, will have, full power and authority
to conduct all the activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus. The Company and each of its
Subsidiaries is, and at the Closing Date and, if later, the Option Closing Date,
will be, duly licensed or qualified to do business and in good standing as a
foreign corporation in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
license or qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not reasonably be expected to
materially and adversely affect the Company and its Subsidiaries or its or their
business, properties, business prospects, condition (financial or other) or
results of operations, taken as a whole. All of the outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly issued
and are fully paid and nonassessable, and owned by the Company free and clear of
all claims, liens, charges and encumbrances. There are no securities outstanding
that are convertible into or exercisable or exchangeable for capital stock of
any Subsidiary. The Company and its Subsidiaries are not, and at the Closing
Date and, if later, the Option Closing Date, will not be, engaged in any
discussions or a party to any agreement or understanding, written or oral,
regarding the acquisition of an interest in any corporation, firm, partnership,
joint venture, association or other entity where such discussions, agreements or
understandings would require amendment to the Registration Statement pursuant to
applicable securities laws, unless such amendment has been filed. Complete and
correct copies of the articles of incorporation and of the by-laws, or other
organizational documents, of the Company and each of its Subsidiaries and all
amendments thereto have been delivered to the Representatives, and no changes
therein will be made subsequent to the date hereof and prior to the Closing Date
or, if later, the Option Closing Date.
(e) All of the outstanding shares of capital stock of the
Company (including the Selling Shareholder Firm Shares and the Selling
Shareholder Option Shares to be sold by the Selling Shareholder under this
Agreement) have been duly authorized, validly issued and are fully paid and
nonassessable and were issued in compliance with all applicable state and
federal securities laws. The Company Firm Shares and the Company Option Shares
to be issued by the Company (if any) have been duly authorized and when issued
and paid for as contemplated herein will be validly issued, fully paid and
nonassessable. No preemptive or similar rights exist with respect to any of the
Shares or the issue and sale thereof. The description of the capital stock of
the Company incorporated by reference into the Registration Statement and the
Prospectus is, and at the Closing Date and, if later, the Option Closing Date,
will be, complete and accurate in all material respects. Except as set forth in
the
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Prospectus, or as a result of option grants under the Company's stock option
plans in the ordinary course and consistent with past practice, the Company does
not have outstanding, and at the Closing Date and, if later, the Option Closing
Date, will not have outstanding, any options to purchase, or any rights or
warrants to subscribe for, or any securities or obligations convertible into, or
any contracts or commitments to issue or sell, any shares of capital stock, or
any such warrants, convertible securities or obligations. No further approval or
authority of Shareholders or the Board of Directors of the Company will be
required for the transfer and sale of the Selling Shareholder Firm Shares or the
Selling Shareholder Option Shares or the issuance and sale of the Company Firm
Shares and the Company Option Shares as contemplated herein.
(f) The financial statements, notes and schedules
included in or incorporated by reference into the Registration Statement or the
Prospectus present fairly the financial condition of the Company and its
consolidated Subsidiaries as of the respective dates thereof and the results of
operations and cash flows of the Company and its consolidated Subsidiaries for
the respective periods covered thereby, all in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
entire period involved, except as otherwise disclosed in the Prospectus. No
other financial statements or schedules of the Company are required by the Act
or the Rules and Regulations to be included in the Registration Statement or the
Prospectus. Xxxxx Xxxxxxxx LLP ("Xxxxx Xxxxxxxx"), who have reported on such
financial statements and schedules, are independent accountants with respect to
the Company as required by the Act and the Rules and Regulations. The summary
consolidated financial and statistical data included in the Registration
Statement present fairly the information shown therein and have been compiled on
a basis consistent with the audited financial statements presented in or
incorporated by reference into the Registration Statement subject, in the case
of quarterly information, to normal year-end audit adjustments.
(g) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date and, if later, the Option Closing Date, except as set forth
in or contemplated by the Registration Statement and the Prospectus, (i) there
has not been and will not have been any change in the capitalization of the
Company (other than in connection with the exercise of options to purchase the
Company's Common Stock granted pursuant to the Company's stock option plans from
the shares reserved therefore, and in connection with the purchase of shares
under the Company's stock purchase plan, all as described in the Registration
Statement), or any material adverse change in the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company or any of its Subsidiaries, arising for any reason whatsoever, (ii)
neither the Company nor any of its Subsidiaries has incurred nor will any of
them incur, except in the ordinary course of business as described in the
Prospectus, any material liabilities or obligations, direct or contingent, nor
has the Company or any of its Subsidiaries entered into nor will any of them
enter into, except in the ordinary course of business as described in the
Prospectus, any material transactions other than pursuant to this Agreement and
the transactions referred to herein, and (iii) the Company has not and will not
have paid or declared any dividends or other distributions of any kind on any
class of its capital stock.
(h) The Company is not, will not become as a result of
the transactions contemplated hereby, and will not conduct its business in a
manner that would cause it to become, an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
(i) There are no legal actions, suits or proceedings
pending or threatened against the Company, or any of its Subsidiaries, or any of
its or their officers or directors in their capacity as such, nor, to the
knowledge of either the Company or the Selling Shareholder, any basis therefore,
before or by any federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding might materially and adversely affect
the Company, any of its Subsidiaries, or the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company or any of its Subsidiaries.
(j) The Company and each Subsidiary has, and at the
Closing Date and, if later, the Option Closing Date, will have, performed all
the obligations required to be performed by it, and is not, and at the Closing
Date, and, if later, the Option Closing Date, will not be, in default, under any
contract or other instrument to which it
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is a party or by which its property is bound or affected, which default might
reasonably be expected to materially and adversely affect the Company or the
business, properties, business prospects, condition (financial or other) or
results of operations of the Company or any of its Subsidiaries. To the
knowledge of either the Company or the Selling Shareholder, no other party under
any contract or other instrument to which it or any of its Subsidiaries is a
party is in default in any respect thereunder, which default might reasonably be
expected to materially and adversely affect the Company or any of its
Subsidiaries, or the business, properties, business prospects, condition
(financial or other) or results of operations of the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries is, and at the
Closing Date and, if later, the Option Closing Date, will be in violation of any
provision of its articles of incorporation, by-laws or other organizational
documents.
(k) No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency or body is
required for the consummation by the Company of the transactions on its part
contemplated herein, except such as have been obtained under the Act or the
Rules and Regulations and such as may be required under state securities or Blue
Sky laws or the by-laws and rules of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and distribution by
the Underwriters of the Shares.
(l) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with the terms hereof.
The performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company pursuant to the
terms or provisions of, or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, the articles of incorporation, by-laws or other organizational
documents of the Company or any of its Subsidiaries, any indenture, mortgage,
deed of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other agreement
or instrument to which the Company or any of its Subsidiaries is a party or by
which the Company, any of its Subsidiaries, or any of its or their properties is
bound or affected, or violate or conflict with any judgment, ruling, decree,
order, statute, rule or regulation of any court or other governmental agency,
self-regulatory organization or body applicable to the business or properties of
the Company or any of its Subsidiaries.
(m) The Company and its Subsidiaries have good and
marketable title to all properties and assets described in the Prospectus as
owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not material
to the business of the Company or its Subsidiaries. The Company and its
Subsidiaries have valid, subsisting and enforceable leases for the properties
described in the Prospectus as leased by them. The Company and its Subsidiaries
own or lease all such properties as are necessary to their operations as now
conducted or as proposed to be conducted, except where the failure to so own or
lease would not materially and adversely affect the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company or its Subsidiaries.
(n) There is no document, contract, permit or instrument
of a character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement which is
not described or filed as required. All such contracts to which the Company or
any of its Subsidiaries is a party have been duly authorized, executed and
delivered by the Company or such Subsidiary, constitute valid and binding
agreements of the Company or such Subsidiary and are enforceable against and by
the Company or such Subsidiary in accordance with the terms thereof, except
where the enforcement thereof may be limited by equitable principles or
bankruptcy laws.
(o) No statement, representation, warranty or covenant
made by the Company in this Agreement or made in any certificate or document
required by Section 6 of this Agreement to be delivered to the Representatives
was or will be, when made, inaccurate, untrue or incorrect in any material
respect.
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(p) The Company has not distributed and will not
distribute prior to the later of (i) the Closing Date or, if later, the Option
Closing Date, 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. Neither the Company nor any
of its directors, officers or controlling persons has taken, directly or
indirectly, any action designed, or which might reasonably be expected, to cause
or result in, under the Act or otherwise, or which has constituted,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(q) Except as stated in the prospectus, no holder of
securities of the Company has rights to the registration of any securities of
the Company because of the filing of the Registration Statement, which rights
have not been waived by the holder thereof as of the date hereof.
(r) The Common Stock is registered under Section 12(g) of
the Exchange Act. The Common Stock is included on the Nasdaq National Market
(the "NNM") and the Shares to be sold by the Company hereunder have been
approved for listing, subject to official notice of issuance of the Company Firm
Shares and the Company Option Shares. The Shares to be sold by the Selling
Shareholder hereunder are included on the NNM.
(s) The Company and its Subsidiaries have sufficient
trademarks, trade names, patents, patent rights, mask works, copyrights,
licenses, approvals and governmental authorizations to conduct their businesses
as now conducted, and none of the foregoing intellectual property rights owned
or licensed by the Company is invalid or unenforceable. Neither the Company nor
the Selling Shareholder has any knowledge of any infringement by it or any of
its Subsidiaries of trademarks, trade names, patents, patent rights, mask work
rights, copyrights, licenses, trade secrets or other similar rights of others,
where such infringement could have a material adverse effect on the Company, any
of its Subsidiaries, or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company or any of its
Subsidiaries. The Company is not aware of any infringement, misappropriation or
violation by others of, or conflict by others with rights of the Company with
respect to, any of the foregoing intellectual property rights. There is no claim
being made or threatened to be made against the Company or any of its
Subsidiaries, or to the knowledge of either the Company or the Selling
Shareholder, any employee of the Company or any of its Subsidiaries, regarding
trademark, trade name, patent, mask work, copyright, license, trade secret or
other infringement which could reasonably be expected to have a material adverse
effect on the Company, any of its Subsidiaries, or the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company or any of its Subsidiaries.
(t) The Company and each of its Subsidiaries have filed
all federal, state, local and foreign income tax returns which have been
required to be filed and have paid all taxes and assessments received by them to
the extent that such taxes or assessments have become due. Neither the Company
nor any of its Subsidiaries has any tax deficiency which has been or, to the
knowledge of the Company, might be asserted or threatened against them which
could reasonably be expected to have a material and adverse effect on the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company or any of its Subsidiaries.
(u) The Company and each of its Subsidiaries own or
possess all authorizations, approvals, orders, licenses, registrations, other
certificates and permits of and from all governmental regulatory officials and
bodies, necessary to conduct their respective businesses as contemplated in the
Prospectus, except where the failure to own or possess all such authorizations,
approvals, orders, licenses, registrations, other certificates and permits would
not materially adversely affect the Company, any of its Subsidiaries, or the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company or any of its Subsidiaries. There is no
proceeding pending or threatened (or any basis therefor known to the Company)
which may cause any such authorization, approval, order, license, registration,
certificate or permit to be revoked, withdrawn, cancelled, suspended or not
renewed; and the Company and each of its Subsidiaries is conducting its business
in compliance with all laws, rules and regulations applicable thereto
(including, without limitation, all applicable federal, state and local
environmental laws and regulations), except where such noncompliance would not
materially adversely affect the Company, any of its Subsidiaries, or the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company or any of its Subsidiaries.
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(v) The Company and each of its Subsidiaries maintains
insurance of the types and in the amounts generally deemed adequate for its
business, including, but not limited to, insurance covering product liability
and claims insurance covering real and personal property owned or leased by the
Company and its Subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(w) Neither the Company nor any of its Subsidiaries has
nor, to the knowledge of either the Company or the Selling Shareholder, any of
its or their respective employees or agents at any time during the last five
years (i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law, or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof.
(x) The Company and each of its Subsidiaries 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 or any Subsidiary would have any
liability; neither the Company nor any Subsidiary has incurred or expects 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 or any Subsidiary 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 nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(y) The Company and each of its Subsidiaries has complied
in all material respects with all applicable domestic or foreign laws
(statutory, common, or otherwise), orders, writs, injunctions, decrees, awards,
stipulations, ordinances or administrative doctrines, equitable principles,
codes, rules, regulations, executive orders, requests, or other similar
authority enacted, adopted, promulgated, or applied by any governmental body and
applicable to the Company or a Subsidiary of the Company (collectively, the
"Laws"). No action, appeal, petition, plea, charge, complaint, claim, suit,
demand, litigation, arbitration, mediation, hearing, investigation or similar
event, occurrence or proceeding is pending or, to the knowledge of the Company
or the Selling Shareholder, threatened against it alleging any failure to comply
with the Laws.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLING
SHAREHOLDER.
The Selling Shareholder, represents, warrants and covenants to each
Underwriter that:
(a) All consents, approvals, authorizations and orders
necessary for the execution and delivery by the Selling Shareholder of this
Agreement and the Custody Agreement (the "Shareholder's Agreement") and for the
sale and delivery of the Selling Shareholder Firm Shares and the Selling
Shareholder Option Shares to be sold by the Selling Shareholder hereunder, have
been obtained; and the Selling Shareholder has full right, power and authority
to enter into this Agreement and the Shareholder's Agreement, to make the
representations, warranties and agreements hereunder and thereunder, and to
sell, assign, transfer and deliver the Selling Shareholder Firm Shares and the
Selling Shareholder Option Shares to be sold by such Selling Shareholder
hereunder.
(b) Certificates in negotiable form representing all of
the Selling Shareholder Firm Shares and the Selling Shareholder Option Shares to
be sold by such Selling Shareholder have been placed in custody under the
Shareholder's Agreement, in the form heretofore furnished to you, duly executed
and delivered by the Selling Shareholder to _____________________, (the
"Custodian").
(c) The Selling Shareholder specifically agrees that the
Selling Shareholder Option Shares represented by the certificates held in
custody for the Selling Shareholder under the Shareholder's Agreement are for
the benefit of and coupled with and subject to the interests of the
Underwriters, the Custodian, and the Company, that the arrangements made by the
Selling Shareholder for such custody are, except as specifically provided in the
8
Shareholder's Agreement, to that extent irrevocable, and that the obligations of
the Selling Shareholder hereunder shall not be terminated by operation of law,
whether by the death, disability or incapacity of the Selling Shareholder or by
the occurrence of any other event. If the Selling Shareholder or any executor or
trustee for the Selling Shareholder should die, become incapacitated, or if any
other such event should occur, before the delivery of the Selling Shareholder
Firm Shares and the Selling Shareholder Option Shares, the certificates
representing the Selling Shareholder Firm Shares and the Selling Shareholder
Option Shares shall be delivered by or on behalf of the Selling Shareholder in
accordance with the terms and conditions of this Agreement and of the
Shareholder's Agreement, regardless of whether or not the Custodian shall have
received notice of such death, incapacity, or other event.
(d) This Agreement and the Shareholder's Agreement have
each been duly authorized, executed and delivered by or on behalf of the Selling
Shareholder and each such document constitutes a valid and binding obligation of
the Selling Shareholder, enforceable in accordance with its terms.
(e) No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency or body is
required in connection with the sale of the Selling Shareholder Firm Shares and
the Selling Shareholder Option Shares by the Selling Shareholder or the
consummation by the Selling Shareholder of the transactions on its part
contemplated by this Agreement and the Shareholder's Agreement, except such as
have been obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the by-laws and rules of the
NASD in connection with the purchase and distribution by the Underwriters of the
Selling Shareholder Firm Shares and the Selling Shareholder Option Shares to be
sold by the Selling Shareholder.
(f) The sale of the Selling Shareholder Firm Shares and
the Selling Shareholder Option Shares to be sold by the Selling Shareholder
hereunder and the performance by the Selling Shareholder of this Agreement and
the Shareholder's Agreement and the consummation of the transactions
contemplated hereby and thereby will not result in the creation or imposition of
any lien, charge or encumbrance upon any of the assets of the Selling
Shareholder pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or give any party a right to terminate any of its obligations under, or result
in the acceleration of any obligation under, any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture, note agreement
or other evidence of indebtedness, lease, contract or other agreement or
instrument to which the Selling Shareholder is a party or by which the Selling
Shareholder or any of the Selling Shareholder's properties is bound or affected,
or violate or conflict with any judgment, ruling, decree, order, statute, rule
or regulation of any court or other governmental agency or body applicable to
the Selling Shareholder.
(g) The Selling Shareholder has, and at the Closing Date
and, if later, the Option Closing Date, will have, good and marketable title to
the Selling Shareholder Firm Shares and the Selling Shareholder Option Shares to
be sold by the Selling Shareholder hereunder, free and clear of all liens,
encumbrances, equities or claims whatsoever; and, upon delivery of such Selling
Shareholder Firm Shares and the Selling Shareholder Option Shares and payment
therefor pursuant hereto, good and marketable title to such Selling Shareholder
Firm Shares and the Selling Shareholder Option Shares, free and clear of all
liens, encumbrances, equities or claims whatsoever, will be delivered to the
Underwriters.
(h) On the Closing Date and the Option Closing Date, all
stock transfer or other taxes (other than income taxes) that are required to be
paid in connection with the sale and transfer of the Selling Shareholder Firm
Shares and the Selling Shareholder Option Shares to be sold by the Selling
Shareholder to the Underwriters hereunder will have been fully paid or provided
for by the Selling Shareholder and all laws imposing such taxes will have been
fully complied with.
(i) Other than as permitted by the Act and the Rules and
Regulations, the Selling Shareholder has not distributed and will not distribute
any preliminary prospectus, the Prospectus or any other offering material in
connection with the offering and sale of the Shares. The Selling Shareholder has
not taken and will not at any time take, directly or indirectly, any action
designed, or which might reasonably be expected, to cause
9
or result in, or which will constitute, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of any of
the Shares.
(j) All information with respect to the Selling
Shareholder contained in the Registration Statement, any preliminary prospectus,
the Prospectus or any amendment or supplement thereto complied or will comply in
all material respects with all applicable requirements of the Act and the Rules
and Regulations and does not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
(k) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein contemplated,
the Selling Shareholder agrees to deliver to you prior to or at the Closing Date
a properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
(l) The Selling Shareholder, directly or indirectly, has
not entered into any commitment, transaction or other arrangement, including any
prepaid forward contract, 10b5-1 plan or similar arrangement, which transfers or
may transfer any of the legal or beneficial ownership or any of the economic
consequences of ownership of Common Stock of the Company.
5. AGREEMENTS OF THE COMPANY AND THE SELLING SHAREHOLDER.
The Company and the Selling Shareholder each covenant and agree with
the Underwriters as follows:
(a) The Company will not, either prior to the Effective
Date or thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify the Representatives
promptly, and will confirm such advice in writing, (i) when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective, (ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose or the threat thereof, (iv) of the happening of
any event during the period mentioned in the second sentence of Section 5(e)
that in the judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any changes in
the Registration Statement or the Prospectus in order to make the statements
therein, in the light of the circumstances in which they are made, not
misleading and (v) of receipt by the Company or any representative or attorney
of the Company of any other communication from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus, the Prospectus
or the offering. If at any time the Commission shall issue any order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A of the Rules and Regulations, the
Company will comply with the provisions of and make all requisite filings with
the Commission pursuant to said Rule 430A and notify the Representatives
promptly of all such filings. If the Company elects to rely upon Rule 462(b)
under the Act, the Company shall file a registration statement under Rule 462(b)
with the Commission in compliance with Rule 462(b) by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for such Rule 462(b)
registration statement or give irrevocable instructions for the payment of such
fee pursuant to the Rules and Regulations.
10
(c) The Company will furnish to each of the
Representatives, without charge, one signed copy of each of the Registration
Statement and of any pre- or post-effective amendment thereto, including
financial statements and schedules, and all exhibits thereto, and will furnish
to the Representatives, without charge, for transmittal to each of the other
Underwriters, a copy of the Registration Statement and any pre- or
post-effective amendment thereto, including financial statements and schedules
but without exhibits.
(d) The Company will comply with all the provisions of
any undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to
time, the Company will deliver to each of the Underwriters, without charge, as
many copies of the Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request. The Company and the Selling Shareholder
consent to the use of the Prospectus or any amendment or supplement thereto by
the Underwriters and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. If during such period of time any event shall occur which
in the reasonable judgment of the Company or counsel to the Underwriters should
be set forth in the Prospectus in order to make any statement therein, in the
light of the circumstances under which it was made, not misleading, or if it is
necessary to supplement or amend the Prospectus to comply with law, the Company
will forthwith prepare and duly file with the Commission an appropriate
supplement or amendment thereto, and will deliver to each of the Underwriters,
without charge, such number of copies of such supplement or amendment to the
Prospectus as the Representatives may reasonably request. The Company will not
file any document under the Exchange Act or the Exchange Act Rules and
Regulations before the termination of the offering of the Shares by the
Underwriters, if such document would be deemed to be incorporated by reference
into the Prospectus, that is not approved by the Representatives after
reasonable notice thereof.
(f) Prior to the public offering of the Shares
contemplated by this Agreement, the Company will cooperate with the
Representatives and counsel to the Underwriters in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives may
request; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject.
(g) The Company will, so long as and to the extent
required under the Rules and Regulations, furnish to its Shareholders as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, Shareholders' equity and cash flow of
the Company and its consolidated Subsidiaries, certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), consolidated summary
financial information of the Company and its Subsidiaries for such quarter in
reasonable detail.
(h) During the period of five years commencing on the
Effective Date, the Company will furnish to the Representatives and each other
Underwriter who may so request copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will furnish to
the Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
(i) The Company will timely file such reports under the
Exchange Act as are necessary to make generally available to holders of its
securities as soon as may be practicable an earning statement (which need not be
audited but shall be in reasonable detail) covering a period of 12 months
commencing after the Effective Date, which will satisfy the provisions of
Section 11(a) of the Act (including Rule 158 of the Rules and Regulations).
(j) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company and,
unless otherwise paid by the Company, the Selling Shareholder will pay
11
or reimburse if paid by the Representatives, in such proportions as they may
agree upon themselves, all costs and expenses incident to the performance of the
obligations of the Company and the Selling Shareholder under this Agreement and
in connection with the transactions contemplated hereby, including but not
limited to costs and expenses of or relating to (i) the preparation, printing
and filing of the Registration Statement and exhibits to it, each preliminary
prospectus, Prospectus and any amendment or supplement to the Registration
Statement or Prospectus, (ii) the preparation and delivery of certificates
representing the Shares, (iii) the printing of this Agreement, the Agreement
Among Underwriters, any Selected Dealer Agreements, any Underwriters'
Questionnaires, the Shareholder's Agreement, any Underwriters' Powers of
Attorney, and any invitation letters to prospective Underwriters, (iv)
furnishing (including costs of shipping and mailing) such copies of the
Registration Statement, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold, (v) the listing of the Shares on the NNM, (vi) any
filing fees associated with filings required to be made by the Underwriters with
the NASD, and the fees, disbursements and other charges of counsel for the
Underwriters in connection therewith, (vii) the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 5(f), including the fees,
disbursements and other charges of counsel to the Underwriters in connection
therewith, and the preparation and printing of preliminary, supplemental and
final Blue Sky memoranda, (viii) fees, disbursements and other charges of
counsel to the Company (but not those of counsel for the Underwriters, except as
otherwise provided herein) and (ix) the transfer agent for the Shares. The
Underwriters may deem the Company to be the primary obligor with respect to all
costs, fees and expenses to be paid by the Company and by the Selling
Shareholder. The Selling Shareholder will pay (directly or by reimbursement) all
fees and expenses incident to the performance of the Selling Shareholder's
obligations under this Agreement that are not otherwise specifically provided
for herein, including but not limited to any fees and expenses of counsel for
such Selling Shareholder, any fees and expenses of the Custodian, and all
expenses and taxes incident to the sale and delivery of the Shares to be sold by
such Selling Shareholder to the Underwriters hereunder.
(k) The Company and the Selling Shareholder will not at
any time, directly or indirectly, take any action designed or which might
reasonably be expected to cause or result in, or which will constitute,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the
offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds."
(m) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the Prospectus,
without the prior written consent of Xxxxxxx & Company, Inc., the Company will
not (1) offer, sell, contract to sell, pledge, grant options, warrants or rights
to purchase or otherwise dispose of any equity securities of the Company or any
other securities convertible into or exchangeable for its Common Stock or other
equity security (other than pursuant hereto and to employee stock option plans
and the stock purchase plan disclosed in the Prospectus), 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 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.
(n) During the period of 90 days after the date of the
Prospectus, the Company will not file with the Commission or cause to become
effective any registration statement (other than a registration statement on
Form S-8 filed to register securities issued or to be issued under employee
stock option plans or the employee stock purchase plan, each such plan as
disclosed in the Prospectus) filed relating to any securities of the Company
without the prior written consent of Xxxxxxx & Company, Inc.
(o) The Selling Shareholder will, and the Company will
cause each of its officers and directors to, enter into lock-up agreements with
the Representatives to the effect that they will not, without the prior written
consent of Xxxxxxx & Company, Inc., sell, contract to sell or otherwise dispose
of any shares of Common
12
Stock or rights to acquire such shares according to the terms and subject to the
conditions set forth in the form of lock-up agreement attached as Schedule III
hereto.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of each Underwriter hereunder are subject to the
following conditions:
(a) Notification that the Registration Statement has
become effective shall be received by the Representatives not later than 5:00
p.m., New York City time, on the date of this Agreement or at such later date
and time as shall be consented to in writing by the Representatives and all
filings required by Rule 424 and Rule 430A of the Rules and Regulations shall
have been made. If the Company has elected to rely upon Rule 462(b), the
registration statement filed under Rule 462(b) shall have become effective by
10:00 p.m., Washington, D.C. time, on the date of this Agreement.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities, (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representatives and counsel for the
Underwriters and the Representatives do not object thereto in good faith, and
(v) the Representatives shall have received certificates, dated the Closing Date
and, if later, the Option Closing Date and signed by the Chief Executive Officer
and the Chief Financial Officer of the Company (who may, as to proceedings
threatened, rely upon their information and belief), to the effect of clauses
(i), (ii) and (iii) of this paragraph.
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise) or results
of operations of the Company or any of its Subsidiaries, whether or not arising
from transactions in the ordinary course of business, in each case other than as
described in or contemplated by the Registration Statement and the Prospectus,
and (ii) the Company shall not have sustained any material loss or interference
with its business or properties from fire, explosion, flood, act of terrorism,
or other casualty, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action, order or
decree, which is not described in the Registration Statement and the Prospectus,
if in the reasonable judgment of the Representatives any such development makes
it impracticable or inadvisable to consummate the sale and delivery of the
Shares by the Underwriters at the price set forth in Section 1(a) of this
Agreement.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company, any of its
Subsidiaries, or any of its or their officers or directors in their capacities
as such, before or by any federal, state or local court, commission, regulatory
body, administrative agency or other governmental body, domestic or foreign, in
which litigation or proceeding an unfavorable ruling, decision or finding would,
in the reasonable judgment of the Representatives, materially adversely affect
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company or any of its Subsidiaries.
(e) Each of the representations and warranties of the
Company and the Selling Shareholder contained herein shall be true and correct
in all material respects at the Closing Date and, with respect to the Option
Shares, at the Option Closing Date, and all covenants and agreements contained
herein to be performed on the part of the Company or the Selling Shareholder and
all conditions contained herein to be fulfilled or complied with by the Company
or the Selling Shareholder at or prior to the Closing Date and, with respect to
the Option Shares, at or prior to the Option Closing Date, shall have been duly
performed, fulfilled or complied with.
13
(f) The Representatives shall have received an opinion,
dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date, satisfactory in form and substance to the Representatives and
counsel for the Underwriters, from Wilson, Sonsini, Xxxxxxxx & Xxxxxx, counsel
to the Company and the Selling Shareholder, with respect to the following
matters:
(i) Each of the Company and its Subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation; has full corporate power and
authority to conduct all the activities conducted by it, to own or lease all the
assets owned or leased by it and to conduct its business as described in the
Registration Statement and Prospectus; and is duly licensed or qualified to do
business and is in good standing as a foreign corporation in all jurisdictions
in which the nature of the activities conducted by it or the character of the
assets owned or leased by it makes such license or qualification necessary and
where the failure to be licensed or qualified would have a material and adverse
effect on the business or financial condition of the Company.
(ii) All of the outstanding shares of capital
stock of the Company (including the Selling Shareholder Firm Shares and Selling
Shareholder Option Shares to be sold by the Selling Shareholder) have been duly
authorized, validly issued and are fully paid and nonassessable, were issued
pursuant to effective registration statements under the Act or exemptions from
the registration and qualification requirements of federal and applicable state
securities laws, and were not issued in violation of or subject to any
preemptive or similar rights.
(iii) The Shares to be sold by the Company
hereunder have been duly authorized and, when issued and paid for as
contemplated by this Agreement, will be validly issued, fully paid and
nonassessable; and no preemptive or similar rights exist with respect to any of
the Shares or the issue and sale thereof.
(iv) All of the outstanding shares of capital
stock of each Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable, and owned by the Company free and clear of all
claims, liens, charges and encumbrances. There are no securities outstanding
that are convertible into or exercisable or exchangeable for capital stock of
any Subsidiary.
(v) The authorized and outstanding capital stock
of the Company is as set forth in the Registration Statement and the Prospectus
in the column titled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement or pursuant to
reservations, agreements, employee benefit plans or the exercise of convertible
securities, options or warrants referred to in the Prospectus). To such
counsel's knowledge, except as disclosed in or specifically contemplated by the
Prospectus, there are no outstanding options, warrants or other rights calling
for the issuance of, and no commitments, plans or arrangements to issue, any
shares of capital stock of the Company or any security convertible into or
exchangeable or exercisable for capital stock of the Company. The description of
the capital stock of the Company in the Registration Statement and the
Prospectus conforms in all material respects to the terms thereof.
(vi) To such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened to which the Company or
any of its Subsidiaries is a party or to which any of their respective
properties is subject that are required to be described in the Registration
Statement or the Prospectus but are not so described.
(vii) No consent, approval, authorization or order
of, or any filing or declaration with, any court or governmental agency or body
is required for the consummation by the Company of the transactions on its part
contemplated under this Agreement, except such as have been obtained or made
under the Act or the Rules and Regulations and such as may be required under
state securities or Blue Sky laws or the by-laws and rules of the NASD in
connection with the purchase and distribution by the Underwriters of the Shares.
(viii) The Company has full corporate power and
authority to enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
14
(ix) The execution and delivery of this
Agreement, the compliance by the Company with all of the terms hereof and the
consummation of the transactions contemplated hereby do not contravene any
provision of applicable law or the Articles of Incorporation or By-Laws of the
Company or any of its Subsidiaries, and to such counsel's knowledge will not
result in the creation or imposition of any lien, charge or encumbrance upon any
of the assets of the Company or any of its Subsidiaries pursuant to the terms
and provisions of, result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument known to such
counsel to which the Company or any of its Subsidiaries is a party or by which
the Company, any of its Subsidiaries, or any of their respective properties is
bound or affected, or violate or conflict with (i) any judgment, ruling, decree
or order known to such counsel, or (ii) any statute, rule or regulation of any
court or other governmental agency or body, applicable to the business or
properties of the Company or any of its Subsidiaries.
(x) To such counsel's knowledge, there is no
document or contract of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed or incorporated by reference as
required, and each description of such contracts and documents that is contained
in the Registration Statement and Prospectus fairly presents in all material
respects the information required under the Act and the Rules and Regulations.
(xi) The statements under the caption "Risk
Factors - Anti-takeover provisions in our charter documents and under California
law could prevent or delay a change in control, which could negatively impact
the value of our common stock by discouraging a favorable merger or acquisition
of us" in the Prospectus, insofar as the statements constitute a summary of
documents referred to therein or matters of law, are accurate summaries and
fairly and correctly present, in all material respects, the information called
for with respect to such documents and matters.
(xii) All of the issued shares of Common Stock
(including the Shares) conform to the description thereof incorporated by
reference into the Prospectus.
(xiii) The Company is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(xiv) The Selling Shareholder Firm Shares and the
Selling Shareholder Option Shares to be sold by the Selling Shareholder are duly
listed on the NNM and the Company Firm Shares and Company Option Shares to be
sold by the Company have been duly authorized for listing on the NNM, subject to
official notice of issuance.
(xv) Except as stated in the Prospectus, no
holder of securities of the Company has rights, which have not been waived or
satisfied, to require the Company to register with the Commission shares of
Common Stock or other securities, as part of the offering contemplated hereby.
(xvi) The Registration Statement has become
effective under the Act, and to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or is pending, threatened or
contemplated.
(xvii) The Registration Statement and the
Prospectus comply as to form in all material respects with the requirements of
the Act and the Rules and Regulations (other than the financial statements,
schedules and other financial data contained in or incorporated by reference
into the Registration Statement or the Prospectus, as to which such counsel need
express no opinion).
(xviii) Such counsel has participated in the
preparation of the Registration Statement and Prospectus and has no reason to
believe that, as of the Effective Date the Registration Statement, or any
15
amendment or supplement thereto, (other than the financial statements, schedules
and other financial data contained therein, as to which such counsel need
express no opinion) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, or any amendment or
supplement thereto, as of its date and the Closing Date and, if later, the
Option Closing Date, contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (other than the financial statements, schedules and other
financial data contained therein, as to which such counsel need express no
opinion).
(xix) The documents incorporated by reference in
the Prospectus (other than the financial statements, schedules and other
financial data contained therein, as to which such counsel need express no
opinion), when they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act and the Exchange Act
Rules and Regulations.
(xx) This Agreement and the Shareholder's
Agreement have each been duly executed and delivered by the Selling Shareholder;
the Shareholder's Agreement constitutes a valid and binding agreement of the
Selling Shareholder in accordance with its terms, except as enforceability may
be limited by the application of bankruptcy, insolvency or other laws affecting
creditors' rights generally or by general principles of equity; the Custodian
has been duly authorized by the Selling Shareholder to deliver the Selling
Shareholder Firm Shares and the Selling Shareholder Option Shares on behalf of
the Selling Shareholder in accordance with the terms of this Agreement; and, to
such counsel's knowledge, the sale of the Selling Shareholder Firm Shares and
the Selling Shareholder Option Shares to be sold by the Selling Shareholder
hereunder, the performance by the Selling Shareholder of this Agreement and the
Shareholder's Agreement and the consummation of the transactions contemplated
hereby and thereby will not result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under any indenture, mortgage, deed of trust, voting trust agreement,
loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument to which the
Selling Shareholder is a party or by which the Selling Shareholder or any of the
Selling Shareholder's properties is bound or affected, or violate or conflict
with any judgment, ruling, decree, order, statute, rule or regulation of any
court or other governmental agency or body applicable to the Selling
Shareholder.
(xxi) No consent, approval, authorization or order
of, or any filing or declaration with, any court or governmental agency or body
is required for the consummation by the Selling Shareholder of the transactions
on the Selling Shareholder's part contemplated by this Agreement, except such as
have been obtained or made under the Act or the Rules and Regulations and such
as may be required under state securities or Blue Sky laws or the by-laws and
rules of the NASD in connection with the purchase and distribution by the
Underwriters of the Shares.
(xxii) The Selling Shareholder has full legal
right, power and authority to enter into this Agreement and the Shareholder's
Agreement and to sell, assign, transfer and deliver the Selling Shareholder Firm
Shares and the Selling Shareholder Option Shares to be sold by the Selling
Shareholder hereunder and, upon payment for such Shares and assuming that the
Underwriters are purchasing such Shares in good faith and without notice of any
other adverse claim within the meaning of the Uniform Commercial Code, the
Underwriters will have acquired all rights of the Selling Shareholder in the
Selling Shareholder Firm Shares and the Selling Shareholder Option Shares free
of any adverse claim, any lien and any restrictions on transfer imposed by the
Company.
In rendering the opinions in subparagraphs (xix) - (xxi), such counsel
may rely upon opinions of other counsel retained by the Selling Shareholder
reasonably acceptable to the Representatives and as to matters of fact on
certificates of the Selling Shareholder, officers of the Company and
governmental officials and the representations and warranties of the Company and
the Selling Shareholder contained in this Agreement and the Shareholder's
Agreement, provided that the opinion of counsel to the Company and the Selling
Shareholder shall state that they are doing so, that they have no reason to
believe that they and the Underwriters are not entitled to rely on such opinions
or certificates and that copies of such opinions or certificates are to be
attached to the opinion.
16
In rendering such opinion, such counsel may rely upon as to matters of
local law on opinions of counsel satisfactory in form and substance to the
Representatives and counsel for the Underwriters, provided that the opinion of
counsel to the Company and the Selling Shareholder shall state that they are
doing so, that they have no reason to believe that they and the Underwriters are
not entitled to rely on such opinions and that copies of such opinions are to be
attached to the opinion.
(g) The Representatives shall have received an opinion,
dated the Closing Date and the Option Closing Date, from Xxxx Xxxx Xxxx &
Freidenrich LLP, counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and this Agreement, which opinion shall be
satisfactory in all respects to the Representatives.
(h) Concurrently with the execution and delivery of this
Agreement, Xxxxx Xxxxxxxx shall have furnished to the Representatives a letter,
dated the date of its delivery, addressed to the Representatives, and in form
and substance satisfactory to the Representatives, confirming that they are
independent accountants with respect to the Company and its Subsidiaries as
required by the Act, the Exchange Act, the Rules and Regulations and the
Exchange Act Rules and Regulations, and with respect to certain financial and
other statistical and numerical information contained in or incorporated by
reference into the Registration Statement. At the Closing Date and, as to the
Option Shares, the Option Closing Date, Xxxxx Xxxxxxxx shall have furnished to
the Representatives a letter, dated the date of its delivery, which shall
confirm, on the basis of a review in accordance with the procedures set forth in
the letter from Xxxxx Xxxxxxxx, that nothing has come to their attention during
the period from the date of the letter referred to in the prior sentence to a
date (specified in the letter) not more than three days prior to the Closing
Date and the Option Closing Date, as the case may be, which would require any
change in their letter dated the date hereof if it were required to be dated and
delivered at the Closing Date and the Option Closing Date.
(i) Concurrently with the execution and delivery of this
Agreement and at the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to the Representatives a certificate,
dated the date of its delivery, signed by each of the Chief Executive Officer
and the Chief Financial Officer of the Company, in form and substance
satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the Prospectus (including any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus) and (A) as of the date of such certificate, the
Registration Statement and Prospectus are true and correct in all material
respects and do not omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not untrue or misleading,
and (B) in the case of the certificate delivered at the Closing Date and the
Option Closing Date, since the Effective Date, no event has occurred as a result
of which it is necessary to amend or supplement the Prospectus in order to make
the statements therein not untrue or misleading.
(ii) Each of the representations and warranties
of the Company contained in this Agreement were, when originally made, and are,
at the time such certificate is delivered, true and correct.
(iii) Each of the covenants contained in this
Agreement required to be performed by the Company on or prior to the date of
such certificate has been duly, timely and fully performed and each condition
herein required to be satisfied or fulfilled on or prior to the date of such
certificate has been duly, timely and fully satisfied or fulfilled.
(j) Concurrently with the execution and delivery of this
Agreement and at the Closing Date, and, as to the Option Shares, the Option
Closing Date, there shall be furnished to the Representatives a certificate,
dated the date of its delivery, signed by the Selling Shareholder, in form and
substance satisfactory to the Representatives, to the effect that the
representations and warranties of the Selling Shareholder contained in this
Agreement are true and correct on and as of the date of such certificate as if
made on and as of the date of such certificate, and each of the covenants and
conditions required in this Agreement to be performed or complied with
17
by the Selling Shareholder on or prior to the date of such certificate has been
duly, timely and fully performed or complied with.
(k) On or prior to the Closing Date, the Representatives
shall have received the executed lock-up agreements referred to in Section 5(o).
(l) The Shares shall be qualified for sale in such
jurisdictions as the Representatives may reasonably request and each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date or the Option Closing Date.
(m) Prior to the Closing Date, the Company Firm Shares
and the Company Option Shares shall have been duly authorized for listing on the
NNM upon official notice of issuance.
(n) The Company and the Selling Shareholder shall have
furnished to the Representatives such certificates, in addition to those
specifically mentioned in this Agreement, as the Representatives may have
reasonably requested as to the accuracy and completeness at the Closing Date and
the Option Closing Date of any statement in the Registration Statement or the
Prospectus, as to the accuracy at the Closing Date and the Option Closing Date
of the representations and warranties of the Company and the Selling Shareholder
contained in this Agreement, as to the performance by the Company and the
Selling Shareholder of their respective obligations pursuant to this Agreement,
or as to the fulfillment of the conditions concurrent and precedent to the
obligations of the Representatives pursuant to this Agreement.
7. INDEMNIFICATION.
(a) The Company and the Selling Shareholder, jointly and
severally, will indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person, if any, who
controls each Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims,
liabilities, expenses and damages (including any and all investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act,
or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement to the Registration
Statement or the Prospectus, or the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it not misleading in the light of the circumstances in which
they were made, or arise out of or are based in whole or in part on any
inaccuracy in the representations and warranties of the Company or the Selling
Shareholder contained in this Agreement or any failure of the Company or the
Selling Shareholder to perform their respective obligations pursuant to this
Agreement or under law in connection with the transactions contemplated hereby;
provided, however, that (i) the Company and the Selling Shareholder will not be
liable to the extent that such loss, claim, liability, expense or damage arises
from the sale of the Shares in the public offering to any person by an
Underwriter and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Underwriters, expressly for inclusion in the Registration Statement, the
preliminary prospectus or the Prospectus; (ii) the Company and the Selling
Shareholder will not be liable to any Underwriter, the directors, officers,
employees or agents of such Underwriter or any person controlling such
Underwriter with respect to any loss, claim, liability, expense, or damage
arising out of or based on any untrue statement or omission or alleged untrue
statement or omission or alleged omission to state a material fact in the
preliminary prospectus which is corrected in the Prospectus if the person
asserting any such loss, claim, liability, charge or damage purchased Shares
from such Underwriter but was not sent or given a copy of the Prospectus at or
prior to the written confirmation of the sale of such Shares to such person and
if copies of the Prospectus were timely delivered to such Underwriter pursuant
to Section 5 hereof; and (iii) the liability of the Selling Shareholder under
this Section 7(a) shall not exceed the product of the purchase price for each
Share set forth in Section 1(a) hereof multiplied by 2,100,000 (the number of
Shares sold by the Selling Shareholder pursuant to this Agreement). The Company
and the Selling Shareholder each acknowledges that the
18
only information furnished in writing to the Company by the Representatives on
behalf of the Underwriters expressly for inclusion in the Registration Statement
or Prospectus or any amendments or supplements thereto, appears under the
heading "Underwriting". This indemnity agreement will be in addition to any
liability that the Company and the Selling Shareholder might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who signs the
Registration Statement, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the
Selling Shareholder to the same extent as the foregoing indemnity from the
Company and the Selling Shareholder to each Underwriter, as set forth in Section
7(a), but only insofar as losses, claims, liabilities, expenses or damages arise
out of or are based on any untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives, on behalf of such Underwriter, expressly for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus. The
Company and the Selling Shareholder each acknowledges that the only information
furnished in writing to the Company by the Representatives on behalf of the
Underwriters expressly for inclusion in the Registration Statement or Prospectus
or any amendments or supplements thereto, appears under the heading
"Underwriting". This indemnity will be in addition to any liability that each
Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be
indemnified under this Section 7 shall, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 7, notify
each such indemnifying party in writing of the commencement of such action,
enclosing with such notice a copy of all papers served, but the omission to so
notify such indemnifying party will not relieve it from any liability that it
may have to any indemnified party under the foregoing provisions of this Section
7 unless, and only to the extent that, such omission results in the loss of
substantive rights or defenses by any indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying party of
its commencement, the indemnifying party will be entitled to participate in and,
to the extent that it elects by delivering written notice to the indemnified
party promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, 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, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation incurred by
the indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (iii) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party), or (iv) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
settlement (i) includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such action, and (ii)
does not include a statement as to, or an admission of, fault, culpability or a
failure to act by or on behalf of an indemnified party. An
19
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld or delayed).
(d) If the indemnification provided for in this Section 7
is applicable in accordance with its terms but for any reason is held to be
unavailable to or insufficient to hold harmless an indemnified party under
paragraphs (a), (b) and (c) of this Section 7 in respect of any losses, claims,
liabilities, expenses and damages referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable (including any investigative, legal and
other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company or the Selling Shareholder
from persons other than the Underwriters, such as persons who control the
Company within the meaning of the Act, officers of the Company who signed the
Registration Statement and directors of the Company, who also may be liable for
contribution) by such indemnified party as a result of such losses, claims,
liabilities, expenses and damages in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and the Selling
Shareholder, on the one hand, and the Underwriters, on the other hand. The
relative benefits received by the Company and the Selling Shareholder, on the
one hand, and the Underwriters, on the other hand, shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Shareholder bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. If, but only
if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company and the Selling
Shareholder, on the one hand, and the Underwriters, on the other hand, with
respect to the statements or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such 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, the Selling Shareholder 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, the Selling Shareholder and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 7(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,
liability, expense or damage, or action in respect thereof, referred to above in
this Section 7(d) shall be deemed to include, for purposes of this Section 7(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 7(d), no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts
received by it and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will 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 7(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 7(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against any such party in respect of which a claim for contribution may be made
under this Section 7(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 7(d). No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained
in this Section 7 and the representations and warranties of the Company and the
Selling Shareholder contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any investigation made by or on behalf
of the Underwriters, (ii) acceptance of any of the Shares and payment therefor,
or (iii) any termination of this Agreement.
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8. REIMBURSEMENT OF CERTAIN EXPENSES.
In addition to their other obligations under Section 7(a) of this
Agreement, the Company and the Selling Shareholder, jointly and severally,
hereby agree to reimburse on a quarterly basis the Underwriters for all
reasonable legal and other expenses incurred in connection with investigating or
defending any claim, action, investigation, inquiry or other proceeding arising
out of or based upon, in whole or in part, any statement or omission or alleged
statement or omission, or any inaccuracy in the representations and warranties
of the Company or the Selling Shareholder contained herein or failure of the
Company or the Selling Shareholder to perform their respective obligations
hereunder or under law, all as described in Section 7(a), notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the obligations under this Section 8 and the possibility that such payment might
later be held to be improper; provided, however, that, to the extent any such
payment is ultimately held to be improper, the persons receiving such payments
shall promptly refund them.
9. TERMINATION.
The obligations of the Underwriters under this Agreement may be
terminated at any time on or prior to the Closing Date (or, with respect to the
Option Shares, on or prior to the Option Closing Date), by notice to the Company
and the Selling Shareholder, without liability on the part of any Underwriter to
the Company or the Selling Shareholder if, prior to delivery and payment for the
Firm Shares or Option Shares, as the case may be, in the sole judgment of the
Representatives (i) trading in any of the equity securities of the Company shall
have been suspended by the Commission or by NNM, (ii) trading in securities
generally on NNM shall have been suspended or limited or minimum or maximum
prices shall have been generally established in such market, or additional
material governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by such market, by
order of the Commission or any court or other governmental authority, (iii) a
general banking moratorium shall have been declared by federal authority, or
(iv) any material adverse change in the financial or securities markets in the
United States or in political, financial or economic conditions in the United
States or any outbreak or material escalation of war or armed hostilities or
other national or international calamity, crisis or terrorist act shall have
occurred, the effect of which is such as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with completion of the
public offering or the delivery of and payment for the Shares.
If this Agreement is terminated pursuant to Section 9 or 10 hereof,
neither the Company nor the Selling Shareholder shall be under any liability to
any Underwriter except as provided in Sections 5(j), 7 and 8 hereof; but, if for
any other reason the purchase of the Shares by the Underwriters is not
consummated or if for any reason the Company shall be unable to perform its
obligations hereunder, the Company and the Selling Shareholder in addition to
any liability under Sections 5(j), 7 and 8 or otherwise hereunder will reimburse
the Underwriters for all reasonable out-of-pocket expenses (including the
reasonable fees, disbursements and other charges of counsel to the Underwriters)
incurred by them in connection with the offering of the Shares.
10. SUBSTITUTION OF UNDERWRITERS.
If any one or more of the Underwriters shall fail or refuse to purchase
any of the Firm Shares which it or they have agreed to purchase hereunder, and
the aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Firm Shares, the other Underwriters shall be
obligated, severally, to purchase the Firm Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase, in the
proportions which the number of Firm Shares which they have respectively agreed
to purchase pursuant to Section 1 bears to the aggregate number of Firm Shares
which all such non-defaulting Underwriters have so agreed to purchase, or in
such other proportions as the Representatives may specify; provided that in no
event shall the maximum number of Firm Shares which any Underwriter has become
obligated to purchase pursuant to Section 1 be increased pursuant to this
Section 10 by more than one-ninth of such number of Firm Shares without the
prior written consent of such Underwriter. In any such case either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. If any
21
Underwriter or Underwriters shall fail or refuse to purchase any Firm Shares and
the aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase exceeds one-tenth of the
aggregate number of the Firm Shares and arrangements satisfactory to the
Representatives and the Company for the purchase of such Firm Shares are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Shareholder for the purchase or sale of any Shares under this Agreement.
Any action taken pursuant to this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
11. MISCELLANEOUS.
Notice given pursuant to any of the provisions of this Agreement shall
be in writing and, unless otherwise specified, shall be mailed or delivered (a)
if to the Company or the Selling Shareholder, at the office of the Company, 0000
Xxxxxxx Xxxxxx, Xxxxx Xxxxx, XX 00000 Attention: Chief Executive Officer, with a
copy to Xxxxxxx X. Xxxxxxx, Esq., Wilson, Sonsini, Xxxxxxxx & Xxxxxx, 000 Xxxx
Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000-0000, or (b) if to the Underwriters, to
Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department, with a copy to Xxxxx Xxxxxxx, Esq., Xxxx Xxxx Xxxx
& Freidenrich LLP, 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx
00000. Any such notice shall be effective only upon receipt. Any notice under
such Section 9 or 10 may be made by telecopier or telephone, but if so made
shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, the Selling Shareholder and the controlling
persons, directors and officers referred to in Section 7, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as used
in this Agreement shall not include a purchaser, as such purchaser, of Shares
from any of the several Underwriters.
Any action required or permitted to be taken by the Representatives
under this Agreement may be taken by them jointly or by Xxxxxxx & Company, Inc.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company the Selling Shareholder and the Underwriters each hereby
waive any right they may have to a trial by jury in respect of any claim based
upon or arising out of this Agreement or the transactions contemplated hereby.
22
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholder and the Underwriters.
Very truly yours,
INTEVAC, INC.
By:_______________________________________
Title:
SELLING SHAREHOLDER
By:_______________________________________
[print name]
23
Confirmed as of the date first
above mentioned:
XXXXXXX & COMPANY, INC.
XXXXXX XXXXXX PARTNERS LLC
As Representatives of the Several Underwriters
listed on Schedule I of this Agreement
By: XXXXXXX & COMPANY, INC.
By:____________________________
Title:_________________________
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SCHEDULE I
UNDERWRITERS
NUMBER OF COMPANY FIRM NUMBER OF SELLING SHAREHOLDER
UNDERWRITERS SHARES TO BE PURCHASED FIRM SHARES TO BE PURCHASED
--------------------------- ---------------------- ------------------------------
Xxxxxxx & Company, Inc.
Xxxxxx Xxxxxx Partners LLC
--------- ---------
Total 2,500,000 1,500,000
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SCHEDULE II
TOTAL NUMBER TOTAL NUMBER OF
OF FIRM SHARES OPTION SHARES
TO BE SOLD TO BE SOLD
--------------------- ---------------------
Intevac, Inc. 2,500,000 0
Xxxxxx City LLC 1,500,000 600,000
--------- -------
TOTALS 4,000,000 600,000
========= =======
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SCHEDULE III
INTEVAC, INC.
FORM OF LOCK-UP AGREEMENT
December __, 2003
Xxxxxxx & Company, Inc.
Xxxxxx Xxxxxx Partners LLC
c/o Needham & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned is a holder of securities of Intevac, Inc. a Delaware
corporation (the "Company"), and wishes to facilitate the public offering of
shares of the Common Stock (the "Common Stock") of the Company (the "Offering").
The undersigned recognizes that such Offering will be of benefit to the
undersigned.
In consideration of the foregoing and in order to induce you to act as
underwriters in connection with the Offering, the undersigned hereby agrees that
he, she or it will not, without the prior written approval of Xxxxxxx & Company,
Inc., acting on its own behalf and/or on behalf of other representatives of the
underwriters, directly or indirectly, sell, contract to sell, make any short
sale, pledge, or otherwise dispose of, or enter into any hedging transaction
that is likely to result in a transfer of, any shares of Common Stock, options
to acquire shares of Common Stock or securities exchangeable for or convertible
into shares of Common Stock of the Company which he, she or it may own, for a
period commencing as of the date hereof and ending on the date which is ninety
(90) days after the date of the final Prospectus relating to the Offering;
provided, however, that the foregoing shall not prohibit any distribution by a
partnership to its partners so long as such partners agree to be bound by the
terms of this Agreement. The undersigned confirms that he, she or it understands
that the underwriters and the Company will rely upon the representations set
forth in this Agreement in proceeding with the Offering. The undersigned further
confirms that the agreements of the undersigned are irrevocable and shall be
binding upon the undersigned's heirs, legal representatives, successors and
assigns. The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of
securities held by the undersigned except in compliance with this Agreement.
This Agreement shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns.
Very truly yours,
_________________________________________
(Print Shareholder Name)
By: _____________________________________
Title, if applicable:
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