1
EXHIBIT 1.1
Draft of 5/17/98
3,300,000 SHARES(1)
SCC COMMUNICATIONS CORP.
COMMON STOCK
UNDERWRITING AGREEMENT
____________, 1998
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXXXXX & XXXXX LLC
As Representatives of the several Underwriters
c/o BancAmerica Xxxxxxxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
SCC Communications Corp., a Delaware corporation (the "Company"), and
certain stockholders of the Company named in Schedule B hereto (hereafter
called the "Selling Stockholders") address you as the Representatives of each
of the persons, firms and corporations listed in Schedule A hereto (herein
collectively called the "Underwriters") and hereby confirm their respective
agreements with the several Underwriters as follows:
1. Description of Shares. The Company proposes to issue and sell
2,100,000 shares of its authorized and unissued common stock, $.001 par value
per share, to the several Underwriters. The Selling Stockholders, acting
severally and not jointly, propose to sell an aggregate of 1,200,000 shares of
the Company's authorized and outstanding common stock, $.001 par value per
share, to the several Underwriters. The 2,100,000 shares of the Company's
common stock, $.001 par value per share, to be sold by the Company are
hereinafter called the "Company Shares" and the 1,200,000 shares of the
Company's common stock, $.001 par value per share, to be sold by the Selling
Stockholders are hereinafter called the "Selling Stockholder Shares." The
Company Shares and the Selling Stockholder Shares are hereinafter collectively
referred to as the "Firm Shares." The Company and certain Selling Stockholders
also propose to grant, severally and not jointly, to the Underwriters an option
to purchase up to 495,000 additional shares of the Company's common stock,
$.001 par value per share (the "Option Shares"), as provided in Section 7
hereof. As used in this Agreement, the term "Shares" shall refer collectively
to the Firm Shares and the Option Shares. All shares of the Company's common
stock, $.001 par value per share, to be outstanding after giving effect to the
sales contemplated hereby, including the Shares, are hereinafter referred to as
"Common Stock."
2. Representations, Warranties and Agreements of the Company and the
Selling Stockholders.
I. The Company and the Selling Stockholders identified by an
asterisk on Schedule B hereto represent and warrant to and agrees with each
Underwriter that:
(a) A registration statement on Form S-1 (File No.
333-49767) with respect to the Shares, including a prospectus subject to
completion, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and
the applicable rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the
----------------
(1) Plus an option to purchase up to 495,000 additional shares from the Company
and certain stockholders of the Company to cover over-allotments.
2
"Commission") under the Act and has been filed with the Commission; such
amendments to such registration statement, such amended prospectuses
subject to completion and such abbreviated registration statements
pursuant to Rule 462(b) of the Rules and Regulations as may have been
required prior to the date hereof have been similarly prepared and filed
with the Commission; and the Company will file such additional amendments
to such registration statement, such amended prospectuses subject to
completion and such abbreviated registration statements as may hereafter
be required. Copies of such registration statement and amendments, of
each related prospectus subject to completion (the "Preliminary
Prospectuses") and of any abbreviated registration statement pursuant to
Rule 462(b) of the Rules and Regulations have been delivered to you.
If the registration statement relating to the Shares has
been declared effective under the Act by the Commission, the Company will
prepare and promptly file with the Commission the information omitted
from the registration statement pursuant to Rule 430A(a) or, if
BancAmerica Xxxxxxxxx Xxxxxxxx, on behalf of the several Underwriters,
shall agree to the utilization of Rule 434 of the Rules and Regulations,
the information required to be included in any term sheet filed pursuant
to Rule 434(b) or (c), as applicable, of the Rules and Regulations
pursuant to subparagraph (1), (4) or (7) of Rule 424(b) of the Rules and
Regulations or as part of a post-effective amendment to the registration
statement (including a final form of prospectus). If the registration
statement relating to the Shares has not been declared effective under
the Act by the Commission, the Company will prepare and promptly file an
amendment to the registration statement, including a final form of
prospectus, or, if BancAmerica Xxxxxxxxx Xxxxxxxx, on behalf of the
several Underwriters, shall agree to the utilization of Rule 434 of the
Rules and Regulations, the information required to be included in any
term sheet filed pursuant to Rule 434(b) or (c), as applicable, of the
Rules and Regulations. The term "Registration Statement" as used in this
Agreement shall mean such registration statement, including financial
statements, schedules and exhibits, in the form in which it became or
becomes, as the case may be, effective (including, if the Company omitted
information from the registration statement pursuant to Rule 430A(a) or
files a term sheet pursuant to Rule 434 of the Rules and Regulations, the
information deemed to be a part of the registration statement at the time
it became effective pursuant to Rule 430A(b) or Rule 434(d) of the Rules
and Regulations) and, in the event of any amendment thereto or the filing
of any abbreviated registration statement pursuant to Rule 462(b) of the
Rules and Regulations relating thereto after the effective date of such
registration statement, shall also mean (from and after the effectiveness
of such amendment or the filing of such abbreviated registration
statement) such registration statement as so amended, together with any
such abbreviated registration statement. The term "Prospectus" as used
in this Agreement shall mean the prospectus relating to the Shares as
included in such Registration Statement at the time it becomes effective
(including, if the Company omitted information from the Registration
Statement pursuant to Rule 430A(a) of the Rules and Regulations, the
information deemed to be a part of the Registration Statement at the time
it became effective pursuant to Rule 430A(b) of the Rules and
Regulations); provided, however, that if in reliance on Rule 434 of the
Rules and Regulations and with the consent of BancAmerica Xxxxxxxxx
Xxxxxxxx, on behalf of the several Underwriters, the Company shall have
provided to the Underwriters a term sheet pursuant to Rule 434(b) or (c),
as applicable, prior to the time that a confirmation is sent or given for
purposes of Section 2(10)(a) of the Act, the term "Prospectus" shall mean
the "prospectus subject to completion" (as defined in Rule 434(g) of the
Rules and Regulations) last provided to the Underwriters by the Company
and circulated by the Underwriters to all prospective purchasers of the
Shares (including the information deemed to be a part of the Registration
Statement at the time it became effective pursuant to Rule 434(d) of the
Rules and Regulations). Notwithstanding the foregoing, if any revised
prospectus shall be provided to the Underwriters by the Company for use
in connection with the offering of the Shares that differs from the
prospectus referred to in the immediately preceding sentence (whether or
not such revised prospectus is required to be filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations), the term
"Prospectus" shall
2
3
refer to such revised prospectus from and after the time it is first
provided to the Underwriters for such use. If in reliance on Rule 434 of
the Rules and Regulations and with the consent of BancAmerica Xxxxxxxxx
Xxxxxxxx, on behalf of the several Underwriters, the Company shall have
provided to the Underwriters a term sheet pursuant to Rule 434(b) or (c),
as applicable, prior to the time that a confirmation is sent or given for
purposes of Section 2(10)(a) of the Act, the Prospectus and the term
sheet, together, will not be materially different from the prospectus in
the Registration Statement.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or instituted
proceedings for that purpose, and each such Preliminary Prospectus has
conformed in all material respects to the requirements of the Act and the
Rules and Regulations and, as of its date, has not included any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and at the time
the Registration Statement became or becomes, as the case may be,
effective and at all times subsequent thereto up to and on the Closing
Date (hereinafter defined) and on any later date on which Option Shares
are to be purchased, (i) the Registration Statement and the Prospectus,
and any amendments or supplements thereto, contained and will contain all
material information required to be included therein by the Act and the
Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, (ii) the
Registration Statement, and any amendments or supplements thereto, did
not and will not include any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (iii) the Prospectus, and
any amendments or supplements thereto, did not and will not include any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that none of the representations and warranties contained in
this subparagraph (b) shall apply to information contained in or omitted
from the Registration Statement or Prospectus, or any amendment or
supplement thereto, in reliance upon, and in conformity with, written
information relating to any Underwriter furnished to the Company by such
Underwriter specifically for use in the preparation thereof.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full power and authority (corporate and other) to own,
lease and operate its properties and conduct its business as described in
the Prospectus; the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
or be in good standing would not have a material adverse effect on its
condition (financial or otherwise), earnings, operations, business or
business prospects; no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification; the Company
is in possession of and operating in compliance with all authorizations,
licenses, certificates, consents, orders and permits from state, federal
and other regulatory authorities that are material to the conduct of its
business, all of which are valid and in full force and effect; the
Company is not in violation of its certificate of incorporation or bylaws
or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any material
bond, debenture, note or other evidence of indebtedness, or in any
material lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which the
Company is a party or by which it or its properties may be bound; and
Company is not in material violation of any law, order, rule, regulation,
writ, injunction, judgment or decree of any court, government or
governmental agency or body, domestic or foreign, having jurisdiction
over the Company or its properties of which it has knowledge. The
Company does not own or control, directly or indirectly, any corporation,
association or other entity.
3
4
(d) The Company has full legal right, power and authority
to enter into this Agreement and perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement on the part of the
Company, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as
the enforcement hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by general equitable
principles; the performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a material breach or
violation of any of the terms and provisions of, or constitute a default
under, (i) any bond, debenture, note or other evidence of indebtedness,
or under any lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which the
Company is a party or by which it or its properties may be bound, (ii)
the certificate of incorporation or bylaws of the Company, or (iii) any
law, order, rule, regulation, writ, injunction, judgment or decree of any
court, government or governmental agency or body, domestic or foreign,
having jurisdiction over the Company or its properties. No consent,
approval, authorization or order of or qualification with any court,
government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or its properties is required for the
execution and delivery of this Agreement and the consummation by the
Company of the transactions herein contemplated, except such as may be
required under the Act, the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or under state or other securities or Blue Sky
laws, all of which requirements have been satisfied in all material
respects.
(e) There is not any pending or, to the best of the
Company's knowledge, threatened action, suit, claim or proceeding against
the Company or any of its officers, properties, assets or rights before
any court, government or governmental agency or body, domestic or
foreign, having jurisdiction over the Company or its officers, properties
or otherwise that (i) might result in any material adverse change in the
condition (financial or otherwise), earnings, operations, business or
business prospects of the Company or might materially and adversely
affect their properties, assets or rights, (ii) might prevent
consummation of the transactions contemplated hereby or (iii) is required
to be disclosed in the Registration Statement or Prospectus and is not so
disclosed; and there are no agreements, contracts, leases or documents of
the Company of a character required to be described or referred to in the
Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement by the Act or the Rules and Regulations that have
not been accurately described in all material respects in the
Registration Statement or Prospectus or filed as exhibits to the
Registration Statement.
(f) All outstanding shares of capital stock of the
Company (including the Selling Stockholder Shares) have been duly
authorized and validly issued and are fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws,
were not issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities, and the authorized
and outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" and conforms in all
material respects to the statements relating thereto contained in the
Registration Statement and the Prospectus (and such statements correctly
state the substance of the instruments defining the capitalization of the
Company); the Firm Shares and the Option Shares to be purchased from the
Company hereunder have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by
the Company against payment therefor in accordance with the terms of this
Agreement, will be duly and validly issued and fully paid and
nonassessable, and will be sold free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest; and no
preemptive right, co-sale right, registration right, right of first
refusal or other similar right of stockholders exists with respect to any
of the Firm Shares or Option Shares to be purchased from the Company
hereunder or the issuance and sale thereof other than those that have
been expressly waived prior to the date hereof and those that will
automatically expire upon and will not apply to the consummation of the
transactions contemplated on the Closing Date. No further approval or
authorization of any stockholder, the Board of Directors of the Company
or others is required for the issuance and
4
5
sale or transfer of the Shares except as may be required under the Act,
the Exchange Act or under state or other securities or Blue Sky laws.
Except as disclosed in the Prospectus and the financial statements of the
Company, and the related notes thereto, included in the Prospectus, the
Company does not have any outstanding options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations. The description
of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised
thereunder, set forth in the Prospectus accurately and fairly presents
the information required to be shown with respect to such plans,
arrangements, options and rights.
(g) Xxxxxx Xxxxxxxx LLP, which has examined the financial
statements of the Company, together with the related schedules and notes,
as of December 31, 1996 and 1997 and for each of the years in the three
years ended December 31, 1997, filed with the Commission as a part of the
Registration Statement, which are included in the Prospectus, are
independent accountants within the meaning of the Act and the Rules and
Regulations; the audited financial statements of the Company, together
with the related schedules and notes, and the unaudited financial
information, forming part of the Registration Statement and Prospectus,
fairly present the financial position and the results of operations of
the Company at the respective dates and for the respective periods to
which they apply; and all audited financial statements of the Company,
together with the related schedules and notes, and the unaudited
financial information, filed with the Commission as part of the
Registration Statement, have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved except as may be otherwise stated therein. The selected
and summary financial and statistical data included in the Registration
Statement present fairly the information shown therein and have been
compiled on a basis consistent with the audited financial statements
presented therein. No other financial statements or schedules are
required to be included in the Registration Statement.
(h) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus, there
has not been (i) any material adverse change in the condition (financial
or otherwise), earnings, operations, business or business prospects of
the Company, (ii) any transaction that is material to the Company, except
transactions entered into in the ordinary course of business, (iii) any
material obligation, direct or contingent, incurred by the Company,
except any obligation incurred in the ordinary course of business, (iv)
any material change in the capital stock or outstanding indebtedness of
the Company, (v) any dividend or distribution of any kind declared, paid
or made on the capital stock of the Company, or (vi) any loss or damage
(whether or not insured) to the property of the Company that has been
sustained or will have been sustained that has a material adverse effect
on the condition (financial or otherwise), earnings, operations, business
or business prospects of the Company.
(i) Except as set forth in the Registration Statement and
Prospectus, (i) the Company has good and marketable title to all
properties and assets described in the Registration Statement and
Prospectus as owned by it, free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest, other than such as
would not have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the
Company, (ii) the agreements to which the Company is a party described in
the Registration Statement and Prospectus are valid agreements,
enforceable by the Company, except as the enforcement thereof may be
limited
5
6
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles and, to the best of the Company's knowledge,
the other contracting party or parties thereto are not in material breach
or material default under any of such agreements, and (iii) the Company
has valid and enforceable leases for all properties described in the
Registration Statement and Prospectus as leased by it, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles. Except
as set forth in the Registration Statement and Prospectus, the Company
owns or leases all such properties as are necessary to its operations as
now conducted or as proposed to be conducted.
(j) The Company has timely filed all necessary federal,
state and foreign income and franchise tax returns and has paid all taxes
shown thereon as due, and there is no tax deficiency that has been or, to
the best of the Company's knowledge, might be asserted against the
Company that might have a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company; and all tax liabilities are adequately provided
for on the books of the Company.
(k) The Company maintains insurance with insurers of
recognized financial responsibility of the types and in the amounts
generally deemed adequate for its business and consistent with insurance
coverage maintained by similar companies in similar businesses, including
insurance covering real and personal property owned or leased by the
Company against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in
full force and effect; the Company has not been refused any insurance
coverage sought or applied for; and the Company does not have any reason
to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that would not materially and adversely affect the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company.
(l) To the best of Company's knowledge, no labor
disturbance by the employees of the Company exists or is imminent; and
the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its licensors or its significant customers that
might be expected to result in a material adverse change in the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company. No collective bargaining agreement exists with
any of the Company's employees and, to the best of the Company's
knowledge, no such agreement is imminent.
(m) The Company owns or possesses adequate rights to use
all patents, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names and copyrights that are necessary
to conduct its businesses as described in the Registration Statement and
Prospectus; the expiration of any patents, patent rights, trade secrets,
trademarks, service marks, trade names or copyrights would not have a
material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company; the
Company has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of the Company by others
with respect to any patent, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names or copyrights; and the
Company has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of others with respect
to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights that, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding,
6
7
might have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the
Company.
(n) The Common Stock has been approved for quotation on
the Nasdaq National Market, subject to official notice of issuance.
(o) The Company has been advised concerning the
Investment Company Act of 1940, as amended, and the rules and regulations
thereunder, and has in the past conducted, and intends in the future to
conduct, its affairs in such a manner as to ensure that it will not
become an "investment company" or a company "controlled" by an
"investment company" within the meaning of such Act and rules and
regulations.
(p) The Company has not distributed and will not
distribute prior to the later of (i) the Closing Date, or any date on
which Option Shares are to be purchased, as the case may be, and (ii)
completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any
Preliminary Prospectuses, the Prospectus, the Registration Statement and
other materials, if any, permitted by the Act.
(q) The Company has not 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.
(r) The Company has not taken and will not take, directly
or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price
of the Common Stock to facilitate the sale or resale of the Shares.
(s) Each officer and director of the Company, each
Selling Stockholder and each beneficial owner of shares of Common Stock
has agreed in writing that such person will not, for a period of 180 days
after the date of the Prospectus (the "Lock-up Period"), offer to sell,
contract to sell, or otherwise sell, dispose of, loan, pledge or grant
any rights with respect to (collectively, a "Disposition") any shares of
Common Stock, any options or warrants to purchase any shares of Common
Stock or any securities convertible into or exchangeable for shares of
Common Stock (collectively, "Securities") now owned or hereafter acquired
directly by such person or with respect to which such person has or
hereafter acquires the power of disposition, otherwise than (i) as a bona
fide gift or gifts, provided the donee or donees thereof agree in writing
to be bound by this restriction, (ii) as a distribution to, members or
partners or stockholders of such person, provided the distributees
thereof agree in writing to be bound by the terms of this restriction or
(iii) with the prior written consent of BancAmerica Xxxxxxxxx Xxxxxxxx.
The foregoing restriction has been expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other
transaction that is designed to or reasonably expected to lead to or
result in a Disposition of Securities during the Lock-up Period, even if
such Securities would be disposed of by someone other than such holder.
Such prohibited hedging or other transactions would include any short
sale (whether or not against the box) or any purchase, sale or grant of
any right (including any put or call option) with respect to any
Securities or with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any
significant part of its value from the Securities. Notwithstanding the
foregoing, this restriction shall not prohibit (i) the sale of Shares to
the Underwriters pursuant to this Agreement or (ii) resales of shares of
Common Stock acquired either in the public offering to which the
Registration Statement relates or in subsequent open-market purchases.
Furthermore, such
7
8
person also has agreed and consented to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of
the Securities held by such person except in compliance with this
restriction. The Company has provided to Xxxxx, Xxxx & Xxxxx LLP,
counsel for the several Underwriters ("Underwriters' Counsel"), a
complete and accurate list of all securityholders of the Company and the
number and type of securities held by each securityholder. The Company
has provided to Underwriters' Counsel true, accurate and complete copies
of all of the agreements pursuant to which its officers, directors and
stockholders have agreed to such or similar restrictions (the "Lock-up
Agreements") presently in effect or effected hereby. The Company hereby
represents and warrants that it will not release any of its officers,
directors or other stockholders from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of
BancAmerica Xxxxxxxxx Xxxxxxxx.
(t) Except as set forth in the Registration Statement and
Prospectus, (i) the Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental
Laws") that are applicable to its business, (ii) the Company has received
no notice from any governmental authority or third party of an asserted
claim under Environmental Laws, which claim is required to be disclosed
in the Registration Statement and the Prospectus, (iii) the Company will
not be required to make future material capital expenditures to comply
with Environmental Laws and (iv) no property that is owned, leased or
occupied by the Company has been designated as a Superfund site pursuant
to the Comprehensive Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et seq.), or has been otherwise
designated as a contaminated site under applicable state or local law.
(u) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(v) There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business)
or guarantees of indebtedness by the Company to or for the benefit of any
of the officers or directors of the Company or any of the members of the
families of any of them, except as disclosed in the Registration
Statement and the Prospectus.
(w) The Company has complied with all provisions of
Section 517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
II. Each Selling Stockholder, severally and not jointly,
represents and warrants to and agrees with each Underwriter and the Company
that:
(a) Such Selling Stockholder now has and on the Closing
Date, and on any later date on which Option Shares are purchased, will
have valid marketable title to the Shares to be sold by such Selling
Stockholder, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest other than pursuant to this
Agreement; and upon delivery of such Shares hereunder and payment of the
purchase price as herein contemplated, each of the Underwriters will
obtain valid marketable title to the Shares purchased by it from such
Selling Stockholder, free and clear of any pledge, lien, security
interest pertaining to such Selling Stockholder or such Selling
Stockholder's property, encumbrance, claim or equitable interest,
including any liability for estate or inheritance taxes, or any liability
to or claims of any creditor, devisee, legatee or beneficiary of such
Selling Stockholder.
8
9
(b) Such Selling Stockholder has duly authorized (if
applicable), executed and delivered, in the form heretofore furnished to
the Representatives, an irrevocable Power of Attorney (the "Power of
Attorney") appointing Xxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxx as
attorneys-in-fact (collectively, the "Attorneys" and individually, an
"Attorney") and a Letter of Transmittal and Custody Agreement (the
"Custody Agreement") with SCC Communications Corp., as custodian (the
"Custodian"); each of the Power of Attorney and the Custody Agreement
constitutes a valid and binding agreement on the part of such Selling
Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles; and each
of such Selling Stockholder's Attorneys, acting alone, is authorized to
execute and deliver this Agreement and the certificate referred to in
Section 6(h) hereof on behalf of such Selling Stockholder, to determine
the purchase price to be paid by the several Underwriters to such Selling
Stockholder as provided in Section 3 hereof, to authorize the delivery of
the Selling Stockholder Shares and the Option Shares to be sold by such
Selling Stockholder under this Agreement and to duly endorse (in blank or
otherwise) the certificate or certificates representing such Shares or a
stock power or powers with respect thereto, to accept payment therefor,
and otherwise to act on behalf of such Selling Stockholder in connection
with this Agreement.
(c) All consents, approvals, authorizations and orders
required for the execution and delivery by such Selling Stockholder of
the Power of Attorney and the Custody Agreement, the execution and
delivery by or on behalf of such Selling Stockholder of this Agreement
and the sale and delivery of the Selling Stockholder Shares and the
Option Shares to be sold by such Selling Stockholder under this Agreement
(other than, at the time of the execution hereof (if the Registration
Statement has not yet been declared effective by the Commission), the
issuance of the order of the Commission declaring the Registration
Statement effective and such consents, approvals, authorizations or
orders as may be necessary under state or other securities or Blue Sky
laws) have been obtained and are in full force and effect; such Selling
Stockholder, if other than a natural person, has been duly organized and
is validly existing in good standing under the laws of the jurisdiction
of its organization as the type of entity that it purports to be; and
such Selling Stockholder has full legal right, power and authority to
enter into and perform its obligations under this Agreement and such
Power of Attorney and Custody Agreement, and to sell, assign, transfer
and deliver the Shares to be sold by such Selling Stockholder under this
Agreement.
(d) Such Selling Stockholder will not, during the Lock-up
Period, effect the Disposition of any Securities now owned or hereafter
acquired directly by such Selling Stockholder or with respect to which
such Selling Stockholder has or hereafter acquires the power of
disposition, otherwise than (i) as a bona fide gift or gifts, provided
the donee or donees thereof agree in writing to be bound by this
restriction, (ii) as a distribution to limited partners, members or
stockholders of such Selling Stockholder, provided the distributees
thereof agree in writing to be bound by the terms of this restriction or
(iii) with the prior written consent of BancAmerica Xxxxxxxxx Xxxxxxxx.
The foregoing restriction is expressly agreed to preclude the holder of
the Securities from engaging in any hedging or other transaction that is
designed to or reasonably expected to lead to or result in a Disposition
of Securities during the Lock-up Period, even if such Securities would be
disposed of by someone other than the Selling Stockholder. Such
prohibited hedging or other transactions would include any short sale
(whether or not against the box) or any purchase, sale or grant of any
right (including any put or call option) with respect to any Securities
or with respect to any security (other than a broad-based market basket
or index) that includes, relates to or derives any significant part of
its value from the
9
10
Securities. Notwithstanding the foregoing, this restriction shall not
prohibit (i) the sale of Shares to the Underwriters pursuant to this
Agreement or (ii) resales of shares of Common Stock acquired either in
the public offering to which the Registration Statement relates or in
subsequent open-market purchases. Such Selling Stockholder also agrees
and consents to the entry of stop transfer instructions with the
Company's transfer agent against the transfer of Securities held by such
Selling Stockholder except in compliance with this restriction.
(e) Certificates in negotiable form for all Shares to be
sold by such Selling Stockholder under this Agreement, together with a
stock power or powers duly endorsed in blank by such Selling Stockholder,
have been placed in custody with the Custodian for the purpose of
effecting delivery hereunder.
(f) This Agreement has been duly authorized by each
Selling Stockholder that is not a natural person and has been duly
executed and delivered by or on behalf of such Selling Stockholder and is
a valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification hereunder
may be limited by applicable law and except as the enforcement hereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles; and the performance of this Agreement and
the consummation of the transactions herein contemplated will not result
in a breach or violation of any of the terms and provisions of or
constitute a default under any bond, debenture, note or other evidence of
indebtedness, or under any lease, contract, indenture, mortgage, deed of
trust, loan agreement, joint venture or other agreement or instrument to
which such Selling Stockholder is a party or by which such Selling
Stockholder, or any Selling Stockholder Shares or any Option Shares to be
sold by such Selling Stockholder hereunder, may be bound or, to the best
of such Selling Stockholder's knowledge, result in any violation of any
law, order, rule, regulation, writ, injunction, judgment or decree of any
court, government or governmental agency or body, domestic or foreign,
having jurisdiction over such Selling Stockholder or over the properties
of such Selling Stockholder, or, if such Selling Stockholder is other
than a natural person, result in any violation of any provisions of the
charter, bylaws or other organizational documents of such Selling
Stockholder.
(g) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Shares.
(h) Such Selling Stockholder has not distributed and will
not distribute any prospectus or other offering material in connection
with the offering and sale of the Shares.
(i) All information furnished by or on behalf of such
Selling Stockholder relating to such Selling Stockholder and the Selling
Stockholder Shares that is contained in the representations and
warranties of such Selling Stockholder in such Selling Stockholder's
Power of Attorney or set forth in the Registration Statement or the
Prospectus is, and at the time the Registration Statement became or
becomes, as the case may be, effective and at all times subsequent
thereto up to and on the Closing Date, and on any later date on which
Option Shares are to be purchased, was or will be, true, correct and
complete, and does not, and at the time the Registration Statement became
or becomes, as the case may be, effective and at all times subsequent
thereto up to and on the Closing Date, and on any later date on which
Option Shares are to be purchased, will not, contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make such information not misleading.
10
11
(j) Such Selling Stockholder will review the Prospectus
and will comply with all agreements and satisfy all conditions on its
part to be complied with or satisfied pursuant to this Agreement on or
prior to the Closing Date, or any later date on which Option Shares are
to be purchased, as the case may be, and will advise one of its Attorneys
and BancAmerica Xxxxxxxxx Xxxxxxxx prior to the Closing Date or such
later date on which Option Shares are to be purchased, as the case may
be, if any statement to be made on behalf of such Selling Stockholder in
the certificate contemplated by Section 6(h) would be inaccurate if made
as of the Closing Date or such later date on which Option Shares are to
be purchased, as the case may be.
(k) Such Selling Stockholder does not have, or has waived
prior to the date hereof, any preemptive right, co-sale right or right of
first refusal or other similar right to purchase any of the Shares that
are to be sold by the Company or any of the other Selling Stockholders to
the Underwriters pursuant to this Agreement; such Selling Stockholder
does not have, or has waived prior to the date hereof, any registration
right or other similar right to participate in the offering made by the
Prospectus, other than such rights of participation as have been
satisfied by the participation of such Selling Stockholder in the
transactions to which this Agreement relates in accordance with the terms
of this Agreement; and such Selling Stockholder does not own any
warrants, options or similar rights to acquire, and does not have any
right or arrangement to acquire, any capital stock, rights, warrants,
options or other securities from the Company, other than those described
in the Registration Statement and the Prospectus.
(l) If such Selling Stockholder is not identified by an
asterisk on Schedule B hereto, such Selling Stockholder is not aware
(without having conducted any investigation or inquiry) that any of the
representations and warranties of the Company set forth in Section 2.I.
above is untrue or inaccurate in any material respect.
3. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and the Selling Stockholders
agree, severally and not jointly, to sell to the Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Stockholders, respectively, at a purchase price of $_____ per
share, the respective number of Company Shares and Selling Stockholder Shares
as set forth opposite the names of the Company and the Selling Stockholders in
Schedule B hereto. The obligation of each Underwriter to the Company and to
each Selling Stockholder shall be to purchase from the Company or such Selling
Stockholder that number of Company Shares or Selling Stockholder Shares, as the
case may be, that (as nearly as practicable, as determined by you) is in the
same proportion to the number of Company Shares or Selling Stockholder Shares,
as the case may be, set forth opposite the name of the Company or such Selling
Stockholder in Schedule B hereto as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule A hereto (subject to
adjustment as provided in Section 10) is to the total number of Firm Shares to
be purchased by all the Underwriters under this Agreement.
The certificates in negotiable form for the Selling Stockholder
Shares have been placed in custody (for delivery under this Agreement) under
the Custody Agreement. Each Selling Stockholder agrees that the certificates
for the Selling Stockholder Shares of such Selling Stockholder so held in
custody are subject to the interests of the Underwriters hereunder, that the
arrangements made by such Selling Stockholder for such custody, including the
Power of Attorney, is to that extent irrevocable and that the obligations of
such Selling Stockholder hereunder shall not be terminated by the act of such
Selling Stockholder or by operation of law, whether by the death or incapacity
of such Selling Stockholder or the occurrence of any other event, except as
specifically provided herein or in the Custody Agreement. If any Selling
Stockholder should die or be incapacitated, or if any other such event should
occur, before the
11
12
delivery of the certificates for the Selling Stockholder Shares hereunder, the
Selling Stockholder Shares to be sold by such Selling Stockholder shall, except
as specifically provided herein or in the Custody Agreement, be delivered by
the Custodian in accordance with the terms and conditions of this Agreement as
if such death, incapacity or other event had not occurred, regardless of
whether the Custodian shall have received notice of such death or other event.
Delivery of definitive certificates for the Firm Shares to be
purchased by the Underwriters pursuant to this Section 3 shall be made against
payment of the purchase price therefor by the several Underwriters by certified
or official bank check or checks drawn in next-day funds, payable to the order
of the Company with regard to the Shares being purchased from the Company, and
to the order of the Custodian for the respective accounts of the Selling
Stockholders with regard to the Shares being purchased from such Selling
Stockholders (and the Company and such Selling Stockholders agree not to
deposit and to cause the Custodian not to deposit any such check in the bank on
which it is drawn, and not to take any other action with the purpose or effect
of receiving immediately available funds, until the business day following the
date of its delivery to the Company or the Custodian, as the case may be, and,
in the event of any breach of the foregoing, the Company or the Selling
Stockholders, as the case may be, shall reimburse the Underwriters for the
interest lost and any other expenses borne by them by reason of such breach),
at the offices of Xxxxxxx Phleger & Xxxxxxxx LLP, 0000 Xxxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxx (or at such other place as may be agreed upon
among the Representatives, the Company and the Attorneys), at 7 A.M., San
Francisco time, (a) on the third full business day following the first day that
Shares are traded, (b) if this Agreement is executed and delivered after 1:30
P.M., San Francisco time, the fourth full business day following the day that
this Agreement is executed and delivered or (c) at such other time and date not
later than seven full business days following the first day that Shares are
traded as the Representatives, the Company and the Attorneys may determine (or
at such time and date to which payment and delivery shall have been postponed
pursuant to Section 10 hereof), such time and date of payment and delivery
being herein called the "Closing Date"; provided, however, that if the Company
has not made available to the Representatives copies of the Prospectus within
the time provided in Section 4(d) hereof, the Representatives may, in their
sole discretion, postpone the Closing Date until no later than two full
business days following delivery of copies of the Prospectus to the
Representatives. The certificates for the Firm Shares to be so delivered will
be made available to you at such office or such other location, including in
New York City, as you may reasonably request for checking at least one full
business day prior to the Closing Date and will be in such names and
denominations as you may request, such request to be made at least two full
business days prior to the Closing Date. If the Representatives so elect,
delivery of the Firm Shares may be made by credit through full fast transfer to
the accounts at The Depository Trust Company designated by the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated
to) make payment of the purchase price on behalf of any Underwriter or
Underwriters whose check or checks shall not have been received by you prior to
the Closing Date for the Firm Shares to be purchased by such Underwriter or
Underwriters. Any such payment by you shall not relieve any such Underwriter
or Underwriters of any of its or their obligations hereunder.
After the Registration Statement becomes effective, the several
Underwriters intend to make an initial public offering (as such term is
described in Section 11 hereof) of the Firm Shares at an initial public
offering price of $_____ per share. After the initial public offering, the
several Underwriters may, in their discretion, vary the public offering price.
The information set forth in the last paragraph on the front cover
page (insofar as such information relates to the Underwriters), on the inside
front cover concerning stabilization and over-allotment by the Underwriters,
and under the second, sixth and eighth paragraphs and the third sentence of the
fifth
12
13
paragraph under the caption "Underwriting" in any Preliminary Prospectus and in
the Prospectus constitutes the only information furnished by the Underwriters
to the Company for inclusion in any Preliminary Prospectus, the Prospectus or
the Registration Statement, and you, on behalf of the respective Underwriters,
represent and warrant to the Company and the Selling Stockholders that the
statements made therein do not include any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
4. Further Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the
time and date that this Agreement is executed and delivered by the
parties hereto, to become effective as promptly as possible; the Company
will use its best efforts to cause any abbreviated registration statement
pursuant to Rule 462(b) of the Rules and Regulations as may be required
subsequent to the date the Registration Statement is declared effective
to become effective as promptly as possible; the Company will notify you,
promptly after it shall receive notice thereof, of the time when the
Registration Statement, any subsequent amendment to the Registration
Statement or any abbreviated registration statement has become effective
or any supplement to the Prospectus has been filed; if the Company
omitted information from the Registration Statement at the time it was
originally declared effective in reliance upon Rule 430A(a) of the Rules
and Regulations, the Company will provide evidence satisfactory to you
that the Prospectus contains such information and has been filed, within
the time period prescribed, with the Commission pursuant to subparagraph
(1) or (4) of Rule 424(b) of the Rules and Regulations or as part of a
post-effective amendment to such Registration Statement as originally
declared effective that is declared effective by the Commission; if the
Company files a term sheet pursuant to Rule 434 of the Rules and
Regulations, the Company will provide evidence satisfactory to you that
the Prospectus and term sheet meeting the requirements of Rule 434(b) or
(c), as applicable, of the Rules and Regulations, have been filed, within
the time period prescribed, with the Commission pursuant to subparagraph
(7) of Rule 424(b) of the Rules and Regulations; if for any reason the
filing of the final form of Prospectus is required under Rule 424(b)(3)
of the Rules and Regulations, it will provide evidence satisfactory to
you that the Prospectus contains such information and has been filed with
the Commission within the time period prescribed; it will notify you
promptly of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; promptly upon your request, it will prepare and
file with the Commission any amendments or supplements to the
Registration Statement or Prospectus that, in the opinion of
Underwriters' Counsel, may be necessary or advisable in connection with
the distribution of the Shares by the Underwriters; it will promptly
prepare and file with the Commission, and promptly notify you of the
filing of, any amendments or supplements to the Registration Statement or
Prospectus that may be necessary to correct any statements or omissions,
if, at any time when a prospectus relating to the Shares is required to
be delivered under the Act, any event shall have occurred as a result of
which the Prospectus or any other prospectus relating to the Shares as
then in effect would include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; in case any Underwriter is required to deliver a prospectus
nine months or more after the effective date of the Registration
Statement in connection with the sale of the Shares, it will prepare
promptly upon request, but at the expense of such Underwriter, such
amendment or amendments to the Registration Statement and such prospectus
or prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act; and it will file no
amendment or supplement to the Registration Statement or Prospectus that
shall not previously have been submitted to you a reasonable time prior
to the proposed filing thereof or to which you shall reasonably object in
writing, subject, however, to compliance with the Act and the Rules and
Regulations and the provisions of this Agreement.
13
14
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge, of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or
of the initiation or threat of any proceeding for that purpose; and it
will promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal at the earliest possible moment if such
stop order should be issued.
(c) The Company will use its best efforts to qualify the Shares
for offering and sale under the securities laws of such jurisdictions as
you may designate and to continue such qualifications in effect for so
long as may be required for purposes of the distribution of the Shares,
except that the Company shall not be required in connection therewith or
as a condition thereof to qualify as a foreign corporation or to execute
a general consent to service of process in any jurisdiction in which it
is not otherwise required to be so qualified or to so execute a general
consent to service of process. In each jurisdiction in which the Shares
shall have been qualified as above provided, the Company will make and
file such statements and reports in each year as are or may be required
by the laws of such jurisdiction.
(d) The Company will furnish to you, as soon as available, and,
in the case of the Prospectus and any term sheet or abbreviated term
sheet under Rule 434, in no event later than the first full business day
following the first day that Shares are traded, copies of the
Registration Statement (three of which will be signed and which will
include all exhibits), each Preliminary Prospectus, the Prospectus and
any amendments or supplements to such documents, including any prospectus
prepared to permit compliance with Section 10(a)(3) of the Act, all in
such quantities as you may from time to time reasonably request.
Notwithstanding the foregoing, if BancAmerica Xxxxxxxxx Xxxxxxxx, on
behalf of the several Underwriters, shall agree to the utilization of
Rule 434 of the Rules and Regulations, the Company shall provide to you
copies of a Preliminary Prospectus updated in all respects through the
date specified by you in such quantities as you may from time to time
reasonably request.
(e) The Company will make generally available to its
securityholders as soon as practicable, but in any event not later than
the forty-fifth day following the end of the fiscal quarter first
occurring after the first anniversary of the effective date of the
Registration Statement, an earnings statement (which will be in
reasonable detail but need not be audited) complying with the provisions
of Section 11(a) of the Act and covering a twelve-month period beginning
after the effective date of the Registration Statement.
(f) During a period of five years after the date hereof, the
Company will furnish to its stockholders as soon as practicable after the
end of each respective period, annual reports (including financial
statements audited by independent certified public accountants) and
unaudited quarterly reports of operations for each of the first three
quarters of the fiscal year, and will furnish to you and the other
several Underwriters hereunder, upon request (i) concurrently with
furnishing such reports to its stockholders, statements of operations of
the Company for each of the first three quarters in the form furnished to
the Company's stockholders, (ii) concurrently with furnishing to its
stockholders, a balance sheet of the Company as of the end of such fiscal
year, together with statements of operations, of stockholders' equity,
and of cash flows of the Company for such fiscal year, accompanied by a
copy of the certificate or report thereon of independent certified public
accountants, (iii) as soon as they are available, copies of all reports
(financial or other) mailed to stockholders, (iv) as soon as they are
available, copies of all reports and financial statements furnished to or
filed
14
15
with the Commission, any securities exchange or the National Association
of Securities Dealers, Inc. (the "NASD"), (v) every material press
release and every material news item or article in respect of the Company
or its affairs that was generally released to stockholders or prepared by
the Company, and (vi) any additional information of a public nature
concerning the Company, or its business that you may reasonably request.
During such five-year period, if the Company shall have any active
subsidiaries, the foregoing financial statements shall be on a
consolidated basis to the extent that the accounts of the Company and
such subsidiaries are consolidated and shall be accompanied by similar
financial statements for any significant subsidiary that is not so
consolidated.
(g) The Company will apply the net proceeds from the sale of the
Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar
(which may be the same entity as the transfer agent) for its Common
Stock.
(i) If the transactions contemplated hereby are not consummated
by reason of any failure, refusal or inability on the part of the Company
or any Selling Stockholder to perform any agreement on their respective
parts to be performed hereunder or to fulfill any condition of the
Underwriters' obligations hereunder, or if the Company shall terminate
this Agreement pursuant to Section 11(a) hereof, or if the Underwriters
shall terminate this Agreement pursuant to Section 11(b)(i), the Company
will reimburse the several Underwriters for all out-of- pocket expenses
(including fees and disbursements of Underwriters' Counsel) incurred by
the Underwriters in investigating or preparing to market or marketing the
Shares.
(j) If at any time during the ninety-day period after the
Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in
your opinion the market price of the Common Stock has been or is likely
to be materially affected (regardless of whether such rumor, publication
or event necessitates a supplement to or amendment of the Prospectus),
the Company will, after written notice from you advising the Company to
the effect set forth above, forthwith prepare, consult with you
concerning the substance of and disseminate a press release or other
public statement, reasonably satisfactory to you, responding to or
commenting on such rumor, publication or event.
(k) During the Lock-up Period, the Company will not, without the
prior written consent of BancAmerica Xxxxxxxxx Xxxxxxxx, effect the
Disposition of, directly or indirectly, any Securities other than the
sale of the Company Shares and the Option Shares to be sold by the
Company hereunder and the Company's issuance of options or Common Stock
under the Company's presently authorized 1990 Stock Option Plan, as
amended, 1998 Stock Incentive Plan or 1998 Employee Stock Purchase Plan.
(l) During a period of ninety days from the effective date of
the Registration Statement, the Company will not file a registration
statement registering shares under the Company's presently authorized
1990 Stock Option Plan, as amended, 1998 Stock Incentive Plan or 1998
Employee Stock Purchase Plan or any other benefit plan.
5. Expenses.
(a) The Company and the Selling Stockholders agree with each
Underwriter that:
15
16
(i) The Company and the Selling Stockholders will pay and
bear all costs and expenses in connection with the preparation,
printing and filing of the Registration Statement (including
financial statements, schedules and exhibits), Preliminary
Prospectuses and the Prospectus and any amendments or supplements
thereto; the issuance and delivery of the Shares hereunder to the
several Underwriters, including transfer taxes, if any, the cost
of all certificates representing the Shares, and transfer agents'
and registrars' fees; the fees and disbursements of counsel for
the Company; all fees and other charges of the Company's
independent certified public accountants; the cost of furnishing
to the several Underwriters copies of the Registration Statement
(including appropriate exhibits), Preliminary Prospectuses and the
Prospectus and any amendments or supplements to any of the
foregoing; NASD filing fees and the cost of qualifying the Shares
under the laws of such jurisdictions as you may designate
(including filing fees and fees and disbursements of Underwriters'
Counsel in connection with such NASD filings and Blue Sky
qualifications); and all other expenses directly incurred by the
Company and the Selling Stockholders in connection with the
performance of their obligations hereunder. Any additional
expenses incurred as a result of the sale of the Shares by the
Selling Stockholders will be borne collectively by the Company and
the Selling Stockholders. The provisions of this Section 5(a)(i)
are intended to relieve the Underwriters from the payment of the
expenses and costs that the Selling Stockholders and the Company
hereby agree to pay, but shall not affect any agreement that the
Selling Stockholders and the Company may make, or may have made,
for the sharing of any of such expenses and costs. Such
agreements shall not impair the obligations of the Company and the
Selling Stockholders hereunder to the several Underwriters.
(ii) In addition to its other obligations under Section
8(a) hereof, the Company agrees that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other
proceeding described in Section 8(a) hereof, it will reimburse the
Underwriters on a monthly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the
Company's obligation to reimburse the Underwriters for such
expenses and the possibility that such payments might later be
held to have been improper by a court of competent jurisdiction.
To the extent that any such interim reimbursement payment is so
held to have been improper, the Underwriters shall promptly return
such payment to the Company together with interest, compounded
daily, determined on the basis of the prime rate (or other
commercial lending rate for borrowers of the highest credit
standing) listed from time to time in The Wall Street Journal that
represents the base rate on corporate loans posted by a
substantial majority of the nation's thirty largest banks (the
"Prime Rate"). Any such interim reimbursement payments that are
not made to the Underwriters within thirty days of a request for
reimbursement shall bear interest at the Prime Rate from the date
of such request.
(iii) In addition to their other obligations under Section
8(b) hereof, each Selling Stockholder agrees that, as an interim
measure during the pendency of any claim, action, investigation,
inquiry or other proceeding described in Section 8(b) hereof
relating to such Selling Stockholder, it will reimburse the
Underwriters on a monthly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of such
Selling Stockholder's obligation to reimburse the Underwriters for
such expenses and the possibility that such payments might later
be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Underwriters shall
promptly return such payment to the Selling Stockholders, together
with interest, compounded
16
17
daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments that are not made to the
Underwriters within thirty days of a request for reimbursement
shall bear interest at the Prime Rate from the date of such
request.
(b) In addition to their other obligations under Section 8(c)
hereof, the Underwriters severally and not jointly agree that, as an
interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding described in Section 8(c) hereof, they will
reimburse the Company and each Selling Stockholder on a monthly basis for
all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Underwriters'
obligation to reimburse the Company and each such Selling Stockholder for
such expenses and the possibility that such payments might later be held
to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have
been improper, the Company and each such Selling Stockholder shall
promptly return such payment to the Underwriters together with interest,
compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments that are not made to the Company and each
such Selling Stockholder within thirty days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request.
(c) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections
5(a)(ii), 5(a)(iii) and 5(b) hereof, including the amounts of any
requested reimbursement payments, the method of determining such amounts
and the basis on which such amounts shall be apportioned among the
reimbursing parties, shall be settled by arbitration conducted under the
provisions of the Constitution and Rules of the Board of Governors of the
New York Stock Exchange, Inc. or pursuant to the Code of Arbitration
Procedure of the NASD. Any such arbitration must be commenced by service
of a written demand for arbitration or a written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the
party demanding arbitration does not make such designation of an
arbitration tribunal in such demand or notice, then the party responding
to said demand or notice is authorized to do so. Any such arbitration
will be limited to the operation of the interim reimbursement provisions
contained in Sections 5(a)(ii), 5(a)(iii) and 5(b) hereof and will not
resolve the ultimate propriety or enforceability of the obligation to
indemnify for expenses that is created by the provisions of Sections
8(a), 8(b) and 8(c) hereof or the obligation to contribute to expenses
that is created by the provisions of Section 8(e) hereof.
6. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Shares as provided herein
shall be subject to the accuracy, as of the date hereof and the Closing Date
and any later date on which Option Shares are to be purchased, as the case may
be, of the representations and warranties of the Company and the Selling
Stockholders herein, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become effective not
later than 2 P.M., San Francisco time, on the date following the date of
this Agreement, or such later date as shall be consented to in writing by
you; and no stop order suspending the effectiveness thereof shall have
been issued and no proceedings for that purpose shall have been initiated
or, to the knowledge of the Company, any Selling Stockholder or any
Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with
to the satisfaction of Underwriters' Counsel.
17
18
(b) All corporate proceedings and other legal matters in
connection with this Agreement, the form of Registration Statement and
the Prospectus, and the registration, authorization, issue, sale and
delivery of the Shares, shall have been reasonably satisfactory to
Underwriters' Counsel, and Underwriters' Counsel shall have been
furnished with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in this
Section.
(c) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, or any later date on which Option Shares
are to be purchased, as the case may be, there shall not have been any
change in the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company from that set forth in the
Registration Statement or Prospectus that, in your sole judgment, is
material and adverse and that makes it, in your sole judgment,
impracticable or inadvisable to proceed with the public offering of the
Shares as contemplated by the Prospectus.
(d) You shall have received on the Closing Date and on any later
date on which Option Shares are to be purchased, as the case may be, the
following opinion of Xxxxxxx, Phleger & Xxxxxxxx LLP, special counsel for
the Company and counsel for the Selling Stockholders, dated the Closing
Date or such later date on which Option Shares are to be purchased,
addressed to the Underwriters and with reproduced copies or signed
counterparts thereof for each of the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Company has the corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus.
(iii) The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction, if
any, in which the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where
the failure to be so qualified or be in good standing would not have
a material adverse effect on the condition (financial or otherwise),
earnings, operations or business of the Company. To such counsel's
knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entity.
(iv) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under the caption
"Capitalization" as of the dates stated therein. The issued and
outstanding shares of capital stock of the Company (including the
Selling Stockholder Shares) have been duly and validly issued and
are fully paid and nonassessable (assuming that the Company has
received payment for such shares as contemplated by the votes of the
Board of Directors of the Company approving such issuances) and, to
such counsel's knowledge, have not been issued in violation of or
subject to any preemptive right, co-sale right, registration right,
right of first refusal or other similar right.
(v) The Firm Shares or the Option Shares, as the case may
be, to be issued by the Company pursuant to the terms of this
Agreement have been duly authorized and, upon issuance and delivery
against payment therefor in accordance with the terms hereof, will
be duly and validly issued and fully paid and nonassessable, and
will not have been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of first
refusal or other similar right.
18
19
(vi) The Company has the corporate power and authority to
enter into this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by it hereunder.
(vii) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has been
duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by you, is a valid and binding
agreement of the Company, enforceable in accordance with its terms,
except insofar as indemnification provisions may be limited by
applicable law and except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally or by general
equitable principles.
(viii) 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 proceedings for that purpose have been instituted or are pending
or threatened under the Act.
(ix) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial
statements, including supporting schedules, and financial data
derived therefrom, as to which such counsel need express no
opinion), as of the effective date of the Registration Statement,
complied as to form in all material respects with the requirements
of the Act and the applicable Rules and Regulations.
(x) The information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such
counsel and is a fair summary of such matters and conclusions; and
the forms of certificates evidencing the Common Stock and filed as
exhibits to the Registration Statement comply with the Delaware
General Corporation Law.
(xi) The description in the Registration Statement and the
Prospectus of the certificate of incorporation and bylaws of the
Company and of statutes are accurate and fairly present the
information required to be presented by the Act and the applicable
Rules and Regulations.
(xii) To such counsel's knowledge, there are no agreements,
contracts, leases or documents to which the Company is a party of a
character required to be described or referred to in the
Registration Statement or Prospectus or to be filed as an exhibit to
the Registration Statement that are not described or referred to
therein or filed as required.
(xiii) The performance of this Agreement and the consummation
of the transactions herein contemplated (other than performance of
the Company's indemnification obligations hereunder, concerning
which no opinion need be expressed) will not (a) result in any
violation of the Company's certificate of incorporation or bylaws or
(b) to such counsel's knowledge, result in a material breach or
violation of any of the terms and provisions of, or constitute a
default under, (1) any bond, debenture, note or other evidence of
indebtedness, or any lease, contract, indenture, mortgage, deed of
trust, loan agreement, joint venture or other agreement or
instrument known to such counsel to which the Company is a party or
by which its properties are bound, (2) any applicable statute, rule
or regulation known to such counsel or (3) any order, writ or decree
known to such counsel of any court, government or governmental
agency or body having jurisdiction over the Company or any of its
properties or operations.
19
20
(xiv) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or
body having jurisdiction over the Company or any of its properties
or operations is necessary in connection with the consummation by
the Company of the transactions herein contemplated, except such as
have been obtained under the Act or such as may be required under
state or other securities or Blue Sky laws in connection with the
purchase and the distribution of the Shares by the Underwriters.
(xv) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company
of a character required to be disclosed in the Registration
Statement or the Prospectus by the Act or the Rules and Regulations,
other than those described therein.
(xvi) To such counsel's knowledge, the Company is not
presently (a) in material violation of its certificate of
incorporation or bylaws or (b) in material breach of any applicable
statute, rule or regulation known to such counsel or, to such
counsel's knowledge, any order, writ or decree of any court or
governmental agency or body having jurisdiction over the Company or
any of its properties or operations.
(xvii) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders of Common Stock or
other securities of the Company have registration rights with
respect to securities of the Company and, except as set forth in the
Registration Statement and Prospectus, all holders of securities of
the Company having rights known to such counsel to registration of
such shares of Common Stock or other securities, because of the
filing of the Registration Statement by the Company have, with
respect to the offering contemplated thereby, waived such rights or
such rights have expired by reason of lapse of time following
notification of the Company's intent to file the Registration
Statement or have included securities in the Registration Statement
pursuant to the exercise of and in full satisfaction of such rights.
(xviii) Each Selling Stockholder that is not a natural
person has full right, power and authority to enter into and to
perform its obligations under the Power of Attorney and Custody
Agreement to be executed and delivered by it in connection with the
transactions contemplated herein. The Power of Attorney and Custody
Agreement of each Selling Stockholder that is not a natural person
has been duly authorized by such Selling Stockholder; the Power of
Attorney and Custody Agreement of each Selling Stockholder has been
duly executed and delivered by or on behalf of such Selling
Stockholder; and the Power of Attorney and Custody Agreement of each
Selling Stockholder constitutes the valid and binding agreement of
such Selling Stockholder, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general
equitable principles.
(xix) Each of the Selling Stockholders has full right, power
and authority to enter into and to perform its obligations under
this Agreement and to sell, transfer, assign and deliver the Shares
to be sold by such Selling Stockholder hereunder.
(xx) This Agreement has been duly authorized by each Selling
Stockholder that is not a natural person and has been duly executed
and delivered by or on behalf of each Selling Stockholder.
(xxi) Upon the delivery of and payment for the Shares as
contemplated in this Agreement, each of the Underwriters will
receive valid marketable title to the Shares purchased by it from
20
21
such Selling Stockholder, free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest. In
rendering such opinion, such counsel may assume that the
Underwriters are without notice of any defect in the title of the
Shares being purchased from the Selling Stockholders.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of
the Company, the Representatives, Underwriters' Counsel and the
independent certified public accountants of the Company, at which such
conferences the contents of the Registration Statement and Prospectus and
related matters were discussed, and although they have not verified the
accuracy or completeness of the statements contained in the Registration
Statement or the Prospectus, nothing has come to the attention of such
counsel that leads them to believe that, at the time the Registration
Statement became effective and at all times subsequent thereto up to and
on the Closing Date and on any later date on which Option Shares are to
be purchased, the Registration Statement and any amendment or supplement
thereto (other than the financial statements, including supporting
schedules, and other financial and statistical information derived
therefrom, as to which such counsel need express no comment) contained
any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or at the Closing Date or any later date on which
the Option Shares are to be purchased, as the case may be, the
Registration Statement, the Prospectus and any amendment or supplement
thereto (except as aforesaid) contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Counsel rendering the foregoing opinion may rely as to
questions of law not involving the laws of the United States or the State
of California or Colorado or the corporate law of the State of Delaware
upon opinions of local counsel, and as to questions of fact upon
representations or certificates of officers of the Company, the Selling
Stockholders or officers of the Selling Stockholders (when the Selling
Stockholder is not a natural person), and of government officials, in
which case their opinion is to state that they are so relying and that
they have no knowledge of any material misstatement or inaccuracy in any
such opinion, representation or certificate. Copies of any opinion,
representation or certificate so relied upon shall be delivered to you,
as Representatives of the Underwriters, and to Underwriters' Counsel.
(e) You shall have received on the Closing Date and on any later
date on which Option Shares are to be purchased, as the case may be, the
following opinion of Ireland, Xxxxxxxxx, Xxxxx & Xxxxxx, P.C., general
counsel for the Company, dated the Closing Date or such later date on
which Option Shares are to be purchased, addressed to the Underwriters
and with reproduced copies or signed counterparts thereof for each of the
Underwriters, to the effect that:
(i) To such counsel's knowledge, the Company does not own
or control, directly or indirectly, any corporation, association or
other entity.
(ii) To such counsel's knowledge, none of the issued and
outstanding shares of capital stock of the Company (including the
Selling Stockholder Shares) have been issued in violation of or
subject to any preemptive right, co-sale right, registration right,
right of first refusal or other similar right.
(iii) To such counsel's knowledge, there are no agreements,
contracts, leases or documents to which the Company is a party of a
character required to be described or referred to
21
22
in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement that are not described or
referred to therein or filed as required.
(iv) To such counsel's knowledge, the performance of this
Agreement and the consummation of the transactions herein
contemplated (other than performance of the Company's
indemnification obligations hereunder, concerning which no opinion
need be expressed) will not result in a material breach or violation
of any of the terms and provisions of, or constitute a default
under, (1) any bond, debenture, note or other evidence of
indebtedness, or any lease, contract, indenture, mortgage, deed of
trust, loan agreement, joint venture or other agreement or
instrument known to such counsel to which the Company is a party or
by which its properties are bound, (2) any applicable statute, rule
or regulation known to such counsel or (3) any order, writ or decree
known to such counsel of any court, government or governmental
agency or body having jurisdiction over the Company or any of its
properties or operations.
(v) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company
of a character required to be disclosed in the Registration
Statement or the Prospectus by the Act or the Rules and Regulations,
other than those described therein.
(vi) To such counsel's knowledge, the Company is not
presently (a) in material violation of its certificate of
incorporation or bylaws or (b) in material breach of any applicable
statute, rule or regulation known to such counsel or, to such
counsel's knowledge, any order, writ or decree of any court or
governmental agency or body having jurisdiction over the Company or
any of its properties or operations.
(vii) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders of Common Stock or
other securities of the Company have registration rights with
respect to securities of the Company and, except as set forth in the
Registration Statement and Prospectus, all holders of securities of
the Company having rights known to such counsel to registration of
such shares of Common Stock or other securities, because of the
filing of the Registration Statement by the Company have, with
respect to the offering contemplated thereby, waived such rights or
such rights have expired by reason of lapse of time following
notification of the Company's intent to file the Registration
Statement or have included securities in the Registration Statement
pursuant to the exercise of and in full satisfaction of such rights.
In addition, such counsel shall state that such counsel has
participated in certain conferences with officials and other
representatives of the Company, the Representatives, Underwriters'
Counsel and the independent certified public accountants of the Company
(which conferences did not constitute all of the conferences held by such
parties with respect to the preparation of the Registration Statement),
at which such conferences the contents of the Registration Statement and
Prospectus and related matters were discussed, and although they have not
verified the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, nothing has come to the
attention of such counsel that leads them to believe, based upon such
conferences and such counsel's prior experience with the Company's
business, that, at the time the Registration Statement became effective
and at all times subsequent thereto up to and on the Closing Date and on
any later date on
22
23
which Option Shares are to be purchased, the Registration Statement and
any amendment or supplement thereto (other than the financial statements,
including supporting schedules, and other financial and statistical
information derived therefrom, as to which such counsel need express no
comment) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, or at the Closing Date or any
later date on which the Option Shares are to be purchased, as the case
may be, the Registration Statement, the Prospectus and any amendment or
supplement thereto (except as aforesaid) contained any untrue statement
of a material fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to
questions of law not involving the laws of the United States or the State
of Colorado or the corporate law of the State of Delaware upon opinions
of local counsel, and as to questions of fact upon representations or
certificates of officers of the Company and of government officials, in
which case their opinion is to state that they are so relying and that
they have no knowledge of any material misstatement or inaccuracy in any
such opinion, representation or certificate. Copies of any opinion,
representation or certificate so relied upon shall be delivered to you,
as Representatives of the Underwriters, and to Underwriters' Counsel.
(f) You shall have received on the Closing Date and on any later
date on which Option Shares are to be purchased, as the case may be, an
opinion of Underwriters' Counsel, in form and substance satisfactory to
you, with respect to the sufficiency of all such corporate proceedings
and other legal matters relating to this Agreement and the transactions
contemplated hereby as you may reasonably require, and the Company shall
have furnished to Underwriters' Counsel such documents as they may have
requested for the purpose of enabling them to pass upon such matters.
(g) You shall have received on the Closing Date and on any later
date on which Option Shares are to be purchased, as the case may be, a
letter from Xxxxxx Xxxxxxxx LLP addressed to the Underwriters, dated the
Closing Date or such later date on which Option Shares are to be
purchased, as the case may be, confirming that they are independent
certified public accountants with respect to the Company within the
meaning of the Act and the applicable published Rules and Regulations and
based upon the procedures described in such letter delivered to you
concurrently with the execution of this Agreement (herein called the
"Original Letter"), but carried out to a date not more than five business
days prior to the Closing Date or such later date on which Option Shares
are to be purchased, as the case may be, (i) confirming, to the extent
true, that the statements and conclusions set forth in the Original
Letter are accurate as of the Closing Date or such later date on which
Option Shares are to be purchased, as the case may be, and (ii) setting
forth any revisions and additions to the statements and conclusions set
forth in the Original Letter that are necessary to reflect any changes in
the facts described in the Original Letter since the date of such letter,
or to reflect the availability of more recent financial statements, data
or information. The letter shall not disclose any change in the
condition (financial or otherwise), earnings, operations, business or
business prospects of the Company from that set forth in the Registration
Statement or Prospectus that, in your sole judgment, is material and
adverse and that makes it, in your sole judgment, impracticable or
inadvisable to proceed with the public offering of the Shares as
contemplated by the Prospectus. The Original Letter from Xxxxxx Xxxxxxxx
LLP shall be addressed to or for the use of the Underwriters in form and
substance satisfactory to the Underwriters and shall (i) represent that
they are independent certified public accountants with respect to the
Company within the meaning of the Act and the applicable published Rules
and Regulations, (ii) set forth their opinion with respect to their
examination of the balance sheet of the Company as of December 31, 1997
and related statements of operations, stockholders' equity, and cash
flows for the twelve months ended December 31, 1997, and (iii) address
other matters agreed upon by Xxxxxx Xxxxxxxx LLP and you. In addition,
you shall have received from Xxxxxx Xxxxxxxx LLP a letter addressed to
the Company and made available to you for the use of the Underwriters
stating that their review of the Company's system of internal accounting
controls, to the extent they deemed necessary in establishing the scope
of their examination of the Company's financial statements as of December
31, 1997, did not disclose any weaknesses in internal controls that they
considered to be material weaknesses.
23
24
(h) You shall have received on the Closing Date and on any later
date on which Option Shares are to be purchased, as the case may be, a
certificate of the Company, dated the Closing Date or such later date on
which Option Shares are to be purchased, as the case may be, signed by
the Chief Executive Officer and Chief Financial Officer of the Company,
to the effect that, and you shall be satisfied that:
(i) The representations and warranties of the Company in
this Agreement are true and correct, as if made on and as of the
Closing Date or any later date on which Option Shares are to be
purchased, as the case may be, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date or any later
date on which Option Shares are to be purchased, as the case may be;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the
Act;
(iii) When the Registration Statement became effective and at
all times subsequent thereto up to the delivery of such certificate,
the Registration Statement and the Prospectus, and any amendments or
supplements thereto, contained all material information required to
be included therein by the Act and the Rules and Regulations and in
all material respects conformed to the requirements of the Act and
the Rules and Regulations, the Registration Statement, and any
amendment or supplement thereto, did not and does not include any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, the Prospectus, and any amendment or
supplement thereto, did not and does not include any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and, since
the effective date of the Registration Statement, there has occurred
no event required to be set forth in an amended or supplemented
Prospectus that has not been so set forth; and
(iv) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus,
there has not been (a) any material adverse change in the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company, (b) any transaction that is material to
the Company, except transactions entered into in the ordinary course
of business, (c) any material obligation, direct or contingent,
incurred by the Company, except obligations incurred in the ordinary
course of business, (d) any change in the capital stock or
outstanding indebtedness of the Company that is material to the
Company, (e) any dividend or distribution of any kind declared, paid
or made on the capital stock of the Company, or (f) any loss or
damage (whether or not insured) to the property of the Company that
has been sustained or will have been sustained and that has a
material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company.
(i) You shall be satisfied that, and you shall have received a
certificate, dated the Closing Date, or any later date on which Option
Shares are to be purchased, as the case may be, from the Attorneys for
each Selling Stockholder to the effect that, as of the Closing Date, or
any later date on which Option Shares are to be purchased, as the case
may be, they have not been informed that:
24
25
(i) The representations and warranties made by such Selling
Stockholder herein are not true or correct in any material respect
on the Closing Date or on any later date on which Option Shares are
to be purchased, as the case may be; or
(ii) Such Selling Stockholder has not complied with any
obligation or satisfied any condition that is required to be
performed or satisfied on the part of such Selling Stockholder at or
prior to the Closing Date or any later date on which Option Shares
are to be purchased, as the case may be.
(j) The Company shall have obtained and delivered to you an
agreement from each officer and director of the Company, each Selling
Stockholder and each other beneficial owner of Common Stock in writing
prior to the date hereof that such person will not, during the Lock-up
Period, effect the Disposition of any Securities now owned or hereafter
acquired directly by such person or with respect to which such person has
or hereafter acquires the power of disposition, otherwise than (i) as a
bona fide gift or gifts, provided the donee or donees thereof agree in
writing to be bound by this restriction, (ii) as a distribution to
limited partners, members or stockholders of such person, provided the
distributees thereof agree in writing to be bound by the terms of this
restriction or (iii) with the prior written consent of BancAmerica
Xxxxxxxxx Xxxxxxxx. The foregoing restriction shall have been expressly
agreed to preclude the holder of the Securities from engaging in any
hedging or other transaction that is designed to or reasonably expected
to lead to or result in a Disposition of Securities during the Lock-up
Period, even if such Securities would be disposed of by someone other
than the such holder. Such prohibited hedging or other transactions
would include any short sale (whether or not against the box) or any
purchase, sale or grant of any right (including any put or call option)
with respect to any Securities or with respect to any security (other
than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from the Securities.
Notwithstanding the foregoing, this restriction shall not prohibit (i)
the sale of Shares to the Underwriters pursuant to this Agreement or (ii)
resales of shares of Common Stock acquired either in the public offering
to which the Registration Statement relates or in subsequent open-market
purchases. Furthermore, such person will have also agreed and consented
to the entry of stop transfer instructions with the Company's transfer
agent against the transfer of the Securities held by such person except
in compliance with this restriction.
(k) The Company and the Selling Stockholders shall have furnished
to you such further certificates and documents as you shall reasonably
request (including certificates of officers of the Company, the Selling
Stockholders or officers of the Selling Stockholders (when the Selling
Stockholder is not a natural person) as to the accuracy of the
representations and warranties of the Company and the Selling
Stockholders herein, as to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and as to the
other conditions concurrent and precedent to the obligations of the
Underwriters hereunder.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The Company and the Selling Stockholders will
furnish you with such number of conformed copies of such opinions,
certificates, letters and documents as you shall reasonably request.
7. Option Shares.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set
forth, the Company and the Selling Stockholders named in Schedule C
hereto (the "Option Stockholders") hereby grant, severally and not
jointly, to the several
25
26
Underwriters, for the purpose of covering over-allotments in connection
with the distribution and sale of the Firm Shares only, nontransferable
options to purchase the respective number of Option Shares as set forth
opposite the names of the Company and the Option Stockholders in Schedule
C hereto, all at the purchase price per share for the Firm Shares set
forth in Section 3 hereof. Such option may be exercised by the
Representatives on behalf of the several Underwriters on one or more
occasions in whole or in part during the period of thirty days after the
date on which the Firm Shares are initially offered to the public, by
giving written notice to the Company and the Option Stockholders in
accordance with Section 12 hereof. The number of Option Shares to be
purchased by each Underwriter upon the exercise of such option shall be
the same proportion of the total number of Option Shares to be purchased
by the several Underwriters pursuant to the exercise of such option as
the number of Firm Shares purchased by such Underwriter (set forth in
Schedule A hereto) bears to the total number of Firm Shares purchased by
the several Underwriters (set forth in Schedule A hereto), adjusted by
the Representatives in such manner as to avoid fractional shares. In the
event such option is exercised for less than all of the Option Shares,
the Option Shares to be purchased shall be purchased [let us know if this
will be pro rata (based on the numbers of Option Shares set forth in
Schedule C hereto) from the Company and each of the Option Stockholders,
or whether there will be a priority (e.g., Option Stockholders first, on
a pro rata basis, and then Company)], adjusted by the Representatives in
such manner as to avoid fractional shares.
The certificates in negotiable form for the Option Shares to
be purchased from the Option Stockholders pursuant to the exercise of the
option granted by this Section 7 have been placed in custody (for
delivery under this Agreement) under the Custody Agreement. Each Option
Stockholder agrees that the certificates for the Option Shares of such
Option Stockholder so held in custody are subject to the interests of the
Underwriters hereunder, that the arrangements made by such Option
Stockholder for such custody, including the Power of Attorney is to that
extent irrevocable and that the obligations of such Option Stockholder
hereunder shall not be terminated by the act of such Option Stockholder
or by operation of law, whether by the death or incapacity of such Option
Stockholder or the occurrence of any other event, except as specifically
provided herein or in the Custody Agreement. If any Option Stockholder
should die or be incapacitated, or if any other such event should occur,
before the delivery of the certificates for the Option Shares to be sold
by such Option Stockholder, such Option Shares shall, except as
specifically provided herein or in the Custody Agreement, be delivered by
the Custodian in accordance with the terms and conditions of this
Agreement as if such death, incapacity or other event had not occurred,
regardless of whether the Custodian shall have received notice of such
death or other event.
Delivery of definitive certificates for the Option Shares to
be purchased by the several Underwriters pursuant to the exercise of the
option granted by this Section 7 shall be made against payment of the
purchase price therefor by the several Underwriters by certified or
official bank check or checks drawn in next-day funds, payable to the
order of the Company with regard to the Option Shares being purchased
from the Company, and to the order of the Custodian for the respective
accounts of Option Stockholders with regard to the Option Shares being
purchased from the Option Stockholders (and the Company and the Option
Stockholders agree not to deposit and to cause the Custodian not to
deposit any such check in the bank on which it is drawn, and not to take
any other action with the purpose or effect of receiving immediately
available funds, until the business day following the date of its
delivery to the Company or the Custodian, as the case may be). In the
event of any breach of the foregoing, the Company and the Option
Stockholders, as the case may be, shall reimburse the Underwriters for
the interest lost and any other expenses borne by them by reason of such
breach. Such delivery and payment shall take place at the offices of
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx or at such other place as may be agreed upon
26
27
among the Representatives, the Company and the Attorneys (i) on the
Closing Date, if written notice of the exercise of such option is
received by the Company and the Option Stockholders at least two full
business days prior to the Closing Date, or (ii) on a date that shall not
be later than the third full business day following the date the Company
and the Option Stockholders receive written notice of the exercise of
such option, if such notice is received by the Company and the Option
Stockholders less than two full business days prior to the Closing Date.
The certificates for the Option Shares to be so delivered will
be made available to you at such office or such other location, including
in New York City, as you may reasonably request for checking at least one
full business day prior to the date of payment and delivery and will be
in such names and denominations as you may request, such request to be
made at least two full business days prior to such date of payment and
delivery. If the Representatives so elect, delivery of the Option Shares
may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be
obligated to) make payment of the purchase price on behalf of any
Underwriter or Underwriters whose check or checks shall not have been
received by you prior to the date of payment and delivery for the Option
Shares to be purchased by such Underwriter or Underwriters. Any such
payment by you shall not relieve any such Underwriter or Underwriters of
any of its or their obligations hereunder.
(b) Upon exercise of any option provided for in Section 7(a)
hereof, the obligations of the several Underwriters to purchase such
Option Shares will be subject (as of the date hereof and as of the date
of payment and delivery for such Option Shares) to the accuracy of and
compliance with the representations, warranties and agreements of the
Company and the Option Stockholders herein, to the accuracy of the
statements of the Company, the Option Stockholders and officers of the
Company made pursuant to the provisions hereof, to the performance by the
Company and the Option Stockholders of their respective obligations
hereunder, to the conditions set forth in Section 6 hereof, and to the
condition that all proceedings taken at or prior to the payment date in
connection with the sale and transfer of such Option Shares shall be
satisfactory in form and substance to you and to Underwriters' Counsel,
and you shall have been furnished with all such documents, certificates
and opinions as you may request in order to evidence the accuracy and
completeness of any of the representations, warranties or statements, the
performance of any of the covenants or agreements of the Company and the
Option Stockholders or the satisfaction of any of the conditions herein
contained.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject (including in its
capacity as an Underwriter or as a "qualified independent underwriter"
within the meaning of Schedule E of the Bylaws of the NASD), under the
Act, the Exchange Act or otherwise, specifically including losses,
claims, damages or liabilities (or actions in respect thereof) arising
out of or based upon (i) any breach of any representation, warranty,
agreement or covenant of the Company herein contained, (ii) any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading or (iii) any untrue statement or alleged untrue statement of
any material fact contained in any Preliminary Prospectus or the
Prospectus or any amendment or
27
28
supplement thereto, or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, and agrees to reimburse each Underwriter for
any legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, such Preliminary Prospectus or the Prospectus, or any such
amendment or supplement thereto, in reliance upon, and in conformity
with, written information relating to any Underwriter furnished to the
Company by such Underwriter, directly or through you, specifically for
use in the preparation thereof and, provided further that the indemnity
agreement provided in this Section 8(a) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom
the person asserting any losses, claims, damages, liabilities or actions
based upon any untrue statement or alleged untrue statement of material
fact or omission or alleged omission to state therein a material fact
purchased Shares, if a copy of the Prospectus in which such untrue
statement or alleged untrue statement or omission or alleged omission was
corrected had not been sent or given to such person within the time
required by the Act and the Rules and Regulations, unless such failure is
the result of noncompliance by the Company with Section 4(d) hereof.
The indemnity agreement in this Section 8(a) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the
Act or the Exchange Act. This indemnity agreement shall be in addition
to any liabilities that the Company may otherwise have.
(b) Each Selling Stockholder, severally and not jointly, agrees to
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may
become subject (including in its capacity as an Underwriter) under the
Act, the Exchange Act or otherwise, specifically including losses,
claims, damages or liabilities (or actions in respect thereof) arising
out of or based upon (i) any breach of any representation, warranty,
agreement or covenant of such Selling Stockholder herein contained, (ii)
any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any untrue statement or alleged untrue
statement of any material fact contained in any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, in the case of subparagraphs (ii) and (iii) of
this Section 8(b) to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information
furnished to the Company or such Underwriter by such Selling Stockholder,
directly or through such Selling Stockholder's representatives,
specifically for use in the preparation thereof, and agrees to reimburse
each Underwriter for any legal or other expenses reasonably incurred by
it in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity
agreement provided in this Section 8(b) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom
the person asserting any losses, claims, damages, liabilities or actions
based upon any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state therein a material fact
purchased Shares, if a copy of the Prospectus in which such untrue
statement or alleged untrue statement or omission or alleged omission was
corrected had not been sent or given to such person within the time
required by the Act and the Rules and Regulations, unless such failure is
the result of noncompliance by the Company with Section 4(d) hereof.
28
29
The indemnity agreement in this Section 8(b) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the
Act or the Exchange Act. This indemnity agreement shall be in addition
to any liabilities that such Selling Stockholder otherwise may have.
(c) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company and each Selling Stockholder
against any losses, claims, damages or liabilities, joint or several, to
which the Company or such Selling Stockholder may become subject under
the Act or otherwise, specifically including losses, claims, damages or
liabilities (or actions in respect thereof) arising out of or based upon
(i) any breach of any representation, warranty, agreement or covenant of
such Underwriter herein contained, (ii) any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading or
(iii) any untrue statement or alleged untrue statement of any material
fact contained in any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or the omission or alleged omission to
state therein a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, in the case of subparagraphs (ii) and (iii) of this Section
8(c) to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter, directly or through you, specifically for
use in the preparation thereof, and agrees to reimburse the Company and
each such Selling Stockholder for any legal or other expenses reasonably
incurred by the Company and each such Selling Stockholder in connection
with investigating or defending any such loss, claim, damage, liability
or action.
The indemnity agreement in this Section 8(c) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
officer of the Company who signed the Registration Statement and each
director of the Company, each Selling Stockholder and each person, if
any, who controls the Company or any Selling Stockholder within the
meaning of the Act or the Exchange Act. This indemnity agreement shall
be in addition to any liabilities that each Underwriter may otherwise
have.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof but the omission so to notify the
indemnifying party will not relieve it from any liability that it may
have to any indemnified party otherwise than under this Section 8. In
case any such action is brought against any indemnified party, and it
notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it shall elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties that are different from or additional to those
available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal
defenses and to otherwise
29
30
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of the indemnifying party's election so to assume
the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel (together with appropriate
local counsel) approved by the indemnifying party representing all the
indemnified parties under Section 8(a), 8(b) or 8(c) hereof who are
parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement
of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. In no event shall any indemnifying party be liable
in respect of any amounts paid in settlement of any action unless the
indemnifying party shall have approved the terms of such settlement;
provided that such consent shall not be unreasonably withheld. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
been a party and indemnification could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on all claims that
are the subject matter of such proceeding.
(e) In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this
Section 8 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 8 provides for indemnification
in such case, all the parties hereto shall contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that, except as
set forth in Section 8(f) hereof, the Underwriters severally and not
jointly are responsible pro rata for the portion represented by the
percentage that the underwriting discount bears to the initial public
offering price, and the Company and the Selling Stockholders are
responsible for the remaining portion, provided, however, that (i) no
Underwriter shall be required to contribute any amount in excess of the
amount by which the underwriting discount applicable to the Shares
purchased by such Underwriter exceeds the amount of damages that such
Underwriter has otherwise required to pay and (ii) no person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who is not guilty
of such fraudulent misrepresentation. The contribution agreement in this
Section 8(e) shall extend upon the same terms and conditions to, and
shall inure to the benefit of, each person, if any, who controls any
Underwriter, the Company or any Selling Stockholder within the meaning of
the Act or the Exchange Act and each officer of the Company who signed
the Registration Statement and each director of the Company.
(f) The liability of each Selling Stockholder under the
representations, warranties and agreements contained herein and under the
indemnity and contribution agreements contained in the provisions of this
Section 8 shall be limited to an amount equal to the initial public
offering price of the Selling Stockholder Shares and any Option Shares
sold by such Selling Stockholder to the Underwriters minus the amount of
the underwriting discount paid thereon to the Underwriters by such
Selling Stockholder. The Company and such Selling Stockholders may
agree, as among themselves and without limiting the rights of the
Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible.
30
31
(g) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including the provisions of
this Section 8, and are fully informed regarding said provisions. They
further acknowledge that the provisions of this Section 8 fairly allocate
the risks in light of the ability of the parties to investigate the
Company and its business in order to assure that adequate disclosure is
made in the Registration Statement and Prospectus as required by the Act
and the Exchange Act.
9. Representations, Warranties, Covenants and Agreements to Survive
Delivery. All representations, warranties, covenants and agreements of the
Company, the Selling Stockholders and the Underwriters herein or in
certificates delivered pursuant hereto, and the indemnity and contribution
agreements contained in Section 8 hereof shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter within the meaning of the
Act or the Exchange Act, or by or on behalf of the Company or any Selling
Stockholder, or any of their officers, directors or controlling persons within
the meaning of the Act or the Exchange Act, and shall survive the delivery of
the Shares to the several Underwriters hereunder or termination of this
Agreement.
10. Substitution of Underwriters. If any Underwriter or Underwriters
shall fail to take up and pay for the number of Firm Shares agreed by such
Underwriter or Underwriters to be purchased hereunder upon tender of such Firm
Shares in accordance with the terms hereof, and if the aggregate number of Firm
Shares that such defaulting Underwriter or Underwriters so agreed but failed to
purchase does not exceed ten percent of the Firm Shares, the remaining
Underwriters shall be obligated, severally in proportion to their respective
commitments hereunder, to take up and pay for the Firm Shares of such
defaulting Underwriter or Underwriters.
If any Underwriter or Underwriters so defaults and the aggregate
number of Firm Shares that such defaulting Underwriter or Underwriters agreed
but failed to take up and pay for exceeds ten percent of the Firm Shares, the
remaining Underwriters shall have the right, but shall not be obligated, to take
up and pay for (in such proportions as may be agreed upon among them) the Firm
Shares that the defaulting Underwriter or Underwriters so agreed but failed to
purchase. If such remaining Underwriters do not, at the Closing Date, take up
and pay for the Firm Shares that the defaulting Underwriter or Underwriters so
agreed but failed to purchase, the Closing Date shall be postponed for
twenty-four hours to allow the several Underwriters the privilege of
substituting within twenty-four hours (including non-business hours) another
underwriter or underwriters (which may include any nondefaulting Underwriter)
satisfactory to the Company. If no such underwriter or underwriters shall have
been substituted as aforesaid by such postponed Closing Date, the Closing Date
may, at the option of the Company, be postponed for a further twenty-four hours,
if necessary, to allow the Company the privilege of finding another underwriter
or underwriters, satisfactory to you, to purchase the Firm Shares that the
defaulting Underwriter or Underwriters so agreed but failed to purchase. If it
shall be arranged for the remaining Underwriters or substituted underwriter or
underwriters to take up the Firm Shares of the defaulting Underwriter or
Underwriters as provided in this Section 10, (i) the Company shall have the
right to postpone the time of delivery for a period of not more than seven full
business days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees promptly to file any amendments to the
Registration Statement, supplements to the Prospectus or other such documents
that may thereby be made necessary, and (ii) the respective number of Firm
Shares to be purchased by the remaining Underwriters and substituted underwriter
or underwriters shall be taken as the basis of their underwriting obligation.
If the remaining Underwriters shall not take up and pay for all such Firm Shares
so agreed to be purchased by the defaulting Underwriter or Underwriters or
substitute another underwriter or underwriters as aforesaid and the Company
shall not find or shall not elect to seek another underwriter or underwriters
for such Firm Shares as aforesaid, then this Agreement shall terminate.
31
32
In the event of any termination of this Agreement pursuant to the
preceding paragraph of this Section 10, neither the Company nor any Selling
Stockholder shall be liable to any Underwriter (except as provided in Sections
5 and 8 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this Agreement, to
purchase the number of Firm Shares agreed by such Underwriter to be purchased
hereunder, which Underwriter shall remain liable to the Company, the Selling
Stockholders and the other Underwriters for damages, if any, resulting from
such default) be liable to the Company or any Selling Stockholder (except to
the extent provided in Sections 5 and 8 hereof).
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section 10.
11. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at the earlier of (i)
6:30 A.M., San Francisco time, on the first full business day following
the effective date of the Registration Statement or (ii) the time of the
initial public offering of any of the Shares by the Underwriters after
the Registration Statement becomes effective. The time of the initial
public offering shall mean the time of the release by you, for
publication, of the first newspaper advertisement relating to the Shares,
or the time at which the Shares are first generally offered by the
Underwriters to the public by letter, telephone, telegram or telecopy,
whichever shall first occur. By giving notice as set forth in Section 12
before the time this Agreement becomes effective, you, as Representatives
of the several Underwriters, or the Company, may prevent this Agreement
from becoming effective without liability of any party to any other
party, except as provided in Sections 4(j), 5 and 8 hereof.
(b) You, as Representatives of the several Underwriters, shall
have the right to terminate this Agreement by giving notice as
hereinafter specified at any time on or prior to the Closing Date or on
or prior to any later date on which Option Shares are to be purchased, as
the case may be, (i) if the Company or any Selling Stockholder shall have
failed, refused or been unable to perform any agreement on its part to be
performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled is not fulfilled,
including any change in the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company from that set
forth in the Registration Statement or Prospectus that, in your sole
judgment, is material and adverse, or (ii) if additional material
governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally or minimum
or maximum prices shall have been generally established on the New York
Stock Exchange or on the American Stock Exchange or in the
over-the-counter market by the NASD, or trading in securities generally
shall have been suspended on either such exchange or in the
over-the-counter market by the NASD, or if a banking moratorium shall
have been declared by federal, New York or California authorities, or
(iii) if the Company shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity of such character as to interfere
materially with the conduct of the business and operations of the Company
regardless of whether or not such loss shall have been insured or (iv) if
there shall have been a material adverse change in the general political
or economic conditions or financial markets as in your reasonable
judgment makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Shares, or (v) if there shall have
been an outbreak or escalation of hostilities or of any other
insurrection or armed conflict or the declaration by the United States of
a national emergency that, in the reasonable opinion of the
Representatives, makes it impracticable or inadvisable to proceed with
the public offering of the Shares as contemplated by the Prospectus. In
the event of termination pursuant to subparagraph (i) above, the Company
shall remain obligated to pay costs and expenses
32
33
pursuant to Sections 4(j), 5 and 8 hereof. Any termination pursuant to
any of subparagraphs (ii) through (v) above shall be without liability of
any party to any other party except as provided in Sections 5 and 8
hereof.
If you elect to prevent this Agreement from becoming effective
or to terminate this Agreement as provided in this Section 11, you shall
promptly notify the Company by telephone, telecopy or telegram, in each
case confirmed by letter. If the Company shall elect to prevent this
Agreement from becoming effective, the Company shall promptly notify you
by telephone, telecopy or telegram, in each case, confirmed by letter.
12. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall
be mailed, delivered, telegraphed (and confirmed by letter) or telecopied (and
confirmed by letter) to you c/o BancAmerica Xxxxxxxxx Xxxxxxxx, 000 Xxxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, telecopier number (415)
781-0278, Attention: General Counsel; if sent to the Company, such notice
shall be mailed, delivered, telegraphed (and confirmed by letter) or telecopied
(and confirmed by letter) to SCC Communications Corp., 0000 Xxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxx 00000, telecopier number (000) 000-0000, Attention: Chief
Executive Officer; if sent to one or more of the Selling Stockholders, such
notice shall be sent mailed, delivered, telegraphed (and confirmed by letter)
or telecopied (and confirmed by letter) to Xxxxxx X. Xxxxxxxxx, as Attorney-in-
Fact for the Selling Stockholders, at SCC Communications Corp., 0000 Xxxxxxx
Xxxx, Xxxxxxx, Xxxxxxxx 00000, telecopier number (000) 000-0000.
13. Parties. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company and the Selling Stockholders
and their respective executors, administrators, successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person or entity, other than the parties hereto and their
respective executors, administrators, successors and assigns, and the
controlling persons within the meaning of the Act or the Exchange Act, officers
and directors referred to in Section 8 hereof, any legal or equitable right,
remedy or claim in respect of this Agreement or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective executors, administrators, successors and assigns
and said controlling persons and said officers and directors, and for the
benefit of no other person or entity. No purchaser of any of the Shares from
any Underwriter shall be construed a successor or assign by reason merely of
such purchase.
In all dealings with the Company under this Agreement, you shall act
on behalf of each of the several Underwriters, and the Company and the Selling
Stockholders shall be entitled to act and rely upon any statement, request,
notice or agreement made or given by you jointly or by BancAmerica Xxxxxxxxx
Xxxxxxxx on behalf of you.
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California.
15. Construction. The headings in this Agreement are included only for
convenience and shall not affect the meaning or interpretation of this
Agreement. The words "herein" and "hereof" and other words of similar import
refer to this Agreement as a whole and not to any particular part of this
Agreement. The word "including" as used herein shall not be construed so as to
exclude any other thing not referred to or described.
16. Counterparts. This Agreement may be signed in several counterparts,
each of which will constitute an original.
33
34
* * *
If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholders and the several Underwriters, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company, the Selling
Stockholders and the several Underwriters.
Very truly yours,
SCC COMMUNICATIONS CORP.
By
---------------------------------------------
President and Chief Executive Officer
SELLING STOCKHOLDERS
By
---------------------------------------------
Attorney-in-Fact for the Selling Stockholders
named in Schedule B hereto
Accepted as of the date first above written:
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXXXXX & XXXXX LLC
On their behalf and on behalf of each of the
several Underwriters named in Schedule A hereto
By BancAmerica Xxxxxxxxx Xxxxxxxx
By
----------------------------------
Authorized Signatory
34
35
SCHEDULE A
NUMBER OF
FIRM SHARES
TO BE
UNDERWRITERS PURCHASED
------------ -----------
BancAmerica Xxxxxxxxx Xxxxxxxx . . . . . . . . . . . . . . . . .
Xxxxxxxxx & Xxxxx LLC . . . . . . . . . . . . . . . . . . . . . .
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,300,000
==========
36
SCHEDULE B
NUMBER OF
COMPANY
SHARES TO
COMPANY BE SOLD
------- ----------
SCC Communications Corp. . . . . . . . . . . . . . . . . . . . 2,100,000
==========
NUMBER OF
SELLING
STOCKHOLDER
SHARES
NAME OF SELLING STOCKHOLDER TO BE SOLD
--------------------------- -----------
-----------
Total 1,200,000
===========
37
SCHEDULE C
NUMBER OF
OPTION
SHARES TO
COMPANY OR OPTION STOCKHOLDER BE SOLD
----------------------------- ---------
SCC Communications Corp. . . . . . . . . . . . . . . . . . . .
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 495,000
=========
