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Exhibit 1.1
ANSOFT CORPORATION
3,500,000 SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
_________, 0000
XXXXXXXXX & XXXXX LLC
XXXXXXX, XXXXXX & XXXXXXXXX, L.L.C.
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Ansoft Corporation, a Delaware corporation (herein called the Company),
proposes to issue and sell 2,550,000 shares of its authorized but unissued
Common Stock, $.01 par value per share (herein called the Common Stock), and the
stockholders of the Company named in Schedule II hereto (herein collectively
called the Selling Stockholders) propose to sell an aggregate of 950,000
shares of Common Stock of the Company (said 3,500,000 shares of Common Stock
being herein called the Underwritten Stock). The Company proposes to grant to
the Underwriters (as hereinafter defined) an option to purchase up to 525,000
additional shares of Common Stock (herein called the Option Stock and with the
Underwritten Stock herein collectively called the Stock). The Common Stock is
more fully described in the Registration Statement and the Prospectus
hereinafter mentioned.
The Company and the Selling Stockholders severally hereby confirm the
agreements made with respect to the purchase of the Stock by the several
underwriters, for whom you are acting, named in Schedule I hereto (herein
collectively called the Underwriters, which term shall also include any
underwriter purchasing Stock pursuant to Section 3(b) hereof). You represent and
warrant that you have been authorized by each of the other Underwriters to enter
into this Agreement on its behalf and to act for it in the manner herein
provided.
1. REGISTRATION STATEMENT. The Company has filed with the Securities
and Exchange Commission (herein called the Commission) a registration statement
on Form S-1 (No. 333-[____]), including the related Preliminary Prospectus, for
the registration under the
__________
(1) Plus an option to purchase from the Company up to 525,000 additional
shares to cover over-allotments.
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Securities Act of 1933, as amended (herein called the Securities Act), of the
Stock. Copies of such registration statement and of each amendment thereto, if
any, including the related Preliminary Prospectus (meeting the requirements of
Rule 430A of the rules and regulations of the Commission) heretofore filed by
the Company with the Commission have been delivered to you.
The term Registration Statement as used in this Agreement shall mean
such registration statement, including all exhibits and financial statements,
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, and any registration statement filed pursuant
to Rule 462(b) of the rules and regulations of the Commission with respect to
the Stock (herein called a Rule 462(b) registration statement) in the form in
which it became effective and, in the event of any amendment thereto after the
effective date of such registration statement (herein called the Effective
Date), shall also mean (from and after the effectiveness of such amendment) such
registration statement as so amended including any Rule 462(b) registration
statement. The term Prospectus as used in this Agreement shall mean the
prospectus relating to the Stock first filed with the Commission pursuant to
Rule 424(b) and Rule 430A or (if no such filing is required) as included in the
Registration Statement, and, in the event of any supplement or amendment to such
prospectus after the Effective Date, shall also mean (from and after the filing
with the Commission of such supplement or of the effectiveness of such
amendment) such prospectus as so supplemented or amended. The term Preliminary
Prospectus as used in this Agreement shall mean each preliminary prospectus
included in such registration statement prior to the time it becomes effective.
For purposes of this Agreement, all references to the Registration Statement,
any Preliminary Prospectus, the Prospectus or any amendment or supplement to any
of the foregoing shall, if applicable, be deemed to include the copy filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
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2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDERS.
(a) Each of the Company and the Selling Stockholders hereby
represents and warrants as follows:
(i) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has full
corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement and the
Prospectus and as currently being conducted, and is duly qualified as a
foreign corporation and in good standing in all jurisdictions in which
the character of the property owned or leased or the nature of the
business transacted by it makes qualification necessary (except where
the failure to be so qualified would not have a material adverse effect
on the business, operations, financial condition or income of the
Company and its subsidiaries, taken as a whole). The outstanding shares
of capital stock of each such subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable and are owned by the
Company free and clear of all liens, encumbrances and security
interests; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in any
such subsidiary are outstanding.
(ii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any material adverse change in the business, operations, financial
condition, income or business prospects of the Company and its
subsidiaries taken as a whole, whether or not arising from transactions
in the ordinary course of business, other than as set forth in the
Registration Statement and the Prospectus, and since such dates, except
in the ordinary course of business, neither the Company nor any of its
subsidiaries has entered into any material transaction not referred to
in the Registration Statement and the Prospectus.
(iii) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, nor
instituted proceedings for that purpose. The Registration Statement and
the Prospectus comply, and on the Closing Date (as hereinafter defined)
and any later date on which Option Stock is to be purchased, the
Prospectus will comply in all material respects with the provisions of
the Securities Act and the rules and regulations of the Commission
thereunder; on the Effective Date and on the Closing Date and any later
date on which Option Stock may be purchased, neither the Registration
Statement nor any amendment thereto, and neither the Prospectus nor any
supplements thereto, contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein not misleading; provided, however, that none of the
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representations and warranties in this subparagraph (iii) shall apply
to statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
herein or otherwise furnished in writing to the Company by or on behalf
of the Underwriters for use in the Registration Statement or the
Prospectus. There are no contracts or documents of the Company which
would be required by the Securities Act or by the rules and regulations
of the Commission to be filed as exhibits to the Registration Statement
which have not been so filed.
(iv) The capitalization of the Company is, and upon
consummation of the transactions contemplated hereby will be, as set
forth in the Prospectus under the caption "Capitalization"; the
outstanding shares of Common Stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable;
the capital stock of the Company conforms to the description thereof in
the Registration Statement under the caption "Description of Capital
Stock"; the Stock is duly and validly authorized, is (or, in the case
of shares of the Stock to be sold by the Company, will be, when issued
and sold to the Underwriters as provided herein) duly and validly
issued, fully paid, nonassessable, free of pre-emptive rights and
conforms to the description thereof in the Prospectus. There are no
outstanding options, warrants or other rights granted to or by the
Company to purchase shares of Common Stock or other securities of the
Company other than as described in the Registration Statement; and no
such option, warrant or other right has been granted to any person, the
exercise of which would cause such person to own more than five percent
of the Common Stock outstanding immediately after the offering other
than as described in the Prospectus. No person or entity holds a right
to require or participate in the registration under the Securities Act
of shares of Common Stock of the Company which right has not been
waived by the holder thereof as of the date hereof with respect to the
registration of shares pursuant to the Registration Statement, and
except as described in the Prospectus, no person holds a right to
require registration under the Securities Act of shares of Common Stock
of the Company at any other time. No person or entity has a right of
participation with respect to the sale of shares of the Stock by the
Company. No further approval or authority of the stockholders or the
Board of Directors of the Company will be required for the issuance and
sale of the Stock as contemplated herein.
(v) The Company and its subsidiaries now hold, and at the
Closing Date (as defined in Section 5(a) hereof) will hold, all
material licenses, certificates and permits from state, federal and
other regulatory authorities which are necessary for the conduct of the
business of the Company and its subsidiaries taken as a whole; neither
the Company nor any of its subsidiaries is in violation of its
corporate charter or by-laws, or in default in the performance or
observance of any provision of any obligation, agreement, covenant or
condition contained in any bond, debenture or in any contract,
indenture, mortgage, loan agreement, joint venture or other agreement
or instrument to which the Company or such subsidiary is a party or by
which it or any of its properties is bound or, to the best of the
Company's or the Selling Stockholders' knowledge, is in violation of
any law, order,
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rule, regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign.
(vi) The Company owns, or possesses adequate rights to use or
sublicense, all patents, patent rights, inventions, trade secrets,
licenses, know-how, proprietary techniques, including processes,
trademarks, service marks, trade names, copyrights and other
intellectual property described or referred to in the Registration
Statement and the Prospectus as owned or used by it or which are
necessary for the conduct of its business as now conducted and as
described in the Registration Statement and the Prospectus. All such
patents, patent rights, licenses, trademarks, service marks and
copyrights are (i) valid and enforceable and (ii) not being infringed
by any third parties which infringement could, whether singly or in the
aggregate, materially and adversely affect the business, properties,
operations, condition (financial or otherwise), results of operations,
income or business prospects or the Company, as presently being
conducted or as proposed to be conducted in the Prospectus. Neither the
Company nor any Selling Stockholder has any knowledge of, or has
received any notice of, infringement of or conflict with asserted
rights of others with respect to any patents, patent rights,
inventions, trade secrets, licenses, know-how, proprietary techniques,
including processes and substances, trademarks, service marks, trade
names, copyrights or other intellectual property which, singly or in
the aggregate, is, or is reasonably likely to be, the subject of an
unfavorable decision, ruling or finding that could materially and
adversely affect the business, properties, operations, condition
(financial or otherwise), results of operations, income or business
prospects of the Company, as now conducted or as proposed to be
conducted in the Registration Statement and the Prospectus.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company and by the Attorney-in-Fact for the Selling
Stockholders; 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, (A) any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the property
of the Company or any of the subsidiaries is bound, (B) the corporate
charter or by-laws of the Company or any of the subsidiaries or (C)
(assuming the making of all filings required under Rule 424(b) or Rule
430A and the due qualification of the Stock for public offering by the
Underwriters under state and foreign securities laws) any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of the subsidiaries or
over the properties of the Company.
(viii) Except as set forth in the Prospectus, there is not any
action, suit or proceeding, at law or in equity, pending against the
Company or any subsidiary before any court or administrative agency,
which, if determined adversely to the Company or any subsidiary, would
materially adversely affect the business, operations, financial
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condition, income or business prospects of the Company and the
subsidiaries taken as a whole, or prevent consummation of the
transactions contemplated hereby.
(ix) The consolidated financial statements of the Company and
its subsidiaries, together with the related notes and schedules as set
forth in the Registration Statement, present fairly the consolidated
financial position and the results of operations of the Company and its
subsidiaries, at the indicated dates and for the indicated periods.
Such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, and all adjustments necessary for a
fair presentation of results for such periods have been made. The
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 financial statements presented
therein.
(x) The Company and its subsidiaries have filed all federal,
state and foreign income tax returns which have been required to be
filed (or have filed extensions therefor or obtained any required
extensions in connection therewith), and have paid all taxes indicated
by said returns and all assessments received by them or any of them to
the extent that such taxes have become due and are not being contested
in good faith.
(xi) Each approval, consent, order, authorization,
designation, declaration or filing by or with any United States
regulatory, administrative or other governmental body necessary in
connection with the execution and delivery by the Company and the
Selling Stockholders of this Agreement and the consummation by the
Company and the Selling Stockholders of the transactions herein
contemplated (except (A) such additional steps as may be required by
the National Association of Securities Dealers, Inc. (the "NASD"), (B)
as may be necessary to make the Registration Statement effective (and
to maintain such effectiveness) and to qualify the Stock for public
offering by the Underwriters under state and foreign securities laws or
(C) filings required under Rule 424(b) or Rule 430(A)) has been
obtained or made and is in full force and effect.
(xii) KPMG Peat Marwick LLP, who have certified the financial
statements filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the
Securities Act and the rules and regulations thereunder.
(xiii) The Company and the subsidiaries have good and
marketable title to all of the properties and assets reflected in the
financial statements (or as described in the Registration Statement)
described as owned by them, subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except those reflected in such
financial statements (or as described in the Registration Statement) or
which are not material in amount.
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(xiv) Neither the Company nor any of its subsidiaries is
involved in any material labor dispute nor, to the knowledge of the
Company, is any such dispute threatened.
(xv) The Common Stock is registered pursuant to Section 12(g)
of the Securities Exchange Act of 1934, as amended (hereinafter the
Exchange Act), and is listed on the Nasdaq National Market, and the
Company has taken no action designed to, or likely to have the effect
of, terminating the registration of the Common Stock under the Exchange
Act or delisting the Common Stock from the Nasdaq National Market, nor
has the Company received any notification that the Commission or the
NASD is contemplating terminating such registration or listing has been
approved, subject to notice of issuance of the Stock.
(xvi) Neither the Company nor, to its knowledge, any of its
officers, directors or affiliates have taken, and at the Closing Date
and at each purchase of the Option Stock, neither the Company nor, to
its knowledge, any of its officers, directors or affiliates will have
taken, directly or indirectly, any action which has constituted, or
might reasonably be expected to constitute, the stabilization or
manipulation of the price of sale or resale of the Stock.
(xvii) Neither the Company nor any Subsidiary has been an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(xviii) The Company has timely and properly filed with the
Commission all reports and other documents required to have been filed
with the Commission.
(b) Each of the Selling Stockholders represents and warrants as
follows:
(i) Such Selling Stockholder has good and marketable title to all
the shares of Stock to be sold by such Selling Stockholder hereunder, free and
clear of all liens, encumbrances, equities, security interests and claims
whatsoever, with full right and authority to deliver the same hereunder,
subject, in the case of each Selling Stockholder, to the rights of the Company,
as custodian (herein called the Custodian), and that upon the delivery of and
payment for such shares of the Stock hereunder, the several Underwriters will
receive good and marketable title thereto, free and clear of all liens,
encumbrances, equities, security interests and claims whatsoever.
(ii) Certificates in negotiable form for the shares of the Stock to
be sold by such Selling Stockholder have been placed in custody under a Letter
of Transmittal and Custodian Agreement (herein called the Custody Agreement) for
delivery under this Agreement with the Custodian; such Selling Stockholder
specifically agrees that the shares of the Stock represented by the certificates
so held in custody for such Selling Stockholder are subject to the
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interests of the several Underwriters and the Company, that the arrangements
made by such Selling Stockholder for such custody, including the Selling
Stockholder's Irrevocable Power of Attorney (herein called the Power of
Attorney) provided for in the Custody Agreement, are to that extent irrevocable,
and that the obligations of such Selling Stockholder shall not be terminated by
any act of such Selling Stockholder or by operation of law, whether by the death
or incapacity of such Selling Stockholder or the occurrence of any other event;
if any such death, incapacity, dissolution, liquidation or other such event
should occur before the delivery of such shares of the Stock hereunder,
certificates for such shares of the Stock shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement as if such death,
incapacity, dissolution, liquidation or other event had not occurred, regardless
of whether the Custodian shall have received notice of such death, incapacity,
dissolution, liquidation or other event.
(iii) All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling Stockholder of this
Agreement, the Power of Attorney and the Custody Agreement, and (assuming the
making of all filings required under Rule 424(b) or Rule 430A and the due
qualification of the Stock for public offering by the Underwriters under state
and foreign securities laws) for the sale and delivery of the Stock to be sold
by the Selling Stockholder hereunder, have been obtained; and the Selling
Stockholder has the right, power and authority to enter into this Agreement, the
Power of Attorney and Custody Agreement and to sell, assign, transfer and
deliver the Stock to be sold by the Selling Stockholder hereunder; the Power of
Attorney and the Custody Agreement constitute valid and binding obligations and
agreements of such Selling Stockholder in accordance with their respective
terms.
(iv) The performance of this Agreement, the Selling
Stockholder's Irrevocable Power of Attorney and the Custody Agreement and the
consummation of the transactions herein and therein contemplated will not result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder is bound, or (assuming the making of all filings
required under Rule 424(b) or Rule 430A and the due qualification of the Stock
for public offering by the Underwriters under state and foreign securities laws)
any statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over such Selling Stockholder or the property of
such Selling Stockholder.
(v) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which has constituted, or which is designed
to or might reasonably be expected to cause or result in, stabilization or
manipulation of the price of sale or resale of the Stock.
(vi) The Selling Stockholder has reviewed the Registration
Statement and Prospectus and nothing has come to the attention of the Selling
Stockholder that would lead the Selling Stockholder to believe that either (A)
on the Effective Date, the Registration Statement
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contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or (B) on the Effective Date the Prospectus
contained and, on the Closing Date and any later date on which Option Stock is
to be purchased, contains any untrue statement of a material fact or omitted or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company agrees to issue and sell
2,600,000 shares of the Underwritten Stock to the several Underwriters, each
Selling Stockholder agrees to sell to the several Underwriters the number of
shares of the Underwritten Stock set forth in Schedule II opposite the name of
such Selling Stockholder, and each of the Underwriters agrees to purchase from
the Company and the Selling Stockholders the respective aggregate number of
shares of Underwritten Stock set forth opposite its name in Schedule I. The
price at which such shares of Underwritten Stock shall be sold by the Company
and the Selling Stockholders and purchased by the several Underwriters shall be
$[_____] per share. The obligation of each Underwriter to the Company and each
of the Selling Stockholders shall be to purchase from the Company and the
Selling Stockholders that number of shares of the Underwritten Stock which
represents the same proportion of the total number of shares of the Underwritten
Stock to be sold by each of the Company and the Selling Stockholders pursuant to
this Agreement as the number of shares of the Underwritten Stock set forth
opposite the name of such Underwriter in Schedule I hereto represents of the
total number of shares of the Underwritten Stock to be purchased by all
Underwriters pursuant to this Agreement, as adjusted by you in such manner as
you deem advisable to avoid fractional shares. In making this Agreement, each
Underwriter is contracting severally and not jointly; except as provided in
paragraphs (b) and (c) of this Section 3, the agreement of each Underwriter is
to purchase only the respective number of shares of the Underwritten Stock
specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the non-defaulting Underwriters shall have the
right within twenty-four (24) hours after receipt by you of such notice to
purchase, or procure one or more other Underwriters to purchase, in such
proportions as may be agreed upon between you and such purchasing Underwriter or
Underwriters and upon the terms herein set forth, all or any part of the shares
of the Stock which such defaulting Underwriter or Underwriters agreed to
purchase. If the non-defaulting Underwriters fail so to make such arrangements
with respect to all such shares and portion, the number of shares of the Stock
which each non-defaulting Underwriter is otherwise obligated to purchase under
this Agreement shall be automatically increased on a pro rata basis to absorb
the remaining shares and portion which the defaulting
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Underwriter or Underwriters agreed to purchase; provided, however, that the
non-defaulting Underwriters shall not be obligated to purchase the shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase if
the aggregate number of such shares of the Stock exceeds 10% of the total number
of shares of the Stock which all Underwriters agreed to purchase hereunder. If
the total number of shares of the Stock which the defaulting Underwriter or
Underwriters agreed to purchase shall not be purchased or absorbed in accordance
with the two preceding sentences, the Company and the Selling Stockholders shall
have the right, within twenty-four (24) hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such shares and portion on the terms herein
set forth. In any such case, either you or the Company and the Selling
Stockholders shall have the right to postpone the Closing Date determined as
provided in Section 5 hereof for not more than seven business days after the
date originally fixed as the Closing Date pursuant to said Section 5 in order
that any necessary changes in the Registration Statement, the Prospectus or any
other documents or arrangements may be made. If neither the non-defaulting
Underwriters nor the Company and the Selling Stockholders shall make
arrangements within the 24-hour periods stated above for the purchase of all the
shares of the Stock which the defaulting Underwriter or Underwriters agreed to
purchase hereunder, this Agreement shall be terminated without further act or
deed and without any liability on the part of the Company or the Selling
Stockholders to any non-defaulting Underwriter and without any liability on the
part of any non-defaulting Underwriter to the Company or the Selling
Stockholders. Nothing in this paragraph (b), and no action taken hereunder,
shall relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase, severally and
not jointly, up to 525,000 shares in the aggregate, of the Option Stock from the
Company at the same price per share as the Underwriters shall pay for the
Underwritten Stock. Said option may be exercised only to cover over-allotments
in the sale of the Underwritten Stock by the Underwriters and may be exercised
in whole or in part at any time (but not more than once) on or before the 30th
day after the date of this Agreement upon written or telegraphic notice by you
to the Company setting forth the aggregate number of shares of the Option Stock
as to which the several Underwriters are exercising the option. Delivery of
certificates for the shares of Option Stock, and payment therefor, shall be made
as provided in Section 5 hereof. The number of shares of the Option Stock to be
purchased by each Underwriter shall be the same percentage of the total number
of shares of the Option Stock to be purchased by the several Underwriters as
such Underwriter is purchasing of the Underwritten Stock, as adjusted by you in
such manner as you deem advisable to avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the public offering by the Underwriters of the
Stock to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change
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the public offering price after the closing of the public offering and increase
or decrease the concessions and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the front cover
page and under "Underwriting" in the Registration Statement, any Preliminary
Prospectus or the Prospectus relating to the Stock (insofar as such information
relates to the Underwriters) constitutes the only information furnished by the
Underwriters to the Company for inclusion in the Registration Statement, any
Preliminary Prospectus, and the Prospectus, and you on behalf of the respective
Underwriters represent and warrant to the Company that the statements made
therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten Stock
and the (if the option granted by Section 3(c) hereof shall have been exercised
not later than 7:00 a.m., San Francisco time, on the date two business days
preceding the Closing Date), and payment therefor, shall be made at the office
of Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 at 7:00 a.m.,
San Francisco time, on the fourth business day after the date of this Agreement,
or at such time on such other day, not later than seven full business days after
such fourth business day, as shall be agreed upon in writing by the Company, the
Selling Stockholders and you. The date and hour of such delivery and payment
(which may be postponed as provided in Section 3(b) hereof) are herein called
the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be exercised
after 7:00 a.m., San Francisco time, on the date two business days preceding the
Closing Date, and on or before the 30th day after the date of this Agreement,
delivery of certificates for the shares of Option Stock, and payment therefor,
shall be made at the office of Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 at 7:00 a.m., San Francisco time, on the third business day
after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made to
the Company or its order, and payment for the Stock purchased from the Selling
Stockholders shall be made to the Custodian, for the account of the Selling
Stockholders, in each case by one or more wire transfers or one or more
certified or official bank check or checks in same day funds. Such payment shall
be made upon delivery of certificates for the Stock to you for the respective
accounts of the several Underwriters against receipt therefor signed by you.
Certificates for the Stock to be delivered to you shall be registered in such
name or names and shall be in such denominations as you may request at least one
business day before the Closing Date, in the case of Underwritten Stock, and at
least one business day prior to the purchase thereof, in the case of the Option
Stock. Such certificates will be made available to the Underwriters for
inspection, checking and packaging at the offices of Lewco Securities
Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 not less than one full
business day prior to the Closing Date or, in the case of the Option Stock, by
3:00 p.m., New York time, on the business day preceding the date of purchase.
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It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
and the Selling Stockholders for shares to be purchased by any Underwriter whose
check shall not have been received by you on the Closing Date or any later date
on which Option Stock is purchased for the account of such Underwriter. Any such
payment by you shall not relieve such Underwriter from any of its obligations
hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING STOCKHOLDERS. Each
of the Company and the Selling Stockholders respectively covenants and agrees as
follows:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A and
(ii) not file any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and furnished
with a copy or to which you shall have reasonably objected in writing or which
is not in compliance in all material respects with the Securities Act or the
rules and regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the event of
(i) the request by the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceeding for that purpose, (iv) the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction, or (v) the receipt by the Company of notice
of the initiation or threatening of any proceeding for such purpose. The Company
and the Selling Stockholders will make every reasonable effort to prevent the
issuance of such a stop order and, if such an order shall at any time be issued,
to obtain the withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you
a signed copy of the Registration Statement as originally filed and of each
amendment thereto filed prior to the time the Registration Statement becomes
effective and, promptly upon the filing thereof, a signed copy of each
post-effective amendment, if any, to the Registration Statement (together with,
in each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters, at
such office or offices as you may designate, as many copies of the Prospectus as
you may reasonably request, and (iii) thereafter from time to time during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, likewise send to the Underwriters as many additional
copies of the Prospectus and as many copies of any supplement to the Prospectus
and of any amended prospectus, filed by the Company with the Commission, as you
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may reasonably request for the purposes contemplated by the
Securities Act. The copies of the Registration Statement, any Preliminary
Prospectus or Prospectus and each amendment or supplement thereto furnished to
the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(d) If at any time during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing by
you, shall occur as a result of which it is necessary, in the reasonable opinion
of counsel for the Company or of counsel for the Underwriters, to supplement or
amend the Prospectus in order to make the Prospectus not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser of the
Stock, the Company will forthwith prepare and file with the Commission a
supplement to the Prospectus or an amended prospectus so that the Prospectus as
so supplemented or amended will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time such
Prospectus is delivered to such purchaser, not misleading. If, after the public
offering of the Stock by the Underwriters and during such period, the
Underwriters shall propose to vary the terms of offering thereof by reason of
changes in general market conditions or otherwise, you will advise the Company
in writing of the proposed variation, and, if in the reasonable opinion either
of counsel for the Company or of counsel for the Underwriters such proposed
variation requires that the Prospectus be supplemented or amended, the Company
will forthwith prepare and file with the Commission a supplement to the
Prospectus or an amended prospectus setting forth such variation. The Company
authorizes the Underwriters and all dealers to whom any of the Stock may be sold
by the several Underwriters to use the Prospectus, as from time to time amended
or supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment to
the Registration Statement and any supplement to the Prospectus or any amended
prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. The Company will, from time to
time, prepare and file such statements, reports, and other documents as are or
may be required to continue such qualifications in effect for so long a period
as you may reasonably request for distribution of the Stock.
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(g) During a period of five years commencing with the date hereof, the
Company will furnish to you, and to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to stockholders of
the Company and of all information, documents and reports filed with the
Commission.
(h) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including all costs and
expenses incident to (i) the preparation, printing and filing with the
Commission and the NASD of the Registration Statement, any Preliminary
Prospectus and the Prospectus, (ii) the furnishing to the Underwriters of copies
of any Preliminary Prospectus and of the several documents required by paragraph
(c) of this Section 6 to be so furnished, (iii) the printing of this Agreement
and related documents delivered to the Underwriters, (iv) the preparation,
printing and filing of all supplements and amendments to the Prospectus referred
to in paragraph (d) of this Section 6, (v) the furnishing to you and the
Underwriters of the reports and information referred to in paragraph (g) of this
Section 6 and (vi) the printing and issuance of stock certificates, including
the transfer agent's fees. The Selling Stockholders will pay any transfer taxes
incident to the transfer to the Underwriters of the shares of the Stock being
sold by the Selling Stockholders.
(i) The Company and the Selling Stockholders jointly and severally
agree to reimburse you, for the account of the several Underwriters, for blue
sky fees and related disbursements (including reasonable counsel fees and
disbursements and cost of printing memoranda for the Underwriters) paid by or
for the account of the Underwriters or their counsel in qualifying the Stock
under state securities or blue sky laws and for filing fees incident to the
review of the offering by the NASD.
(j) The provisions of paragraphs (h) and (i) of this Section are
intended to relieve the Underwriters from the payment of the expenses and costs
which the Company and the Selling Stockholders hereby agree to pay and shall not
affect any agreement which the Company and the Selling Stockholders may make, or
may have made, for the sharing of any such expenses and costs.
(k) The Company and each of the Selling Stockholders hereby agree that,
without the prior written consent of Xxxxxxxxx & Xxxxx LLC on behalf of the
Underwriters, the Company or such Selling Stockholder, as the case may be, will
not, for a period of 90 days following the Effective Date, directly or
indirectly, (i) sell, offer, contract to sell, make any short sale, pledge, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or dispose
of any shares of Common Stock or any securities convertible into or exchangeable
or exercisable for or any rights to purchase or acquire Common Stock or (ii)
enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences or ownership of Common Stock, whether any such
transaction described in clause (i) or (ii) above is settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (i) the Stock to be sold to the Underwriters
pursuant to this Agreement, (ii) shares of Common Stock issued by
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the Company upon the exercise of options granted under the stock option plans of
the Company (the "Option Plans") or upon the exercise of options outstanding as
of the date hereof, all as described in the Prospectus and (iii) options to
purchase Common Stock granted under the Option Plans. For purposes of this
paragraph (k), a sale, offer, or other disposition shall be deemed to include
any sale to an institution which can, following such sale, sell Common Stock to
the public in reliance on Rule 144A.
(l) Until the termination of the offering of the Stock, the Company
will timely file all documents, and any amendments to previously filed
documents, required to be filed by it pursuant to Sections 13, 14 or 15(d) of
the Exchange Act.
(m) The Company is familiar with the Investment Company Act of 1940, as
amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not and
will not be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(n) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the "effective date of the
Registration Statement" (as defined in Rule 158(c) of the Securities Act), the
Company will make generally available an earnings statement in accordance with
Section 11(a) of the Securities Act and Rule 158 thereunder.
(o) The Company covenants that it will not, any time prior to April 30,
1999 (i) invest more than 25% in book value of its liquid assets, as outstanding
from time to time, in securities or instruments with a maturity greater than one
year ("Long-term Securities") or (ii) enter into any margin loan or similar
financing arrangement pursuant to which securities or instruments in which the
Company has invested proceeds of the offering are pledged to secure
indebtedness, other than with a commercial bank or insurance company. With
respect to the Long-term Securities, such securities, during the period set
forth above, shall be investment-grade (as such term is defined by Standard &
Poor's), interest-bearing, denominated in U.S. dollars and have a maturity
within ten years of the date of purchase by the Company.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (f) below, the Company and
the Selling Stockholders jointly and severally agree to indemnify and hold
harmless each Underwriter and each person (including each partner or officer
thereof) who controls any Underwriter within the meaning of Section 15 of the
Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Securities Act, the Exchange Act, or the common law
or otherwise, and the Company and the Selling Stockholders jointly and severally
agree to reimburse each such Underwriter and controlling person for any legal or
other expenses (including, except as
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otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement), 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
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that (1) the indemnity agreements of the Company and the
Selling Stockholders contained in this paragraph (a) shall not apply to any such
losses, claims, damages, liabilities or expenses if such statement or omission
was made in reliance upon and in conformity with information furnished as herein
stated or otherwise furnished in writing to the Company by or on behalf of any
Underwriter for use in any Preliminary Prospectus or the Registration Statement
or the Prospectus or any such amendment thereof or supplement thereto, and (2)
the indemnity agreement contained in this paragraph (a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages, liabilities or
expenses purchased the Stock which is the subject thereof (or to the benefit of
any person controlling such Underwriter) if at or prior to the written
confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless the failure is the result of noncompliance by
the Company with paragraph (c) of Section 6 hereof. The indemnity agreements of
the Company and the Selling Stockholders contained in this paragraph (a) and the
representations and warranties of the Company and the Selling Stockholders
contained in Section 2 hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any indemnified
party and shall survive the delivery of any payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its officers who signs the Registration Statement on his
own behalf or pursuant to a power of attorney, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of Section
15 of the Securities Act, and the Selling Stockholders from and against any and
all losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, or the common law or otherwise and to reimburse each of them
for any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
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respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus and any 462(b) registration
statement as part thereof) or any post-effective amendment thereto (including
any 462(b) registration statement) 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 (ii) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus or the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished as herein stated or otherwise
furnished in writing to the Company by or on behalf of such indemnifying
Underwriter for use in the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto. The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and
(b) of this Section 7 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against it, in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the Notice) of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
such indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of such indemnity agreement. Any indemnifying party shall be entitled at its own
expense to participate in the defense of any action, suit or proceeding against,
or investigation or inquiry of, an indemnified party. Any indemnifying party
shall be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the Notice of Defense) to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying
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party or parties, then counsel for the indemnified party or parties shall be
entitled to conduct the defense to the extent reasonably determined by such
counsel to be necessary to protect the interests of the indemnified party or
parties and (ii) in any event, the indemnified party or parties shall be
entitled, to have counsel chosen by such indemnified party or parties
participate in, but not conduct, the defense. If, within a reasonable time after
receipt of the Notice, an indemnifying party gives a Notice of Defense and the
counsel chosen by the indemnifying party or parties is reasonably satisfactory
to the indemnified party or parties, the indemnifying party or parties will not
be liable under paragraphs (a) through (c) of this Section 7 for any legal or
other expenses subsequently incurred by the indemnified party or parties in
connection with the defense of the action, suit, investigation, inquiry or
proceeding, except that (A) the indemnifying party or parties shall bear the
legal and other expenses of not more than one separate counsel for the
indemnified party or parties incurred in connection with the conduct of the
defense as referred to in clause (i) of the proviso to the preceding sentence
and (B) the indemnifying party or parties shall bear such other expenses as it
or they have authorized to be incurred by the indemnified party or parties. If,
within a reasonable time after receipt of the Notice, no Notice of Defense has
been given, the indemnifying party or parties shall be responsible for any legal
or other expenses incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Stock received by the Company and the Selling
Stockholders and the total underwriting discount received by the Underwriters,
as set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Stock. Relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by each indemnifying party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission.
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The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparation to defend or defense against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) Neither the Company nor the Selling Stockholders will, without the
prior written consent of each Underwriter, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not such Underwriter or any person who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of such Underwriter and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding. No Underwriter shall be liable for any settlement of
any proceeding entered into without its written consent.
(f) The liability of each Selling Stockholder under such Selling
Stockholder's representations and warranties contained in paragraph (a) of
Section 2 hereof and under the indemnity and reimbursement agreements contained
in the provisions of this Section 7 and Section 11 hereof shall be limited to an
amount equal to the net proceeds received by the Selling Stockholders for the
Stock sold by such Selling Stockholders to the Underwriters. The Company and the
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.
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8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company and the
Selling Stockholders if after the date of this Agreement trading in the Common
Stock shall have been suspended, or if there shall have occurred (i) the
engagement in hostilities or an escalation of major hostilities by the United
States or the declaration of war or a national emergency by the United States on
or after the date hereof, (ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic or political conditions
if the effect of such outbreak, calamity, crisis or change in economic or
political conditions in the financial markets of the United States would, in the
Underwriters' reasonable judgment, make the offering or delivery of the Stock
impracticable, (iii) suspension of trading in securities generally or a material
adverse decline in the value of securities generally on the New York Stock
Exchange, the American Stock Exchange, or the Nasdaq National Market, or
limitation on prices (other than limitations on hours or numbers of days of
trading) for securities on either such exchange or system, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of, or commencement of any proceeding or investigation
by, any court, legislative body, agency or other governmental authority which in
the Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company, (v)
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
Underwriters' reasonable opinion has a material adverse effect on the securities
markets in the United States. If this Agreement shall be terminated pursuant to
this Section 8, there shall be no liability of the Company or the Selling
Stockholders to the Underwriters and no liability of the Underwriters to the
Company or the Selling Stockholders; provided, however, that in the event of any
such termination the Company and the Selling Stockholders agree to indemnify and
hold harmless the Underwriters from all costs or expenses incident to the
performance of the obligations of the Company and the Selling Stockholders under
this Agreement, including all costs and expenses referred to in paragraphs (h)
and (i) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company and by the Selling Stockholders of all their
respective obligations to be performed hereunder at or prior to the Closing Date
or any later date on which Option Stock is to be purchased, as the case may be,
and to the following further conditions:
(a) The Registration Statement shall have become effective; and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder and
the validity and form of the certificates representing the Stock, all corporate
proceedings and other legal matters incident to the foregoing, and the form of
the Registration Statement and of the Prospectus
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(except as to the financial statements contained therein), shall have been
approved at or prior to the Closing Date by Xxxx and Xxxx LLP, counsel for the
Underwriters.
(c) You shall have received from Xxxxxxxx Ingersoll Professional
Corporation, counsel for the Company and the Selling Stockholders, an opinion,
addressed to the Underwriters and dated the Closing Date, covering the matters
set forth in Annex A hereto. If Option Stock is purchased at any date after the
Closing Date, you shall receive an additional opinion from the aforementioned
counsel, addressed to the Underwriters and dated such later date, confirming
that the statements expressed as of the Closing Date in each such opinion remain
valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true and
correct in all material respects and neither the Registration Statement nor the
Prospectus omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, respectively, not misleading,
(ii) since the Effective Date, no event has occurred which should have been set
forth in a supplement or amendment to the Prospectus which has not been set
forth in such a supplement or amendment, (iii) since the respective dates as of
which information is given in the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the business, properties, financial
condition or earnings of the Company and its subsidiaries as a whole, whether or
not arising from transactions in the ordinary course of business, and, since
such dates, except in the ordinary course of business, neither the Company nor
any of its subsidiaries has entered into any material transaction not referred
to in the Registration Statement in the form in which it originally became
effective and the Prospectus contained therein, (iv) neither the Company nor any
of its subsidiaries has any material contingent obligations which are not
disclosed in the Registration Statement and the Prospectus, (v) there are not
any pending or known threatened legal proceedings to which the Company or any of
its subsidiaries is a party or of which property of the Company or any of its
subsidiaries is the subject which are material and which are not disclosed in
the Registration Statement and the Prospectus, (vi) there are not any
franchises, contracts, leases or other documents which are required to be filed
as exhibits to the Registration Statement which have not been filed as required,
(vii) the representations and warranties of the Company herein are true and
correct in all material respects as of the Closing Date or any later date on
which Option Stock is to be purchased, as the case may be, and (viii) there has
not been any material change in the market for securities in general or in
political, financial or economic conditions from those reasonably foreseeable as
to render it impracticable in your reasonable judgment to make a public offering
of the Stock, or a material adverse change in market levels for securities in
general (or those of companies in particular) or financial or economic
conditions which render it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later date
on which Option Stock is purchased a certificate, dated the Closing Date or such
later date, as the case may
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be, and signed by the Chief Executive Officer and the Chief Financial Officer of
the Company, stating that the respective signers of said certificate have
carefully examined the Registration Statement in the form in which it originally
became effective and the Prospectus contained therein and any supplements or
amendments thereto, and that the statements included in clauses (i) through
(vii) of paragraph (d) of this Section 9 are true and correct.
(f) You shall have received from KPMG Peat Marwick LLP, a letter or
letters, addressed to the Underwriters and dated the Closing Date and any later
date on which Option Stock is purchased, confirming that they are independent
public accountants with respect to the Company within the meaning of the
Securities Act and the applicable published rules and regulations thereunder and
based upon the procedures described in its 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 Stock is purchased (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, as the case may
be, and (ii) setting forth any revisions and additions to the statements and
conclusions set forth in the Original Letter which are necessary to reflect any
changes in the facts described in the Original Letter since the date of the
Original Letter or to reflect the availability of more recent financial
statements, data or information. The letters shall not disclose any change, or
any development involving a prospective change, in or affecting the business or
properties of the Company or any of its subsidiaries which, in your sole
judgment, makes it impractical or inadvisable to proceed with the public
offering of the Stock or the purchase of the Option Stock as contemplated by the
Prospectus.
(g) You shall have received on the Closing Date a certificate from each
Selling Stockholder stating that (i) the representations and warranties made by
such Selling Stockholder herein are true and correct on the Closing Date; and
(ii) such Selling Stockholder has complied with each obligation which is
required to be performed on his or its part at or prior to the Closing Date.
(h) You shall have received from KPMG Peat Marwick LLP a letter 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 and as at April 30, 1997 and October
31, 1997, did not disclose any weakness in internal controls that they
considered to be material weaknesses.
(i) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several states, or
other evidence satisfactory to you, of the qualification referred to in
paragraph (f) of Section 6 hereof.
(j) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly authorized for inclusion on the Nasdaq National
Market upon official notice of issuance.
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(k) On or prior to the Closing Date, you shall have received from all
directors, executive officers,[and beneficial holders (known to the Company) of
more than 5% of the outstanding Common Stock, and all Selling Stockholders,
stockholders agreements in form reasonably satisfactory to Xxxxxxxxx & Xxxxx
LLC, stating that without the prior written consent of Xxxxxxxxx & Xxxxx LLC on
behalf of the Underwriters, such person or entity will not, for a period of 90
days following the Effective Date, directly or indirectly (i) sell, offer,
contract to sell, make any short sale, pledge, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any shares of Common
Stock or any securities convertible into or exchangeable or exercisable for or
any right to purchase or acquire Common Stock or (ii) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Xxxx and Xxxx LLP, counsel for the Underwriters, shall
be reasonably satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company and to the Selling Stockholders. Any such termination shall be without
liability of the Company or the Selling Stockholders to the Underwriters and
without liability of the Underwriters to the Company or the Selling
Stockholders; provided, however, that (i) in the event of such termination, the
Company and the Selling Stockholders agree to indemnify and hold harmless the
Underwriters from all costs or expenses incident to the performance of the
obligations of the Company and the Selling Stockholders under this Agreement,
including all costs and expenses referred to in paragraphs (h) and (i) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company or the Selling
Stockholders to perform any agreement herein, to fulfill any of the conditions
herein, or to comply with any provision hereof other than by reason of a default
by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with transactions contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY AND THE SELLING
STOCKHOLDERS. The obligation of the Company and the Selling Stockholders to
deliver the Stock shall be subject to the conditions that (a) the Registration
Statement shall have become effective and (b) no stop order suspending the
effectiveness thereof shall be in effect and no proceedings therefor shall be
pending or threatened by the Commission.
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In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company and the Selling
Stockholders by giving notice to you. Any such termination shall be without
liability of the Company and the Selling Stockholders to the Underwriters and
without liability of the Underwriters to the Company or the Selling
Stockholders; provided, however, that (i) in the event of any such termination
the Company and the Selling Stockholders jointly and severally agree to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company and the Selling
Stockholders under this Agreement, including all costs and expenses referred to
in paragraphs (h) and (i) of Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to their other
obligations under Section 7 of this Agreement and subject, in the case of a
Selling Stockholders, to the provisions of paragraph (f) of Section 7, the
Company and the Selling Stockholders hereby jointly and severally agree to
reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 and the possibility that such payments might later be held
to be improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company, the Selling Stockholders and the several
Underwriters and, with respect to the provisions of Section 7 hereof, the
several parties (in addition to the Company, the Selling Stockholders and the
several Underwriters) indemnified under the provisions of said Section 7, and
their respective personal representatives, successors and assigns. Nothing in
this Agreement is intended or shall be construed to give to any other person,
firm or corporation any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser, of
any of the Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Xxxxxxxxx & Xxxxx LLC, Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000; and if to the Company, shall be mailed,
telegraphed or delivered to it at its office, Xxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, XX 00000, Attention: Chief Executive Officer; and if to the Selling
Stockholders, shall be mailed, telegraphed or delivered to the Selling
Stockholders in care of the Custodian, Ansoft Corporation, Xxxx Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, XX 00000. All notices given by telegraph shall be
promptly confirmed by letter.
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14. DEFAULT BY SELLING STOCKHOLDERS. If on any Closing Date any Selling
Stockholder fails to sell the Stock which such Selling Stockholder has agreed to
sell on such date as set forth in Schedule II hereto, the Company agrees that it
will sell or arrange for the sale of that number of shares of Common Stock to
the Underwriters which represents the shares of Stock which such Selling
Stockholder has failed to so sell, as set forth in Schedule II hereto, or such
fewer number of shares as may be requested by the Underwriters.
15. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or the Selling Stockholders or their respective directors or
officers, and (c) delivery and payment for the Stock under this Agreement;
provided, however, that if this Agreement is terminated prior to the Closing
Date, the provisions of paragraph (k) of Section 6 hereof shall be of no further
force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
Any person executing and delivering this Agreement as Attorney-in-Fact
for the Selling Stockholders represents by so doing that he has been duly
appointed as Attorney-in-Fact by each such Selling Stockholder pursuant to a
validly existing and binding Power of Attorney which authorizes such
Attorney-in-Fact to take such action.
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Please sign and return to the Company and to the Selling Stockholders
in care of the Company the enclosed duplicates of this letter, whereupon this
letter will become a binding agreement among the Company, the Selling
Stockholders and the several Underwriters in accordance with its terms.
Very truly yours,
ANSOFT CORPORATION
By: _________________________
Xxxxxxxx Xxxxxx
President and Chief Executive
Officer
SELLING STOCKHOLDERS LISTED ON SCHEDULE II HERETO
By: _________________________
Attorney-in-Fact
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above written.
XXXXXXXXX & XXXXX LLC
XXXXXXX, XXXXXX & XXXXXXXXX, L.L.C.
By Xxxxxxxxx & Xxxxx LLC
By: _________________________
Managing Director
Acting on behalf of the several
Underwriters, including themselves,
named in Schedule I hereto.
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SCHEDULE I
UNDERWRITERS
Number of Shares
to be
Underwriters Purchased
------------ ---------
Xxxxxxxxx & Xxxxx LLC
Xxxxxxx, Xxxxxx & Xxxxxxxxx, L.L.C.
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SCHEDULE II
SELLING STOCKHOLDERS
Number of
Name and Address* Shares
of Selling Stockholders to be Sold
----------------------- ----------
Xxxxxx A.N. Xxxxxx 200,000
Xxxxxxxx Xxxxxxx 200,000
Ulrich L. and Meta X. Xxxxx 130,000
Xxxxxx X. Xxxxxx 120,000
Xxxxx Xxxxxxxx Trustee 50,000
Xxxxx Xxxx Xxxxxx Trustee 50,000
Xxxxx Family Trust, Residual Fund #2 100,000
Xxxxx X. Xx and Xxxx Xxxxxxxxx 50,000
Xxxxxxxxxxx Xxxxxxxxx 40,000
Xxxx Xxxxxx 10,000
Total 950,000
* Address of each Selling Stockholder is c/o Ansoft Corporation, Xxxx Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000.
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ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF
XXXXXXXX INGERSOLL PROFESSIONAL CORPORATION
COUNSEL FOR THE COMPANY
AND THE SELLING STOCKHOLDERS
(i) Each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, is duly qualified as a foreign corporation in
each state of the United States of America in which its ownership or leasing of
property requires such qualification except where the failure to be so qualified
would not have a material adverse effect on the business, properties, financial
condition or results of operations of the Company and its subsidiaries taken as
a whole, and has full corporate power and authority to own or lease its
properties and to conduct its business as described in the Registration
Statement; all the issued and outstanding capital stock of each of the
subsidiaries has been duly authorized and validly issued and is fully paid and
nonassessable, and is owned by the Company free and clear of all liens,
encumbrances and security interests, and no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to convert
any obligations into shares of capital stock or ownership interests in such
subsidiary are outstanding;
(ii) Following the closing of the sale of the Stock under the
Underwriting Agreement, the duly authorized capital stock of the Company
consists of [_________] shares of Preferred Stock, $.01 par value, of which no
shares are outstanding, and [__________] shares of Common Stock, $.01 par value,
of which there will be [___________] shares outstanding (including the
Underwritten Stock); proper corporate proceedings have been taken validly to
authorize such authorized capital stock; all of the outstanding shares of such
capital stock (including the Stock to be sold by the Selling Stockholders) have
been duly and validly issued and are fully paid and nonassessable; the
certificates evidencing the Stock delivered to the Representatives for the
several accounts of the Underwriters are in due and proper form under Delaware
law, and when duly countersigned by the Company's transfer agent and registrar
and delivered to you or upon your order against payment of the agreed
consideration therefor in accordance with the provisions of the Underwriting
Agreement, the Stock represented thereby will be duly authorized and validly
issued, fully paid and non-assessable; any Option Stock purchased after the
Closing Date when issued and delivered to and paid for by the Underwriters as
provided in the Underwriting Agreement, will have been duly and validly issued
and fully paid and non-assessable; no preemptive rights of, or rights of refusal
in favor of, stockholders exist with respect to the Stock, or the issuance and
sale thereof, pursuant to the Certificate of Incorporation or By-Laws of the
Company and, to such counsel's knowledge, there are no contractual preemptive
rights with respect to the issuance and sale of the Stock that have not been
waived or
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rights of first refusal or rights of co-sale which exist with respect to the
issuance and sale of the Stock or with respect to the Stock being sold by the
Selling Stockholders;
(iii) The Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus is in effect and no proceedings for that purpose have been
instituted or are pending or threatened by the Commission;
(iv) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial data contained therein,
as to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act and with the rules
and regulations of the Commission thereunder;
(v) the information required to be set forth in the Registration
Statement in answer to Item 9, Item 10 (insofar as it relates to such counsel)
and Item 11(c) of Form S-1 is to such counsel's knowledge accurately and
adequately set forth therein in all material respects or no response is required
with respect to such Items; and, to such counsel's knowledge the description of
the Company's stock option plans and the options granted and which may be
granted thereunder and the options granted otherwise than under such plans set
forth in the Registration Statement accurately and fairly presents in all
material respects the information required to be shown with respect to said
plans and options to the extent required by the Securities Act and the rules and
regulations of the Commission thereunder;
(vi) such counsel does not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion of
such counsel are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required;
(vii) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the Underwriting Agreement has been duly executed and delivered
by or on behalf of the Selling Stockholders and the Letter of Transmittal and
Custodian Agreement between the Selling Stockholders and the Company, as
Custodian, and the Power of Attorney referred to in such Letter of Transmittal
and Custodian Agreement have been duly executed and delivered by the several
Selling Stockholders;
(ix) to such counsel's knowledge each Selling Stockholder has full
legal right, power and authority, and any approval required by law (other than
any approval required by the applicable federal or state securities and Blue Sky
laws) to sell, assign, transfer and deliver the Stock to be sold by him in the
manner provided in the Underwriting Agreement and the Letter of Transmittal
Custody Agreement and the Selling Stockholder's Irrevocable Power of Attorney;
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(x) the issuance and sale by the Company of the shares of Stock sold by
the Company as contemplated by the Underwriting Agreement will not conflict
with, or result in a breach of, the Certificate of Incorporation or By-Laws of
the Company or any agreement or instrument known to such counsel to which the
Company or its subsidiary is a party or any applicable law or regulation (other
than federal or state securities or blue sky laws), or so far as is known to
such counsel, any order, writ, injunction or decree, of any jurisdiction, court
or governmental instrumentality;
(xi) all holders of securities of the Company having rights to the
registration of shares of Common Stock, or other securities, because of the
filing of the Registration Statement by the Company are selling all or a
portion of such securities in the Offering pursuant to such rights, have waived
such rights or such rights have expired by reason of lapse of time following
notification of the Company's intent;
(xii) upon delivery to the Underwriters of a certificate for such of
the Stock that is being sold by each Selling Stockholder under the Underwriting
Agreement and payment for such Stock by the Underwriters, each Underwriter will
acquire all of the rights of such Selling Stockholder in such Stock, and each
Underwriter will also acquire such Stock free of any "adverse claim" (within the
meaning of Section 8-302(2) of the Uniform Commercial Code);
(xiii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated in the Underwriting Agreement, except such as have been obtained
under the Securities Act and such as may be required under state securities or
blue sky laws in connection with the purchase and distribution of the Stock by
the Underwriters; and
(xiv) the Stock sold by the Selling Stockholders is listed and duly
admitted to trading on the Nasdaq Stock Market, and the Stock issued and sold by
the Company will have been duly authorized for listing by the Nasdaq Stock
Market upon official notice of issuance.
In addition to the matters set forth above, counsel rendering the
foregoing opinion shall also include a statement to the effect that nothing has
come to the attention of such counsel that leads them to believe that the
Registration Statement (except as to the financial statements and schedules, or
notes thereto, and other financial data contained or incorporated by reference
therein, as to which such counsel need not express any opinion or belief) at the
Effective Date contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus (except as to the
financial statements and schedules, or notes thereto, and other financial data
contained or incorporated by reference therein as to which such counsel need not
express any opinion or belief) as of its date or at the Closing Date (or any
later date on which Option Stock is purchased), contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
---------------------------------------
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Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States, the State of Delaware or of the
Commonwealth of Pennsylvania, upon opinions of local counsel satisfactory in
form and scope to counsel for the Underwriters. Copies of any opinions so relied
upon shall be delivered to the Underwriters and to counsel for the Underwriters
and the foregoing opinion shall also state that counsel knows of no reason the
Underwriters are not entitled to rely upon the opinions of such local counsel.
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