Exhibit 1.1
4,000,000 Shares
CLARENT CORPORATION
Common Stock, $0.001 par value per share
UNDERWRITING AGREEMENT
----------------------
November __, 1999
Credit Suisse First Boston Corporation
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Clarent Corporation, a Delaware corporation ("Company")
proposes to issue and sell shares of its Common Stock, $0.001 par
value per share ("Securities") and the stockholders listed in Schedule A
("Selling Stockholders") propose severally to sell an aggregate of
outstanding shares of the Securities (such shares of Securities being
hereinafter referred to as the "Firm Securities"). The Company also proposes to
sell to the Underwriters, at the option of the Underwriters, an aggregate of not
more than additional shares of its Securities and certain of the
Selling Stockholders also proposes to sell to the Underwriters, at the option of
the Underwriters, an aggregate of not more than additional
outstanding shares of the Company's Securities, as set forth below (such
additional shares being hereinafter referred to as the "Optional Securities").
The Firm Securities and the Optional Securities are herein collectively called
the "Offered Securities". The Company and the Selling Stockholders hereby agree
with the several Underwriters named in Schedule B hereto ("Underwriters") as
follows:
2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. __________) relating to the Offered
Securities, including a form of prospectus, has been filed with the Securities
and Exchange Commission ("Commission") and either (A) has been declared
effective under the Securities Act of 1933, as amended ("Act"), and is not
proposed to be amended or (B) is proposed to be amended by amendment or post-
effective amendment. If such registration statement ("initial registration
statement") has been declared effective, either (A) an additional registration
statement ("additional registration statement") relating to the Offered
Securities may have been filed with the Commission pursuant to Rule 462(b)
("Rule 462(b)") under the Act and, if so filed, has become effective upon
filing pursuant to such Rule and the Offered Securities all have been duly
registered under the Act pursuant to the initial registration statement and,
if applicable, the additional registration statement or (B) such an additional
registration statement is proposed to be filed with the Commission pursuant to
Rule 462(b) and will become effective upon filing pursuant to such Rule and
upon such filing the Offered Securities will all have been duly registered
under the Act pursuant to the initial registration statement and such
additional registration statement. If the Company does not propose to amend
the initial registration statement or if an additional registration statement
has been filed and the Company does not propose to amend it, and if any post-
effective amendment to either such registration statement has been filed with
the Commission prior to the execution and delivery of this Agreement, the most
recent amendment (if any) to each such registration statement has been
declared effective by the Commission or has become effective upon filing
pursuant to Rule 462(c) ("Rule 462(c)") under the Act
or, in the case of the additional registration statement, Rule 462(b). For
purposes of this Agreement, "Effective Time" with respect to the initial
registration statement or, if filed prior to the execution and delivery of
this Agreement, the additional registration statement means (A) if the Company
has advised the Representatives that it does not propose to amend such
registration statement, the date and time as of which such registration
statement, or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared effective
by the Commission or has become effective upon filing pursuant to Rule 462(c),
or (B) if the Company has advised the Representatives that it proposes to file
an amendment or post-effective amendment to such registration statement, the
date and time as of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is declared
effective by the Commission. If an additional registration statement has not
been filed prior to the execution and delivery of this Agreement but the
Company has advised the Representatives that it proposes to file one,
"Effective Time" with respect to such additional registration statement means
the date and time as of which such registration statement is filed and becomes
effective pursuant to Rule 462(b). "Effective Date" with respect to the
initial registration statement or the additional registration statement (if
any) means the date of the Effective Time thereof. The initial registration
statement, as amended at its Effective Time, including all information
contained in the additional registration statement (if any) and deemed to be a
part of the initial registration statement as of the Effective Time of the
additional registration statement pursuant to the General Instructions of the
Form on which it is filed and including all information (if any) deemed to be
a part of the initial registration statement as of its Effective Time pursuant
to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter referred to as
the "Initial Registration Statement." The additional registration statement,
as amended at its Effective Time, including the contents of the initial
registration statement incorporated by reference therein and including all
information (if any) deemed to be a part of the additional registration
statement as of its Effective Time pursuant to Rule 430A(b), is hereinafter
referred to as the "Additional Registration Statement." The Initial
Registration Statement and the Additional Registration Statement are herein
referred to collectively as the "Registration Statements" and individually as
a "Registration Statement." The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is
required) as included in a Registration Statement, is hereinafter referred to
as the "Prospectus." No document has been or will be prepared or distributed
in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective Date
of the Initial Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act and the rules and
regulations of the Commission ("Rules and Regulations") and did not include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
(B) on the Effective Date of the Additional Registration Statement (if any),
each Registration Statement conformed, or will conform, in all respects to the
requirements of the Act and the Rules and Regulations and did not include, or
will not include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (C) on the date of
this Agreement, the Initial Registration Statement and, if the Effective Time of
the Additional Registration Statement is prior to the execution and delivery of
this Agreement, the Additional Registration Statement, each conforms, and at the
time of filing of the Prospectus pursuant to Rule 424(b) or (if no such filing
is required) at the Effective Date of the Additional Registration Statement in
which the Prospectus is included, each Registration Statement will conform, in
all respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
the Prospectus will conform, in all respects to the requirements of the Act and
the Rules and Regulations, and does not include, or will not include, any untrue
statement of a material fact or does not omit, or will not omit, to state any
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made, not misleading.
If the Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement: on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement will conform in all
respects to the requirements of the Act and the Rules and Regulations and such
document will not include any untrue statement of a material fact or will not
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and no Additional Registration
Statement has been or will be filed and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and Regulations and such
document will not include any untrue statement of a material fact or will not
omit to state any material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances in which they were
made, not misleading. The two preceding sentences do not apply to statements in
or
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omissions from a Registration Statement or the Prospectus based upon written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that only such information is that described as such in Section 7(c) hereof.
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus; and the Company is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of
its business requires such qualification, except where the failure to be so
qualified would individually or in the aggregate have a material adverse
effect on the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole ("Material
Adverse Effect").
(iv) Each subsidiary of the Company has been duly incorporated and is an
existing corporation in good standing under the laws of the jurisdiction of
its incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and each
subsidiary of the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect; all of the issued and outstanding capital stock of
each subsidiary of the Company has been duly authorized and validly issued and
is fully paid and nonassessable; and the capital stock of each subsidiary
owned by the Company, directly or through subsidiaries, is owned free from
liens, encumbrances and defects.
(v) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding shares
of capital stock of the Company are, and, when the Offered Securities have
been issued, delivered and paid for in accordance with this Agreement on each
Closing Date (as defined below), such Offered Securities will have been,
validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus under the caption "Description
of Capital Stock"; and the stockholders of the Company have no preemptive
rights with respect to the Securities.
(vi) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with
this offering.
(vii) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered pursuant
to a Registration Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under the Act other than
those that have been waived (or expired).
(viii) The Offered Securities have been approved for listing on the
Nasdaq Stock Market's National Market subject to notice of official issuance.
(ix) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the consummation
of the transactions contemplated by this Agreement in connection with the
issuance and sale of the Offered Securities by the Company, except such as
have been obtained and made under the Act and except for such consents,
approvals or filings with the National Association of Securities Dealers, Inc.
(the "NASD") and such as may be required under state securities laws.
(x) The execution, delivery and performance of this Agreement, and the
issuance and sale of the Offered Securities will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
(A) the charter or by-laws of the Company or any such subsidiary, (B) any
statute, rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company or any
subsidiary of the Company or any of their properties resulting in a Material
Adverse Effect, or (C) any agreement or instrument to which the Company or any
such subsidiary is a party or by which the Company or any such subsidiary is
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bound or to which any of the properties of the Company or any such subsidiary
is subject, which individually or in the aggregate would result in a Material
Adverse Effect, and the Company has full power and authority to authorize,
issue and sell the Offered Securities as contemplated by this Agreement.
(xi) This Agreement has been duly authorized, executed and delivered
by the Company.
(xii) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Prospectus, the Company and its subsidiaries hold
any leased real or personal property under valid and enforceable leases with
no exceptions that would materially interfere with the use made or to be made
thereof by them.
(xiii) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct their business as described in the
Prospectus and have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit that,
if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(xiv) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that might
have a Material Adverse Effect.
(xv) The Company and its subsidiaries own or possess, adequate
trademarks, trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct the
business now operated by them, or currently employed by them, except where the
failure to so own or possess such intellectual property rights would not,
individually or in the aggregate, have a Material Adverse Effect, and have not
received any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect.
(xvi) Except as disclosed in the Prospectus, neither the Company nor
any of its subsidiaries is in violation of any statute, any rule, regulation,
decision or order of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (collectively, "environmental
laws"), owns or operates any real property contaminated with any substance
that is subject to any environmental laws, is liable for any off-site disposal
or contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a Material
Adverse Effect; and the Company is not aware of any pending investigation
which might lead to such a claim.
(xvii) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against the Company, any of its subsidiaries or
any of their respective properties that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a Material Adverse Effect, or would materially and adversely affect the
ability of the Company to perform its obligations under this Agreement, or
which are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are threatened in
writing or, to the Company's knowledge, contemplated.
(xviii) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent basis.
(xix) Except as disclosed in the Prospectus, since the respective
date as of which information is given in the Prospectus, there has been no
material adverse change, nor any development or event that
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could reasonably be expected to result in a material adverse change, in the
condition (financial or other), business, properties or results of operations
of the Company and its subsidiaries taken as a whole, and, except as disclosed
in or contemplated by the Prospectus, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.
(xx) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that
(A) transactions are executed in accordance with management's general or
specific authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxi) All material tax returns required to be filed by the Company
and each of its subsidiaries in any jurisdiction have been filed or have
properly been extended, other than those filings being contested in good
faith, and all material taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the Company or any of its subsidiaries
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided.
(xxii) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940.
(b) Each Selling Stockholder severally represents and warrants to, and
agrees with, the several Underwriters that:
(i) Such Selling Stockholder has and on each Closing Date hereinafter
mentioned will have valid and unencumbered title to the Offered Securities to
be delivered by such Selling Stockholder on such Closing Date and full right,
power and authority to enter into this Agreement and to sell, assign, transfer
and deliver the Offered Securities to be delivered by such Selling Stockholder
on such Closing Date hereunder; and upon the delivery of and payment for the
Offered Securities on each Closing Date hereunder the several Underwriters
will acquire valid and unencumbered title to the Offered Securities to be
delivered by such Selling Stockholder on such Closing Date.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective
Date of the Initial Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act and the Rules and
Regulations and did not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the requirements of the Act and
the Rules and Regulations did not include, or will not include, any untrue
statement of a material fact and did not omit, or will not omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (C) on the date of this Agreement, the
Initial Registration Statement and, if the Effective Time of the Additional
Registration Statement is prior to the execution and delivery of this
Agreement, the Additional Registration Statement, each conforms, and at the
time of filing of the Prospectus pursuant to Rule 424(b) or (if no such filing
is required) at the Effective Date of the Additional Registration Statement in
which the Prospectus is included, each Registration Statement will conform, in
all respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact required to
be stated therein or necessary to make the statements therein not misleading
and the Prospectus will conform, in all respects to the requirements of the
Act and the Rules and Regulations, and does not include, or will not include,
any untrue statement of a material fact or does not omit, or will not omit, to
state any material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made, not
misleading. If the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement: on the Effective
Date of the Initial Registration Statement, the Initial Registration Statement
will conform in all respects to the requirements of the Act and the Rules and
Regulations and such document will not include any untrue statement of a
material fact or will not omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
no Additional Registration Statement has been or will be filed and the
Prospectus will conform, in all respects to the requirements of the Act and
the Rules and Regulations and such document will not include any untrue
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statement of a material fact or will not omit to state any material fact
required to be stated therein or necessary to make the statements therein in
light of the circumstances in which they were made, not misleading. The two
preceding sentences do not apply to statements in or omissions from a
Registration Statement or the Prospectus based upon written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that only such
information is that described as such in Section 7(c) hereof.
(iii) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between such Selling Stockholder and any person
that would give rise to a valid claim against such Selling Stockholder or any
Underwriter for a brokerage commission, finder's fee or other like payment in
connection with this offering.
(iv) All information furnished by or on behalf of such Selling
Stockholder for use in the Registration Statement and Prospectus is, and on
the Closing Date will be, true, correct, and complete, and does not, and on
the Closing Date will not, contain any untrue statement of a material fact or
omit to state any material fact necessary to make such information not
misleading.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and each Selling Stockholder
agree, severally and not jointly, to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
each Selling Stockholder, at a purchase price of $ per share, that
number of Firm Securities (rounded up or down, as determined by Credit Suisse
First Boston Corporation ("CSFBC") in its discretion, in order to avoid
fractions) obtained by multiplying Firm Securities in the case of the
Company and the number of Firm Securities set forth opposite the name of such
Selling Stockholder in Schedule A hereto, in the case of a Selling Stockholder,
in each case by a fraction the numerator of which is the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule B hereto
and the denominator of which is the total number of Firm Securities.
Certificates in negotiable form for the Offered Securities to be sold by
the Selling Stockholders hereunder have been placed in custody, for delivery
under this Agreement, under Custody Agreements made with Norwest Bank Minnesota,
N.A., as custodian ("Custodian"). Each Selling Stockholder agrees that the
shares represented by the certificates held in custody for the Selling
Stockholders under such Custody Agreements are subject to the interests of the
Underwriters hereunder, that the arrangements made by the Selling Stockholders
for such custody are to that extent irrevocable, and that the obligations of the
Selling Stockholders hereunder shall not be terminated by operation of law,
whether by the death of any individual Selling Stockholder or the occurrence of
any other event, or in the case of a trust, by the death of any trustee or
trustees or the termination of such trust. If any individual Selling
Stockholder or any such trustee or trustees should die, or if any other such
event should occur, or if any of such trusts should terminate, before the
delivery of the Offered Securities hereunder, certificates for such Offered
Securities shall be delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such death or other event or termination had
not occurred, regardless of whether or not the Custodian shall have received
notice of such death or other event or termination.
The Company and the Custodian will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters against payment of the
purchase price in Federal (same day) funds by official bank check or checks or
wire transfer to an account at a bank acceptable to CSFBC drawn to the order of
the Company in the case of shares of Firm Securities and in the case of shares
of Firm Securities, at the office of the Company located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 A.M., New York time, on
, or at such other time not later than seven full business days thereafter as
CSFBC and the Company determine, such time being herein referred to as the
"First Closing Date". The certificates for the Firm Securities so to be
delivered will be in definitive form, in such denominations and registered in
such names as CSFBC requests and will be made available for checking and
packaging at the above office of CSFBC, at least 24 hours prior to the First
Closing Date.
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In addition, upon written notice from CSFBC given to the Company and the
Selling Stockholders from time to time not more than 30 days subsequent to the
date of the Prospectus, the Underwriters may purchase all or less than all of
the Optional Securities at the purchase price per Security to be paid for the
Firm Securities. The Company and the Selling Stockholders agree, severally and
not jointly, to sell to the Underwriters the respective numbers of Optional
Securities obtained by multiplying the number of Optional Securities specified
in such notice by a fraction the numerator of which is Optional Securities in
the case of the Company and the number of shares set forth opposite the names of
such Selling Stockholders in Schedule A hereto under the caption "Number of
Optional Securities to be Sold" in the case of the Selling Stockholders and the
denominator of which is the total number of Optional Securities (subject to
adjustment by CSFBC to eliminate fractions). Such Optional Securities shall be
purchased from the Company and each Selling Stockholder for the account of each
Underwriter in the same proportion as the number of Firm Securities set forth
opposite such Underwriter's name bears to the total number of Firm Securities
(subject to adjustment by CSFBC to eliminate fractions) and may be purchased by
the Underwriters only for the purpose of covering over-allotments made in
connection with the sale of the Firm Securities. No Optional Securities shall be
sold or delivered unless the Firm Securities previously have been, or
simultaneously are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to time and to the
extent not previously exercised may be surrendered and terminated at any time
upon notice by CSFBC to the Company and the Selling Stockholders.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company and the Custodian
will deliver the Optional Securities being purchased on each Optional Closing
Date to the Representatives for the accounts of the several Underwriters,
against payment of the purchase price therefor in Federal (same day) funds by
official bank check or checks or wire transfer to an account at a bank
acceptable to CSFBC drawn to the order of the Company in the case of Optional
Securities and in the case of Optional Securities, at the above office of the
Company. The certificates for the Optional Securities being purchased on each
Optional Closing Date will be in definitive form, in such denominations and
registered in such names as CSFBC requests upon reasonable notice prior to such
Optional Closing Date and will be made available for checking and packaging at
the above office of CSFBC, at a reasonable time in advance of such Optional
Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. The
Company agrees with the several Underwriters and the Selling Stockholders
that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will file
the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC, subparagraph
(4)) of Rule 424(b) not later than the earlier of (A) the second business day
following the execution and delivery of this Agreement or (B) the fifteenth
business day after the Effective Date of the Initial Registration Statement.
The Company will advise CSFBC promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement and an additional
registration statement is necessary to register a portion of the Offered
Securities under the Act but the Effective Time thereof has not occurred as of
such execution and delivery, the Company will file the additional registration
statement or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior to 10:00
P.M., New York time, on the date of this Agreement or, if earlier, on or prior
to the time the Prospectus is printed and distributed to any Underwriter, or
will make such filing at such later date as shall have been consented to by
CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to amend
or supplement the initial or any additional registration statement as filed or
the related prospectus or the Initial Registration Statement, the Additional
Registration Statement (if any) or the Prospectus and will not effect such
amendment or supplementation
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without CSFBC's consent; and the Company will also advise CSFBC promptly of
the effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of a Registration Statement or the Prospectus and
of the institution by the Commission of any stop order proceedings in respect
of a Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its lifting,
if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with sales
by any Underwriter or dealer, any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Act, the Company will promptly notify CSFBC of
such event and will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Neither CSFBC's
consent to, nor the Underwriters' delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 6.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12 months
beginning after the Effective Date of the Initial Registration Statement (or,
if later, the Effective Date of the Additional Registration Statement) which
will satisfy the provisions of Section 11(a) of the Act. For the purpose of
the preceding sentence, "Availability Date" means the 45th day after the end
of the fourth fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last quarter
of the Company's fiscal year, "Availability Date" means the 90th day after the
end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (five of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the Act
in connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities
as CSFBC requests. The Prospectus shall be so furnished on or prior to 3:00
P.M., New York time, on the business day following the later of the execution
and delivery of this Agreement or the Effective Time of the Initial
Registration Statement. All other such documents shall be so furnished as soon
as available. The Company and the Selling Stockholders will pay the expenses
of printing and distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC designates
and will continue such qualifications in effect so long as required for the
distribution.
(g) During the period of five (5) years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a copy
of its annual report to stockholders for such year; and the Company will
furnish to the Representatives (i) as soon as available, a copy of each report
and any definitive proxy statement of the Company filed with the Commission
under the Securities Exchange Act of 1934 or mailed to stockholders, and (ii)
from time to time, such other information concerning the Company as CSFBC may
reasonably request.
(h) For a period of 90 days after the date of the initial public
offering of the Offered Securities, the Company will not offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, or transfer
the economic ownership interest of, or file with the Commission a registration
statement under the Act relating to, any additional shares of its Securities
or securities convertible into or exchangeable or exercisable for any shares
of its Securities, or publicly disclose the intention to make any such offer,
sale, pledge, disposition or filing, without the prior written consent of
CSFBC, except issuances of Securities pursuant to the conversion or exchange
of convertible or exchangeable securities or the exercise of warrants or
options, in each case outstanding on the date hereof, grants of employee stock
options pursuant to the terms of a plan in effect on the date hereof,
issuances of Securities pursuant to the exercise of such options and issuances
of Securities pursuant to the Company's employee stock purchase plan in effect
on the date hereof.
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(i) The Company and each Selling Stockholder agree with the several
Underwriters that the Company and such Selling Stockholder will pay all
expenses incident to the performance of the obligations of the Company and
such Selling Stockholder, as the case may be, under this Agreement, for any
filing fees and other expenses (including fees and disbursements of counsel)
in connection with qualification of the Offered Securities for sale under the
laws of such jurisdictions as CSFBC designates and the printing of memoranda
relating thereto for the filing fee incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the National Association of Securities Dealers, Inc. of the Offered
Securities, for any travel expenses of the Company's officers and employees
and any other expenses of the Company in connection with attending or hosting
meetings with prospective purchasers of the Offered Securities, for any
transfer taxes on the sale by the Selling Stockholders of the Offered
Securities to the Underwriters and for expenses incurred in distributing
preliminary prospectuses and the Prospectus (including any amendments and
supplements thereto) to the Underwriters.
(j) Each Selling Stockholder agrees to deliver to CSFBC, attention:
Transactions Advisory Group on or prior to the First Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
(k) Each Selling Stockholder agrees, for a period of 90 days after
the date of the initial public offering of the Offered Securities, not to
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or transfer the economic ownership interest of, any additional
shares of the Securities of the Company or securities convertible into or
exchangeable or exercisable for any shares of Securities, or publicly disclose
the intention to make any such offer, sale, pledge or disposition, without the
prior written consent of CSFBC.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each
Optional Closing Date will be subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Stockholders herein,
to the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the
date of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing of the
amendment or post-effective amendment to the registration statement to be
filed shortly prior to such Effective Time), of Ernst & Young LLP confirming
that they are independent public accountants within the meaning of the Act and
the applicable published Rules and Regulations thereunder and stating to the
effect that:
(i) in their opinion the financial statements and schedules
examined by them and included or incorporated by reference in the Registration
Statements comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published Rules and
Regulations;
(ii) on the basis of a reading of the latest available interim
financial statements of the Company, inquiries of officials of the Company who
have responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe that:
(A) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date not more than
three business days prior to the date of such letter, there was any change in
the capital stock or any increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or, at the date of the latest
available balance sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with amounts shown
on the latest balance sheet included in the Prospectus; or
(B) for the period from the closing date of the
latest income statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there were any
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decreases, as compared with the corresponding period of the previous year and
with the period of corresponding length ended the date of the latest income
statement included in the Prospectus, in consolidated net sales or net
operating income in the total or per share amounts of consolidated net income;
except in all cases set forth in clauses (A) and (B) above for changes,
increases or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent that such
dollar amounts, percentages and other financial information are derived from
the general accounting records of the Company and its subsidiaries subject to
the internal controls of the Company's accounting system or are derived
directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with such
results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statements is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration Statement
is subsequent to such execution and delivery, "Registration Statements" shall
mean the Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the post-
effective amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration Statements.
(b) If the Effective Time of the Initial Registration Statement is
not prior to the execution and delivery of this Agreement, such Effective Time
shall have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or such later date as shall have been consented to by CSFBC. If
the Effective Time of the Additional Registration Statement (if any) is not
prior to the execution and delivery of this Agreement, such Effective Time
shall have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or, if earlier, the time the Prospectus is printed and
distributed to any Underwriter, or shall have occurred at such later date as
shall have been consented to by CSFBC. If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this Agreement.
Prior to such Closing Date, no stop order suspending the effectiveness of a
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of any Selling
Stockholder, the Company or the Representatives, shall be contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this Agreement and
prior to the First Closing Date and with respect to the Optional Shares, the
Optional Closing Date, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of the
Company or its subsidiaries which, in the judgment of a majority in interest
of the Underwriters including the Representatives, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities; (ii) any
downgrading in the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter market;
(iv) any banking moratorium declared by U.S. Federal or New York authorities;
or (v) any outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters including the
Representatives, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the Offered
Securities.
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(d) The Representatives shall have received an opinion, dated such
Closing Date, of ▇▇▇▇▇▇ Godward LLP, counsel for the Company, to the effect
that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business
as described in the Prospectus; and to the knowledge of such counsel, the
Company is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification except
where the failure to be so qualified would not have a Material Adverse Effect;
(ii) The Offered Securities delivered on such Closing Date
against payment therefor, and all other outstanding shares of the Common Stock
of the Company have been duly authorized and validly issued, are fully paid
and nonassessable and conform to the description thereof contained in the
Prospectus under the heading "Description of Capital Stock"; and the
stockholders of the Company have no preemptive rights with respect to the
Securities;
(iii) Except as disclosed in the Prospectus to such counsel's
knowledge, there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company
to file a registration statement under the Act with respect to any securities
of the Company owned or to be owned by such person or to require the Company
to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Act other than
those that have been waived (or expired);
(iv) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required to be
obtained or made by the Company or any Selling Stockholder for the
consummation of the transactions contemplated by this Agreement or the Custody
Agreement in connection with the issuance and sale of the Offered Securities
by the Company and the sale of the Offered Securities by the Selling
Stockholders, except such as required under the Act, such consents, approvals
or filings with the NASD and such as may be required under state securities
laws;
(v) The execution, delivery and performance of this Agreement
or the Custody Agreement, the issuance and sale of the Offered Securities by
the Company and the consummation of the transactions herein or therein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under the charter or by-laws of the
Company, any statute, any rule, regulation or order of any governmental agency
or body or any court having jurisdiction over the Company or any of its
properties which breach, violation or default would have a Material Adverse
Effect, or any agreement or instrument listed on Exhibit 1 attached hereto to
which the Company is a party, which breach, violation or default would have a
Material Adverse Effect, and the Company has full power and authority to
authorize, issue and sell the Offered Securities as contemplated by this
Agreement;
(vi) The Registration Statement has become effective under the
Act and, to the knowledge of such counsel, 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. The required
filing of the Prospectus pursuant to Rule 424(b) of the Rules and Regulations
has been made in the manner and within the time period required by such Rule
424(b). The Registration Statement and the Prospectus except as to the
financial statements and schedules and other financial data and statistical
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 Act
and the Rules and Regulations. To the knowledge of such counsel, there are no
legal or governmental proceedings, pending or threatened, contracts or
documents to which the Company is a party which, are of a character required
to be filed as exhibits to the Registration Statement, which are not filed as
required;
(vii) The statements set forth under the heading "Management,"
"Shares Eligible for Future Sale," "Certain Transactions" and "Description of
Capital Stock" in the Prospectus, insofar as such statements
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purport to summarize legal matters, documents or proceedings referred to
therein, provide a fair summary of such provisions;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company.
In addition to the matters set forth above, counsel rendering the foregoing
opinion shall also include a statement to the effect that while such counsel
have not independently verified and accordingly are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, nothing has come to such
counsel's attention which has caused such counsel to believe that any part of a
Registration Statement or any amendment thereto (except as to the financial
statements and schedules and other financial data and statistical data contained
therein as to which such counsel need express no opinion) on the date it became
effective under the Act, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except as to the financial statements and
schedules and other financial data and statistical data contained therein as to
which such counsel need express no opinion), as of its date or as of the date
hereof contained an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(e) The Representatives shall have received the opinion contemplated
in the Power of Attorney executed and delivered by each Selling Stockholder
and an opinion, dated such Closing Date, of ▇▇▇▇▇▇ Godward LLP, counsel for
certain Selling Stockholders or other counsel for a Selling Stockholder, to
the effect that:
(i) Each Selling Stockholder had valid and unencumbered title
to the Offered Securities delivered by such Selling Stockholder on such
Closing Date and had full right, power and authority to sell, assign, transfer
and deliver the Offered Securities delivered by such Selling Stockholder on
such Closing Date hereunder; and the several Underwriters have acquired valid
and unencumbered title to the Offered Securities purchased by them from the
Selling Stockholders on such Closing Date hereunder;
(ii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required to be
obtained or made by any Selling Stockholder for the consummation of the
transactions contemplated by the Custody Agreement or this Agreement in
connection with the sale of the Offered Securities sold by the Selling
Stockholders, except such as have been obtained and made under the Act and
such as may be required under state securities laws;
(iii) The execution, delivery and performance of the Custody
Agreement and this Agreement and the consummation of the transactions therein
and herein contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court having
jurisdiction over any Selling Stockholder or any of their properties or any
agreement or instrument to which any Selling Stockholder is a party or by
which any Selling Stockholder is bound or to which any of the properties of
any Selling Stockholder is subject, or the charter or by-laws of any Selling
Stockholder, which is a corporation;
(iv) The Power of Attorney and related Custody Agreement with
respect to each Selling Stockholder has been duly authorized, executed and
delivered by such Selling Stockholder and constitute valid and legally binding
obligations of each such Selling Stockholder enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles; and
(v) This Agreement has been duly authorized, executed and
delivered by each Selling Stockholder.
(f) The Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, counsel for the Underwriters,
such opinion or opinions, dated such Closing Date, with respect to the
incorporation of the Company, the validity of the Offered Securities delivered
on such Closing Date, the Registration
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Statements, the Prospectus and other related matters as the Representatives
may require, and the Selling Stockholders and the Company shall have furnished
to such counsel such documents as they request for the purpose of enabling
them to pass upon such matters. In rendering such opinion ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation may rely as to the incorporation
of the Company and all other matters governed by Delaware law upon the opinion
of ▇▇▇▇▇▇ Godward LLP referred to above.
(g) The Representatives shall have received from ▇▇▇▇ & ▇▇▇▇▇▇▇,
patent counsel to the Company, dated such Closing Date, with respect to
certain intellectual property matters, to the effect that:
(i) Such counsel is familiar with the technology used by the
Company in its business and the manner of its use and has read the portions of
the Registration Statement and Prospectus entitled "Risk Factors - We may not
have adequate protection for our intellectual property," " - Our products may
infringe on the intellectual rights of third parties" and "Business -Patents
and Intellectual Property" and that such counsel is of the opinion that such
sections are accurate and complete statements or summaries in all material
respects of the matters therein set forth;
(ii) To the best of such counsel's knowledge, there are no
judicial proceedings pending relating to patents, patent rights or proprietary
information to which the Company is a party or of which any property of the
Company is subject and, to such counsel's knowledge, no such judicial
proceedings are threatened by governmental authorities or others;
(iii) The Company's patent applications have been properly
prepared and filed on behalf of the Company. Each of the applications are held
by the Company and, except as set forth in the Prospectus, no other entity or
individual has any right or claim in any of the applications or any patent to
be issued therefrom, by virtue of any contract, license or other agreement,
known to such counsel, entered into between such entity and the Company; and
(iv) To the best of such counsel's knowledge, except as
otherwise disclosed in the Prospectus, the Company owns, or possesses adequate
rights to use, all patents, patent rights, inventions, trade secrets, know-
how, trademarks, service marks, trade names and copyrights described or
referred to in the Prospectus as owned or used by it or which are necessary
for the conduct of its business as described in the Prospectus; the Company
has not received any notice of infringement of or conflict with asserted
rights of others with respect to any patents, patent rights, inventions, trade
secrets, know-how, trademarks, service marks, trade names or copyrights which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a material adverse effect on the condition (financial
or otherwise), business, results of operations or prospects of the Company.
In addition, such counsel shall state that although he has not verified
the accuracy or completeness of the statements contained in the Prospectus,
nothing has come to the attention of such counsel that caused him to believe
that, at the time the Registration Statement became effective, or at the First
Closing Date or the Optional Closing Date, as the case may be, the information
set forth in the Prospectus under the captions at "Risk Factors --We May Not
Adequately Protect Our Intellectual Property And Our Products May Infringe On
The Intellectual Rights of Third Parties" and "Business -Intellectual
Property" contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(h) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal financial
or accounting officer of the Company in which such officers, to the best of
their knowledge after reasonable investigation, shall state that: the
representations and warranties of the Company in this Agreement are true and
correct; the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date; no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that purpose
have been instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of subparagraphs
(1) and (3) of Rule 462(b) was filed pursuant to Rule 462(b), including
payment of the applicable filing fee in accordance with Rule 111(a) or (b)
under the Act, prior to the time the Prospectus was printed and distributed to
any Underwriter; and, subsequent to the dates of the most recent financial
statements in the Prospectus, there has been no material adverse change, nor
any development or event involving a prospective material adverse change, in
the condition (financial or
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other), business, properties or results of operations of the Company and its
subsidiaries taken as a whole except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(i) The Representatives shall have received a letter, dated such
Closing Date, of Ernst & Young LLP which meets the requirements of subsection
(a) of this Section, except that the specified date referred to in such
subsection will be a date not more than three days prior to such Closing Date
for the purposes of this subsection.
The Selling Stockholders and the Company will furnish the Representatives
with such conformed copies of such opinions, certificates, letters and documents
as the Representatives reasonably request. CSFBC may in its sole discretion
waive on behalf of the Underwriters compliance with any conditions to the
obligations of the Underwriters hereunder, whether in respect of an Optional
Closing Date or otherwise.
7. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter, its
partners, directors and officers and each person, if any who controls such
Underwriter within the meaning of Section 15 of the Act, against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon 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, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from any of such documents
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (c) below.
(b) The Selling Stockholders severally and not jointly, will
indemnify and hold harmless each Underwriter, its partners, directors and
officers and each person who controls such Underwriter within the meaning of
Section 15 of the Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon 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, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action
as such expenses are incurred; provided, however, that the Selling
Stockholders will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by an Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below. The liability of each
Selling Stockholder under the indemnity agreement contained in this paragraph
shall be limited to an amount equal to the net proceeds received by such
Selling Stockholder (before deducting expenses) from the offering of the
Offered Securities sold by such Selling Stockholder.
(c) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company, its directors and officers and each person, if any,
who controls the Company within the meaning of Section 15 of the Act, and each
Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or such Selling Stockholder may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material
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fact contained in any Registration Statement, the Prospectus, or any amendment
or supplement thereto, or any related preliminary prospectus, or arise out of
or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company and each Selling Stockholder
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the following information in the Prospectus furnished on behalf of each
Underwriter: the concession and reallowance figures appearing in the
paragraph under the caption "Underwriting" and the information contained in
the , and paragraphs under the caption "Underwriting."
(d) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a), (b) or (c) above. In case any such
action is brought against any indemnified party and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party unless such (i) settlement includes an unconditional release
of such indemnified party from all liability on any claims that are the
subject matter of such action and (ii) does not include a statement as to, or
an admission of, fault, culpability or a failure to act by or on behalf of an
indemnified party.
(e) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in subsection (a),
(b) or (c) above (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Company and the Selling Stockholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on
the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
and the Selling Stockholders bear to the total underwriting discounts and
commissions received by the Underwriters. The 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 the Company, the
Selling Stockholders or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (e). Notwithstanding the provisions of this subsection (e), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from
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any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (e) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under
this Section shall be in addition to any liability which the Company and the
Selling Stockholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter (as
hereinafter defined) within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed a Registration Statement and to each person, if any,
who controls the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company and the Selling Stockholders for
the purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC, the Company and the Selling Stockholders for the purchase of such Offered
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any non-
defaulting Underwriter, the Company or the Selling Stockholders, except as
provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Stockholders, of the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Company, the Selling
Stockholders, and the Underwriters pursuant to Section 7 shall remain in effect,
and if any Offered Securities have been purchased hereunder the representations
and warranties in Section 2 and all obligations under Section 5 shall also
remain in effect. If the purchase of the Offered Securities by the Underwriters
is not consummated for any reason other than solely because of the termination
of this Agreement pursuant to Section 8 or the occurrence of any event specified
in clause (iii), (iv) or (v) of Section 6(c), the Company and the Selling
Stockholder[s] will, jointly and severally, reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Representatives c/o Credit Suisse First Boston Corporation at
Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: Investment
Banking Department -Transactions Advisory Group, or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at Clarent
Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Chief Operating Officer, or, if sent to the Selling Stockholders or any of
them, will be mailed, delivered or telegraphed and confirmed to Chief
Operating Officer at
-▇▇-
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
provided, however, that any notice to an Underwriter pursuant to Section 7
will be mailed, delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective personal representatives
and successors and the officers and directors and controlling persons referred
to in Section 7, and no other person will have any right or obligation
hereunder.
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this
Agreement, and any action under this Agreement taken by the Representatives
jointly or by CSFBC will be binding upon all the Underwriters. ▇▇▇▇▇ ▇▇▇▇-▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ will act for the Selling Stockholders in connection
with such transactions, and any action under or in respect of this Agreement
taken by ▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ will be binding upon all
the Selling Stockholders.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
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If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Selling
Stockholders, the Company and the several Underwriters in accordance with its
terms.
Very truly yours,
---------------------------------
[Insert name or names of
Selling Stockholder[s]]
---------------------------------
CLARENT CORPORATION
By
-------------------------------
▇▇▇▇▇ ▇▇▇▇-▇▇▇ ▇▇▇▇▇,
Chief Executive Officer
and President
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
Credit Suisse First Boston Corporation
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
Acting on behalf of themselves and as
the Representatives of the several
Underwriters.
Credit Suisse First Boston Corporation
By:
----------------------------------
▇▇▇▇ ▇▇▇▇▇,
Manage Director
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SCHEDULE A
Number of
Number of Firm Optional
Securities Securities to
Selling Stockholder to be Sold be Sold
------------------- ------------------- -------
----------- ----------
Total..............................................................
=========== ==========
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SCHEDULE B
Number of Firm Securities
Underwriter to be Purchased
----------- -------------------------
Credit Suisse First Boston Corporation..................................
-------------
Total.........................................................
=============
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EXHIBIT 1
1. General Agreement for the Procurement of Data Processing Equipment,
Services and Supplies, The License of Software dated September 17, 1998 by
and between the Company and AT&T Corporation.
2. Equipment Sale and Software License Agreement dated January 1, 1998 by and
between the Company and Digital Network Communications and Computers, Inc.
3. Integrator Agreement dated December 26, 1997 by and between the Company and
Global Media Concept.
4. Distribution Agreement dated November 1, 1997 by and between the Company and
Interactive Services, Incorporated.
5. Clarent Distributor Care(TM) Program Agreement dated January 1, 1999 by and
between the Company and Interactive Services, Inc.
6. Solution Provider Agreement dated November 18, 1997 by and between the
Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇.
7. Equipment Sale and Software License Agreement dated June 19, 1997 by and
between the Company and AT&T Jens Corporation.
8. Equipment Sale and Software License Agreement dated August 5, 1997 by and
between the Company and AT&T Jens Corporation.
9. Equipment Sale and Software License Agreement dated July 3, 1997 by and
between the Company and Triumph Technology Inc.
10. Distribution Agreement dated May 13, 1998 by and between the Company and
Korea Telecom International.
11. Clarent End User Agreement dated June 25, 1998 by and between the Company
and TechNet International, Inc.
12. Agreement dated as of January 27, 1999 by and between the Company and
Corio, Inc.
13. License Agreement dated December 29, 1997 by and between the Company and
DataBeam.
14. True Speech 8.5 Object and Source Code license Agreement dated January 3,
1996.
15. Master Maintenance and Support Services Agreement and Statement of Work
dated December 29, 1998 by and between the Company and Equant Integration
Services, Inc.
16. Services Agreement dated January 1, 1999 by and between the Company and
ShareData, Inc.
17. OEM Purchase Agreement by and between the Company and AudioCodes, Ltd.
dated December 1, 1998.
18. Agreement by and between the Company and Intel Corporation dated November
19, 1998.
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19. Software License Agreement dated January 31, 1997 by and between the
Company and Voxware, Inc. and NetiPhone, Inc.
20. Intellectual Property Security Agreement dated February 16, 1999 by and
between the Company and Silicon Valley Bank.
21. Negative Pledge Agreement dated February 16, 1999 by and between the
Company and Silicon Valley Bank.
22. Loan and Security Agreement dated May 28, 1998, as modified on February 16,
1999 by and between the Company and Silicon Valley Bank.
23. Intellectual Property and Security Agreement dated May 22, 1998 by and
between the Company and Silicon Valley Bank.
24. Lease Agreement dated August 12, 1998 by and between the Company and
Seaport Centre Associates, LLC.
25. Sublease dated May 27, 1998 by and between the Company and Unwired Planet,
Inc.
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