Exhibit 1.1
5,000,000 Shares
ALTEON WEBSYSTEMS, INC.
Common Stock, $0.001 par value
UNDERWRITING AGREEMENT
----------------------
December __, 1999
▇▇▇▇▇▇ Brothers Inc.
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
As Representatives of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Alteon WebSystems, Inc., a Delaware corporation (the "Company"), and
certain stockholders of the Company named in Schedule 2 hereto (the "Selling
Stockholders"), propose to sell an aggregate 5,000,000 shares (the "Firm Stock")
of the Company's Common Stock, par value $0.001 per share (the "Common Stock").
Of the 5,000,000 shares of Firm Stock, _____ are being sold by the Company and
______ by the Selling Stockholders. In addition, the Selling Stockholders
propose to grant to the Underwriters named in Schedule 1 hereto (the
"Underwriters") an option to purchase up to an additional 750,000 shares of the
Common Stock on the terms and for the purposes set forth in Section 2 (the
"Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock." This is to confirm the agreement
concerning the purchase of the Stock from the Company and the Selling
Stockholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the
Stock has (i) been prepared by the Company in conformity with the requirements
of the United States Securities Act of 1933, as amended (the "Securities Act")
and the rules and regulations (the "Rules and Regulations") of the United
States Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii) become
effective under the Securities Act. Copies of such registration statement have
been delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this Agreement, "Effective
Time" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date of the Effective
Time; "Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it became effective
under the Securities Act and any prospectus filed with the Commission by the
Company with the consent of the Representatives pursuant to Rule 424(a) of the
Rules and Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including all information
contained in the final prospectus filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations in accordance with Section 5 hereof and
deemed to be a part of the registration statement as of the Effective Time
pursuant to paragraph (b) of Rule 430A of the Rules and Regulations; and
"Prospectus" means such final prospectus, as first filed with the Commission
pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and Regulations.
The Commission has not issued any order preventing or suspending the use of
any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission,
as the case may be, conform in all material respects to the requirements of
the Securities Act and the Rules and Regulations and do not and will not, as
of the applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the Prospectus
and any amendment or supplement thereto) contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein.
(c) The Company and its Subsidiary (as defined in Section 15) have
been duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of incorporation,
are duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, financial condition or results of
operations of the Company and the Subsidiary, taken as a whole, and have all
power and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged; the Subsidiary is the
Company's only subsidiary as that term is defined in Rule 405 of the Rules and
Regulations; and the Subsidiary is not a "significant subsidiary", as such
term is defined in Rule 405 of the Rules and Regulations.
(d) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and non-
assessable and conform to the description thereof contained in the Prospectus;
and all of the issued shares of capital stock of the Subsidiary have been duly
and validly authorized and issued and are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or claims.
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(e) The unissued shares of the Stock have been duly and validly
authorized and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued, fully paid and non-assessable; and
the Stock will conform to the description thereof contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
its Subsidiary is a party or by which the Company or its Subsidiary is bound
or to which any of the property or assets of the Company or its Subsidiary is
subject, except where such conflict, breach, violation or default will not
result in a material adverse effect to the Company, nor will such actions
result in any violation of the provisions of the charter or by-laws of the
Company or of its Subsidiary or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company or its Subsidiary or any of their properties or assets; and except for
the registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(h) Except as described in the Prospectus, 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 Securities Act with respect to any securities of the Company owned or to
be owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act.
(i) Except as described in the Prospectus or elsewhere in the
Registration Statement, the Company has not sold or issued any shares of
Common Stock during the six-month period preceding the date of the Prospectus,
including any sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act, other than shares issued in the Company's initial public
offering, or issued pursuant to employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(j) Neither the Company nor its Subsidiary has sustained, since
the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not
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covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any material change in
the capital stock or long-term debt of the Company or of its Subsidiary or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
Subsidiary, otherwise than as set forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included
in the Prospectus present fairly the financial condition and results of
operations of the entities purported to be shown thereby, at the dates and for
the periods indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved. The selected and summary financial and statistical data and
information included in the Registration Statement present fairly the
information shown therein and have been compiled on a basis substantially
consistent with the financial statements presented therein.
(l) Deloitte & Touche LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who have
delivered the initial letter referred to in Section 7(g) hereof, are
independent public accountants as required by the Securities Act and the Rules
and Regulations and were independent public accountants as required by the
Securities Act and the Rules and Regulations during the periods covered by the
financial statements on which they reported contained in the Prospectus.
(m) The Company and its Subsidiary have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company and its Subsidiary; and all real property and
buildings held under lease by the Company and its Subsidiary are held by them
under valid, subsisting and enforceable leases, with such exceptions as do not
materially interfere with the use made and proposed to be made of such
property and buildings by the Company and its Subsidiary.
(n) The Company and its Subsidiary carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses in
similar industries.
(o) Except as described in the Prospectus, the Company and its
Subsidiary own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service ▇▇▇▇ registrations, copyrights and licenses necessary for the conduct
of their respective businesses, except where the failure to own or possess
such rights does not have a material adverse effect on the Company, have no
reason to believe that the conduct of their respective businesses will
conflict with, and have not received any notice of any claim of conflict with
any such rights of others
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except such claims or conflicts as will not have a material adverse effect on
the Company.
(p) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or its Subsidiary is a
party or of which any property or assets of the Company or its Subsidiary is
the subject which, if determined adversely to the Company or its Subsidiary,
might have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its Subsidiary, taken as a whole; and, except as described in the
Prospectus and to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(q) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have not
been described in the Prospectus, filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by the Rules and
Regulations.
(r) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required to
be described in the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which might be expected to
have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its Subsidiary, taken as a whole.
(t) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan" for
which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would
cause the loss of such qualification.
(u) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or its Subsidiary which has had (nor does the Company
have any knowledge of any tax deficiency which, if determined adversely to the
Company or its Subsidiary, might have) a material adverse effect on the
consolidated financial position, stockholders' equity, results of operations,
business or
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prospects of the Company and its Subsidiary, taken as a whole.
(v) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed
in the Prospectus, the Company has not (i) issued or granted any securities
(except options to purchase shares of Common Stock issued to employees or
consultants of the Company and shares of Common Stock issued upon the exercise
of outstanding options or warrants), (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and obligations which
were incurred in the ordinary course of business, (iii) entered into any
transaction not in the ordinary course of business or (iv) declared or paid
any dividend on its capital stock.
(w) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable assurance
that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability for its
assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets
is compared with existing assets at reasonable intervals.
(x) Neither the Company nor its Subsidiary (i) is in violation of
its charter or by-laws, (ii) is in default in any material respect, and no
event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a party
or by which it is bound or to which any of its properties or assets is subject
or (iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets are subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business, except
such violation or default which does not have a material adverse effect on the
business, financial condition or results of operations of the Company and the
Subsidiary, taken as a whole.
(y) Neither the Company nor its Subsidiary, nor any director,
officer, agent, employee or other person associated with or acting on behalf
of the Company or its Subsidiary, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating
to political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(z) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or its
Subsidiary (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or
leased by the Company or its Subsidiary in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial
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action under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which would not
have, or could not be reasonably likely to have, singularly or in the
aggregate with all such violations and remedial actions, a material adverse
effect on the general affairs, management, consolidated financial position,
stockholders' equity or results of operations of the Company and its
Subsidiary, taken as a whole; there has been no material spill, discharge,
leak, emission, injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property of any toxic
wastes, medical wastes, solid wastes, hazardous wastes or hazardous substances
due to or caused by the Company or its Subsidiary or with respect to which the
Company or its Subsidiary have knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or release which would
not have or would not be reasonably likely to have, singularly or in the
aggregate with all such spills, discharges, leaks, emissions, injections,
escapes, dumpings and releases, a material adverse effect on the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its Subsidiary, taken as a whole; and the terms
"hazardous wastes", "toxic wastes", "hazardous substances" and "medical
wastes" shall have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to environmental
protection.
(aa) Neither the Company nor its Subsidiary is an "investment
company" within the meaning of such term under the Investment Company Act of
1940 and the rules and regulations of the Commission thereunder.
(bb) The Company has reviewed, and is continuing to review, its
operations and products to evaluate the extent to which the business or
operations of the Company or its Subsidiary will be affected by the Year 2000
Problem (that is, any significant risk that computer hardware or software
applications used by the Company or its Subsidiary will not, in the case of
dates or time periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to January
1, 2000); as a result of such review, (i) the Company does not believe that
(A) there are any issues related to the Company's or its Subsidiary's
preparedness to address the Year 2000 Problem that are of a character required
to be described or referred to in the Registration Statement or Prospectus
which have not been accurately described in the Registration Statement or
Prospectus and (B) the Year 2000 Problem will have a material adverse effect
on the consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its Subsidiary, taken as
a whole, or result in any material loss or interference with the business or
operations of the Company or its Subsidiary, taken as a whole; and (ii) to the
Company's knowledge, the material suppliers, vendors, customers and other
third parties used or served by the Company or its Subsidiary are addressing
or will address the Year 2000 Problem in a timely manner, except to the extent
that a failure to address the Year 2000 Problem by any such supplier, vendor,
customer or third party could reasonably be expected to have a material
adverse effect on the consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company and its
Subsidiary, taken as a whole.
2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally represents, warrants and agrees
that:
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(a) The Selling Stockholder has, and immediately prior to the First
Delivery Date (as defined in Section 5 hereof) the Selling Stockholder will
have good and valid title to the shares of Stock to be sold by the Selling
Stockholder hereunder on such date, free and clear of all liens, encumbrances,
equities or claims; and upon delivery of such shares and payment therefor
pursuant hereto, good and valid title to such shares, free and clear of all
liens, encumbrances, equities or claims, will pass to the several
Underwriters.
(b) The Selling Stockholder has placed in custody under a custody
agreement (the "Custody Agreement" and, together with all other similar
agreements executed by the other Selling Stockholders, the "Custody
Agreements") with Equiserve LLP, as custodian (the "Custodian"), for delivery
under this Agreement, certificates in negotiable form (with signature
guaranteed by a commercial bank or trust company having an office or
correspondent in the United States or a member firm of the New York or
American Stock Exchanges) representing the shares of Stock to be sold by the
Selling Stockholder hereunder.
(c) The Selling Stockholder has duly and irrevocably executed and
delivered a power of attorney (the "Power of Attorney" and, together with all
other similar agreements executed by the other Selling Stockholders, the
"Powers of Attorney") appointing ▇▇▇▇▇▇▇ ▇. ▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇ as
attorneys-in-fact, with full power of substitution, and with full authority
(exercisable by any one or more of them) to execute and deliver this Agreement
and to take such other action as may be necessary or desirable to carry out
the provisions hereof on behalf of the Selling Stockholder.
(d) The Selling Stockholder has full right, power and authority to
enter into this Agreement, the Power of Attorney and the Custody Agreement;
the execution, delivery and performance of this Agreement, the Power of
Attorney and the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated
hereby and thereby will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Selling Stockholder is a party or by which the Selling
Stockholder is bound or to which any of the property or assets of the Selling
Stockholder is subject, except where such conflict, breach, violation or
default would not have a material adverse effect on the Selling Stockholder,
nor will such actions result in any violation of the provisions of the charter
or by-laws of the Selling Stockholder, the articles of partnership of the
Selling Stockholder or the deed of trust of the Selling Stockholder or any
statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Selling Stockholder or the property or
assets of the Selling Stockholder; and, except for the registration of the
Stock under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Power of Attorney or the Custody Agreement
by the Selling Stockholder and the
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consummation by the Selling Stockholder of the transactions contemplated
hereby and thereby.
(e) All information furnished by or on behalf of such Selling
Stockholder in writing expressly for use in the Registration Statement and
Prospectus, including, without limitation, information concerning the shares
of Common Stock of the Company held by the Selling Stockholder, as set forth
in the Prospectus under the caption "Principal and Selling Stockholders," is
true and correct in all material respects and does not contain any untrue
statement of material fact or omit to state any material fact necessary to
make such information not misleading. The Selling Stockholder (other than a
Management Selling Stockholder) has no reason to believe that the Registration
Statement and the Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they become effective or
are filed with the Commission, as the case may be, do not and will not, as of
the applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the Prospectus
and any amendment or supplement thereto) contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein.
(f) Each Management Selling Stockholder has no reason to believe
that the representations and warranties of the Company contained in Section 1
hereof are not materially true and correct, is familiar with the Registration
Statement and the Prospectus (as amended or supplemented) and has no knowledge
of any material fact, condition or information not disclosed in the
Registration Statement, as of the effective date, or the Prospectus (or any
amendment or supplement thereto), as of the applicable filing date, which has
adversely affected or may adversely affect the business of the Company. No
Selling Stockholder is prompted to sell shares of Common Stock by any
information concerning the Company which is not set forth in the Registration
Statement and the Prospectus.
(g) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Stock.
(h) Each of ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
General Electric Capital Corporation, ▇▇▇▇▇▇ ▇. Lo, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ and TCV III Strategic Partners, L.P. (each, a "Management Selling
Stockholder") severally represents, warrants and agrees that the Registration
Statement and the Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they become effective or
are filed with the Commission, as the case may be, do not and will not, as of
the applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the Prospectus
and any
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amendment or supplement thereto) contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein.
3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell ________ shares of the
Firm Stock and each Selling Stockholder hereby agrees to sell the number of
shares of the Firm Stock set opposite its name in Schedule 2 hereto, severally
and not jointly, to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. . Each
Underwriter shall be obligated to purchase from the Company, and from each
Selling Stockholder, that number of shares of the Firm Stock which represents
the same proportion of the number of shares of the Firm Stock to be sold by the
Company, and by each Selling Stockholder, as the number of shares of the Firm
Stock set forth opposite the name of such Underwriter in Schedule 1 represents
of the total number of shares of the Firm Stock to be purchased by all of the
Underwriters pursuant to this Agreement. The respective purchase obligations
of the Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, the Selling Stockholders grant to the Underwriters an
option to purchase up to 750,000 shares of Option Stock, with each Selling
Stockholder agreeing to sell the number of shares of Option Stock necessary to
cover this option proportionate to the percentage of shares of Firm Stock being
offered by such Selling Stockholder as set forth in Schedule 2 hereto. Such
option is granted for the purpose of covering over-allotments in the sale of
Firm Stock and is exercisable as provided in Section 5 hereof. Shares of Option
Stock shall be purchased severally for the account of the Underwriters in
proportion to the number of shares of Firm Stock set opposite the name of such
Underwriters in Schedule 1 hereto. The respective purchase obligations of each
Underwriter with respect to the Option Stock shall be adjusted by the
Representatives so that no Underwriter shall be obligated to purchase Option
Stock other than in 100 share amounts. The price of both the Firm Stock and any
Option Stock shall be $____ per share.
The Company and the Selling Stockholders shall not be obligated to
deliver any of the Stock to be delivered on any Delivery Date (as hereinafter
defined), except upon payment for all the Stock to be purchased on such Delivery
Date as provided herein.
4. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and payment
for the
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Firm Stock shall be made at the office of ▇▇▇▇▇▇ Godward LLP, Five ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 9:00 A.M., New York City time, on the
fourth full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives
and the Company. This date and time are sometimes referred to as the "First
Delivery Date." On the First Delivery Date, the Company and the Selling
Stockholders shall deliver or cause to be delivered certificates representing
the Firm Stock to the Representatives for the account of each Underwriter
against payment to or upon the order of the Company and the Selling Stockholders
of the purchase price by wire transfer in immediately available funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company and the Selling Stockholders shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date".
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 5
(or at such other place as shall be determined by agreement between the
Representatives and the Company) at 9:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver
or cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice. For the purpose of expediting
the checking and packaging of the certificates for the Option Stock, the Company
shall make the certificates representing the Option Stock available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to such Second Delivery
Date.
6. Further Agreements of the Company. The Company agrees:
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(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof; to advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or
for additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives a conformed
copy and to counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment thereto
filed with the Commission, including all consents and exhibits filed
therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits other
than this Agreement and the computation of per share earnings) and (ii) each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Stock or any
other securities relating thereto and if at such time any events shall have
occurred 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 in order to make the statements therein, in the light
of the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus in order to comply with the Securities
Act, to notify the Representatives and, upon their request, to file such
document and to prepare and furnish without charge to each Underwriter and to
any dealer in securities as many copies as the Representatives may from time
to time reasonably request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required
by the Securities Act or requested by the Commission;
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(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof
to the Representatives and counsel for the Underwriters and obtain the consent
of the Representatives to the filing;
(f) As soon as practicable after the Effective Date (it being
understood that the Company shall have until at least 410 days after the end
of the Company's current fiscal quarter), to make generally available to the
Company's security holders and to deliver to the Representatives an earnings
statement of the Company and its Subsidiary (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date and to
the extent reasonably requested by the Representatives, to furnish to the
Representatives copies of all materials furnished by the Company to its
shareholders and all public reports and financial statements furnished by the
Company to the principal national securities exchange upon which the Common
Stock may be listed pursuant to requirements of or agreements with such
exchange or to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives
may request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Stock; provided that in
connection therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(i) For a period of 90 days from the date of the Prospectus, not
to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in
the future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than (i) the Stock, (ii) shares issued
pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights, or (iii) shares issued in
connection with an acquisition by the Company of another corporation or entity
or in a private placement by the Company of shares to a strategic partner or
investor, provided that the individuals or entities to whom such shares are
issued agree to the lock-up provided in this Section 6(i)), or sell or grant
options, rights or warrants with respect to any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other than the
grant of options or issuances of shares or rights pursuant to option or
employee stock purchase plans existing on the date hereof), or (2) enter into
any swap or other derivatives transaction that transfers to another, in whole
or in part, any of the economic benefits or risks of ownership of such shares
of Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, in each case without the prior written consent of ▇▇▇▇▇▇
Brothers Inc.; and to cause
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each Selling Stockholder to furnish to the Representatives, prior to the First
Delivery Date, a letter or letters, in form and substance satisfactory to
counsel for the Underwriters, pursuant to which each such person shall agree,
subject to the exceptions set forth in the form of lock-up agreement
previously agreed to by the Company and the Representatives, not to, directly
or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits
or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery
of Common Stock or other securities, in cash or otherwise, in each case for a
period of 90 days from the date of the Prospectus, without the prior written
consent of ▇▇▇▇▇▇ Brothers Inc.;
(j) Prior to the Effective Date, to apply for the inclusion of the
Stock on the Nasdaq National Market and to use its best efforts to complete
that listing, subject only to official notice of issuance and evidence of
satisfactory distribution, prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus; and
(l) To take such steps as shall be necessary to ensure that neither
the Company nor its Subsidiary shall become an "investment company" within the
meaning of such term under the Investment Company Act of 1940 and the rules
and regulations of the Commission thereunder.
7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder agrees:
(a) For a period of 90 days from the date of the Prospectus, and
subject to the exceptions set forth in the form of lock-up agreement
previously agreed to by the Company and the Representatives, not to, directly
or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits
or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery
of Common Stock or other securities, in cash or otherwise, in each case for a
period of 90 days from the date of the Prospectus, without the prior written
consent of ▇▇▇▇▇▇ Brothers Inc.
(b) That the Stock to be sold by the Selling Stockholder hereunder,
which is represented by the certificates held in custody for the Selling
Stockholder, is subject to the interest of the Underwriters and the other
Selling Stockholders thereunder, that the arrangements made by the Selling
Stockholder for such custody are to that extent irrevocable,
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and that the obligations of the Selling Stockholder hereunder shall not be
terminated by any act of the Selling Stockholder, by operation of law, by the
death or incapacity of any individual Selling Stockholder or, in the case of a
trust, by the death or incapacity of any executor or trustee or the
termination of such trust, or the occurrence of any other event.
(c) To deliver to the Representatives prior to the First Delivery
Date a properly completed and executed United States Treasury Department Form
W-8 (if the Selling Stockholder is a non-United States person) or Form W-9 (if
the Selling Stockholder is a United States person.)
8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement and
any other related documents in connection with the offering, purchase, sale and
delivery of the stock; (e) the costs of delivering and distributing the Custody
Agreements, Powers of Attorney and related documents; (f) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of sale of the Stock; (g) any applicable
listing or other fees including, without limitation, the fees for quotation of
the Common Stock on the Nasdaq National Market; (h) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 6(h) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters);
and (i) all other costs and expenses incident to the performance of the
obligations of the Company and the Selling Stockholders under this Agreement;
provided that, except as provided in this Section 8 and in Section 13, the
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Stock which they may sell
and the expenses of advertising any offering of the Stock made by the
Underwriters, and the Selling Stockholders shall pay any transfer taxes payable
in connection with their respective sales of Stock to the Underwriters.
9. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the performance by the Company
and the Selling Stockholders of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion
of additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
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(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement or
the Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of Fenwick & West LLP, counsel for
the Underwriters, is material or omits to state a fact which, in the opinion
of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Custody Agreements
and Powers of Attorney, the Stock, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company and the
Selling Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters.
(d) ▇▇▇▇▇▇ Godward LLP shall have furnished to the Representatives
its written opinion, as counsel to the Company, addressed to the Underwriters
and dated such Delivery Date, in form and substance reasonably satisfactory to
the Representatives, to the effect that:
(i) The Company and the Subsidiary have been duly
incorporated and are validly existing as corporations in good standing
under the laws of the State of Delaware, to the best of our knowledge are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect on the business, financial condition or
results of operations of the Company and the Subsidiary, taken as a whole,
and have all corporate power and authority necessary to own or hold their
respective properties and conduct the businesses as described in the
Prospectus;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock of
the Company (including the shares of Stock being delivered on such Delivery
Date) have been duly and validly authorized and issued, are fully paid and
non-assessable and conform in all material respects to the description
thereof contained in the Prospectus; and all of the issued shares of
capital stock of the Subsidiary have been duly and validly authorized and
issued and are fully paid, non-assessable and are owned directly or
indirectly by the Company, to our knowledge free and clear of all liens,
encumbrances, equities or claims;
(iii) To our knowledge, there are no preemptive or other
rights to subscribe for or to purchase, nor any restriction upon the voting
or transfer of, any shares of the Stock pursuant to the Company's charter
or by-laws or any agreement or other instrument;
(iv) To our knowledge and other than as set forth in the
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Prospectus, there are no legal or governmental proceedings threatened or
pending to which the Company or the Subsidiary is a party or of which any
property or assets of the Company or the Subsidiary is the subject which
are required to be described in the Prospectus by the Securities Act or the
Rules and Regulations;
(v) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph of
Rule 424(b) of the Rules and Regulations specified in such opinion on the
date specified therein and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and, to such
counsel's knowledge, no proceeding for that purpose is pending or
threatened by the Commission;
(vi) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to such
Delivery Date (other than the financial statements and related schedules
therein and other financial data and statistical data derived therefrom, as
to which we need express no opinion) comply as to form in all material
respects with the requirements of the Securities Act and the Rules and
Regulations;
(vii) To our knowledge, there are no contracts or other
documents which are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act or by the
Rules and Regulations which have not been described or filed as exhibits to
the Registration Statement or incorporated by reference as permitted by the
Rules and Regulations;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) The issue and sale of the shares of Stock and the
compliance by the Company with all of the provisions of this Agreement and
the consummation of the transactions contemplated hereby will not conflict
with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or the
Subsidiary is a party or by which the Company or the Subsidiary is bound or
to which any of the property or assets of the Company or the Subsidiary is
subject that is filed as an exhibit to the Registration Statement, nor will
such actions result in any violation of the provisions of the charter or
by-laws of the Company or the Subsidiary or any statute or any order, rule
or regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or the Subsidiary or any of their
properties or assets (except the securities or Blue Sky laws of the various
states and the rules of the NASD governing underwriting compensation, as to
which we express no opinion) except for such violations that will not have
a material adverse effect on the business, financial condition or results
of operations of the Company and the Subsidiary, taken as a whole; and,
except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may
be required under the
-17-
Exchange Act, applicable state securities laws and the rules of the NASD
governing underwriter compensation, no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance of
this Agreement by the Company and the consummation of the transactions
contemplated hereby; and
(x) To our knowledge, and except as described in the
Prospectus, 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 Securities Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement.
In rendering such opinion, such counsel may state that its opinion is limited
to matters governed by the federal laws of the United States of America, the
laws of the State of California and the General Corporation Law of the State
of Delaware and that such counsel is not admitted in the State of Delaware.
Such counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated such Delivery Date, in form
and substance satisfactory to the Representatives, to the effect that:
"In connection with the preparation of the Registration Statement, we have
participated in conferences with officers and other representatives of the
Company, representatives of the independent public or certified public
accountants for the Company and with representatives of the Underwriters. We
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 or the Prospectus
(other than the statements made in the Prospectus under the captions
"Description of Capital Stock" and "Shares Eligible for Resale," insofar as
such statements relate to the Stock and concern legal matters), and any
supplements or amendments thereto. On the basis of the foregoing and in our
capacity as counsel to the Company, nothing has come to our attention which
has caused us to believe that either the Registration Statement or any
amendments thereto (except as to the financial statements and schedules, and
other financial data and statistical data derived therefrom), at the time the
Registration Statement or such amendments became effective, 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 (except as to the financial statements and
schedules, other financial data and statistical data derived therefrom), as of
its date or as of the date hereof contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading."
(e) Counsel for each Selling Stockholder shall have furnished to the
Representatives their written opinion, as counsel to the Selling Stockholders,
addressed to the Underwriters and dated the First Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect that:
(i) Each Selling Stockholder has full right, power and
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authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement; to its knowledge, the execution, delivery and
performance of this Agreement, the Power of Attorney and the Custody
Agreement by each Selling Stockholder and the consummation by each Selling
Stockholder of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
known to such counsel to which any Selling Stockholder is a party or by
which any Selling Stockholder is bound or to which any of the property or
assets of any Selling Stockholder is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of any Selling
Stockholder, the articles of partnership of any Selling Stockholder, the
deed of trust of any Selling Stockholder or any statute or any order, rule
or regulation known to such counsel of any court or governmental agency or
body having jurisdiction over any Selling Stockholder or the property or
assets of any Selling Stockholder, except for violations which would not
have a material adverse effect on the Selling Stockholder; and, except for
the registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement, the
Power of Attorney or the Custody Agreement by any Selling Stockholder and
the consummation by any Selling Stockholder of the transactions
contemplated hereby and thereby;
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of each Selling Stockholder;
(iii) A Power-of-Attorney and a Custody Agreement have been
duly authorized, executed and delivered by each Selling Stockholder and
constitute valid and binding agreements of each Selling Stockholder,
enforceable in accordance with their respective terms; and
(iv) Upon delivery of and payment for the shares of Stock to
be sold by the Selling Stockholders as provided in this Agreement and upon
registration of such shares of Stock in the names of the Underwriters (or
their nominees) in the stock records of the Company, good and valid title
to the shares of Stock to be sold by each Selling Stockholder under this
Agreement, free and clear of all liens, encumbrances, equities or claims,
has been transferred to each of the several Underwriters, assuming for the
purpose of this opinion that the Underwriters are purchasing such shares of
Stock in good faith and without notice of any defect in the title of any
Selling Stockholders, or any adverse claim, to the shares of Stock being
purchased from such Selling Stockholder.
In rendering such opinion, such counsel may (i) state that its
opinion is limited to matters governed by the Federal laws of the United
States of America, the laws of the State of California and the General
Corporation Law of the State of Delaware and (ii) in
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rendering the opinion in Section 9(e)(iv) above, rely upon a certificate of
each Selling Stockholder in respect of matters of fact as to ownership of and
liens, encumbrances, equities or claims on the shares of Stock sold by such
Selling Stockholder, provided that such counsel shall furnish copies thereof
to the Representatives and state that it believes that both the Underwriters
and it are justified in relying upon such certificate. Such counsel shall also
have furnished to the Representatives a written statement, addressed to the
Underwriters and dated the First Delivery Date, in form and substance
satisfactory to the Representatives, to the effect that (x) such counsel has
acted as counsel to each Selling Stockholder in connection with the
preparation of the Registration Statement, and (y) based on the foregoing, no
facts have come to the attention of such counsel which lead it to believe that
the Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact relating to any Selling Stockholder or omitted to
state such a material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or that the Prospectus contains
any untrue statement of a material fact relating to any Selling Stockholder or
omits to state such a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing opinion and statement may
be qualified by a statement to the effect that such counsel does not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus.
(f) The Representatives shall have received from Fenwick & West
LLP, counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP a letter, in
form and substance reasonably satisfactory to the Representatives, addressed
to the Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act and
are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than five days prior to the date hereof), the conclusions and findings of
such firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(h) With respect to the letter of Deloitte & Touche LLP referred
to in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "initial letter"), the
Company shall have furnished to the Representatives a letter (the "bring-down
letter") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the
applicable requirements relating
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to the qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus,
as of a date not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by the initial letter and
(iii) confirming in all material respects the conclusions and findings set
forth in the initial letter.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date; the
Company has complied with all its agreements contained herein; and the
conditions set forth in Sections 9(a) and 9(i) have been fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue statement
of a material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and (B) since the Effective Date no event has occurred which should have
been set forth in a supplement or amendment to the Registration Statement
or the Prospectus.
(j) Each Selling Stockholder (or one or more attorneys-in-fact on
behalf of the Selling Stockholders) shall have furnished to the
Representatives on the First Delivery Date a certificate, dated the First
Delivery Date, signed by, or on behalf of, the Selling Stockholder (or one or
more attorneys-in-fact) stating that the representations, warranties and
agreements of the Selling Stockholder contained herein are true and correct as
of the First Delivery Date and that the Selling Stockholder has complied with
all agreements contained herein to be performed by the Selling Stockholder at
or prior to the First Delivery Date.
(k) (i) Neither the Company nor the Subsidiary shall have
sustained since the date of the latest audited financial statements included
in the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus or (ii) since
such date there shall not have been any change in the capital stock or long-
term debt of the Company or the Subsidiary or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations
of the Company and the Subsidiary, otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Representatives, so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Stock being delivered on
-21-
such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or in
the Nasdaq National Market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall
have been declared by Federal, New York or California authorities, and (iii)
the United States shall have become engaged in hostilities, there shall have
been an escalation in hostilities involving the United States or there shall
have been a declaration of a national emergency or war by the United States or
(iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be such) as to
make it, in the judgment of a majority in interest of the several
Underwriters, impracticable or inadvisable to proceed with the public offering
or delivery of the Stock being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
(m) The Nasdaq National Market shall have approved the Stock for
inclusion, subject only to official notice of issuance.
(n) You shall have been furnished with such additional documents
and certificates as you or counsel for the Underwriters may reasonably request
related to this Agreement and the transactions contemplated hereby.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which that Underwriter,
officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment
or supplement thereto, or (B) in any materials or information provided to
investors by, or with the approval of, the Company in connection with the
marketing of the offering of the Stock ("Marketing Materials"), including any
roadshow or investor presentations made to investors by the Company (whether
in person or electronically), (ii) the omission or alleged omission to state
in any Preliminary Prospectus, the Registration
-22-
Statement or the Prospectus, or in any amendment or supplement thereto, or in
any Marketing Materials, any material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act or
failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and
each such officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by that Underwriter, officer,
employee or controlling person in connection with investigating or defending
or preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any such amendment or supplement, in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company
through the Representatives by or on behalf of any Underwriter specifically
for inclusion therein which information consists solely of the information
specified in Section 10(f). The foregoing indemnity agreement is in addition
to any liability which the Company may otherwise have to any Underwriter or to
any officer, employee or controlling person of that Underwriter.
(b) The Selling Stockholders, jointly and severally, shall indemnify
and hold harmless each Underwriter, its officers and employees, and each
person, if any, who controls any Underwriter within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof (including, but not limited to,
any loss, claim, damage, liability or action relating to purchases and sales
of Stock), to which that Underwriter, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement or the Prospectus or
in any amendment or supplement thereto or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each Underwriter, its officers and employees
and each such controlling person for any legal or other expenses reasonably
incurred by that Underwriter, its officers and employees or controlling person
in connection with investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Selling Stockholders shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any
-23-
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
such amendment or supplement in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein which information consists solely of the information specified in
Section 10(f). The foregoing indemnity agreement is in addition to any
liability which the Selling Stockholders may otherwise have to any Underwriter
or any officer, employee or controlling person of that Underwriter.
(c) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors,
and each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which the Company or any such
director, officer, employee or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (B) in any Blue Sky Application or (ii)
the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be
stated therein or necessary to make the statements therein not misleading, but
in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Underwriter furnished to
the Company through the Representatives by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse the Company and any
such director, officer, employee or controlling person for any legal or other
expenses reasonably incurred by the Company or any such director, officer,
employee or controlling person in connection with investigating or defending
or preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Company or any such director, officer, employee or controlling person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 10 except to the extent it
has been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 10. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 10 for any legal or other expenses subsequently
-24-
incurred by the indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that the
Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Company or any Selling Stockholder under this Section
10 if, in the reasonable judgment of the Representatives, it is advisable for
the Representatives and those Underwriters, officers, employees and
controlling persons to be jointly represented by separate counsel, and in that
event the fees and expenses of such separate counsel shall be paid by the
Company or the Selling Stockholders. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall not
be unreasonably withheld or delayed), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from
all liability arising out of such claim, action, suit or proceeding, or (ii)
be liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld or delayed), but if
settled with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a) or 10(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on
the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock purchased
under this Agreement (before deducting expenses) received by the Company and
the Selling Stockholders on the one hand, and the total underwriting discounts
and commissions received by the Underwriters with respect to the shares of the
Stock purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the shares of the Stock under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a
-25-
material fact relates to information supplied by the Company, the Selling
Stockholders or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 10(e) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 10(e) shall be
deemed to include, for purposes of this Section 10(e), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10(e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Stock underwritten by it and distributed to the public was offered
to the public exceeds the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. Notwithstanding the
provisions of this Section 10, no Selling Stockholder shall be required to
indemnify for or contribute any amount in excess of the amount by which the
net proceeds of the offering (before deducting expenses) received by such
Selling Stockholder exceeds the amount of any damages that such Selling
Stockholder 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 10(e) are several in proportion to
their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, the legend concerning over-
allotments on the inside front cover page of and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriters shall be obligated to purchase the Stock which the defaulting
Underwriter agreed but failed to purchase on such Delivery Date in the
respective proportions which the number of shares of the Firm Stock set opposite
the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears
to the total number of shares of the Firm Stock set opposite the names of all
the remaining non-defaulting Underwriters in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any of the Stock on such Delivery Date if the total number of shares
of the Stock which the defaulting Underwriter or Underwriters agreed but failed
to purchase on such date exceeds 10% of the total number of shares of the Stock
to be purchased on such Delivery Date. If
-26-
the foregoing maximums are exceeded, the remaining non-defaulting Underwriters,
or those other underwriters satisfactory to the Representatives who so agree,
shall have the right, but shall not be obligated, to purchase, in such
proportion as may be agreed upon among them, all the Stock to be purchased on
such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Stock) shall terminate without liability on the part of any non-
defaulting Underwriter or the Company or the Selling Stockholders, except that
the Company will continue to be liable for the payment of expenses to the extent
set forth in Sections 8 and 13. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 11, purchases Firm Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholders for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company and the Selling Stockholders prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections 9(k)
or 9(l), shall have occurred or if the Underwriters shall decline to purchase
the Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the Company or
any Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholders to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholders is
not fulfilled, the Company and the Selling Stockholders will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and upon demand the Company
shall and the Selling Stockholders pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 11 by
reason of the default of one or more Underwriters, neither the Company nor any
Selling Stockholder shall be obligated to reimburse any defaulting Underwriter
on account of those expenses.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three World Financial
Center, New York,
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New York 10285, Attention: Syndicate Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a
copy, in the case of any notice pursuant to Section 11(d), to the Director of
Litigation, Office of the General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
(c) if to the Selling Stockholders, shall be delivered or sent
by mail, telex or facsimile transmission to such Selling Stockholder at the
address set forth on Schedule 2 hereto;
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and
the Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
▇▇▇▇▇▇ Brothers Inc. on behalf of the Representatives and the Company and the
Underwriters shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Selling Stockholders by the
Custodian or the Attorney-in-fact appointed pursuant to the Power of Attorney.
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Selling Stockholders and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Selling Stockholders contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
any Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 10(c) of this
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company who have signed the Registration Statement, employees of
the Company and any person controlling the Company within the meaning of Section
15 of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
15, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholders and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated
-28-
by law or executive order to close and (b) "Subsidiary" means Alteon WebSystems
International Inc.
18. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
ALTEON WEBSYSTEMS, INC.
By _____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇
President and Chief Executive Officer
THE SELLING STOCKHOLDERS
Named in Schedule 2 to this Agreement
By _____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇
Attorney-in-Fact
Accepted:
▇▇▇▇▇▇ Brothers Inc.
BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By ▇▇▇▇▇▇ Brothers Inc.
By _____________________________
Authorized Representative
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SCHEDULE 1
Number
Underwriters of Shares
------------ ---------
▇▇▇▇▇▇ Brothers Inc.
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SCHEDULE 2
Number
Name and Address of Selling Stockholders of Shares
---------------------------------------- ---------