EXHIBIT 1.1
BANC OF AMERICA SECURITIES LLC
FINAL UNDERWRITING AGREEMENT
4,000,000 Shares
Vyyo Inc.
Common Stock
Underwriting Agreement
dated September _____, 2000
Table of Contents
Section 1. Representations and Warranties of the Company and the Selling Stockholders................ 2
A. Representations and Warranties of the Company and Certain of the Selling Stockholders..... 2
(a) Compliance with Registration Requirements................................................. 2
(b) Offering Materials Furnished to Underwriters.............................................. 3
(c) Distribution of Offering Material By the Company.......................................... 3
(d) The Underwriting Agreement................................................................ 3
(e) Authorization of the Common Shares........................................................ 3
(f) No Applicable Registration or Other Similar Rights........................................ 3
(g) No Material Adverse Change................................................................ 3
(h) Independent Accountants................................................................... 4
(i) Preparation of the Financial Statements................................................... 4
(j) Incorporation and Good Standing of the Company and its Subsidiary......................... 4
(k) Capitalization and Other Capital Stock Matters............................................ 4
(l) Stock Exchange Listing.................................................................... 5
(m) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required 5
(n) No Material Actions or Proceedings........................................................ 6
(o) Intellectual Property Rights.............................................................. 6
(p) All Necessary Permits, etc................................................................ 6
(q) Title to Properties....................................................................... 6
(r) Tax Law Compliance........................................................................ 6
(s) Company Not an "Investment Company."...................................................... 7
(t) Insurance................................................................................. 7
(u) Labor Matters............................................................................. 7
(v) Related Party Transactions................................................................ 7
(w) No Unlawful Contributions or Other Payments............................................... 7
(x) Company's Accounting System............................................................... 7
(y) Compliance with Environmental Laws........................................................ 8
(z) ERISA Compliance.......................................................................... 8
(aa) Office of Chief Scientist................................................................. 9
(bb) Israeli Employment Agreements............................................................. 9
B. Representations and Warranties of the Selling Stockholders................................ 9
(a) The Underwriting Agreement................................................................ 9
(b) The Custody Agreement and Power of Attorney............................................... 10
(c) Title to Common Shares to be Sold; All Authorizations Obtained............................ 10
(d) Delivery of the Common Shares to be Sold.................................................. 10
(e) Non-Contravention; No Further Authorizations or Approvals Required........................ 10
(f) No Registration of Other Similar Rights................................................... 11
(g) No Further Consents, etc. ................................................................ 11
(h) Disclosure Made by Such Selling Stockholder in the Prospectus............................. 11
(i) No Price Stabilization or Manipulation.................................................... 11
Section 2. Purchase, Sale and Delivery of the Common Shares.......................................... 11
(a) The Firm Common Shares.................................................................... 11
(b) The First Closing Date.................................................................... 12
(c) The Optional Common Shares; the Second Closing Date....................................... 12
(d) Public Offering of the Common Shares...................................................... 12
(e) Payment for the Common Shares............................................................. 13
(f) Delivery of the Common Shares............................................................. 13
(g) Delivery of Prospectus to the Underwriters................................................ 14
Section 3. Additional Covenants of the Company....................................................... 14
A. Covenants of the Company.................................................................. 14
i.
(a) Representatives' Review of Proposed Amendments and Supplements............................ 14
(b) Securities Act Compliance................................................................. 14
(c) Amendments and Supplements to the Prospectus and Other Securities Act Matters............. 14
(d) Copies of any Amendments and Supplements to the Prospectus................................ 15
(e) Blue Sky Compliance....................................................................... 15
(f) Use of Proceeds........................................................................... 15
(g) Transfer Agent............................................................................ 15
(h) Earnings Statement........................................................................ 15
(i) Periodic Reporting Obligations............................................................ 15
(j) Agreement Not To Offer or Sell Additional Securities...................................... 16
(k) Future Reports to the Representatives..................................................... 16
B. Covenants of the Selling Stockholders..................................................... 16
(a) Agreement Not to Offer or Sell Additional Securities...................................... 16
(b) Delivery of Forms W-8 and W-9............................................................. 17
Section 4. Payment of Expenses....................................................................... 17
Section 5. Conditions of the Obligations of the Underwriters......................................... 17
(a) Accountants' Comfort Letter............................................................... 18
(b) Compliance with Registration Requirements; No Stop Order; No Objection from NASD.......... 18
(c) No Material Adverse Change or Ratings Agency Change....................................... 18
(d) Opinion of Counsel for the Company........................................................ 18
(e) Opinion of Counsel for the Selling Stockholders........................................... 19
(f) Opinion of Foreign Counsel for the Company................................................ 19
(g) Opinion of Patent Counsel for the Company................................................. 19
(h) Opinion of Counsel for the Underwriters................................................... 19
(i) Officers' Certificate..................................................................... 19
(j) Bring-down Comfort Letter................................................................. 20
(k) Selling Stockholder's Certificate......................................................... 20
(l) Selling Stockholders' Documents........................................................... 20
(m) Lock-Up Agreement......................................................................... 21
(n) Additional Documents...................................................................... 21
Section 6. Reimbursement of Underwriters' Expenses................................................... 21
Section 7. Effectiveness of this Agreement........................................................... 21
Section 8. Indemnification........................................................................... 22
(a) Indemnification of the Underwriters....................................................... 22
(b) Indemnification of the Company, its Directors and Officers................................ 24
(c) Notifications and Other Indemnification Procedures........................................ 25
(d) Settlements............................................................................... 26
(e) Settlements............................................................................... 26
Section 9. Contribution.............................................................................. 27
Section 10. Default of One or More of the Several Underwriters........................................ 28
Section 11. Termination of this Agreement............................................................. 29
Section 12. Representations and Indemnities to Survive Delivery....................................... 29
Section 13. Notices................................................................................... 29
Section 14. Successors................................................................................ 30
Section 15. Partial Unenforceability.................................................................. 31
Section 16. (a)....................................................................................... 31
(a) Governing Law Provisions.................................................................. 31
ii.
(b) Consent to Jurisdiction................................................................. 31
(c) Waiver of Immunity...................................................................... 31
Section 17. Failure of One or More of the Selling Stockholders to Sell and Deliver Common Shares.... 31
Section 18. General Provisions...................................................................... 32
iii.
Underwriting Agreement
September____, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
CIBC WORLD MARKETS CORP.
▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇ & COMPANY, INC.
▇.▇. ▇▇▇▇▇▇▇▇▇ + CO., LLC
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Introductory. Vyyo Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several underwriters named in Schedule A (the
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"Underwriters") an aggregate of 2,000,000 shares of its Common Stock, par value
$0.0001 per share (the "Common Stock"); and the Stockholders of the Company
named in Schedule B (collectively, the "Selling Stockholders") severally
----------
propose to sell to the underwriters an aggregate of 2,000,000 shares of Common
Stock. The 2,000,000 shares of Common Stock to be sold by the Company and the
2,000,000 shares of Common Stock to be sold by the Selling Stockholders are
collectively called the "Firm Common Shares". In addition, the Company has
granted to the Underwriters an option to purchase up to an additional 300,000
shares of Common Stock and certain of the Selling Stockholders have severally
granted to the Underwriters an option to purchase up to an additional 300,000
shares of Common Stock, each Selling Stockholder selling up to the amount set
forth opposite such Selling Stockholder's name in Schedule B, as provided in
-----------
Section 2 (collectively, the "Optional Common Shares"). The Firm Common Shares
and, if and to the extent such options are exercised, the Optional Common Shares
are collectively called the "Common Shares." Banc of America Securities LLC
("BAS"), CIBC World Markets Corp., ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇ &
Company, Inc. and ▇.▇. ▇▇▇▇▇▇▇▇▇ + Co., LLC have agreed to act as
representatives of the several Underwriters (in such capacity, the
"Representatives") in connection with the offering and sale of the Common
Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
333-45132), which contains a form of prospectus to be used in connection with
the public offering and sale of the Common Shares. Such registration statement,
as amended, including the financial statements, exhibits and schedules thereto,
in the form in which it was declared effective by the Commission under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the "Securities Act"), including any information
deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A
or Rule 434 under the Securities Act, is called the "Registration Statement."
Any registration statement filed by the Company pursuant to Rule 462(b) under
the Securities Act is called the "Rule 462(b)
1.
Registration Statement," and from and after the date and time of filing of the
Rule 462(b) Registration Statement the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. Such prospectus, in the form
first used by the Underwriters to confirm sales of the Common Shares, is called
the "Prospectus;" provided, however, if the Company has, with the consent of
BAS, elected to rely upon Rule 434 under the Securities Act, the term
"Prospectus" shall mean the Company's prospectus subject to completion (each, a
"preliminary prospectus") dated September 6, 2000 (such preliminary prospectus
is called the "Rule 434 preliminary prospectus"), together with the applicable
term sheet (the "Term Sheet") prepared and filed by the Company with the
Commission under Rules 434 and 424(b) under the Securities Act and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. All references in this Agreement to (i) the Registration
Statement, the Rule 462(b) Registration Statement, a preliminary prospectus, the
Prospectus or the Term Sheet, or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System ("▇▇▇▇▇").
The Company hereby confirms its agreements with the Underwriters as
follows:
Section 1. Representations and Warranties of the Company and the Selling
Stockholders.
A. Representations and Warranties of the Company and Certain of the Selling
Stockholders. The Company and ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(the "Company Selling Stockholders") hereby represent, warrant and covenant,
severally and not jointly, to each Underwriter as follows:
(a) Compliance with Registration Requirements. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. No stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement is in effect and no proceedings for such
purpose have been instituted or are pending or, to the best knowledge of
the Company, are contemplated or threatened by the Commission.
Each preliminary prospectus and the Prospectus when filed complied in
all material respects with the Securities Act and, if filed by electronic
transmission pursuant to ▇▇▇▇▇ (except as may be permitted by Regulation S-
T under the Securities Act), was identical to the copy thereof delivered to
the Underwriters for use in connection with the offer and sale of the
Common Shares. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto, at the
time it became effective and at all subsequent times, complied and will
comply in all material respects with the Securities Act and did not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, as amended or
supplemented, as of its date and at all subsequent times, did not and will
not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately preceding
sentences do not apply to statements in or omissions from the
2.
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing
by the Representatives expressly for use therein. There are no contracts or
other documents required to be described in the Prospectus or to be filed
as exhibits to the Registration Statement which have not been described or
filed as required.
(b) Offering Materials Furnished to Underwriters. The Company has
delivered to the Representatives a manually signed copy of the Registration
Statement and of each consent and certificate of experts filed as a part
thereof, and conformed copies of the Registration Statement (without
exhibits) and preliminary prospectuses and the Prospectus, as amended or
supplemented, in such quantities and at such places as the Representatives
has reasonably requested for each of the Underwriters.
(c) Distribution of Offering Material By the Company. The Company
has not distributed and will not distribute, prior to the later of the
Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Common Shares, any offering material in
connection with the offering and sale of the Common Shares other than a
preliminary prospectus, the Prospectus or the Registration Statement.
(d) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement
of the Company, enforceable in accordance with its terms, except as rights
to indemnification hereunder may be limited by applicable law and except as
the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
(e) Authorization of the Common Shares. The Common Shares to be
purchased by the Underwriters from the Company have been duly authorized
for issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company and paid for by the Underwriters pursuant to this
Agreement, will be validly issued, fully paid and nonassessable.
(f) No Applicable Registration or Other Similar Rights. There are
no persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement, except for such
rights as have been duly waived.
(g) No Material Adverse Change. Except as otherwise disclosed in
the Prospectus, subsequent to the respective dates as of which information
is given in the Prospectus: (i) there has been no material adverse change,
or any development that would reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise, or in
the earnings, business, operations or prospects, whether or not arising
from transactions in the ordinary course of business, of the Company and
its subsidiary, considered as one entity (any such change is called a
"Material Adverse Change"); (ii) the Company and its subsidiary, considered
as one entity, have not
3.
incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into any
material transaction or agreement not in the ordinary course of business;
and (iii) there has been no dividend or distribution of any kind declared,
paid or made by the Company or, except for dividends paid to the Company or
other subsidiary, its subsidiary on any class of capital stock or
repurchase or redemption by the Company or its subsidiary of any class of
capital stock.
(h) Independent Accountants. Ernst & Young LLP, who have expressed
their opinion with respect to the financial statements (which term as used
in this Agreement includes the related notes thereto) and supporting
schedules filed with the Commission as a part of the Registration Statement
and included in the Prospectus, are independent public or certified public
accountants as required by the Securities Act.
(i) Preparation of the Financial Statements. The financial
statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly in all material
respects the consolidated financial position of the Company and its
subsidiary as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. Such financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent basis
throughout the periods involved. No other financial statements are required
to be included in the Registration Statement. The financial data set forth
in the Prospectus under the captions "Prospectus Summary--Summary
Consolidated Financial Data," "Selected Consolidated Financial Data" and
"Capitalization" fairly present in all material respects the information
set forth therein on a basis consistent with that of the audited financial
statements contained in the Registration Statement.
(j) Incorporation and Good Standing of the Company and its
Subsidiary. Each of the Company and its subsidiary has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and, in the case of the
Company, to enter into and perform its obligations under this Agreement.
Each of the Company and each subsidiary is duly qualified as a foreign
corporation to transact business and is in good standing in the State of
California and each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions (other than the State of
California) where the failure to so qualify or to be in good standing would
not, individually or in the aggregate, result in a Material Adverse Change.
All of the issued and outstanding capital stock of each subsidiary has been
duly authorized and validly issued, is fully paid and nonassessable and is
owned by the Company, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim. The Company does not own or control,
directly or indirectly, any corporation, association or other entity other
than the subsidiary listed in Exhibit 21 to the Registration Statement.
(k) Capitalization and Other Capital Stock Matters. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to
4.
employee benefit plans described in the Prospectus or upon exercise of
outstanding options or warrants described in the Prospectus). The Common
Stock (including the Common Shares) conforms in all material respects to
the description thereof contained in the Prospectus. All of the issued and
outstanding shares of Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable and have been issued in
compliance with the registration or exemption provisions of the federal
securities laws. None of the outstanding shares of Common Stock were issued
in violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company.
There are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or equity or
debt securities convertible into or exchangeable or exercisable for, any
capital stock of the Company or its subsidiary other than those described
in the Prospectus. The description of the Company's stock option, stock
bonus and other stock plans or arrangements, and the options or other
rights granted thereunder, set forth in the Prospectus accurately and
fairly presents in all material respects the information required to be
disclosed with respect to such plans, arrangements, options and rights.
(l) Stock Exchange Listing. The Common Shares have been approved
for listing on the Nasdaq National Market, subject only to official notice
of issuance.
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor its
subsidiary is in violation of its charter or by-laws or is in default (or,
with the giving of notice or lapse of time, would be in default)
("Default") under any indenture, mortgage, loan or credit agreement, note,
contract, franchise, lease or other instrument to which the Company or its
subsidiary is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or its subsidiary is
subject (each, an "Existing Instrument"), except for such Defaults as would
not, individually or in the aggregate, result in a Material Adverse Change.
The Company's execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by the Prospectus
(i) have been duly authorized by all necessary corporate action and will
not result in any violation of the provisions of the charter or by-laws of
the Company or its subsidiary, (ii) will not conflict with or constitute a
breach of, or Default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
its subsidiary pursuant to, or require the consent of any other party to,
any Existing Instrument, except for such conflicts, breaches, Defaults,
liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and (iii) will not result in
any violation of any law, administrative regulation or administrative or
court decree applicable to the Company or its subsidiary, except for any
violations that would not, individually or in the aggregate, result in a
Material Adverse Change. No consent, approval, authorization or other order
of, or registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company's execution,
delivery and performance of this Agreement and consummation of the
transactions contemplated hereby and by the Prospectus, except such as have
been obtained or made by the Company and are in full force and effect under
the Securities Act, applicable state securities or blue sky laws and from
the National Association of Securities Dealers, Inc. (the "NASD").
5.
(n) No Material Actions or Proceedings. Except as disclosed in the
Prospectus, there are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company's knowledge, threatened
(i) against or affecting the Company or its subsidiary, (ii) which has as
the subject thereof any officer or director of, or property owned or leased
by, the Company or its subsidiary or (iii) relating to environmental or
discrimination matters, where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined
adversely to the Company or such subsidiary and (B) any such action, suit
or proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change or to materially and adversely affect
the ability of the Company to consummate the transactions contemplated by
this Agreement.
(o) Intellectual Property Rights. Except as disclosed in the
Prospectus, the Company and its subsidiary own or possess sufficient
trademarks, trade names, patent rights, copyrights, licenses, approvals,
trade secrets and other similar rights (collectively, "Intellectual
Property Rights") reasonably necessary to conduct their businesses as now
conducted; and the expected expiration of any of such Intellectual Property
Rights would not result in a Material Adverse Change. Except as disclosed
in the Prospectus, neither the Company nor its subsidiary has received any
notice of infringement or conflict with asserted Intellectual Property
Rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Change.
(p) All Necessary Permits, etc. Except as disclosed in the
Prospectus, the Company and each subsidiary possess such valid and current
certificates, authorizations or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct their
respective businesses, and neither the Company nor any subsidiary has
received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, could result in a Material
Adverse Change.
(q) Title to Properties. Except as disclosed in the Prospectus, the
Company and each of its subsidiary has good and marketable title to all the
properties and assets reflected as owned in the financial statements
referred to in Section 1(A) (i) above, in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except such as do not materially and adversely affect the
value of such property and do not materially interfere with the use made or
proposed to be made of such property by the Company or such subsidiary.
Except as disclosed in the Prospectus, the real property, improvements,
equipment and personal property held under lease by the Company or any
subsidiary are held under valid and enforceable leases, with such
exceptions as are not material and do not materially interfere with the use
made or proposed to be made of such real property, improvements, equipment
or personal property by the Company or such subsidiary.
(r) Tax Law Compliance. The Company and its consolidated subsidiary
have filed all necessary federal, state and foreign income and franchise
tax returns and have paid all taxes required to be paid by any of them and,
if due and payable, any related or
6.
similar assessment, fine or penalty levied against any of them. The Company
has made adequate charges, accruals and reserves in the applicable
financial statements referred to in Section 1 (A) (i) above in respect of
all federal, state and foreign income and franchise taxes for all periods
as to which the tax liability of the Company or any of its consolidated
subsidiary has not been finally determined.
(s) Company Not an "Investment Company." The Company has been
advised of the rules and requirements under the Investment Company Act of
1940, as amended (the "Investment Company Act"). The Company is not, and
after receipt of payment for the Common Shares will not be, an "investment
company" within the meaning of the Investment Company Act and will conduct
its business in a manner so that it will not become subject to the
Investment Company Act.
(t) Insurance. Each of the Company and its subsidiary are insured
by recognized, financially sound and reputable institutions with policies
in such amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary for their businesses including, but
not limited to, policies covering real and personal property owned or
leased by the Company and its subsidiary against theft, damage,
destruction, acts of vandalism and earthquakes. The Company has no reason
to believe that it or any subsidiary will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change. Neither of the Company nor
any subsidiary has been denied any insurance coverage which it has sought
or for which it has applied.
(u) Labor Matters. To the best of the Company's knowledge, no labor
disturbance by the employees of the Company or its subsidiary exists or is
imminent; and, to the Company's knowledge, there are no existing or
imminent labor disturbance by the employees of any of its principal
suppliers, subassemblers, value added resellers, subcontractors, original
equipment manufacturers, authorized dealers or international distributors
that might be expected to result in a Material Adverse Change.
(v) Related Party Transactions. There are no business relationships
or related-party transactions involving the Company or any subsidiary or
any other person required to be described in the Prospectus which have not
been described as required.
(w) No Unlawful Contributions or Other Payments. Neither the
Company nor its subsidiary nor, to the best of the Company's knowledge, any
employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of the
character required to be disclosed in the Prospectus.
(x) Company's Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in
7.
conformity with generally accepted accounting principles in the United
States and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(y) Compliance with Environmental Laws. Except as would not,
individually or in the aggregate, result in a Material Adverse Change (i)
neither the Company nor its subsidiary is in violation of any federal,
state, local or foreign law or regulation relating to pollution or
protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum and petroleum products (collectively,
"Materials of Environmental Concern"), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environment Concern (collectively,
"Environmental Laws"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or its subsidiary
under applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company or its subsidiary received any
written communication, whether from a governmental authority, citizens
group, employee or otherwise, that alleges that the Company or its
subsidiary is in violation of any Environmental Law; (ii) there is no
claim, action or cause of action filed with a court or governmental
authority, no investigation with respect to which the Company has received
written notice, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages, personal
injuries, attorneys' fees or penalties arising out of, based on or
resulting from the presence, or release into the environment, of any
Material of Environmental Concern at any location owned, leased or operated
by the Company or its subsidiary, now or in the past (collectively,
"Environmental Claims"), pending or, to the best of the Company's
knowledge, threatened against the Company or its subsidiary or any person
or entity whose liability for any Environmental Claim the Company or its
subsidiary has retained or assumed either contractually or by operation of
law; and (iii) to the best of the Company's knowledge, there are no past or
present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that
reasonably could result in a violation of any Environmental Law or form the
basis of a potential Environmental Claim against the Company or its
subsidiary or against any person or entity whose liability for any
Environmental Claim the Company or its subsidiary has retained or assumed
either contractually or by operation of law.
(z) ERISA Compliance. The Company and its subsidiary and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or
maintained by the Company, its subsidiary or their "ERISA Affiliates" (as
defined below) are in compliance in all material respects with ERISA.
8.
"ERISA Affiliate" means, with respect to the Company or a subsidiary, any
member of any group of organizations described in Sections 414(b),(c),(m)
or (o) of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the "Code") of which
the Company or such subsidiary is a member. No "reportable event" (as
defined under ERISA) has occurred or is reasonably expected to occur with
respect to any "employee benefit plan" established or maintained by the
Company, its subsidiary or any of their ERISA Affiliates. No "employee
benefit plan" established or maintained by the Company, its subsidiary or
any of their ERISA Affiliates, if such "employee benefit plan" were
terminated, would have any "amount of unfunded benefit liabilities" (as
defined under ERISA). Neither the Company, its subsidiary nor any of their
ERISA Affiliates has incurred or reasonably expects to incur any liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal
from, any "employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B
of the Code. Each "employee benefit plan" established or maintained by the
Company, its subsidiary or any of their ERISA Affiliates that is intended
to be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or failure to act, which would
cause the loss of such qualification.
(aa) Office of Chief Scientist. Except as described in the
Prospectus, the Company is not in material violation of any conditions or
requirements stipulated by the instruments of approval granted to any of
them by the Office of Chief Scientist in the Ministry of Industry & Trade
and any applicable laws and regulations, with respect to any research and
development grants given to it by such office, which violation,
individually or in the aggregate, could have a Material Adverse Effect. All
information supplied by the Company with respect to such applications was
true, correct and complete in all material respects when supplied to the
appropriate authorities.
(bb) Israeli Employment Agreements. The Company's employment
agreements in Israel do not differentiate between compensation paid to
employees for a 43 hour work week or for maximum daily hours, and
compensation for overtime work. The Company believes that it does not have
any material exposure by reason of claims by the employees due to (i) the
fact that most of the employees of the Company are in a position of
"special trust," (ii) the agreement by the employees to be compensated on a
fixed basis, (iii) the payment by the Company of higher salaries, which
take into account payments for additional hours, (iv) the distribution of
bonuses and stock options by the Company, which come in part as
compensation for additional hours, (v) the fact that a non-material number
of overtime hours has been reported, and (vi) the fact that most employees
sign a "waiver of claims" letter upon termination of employment.
B. Representations and Warranties of the Selling Stockholders. Each Selling
Stockholder, severally and not jointly, represents, warrants and covenants to
each Underwriter as follows:
(a) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as
the enforcement hereof my be limited by bankruptcy, insolvency,
9.
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
(b) The Custody Agreement and Power of Attorney. Each of the (i)
Custody Agreement signed by such Selling Stockholder and [____], as
custodian (the "Custodian"), relating to the deposit of the Common Shares
to be sold by such Selling Stockholder (the "Custody Agreement") and (ii)
Power of Attorney appointing certain individuals named therein as such
Selling Stockholder's attorneys-in-fact (each, an "Attorney-in-Fact") to
the extent set forth therein relating to the transactions contemplated
hereby and by the Prospectus (the "Power of Attorney"), of such Selling
Stockholder has been duly authorized, executed and delivered by such
Selling Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
(c) Title to Common Shares to be Sold; All Authorizations Obtained.
Such Selling Stockholder has, and on the First Closing Date and the Second
Closing Date (as defined below) will have, good and valid title to all of
the Common Shares which may be sold by such Selling Stockholder pursuant to
this Agreement on such date and the legal right and power, and all
authorizations and approvals required by law and under its charter or by-
laws, to enter into this Agreement and its Custody Agreement and Power of
Attorney, to sell, transfer and deliver all of the Common Shares which may
be sold by such Selling Stockholder pursuant to this Agreement and to
comply with its other obligations hereunder and thereunder.
(d) Delivery of the Common Shares to be Sold. Delivery of the Common
Shares which are sold by such Selling Stockholder pursuant to this
Agreement and upon receipt of payment therefor will pass good and valid
title to such Common Shares, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or other claim, provided that the
Underwriters purchase such Common Shares without notice of adverse claims.
(e) Non-Contravention; No Further Authorizations or Approvals
Required. The execution and delivery by such Selling Stockholder of, and
the performance by such Selling Stockholder of its obligations under, this
Agreement, the Custody Agreement and the Power of Attorney will not
contravene or conflict with, result in a breach of, or constitute a Default
under, or require the consent of any other party to, the charter or by-
laws, or other organizational documents of such Selling Stockholder or any
other agreement or instrument to which such Selling Stockholder is a party
or by which it is bound or under which it is entitled to any right or
benefit, any provision of applicable law or any judgment, order, decree or
regulation applicable to such Selling Stockholder of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder. No consent, approval,
authorization or other order of, or registration or filing with any court
or other governmental authority or agency, is required for the consummation
by such Selling Stockholder of the transactions
10.
contemplated in the Agreement, except such as have been obtained or made
and are in full force and effect under the Securities Act, applicable state
securities or blue sky laws and from the NASD.
(f) No Registration or Other Similar Rights. Such Selling
Stockholder does not have any registration or other similar rights to have
any equity or debt securities registered for sale by the Company under the
Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as are described in the Prospectus under
"Shares Eligible for Future Sale."
(g) No Further Consents, etc. No consent, approval or waiver is
required under any instrument or agreement to which such Selling
Stockholder is a party or by which it is bound or under which it is
entitled to any right or benefit, in connection with the offering, sale or
purchase by the Underwriters of any of the Common Shares which may be sold
by such Selling Stockholder under this Agreement or the consummation by
such Selling Stockholder of any of the other transactions contemplated
hereby.
(h) Disclosure Made by Such Selling Stockholder in the Prospectus.
All information furnished by or on behalf of such Selling Stockholder in
writing expressly for use in the Registration Statement and Prospectus is,
and on the First closing Date and the second Closing Date will be, true,
correct, and complete in all material respects, and does not, and on the
First Closing Date and the Second Closing Date will not, contain any untrue
statement of a material fact or omit to state any material fact necessary
to make such information not misleading. Such Selling Stockholder confirms
as accurate the number of shares of Common Stock set forth opposite such
Selling Stockholder's name in the Prospectus under the caption "Principal
and Selling Stockholders" (both prior to and after giving effect to the
sale of the Common Shares).
(i) No Price Stabilization or Manipulation. Such Selling Stockholder
has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Shares.
Any certificate signed by or on behalf of any Selling Stockholder and delivered
to the Representative or to counsel for the Underwriters shall be deemed to be a
representation and warranty by such Selling Stockholder to each Underwriter as
to the matters covered thereby.
Section 2. Purchase, Sale and Delivery of the Common Shares.
(a) The Firm Common Shares. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an aggregate of
2,000,000 Firm Common Shares and (ii) the Selling Stockholders agree to sell to
the several Underwriters an aggregate of 2,000,000 Firm Common Shares, each
Selling Stockholder selling the number of Firm Common Shares set forth opposite
such Selling Stockholder's name on Schedule B. On the basis of the
----------
representations, warranties and agreements herein contained, and upon the terms
but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly to purchase from
11.
the Comapny and the Selling Stockholders the respective number of Firm Common
Shares set forth opposite their names on Schedue A. The purchase price per Firm
---------
Common Share to be paid by the several Underwriters to the Company and the
Selling Stockholders shall be $[____] per share.
(b) The First Closing Date. Delivery of certificates for the Firm
Common Shares to be purchased by the Underwriters and payment therefor shall be
made at the offices of BAS, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (or
such other place as may be agreed to by the Company and the Representatives) at
8:00 a.m. San Francisco time, on ___, 2000 or such other time and date not later
than 10:30 a.m. San Francisco time, on ____, 2000 as the Representatives shall
designate by notice to the Company (the time and date of such closing are called
the "First Closing Date"). The Company hereby acknowledges that circumstances
under which the Representatives may provide notice to postpone the First Closing
Date as originally scheduled include, but are in no way limited to, any
determination by the Company or the Representatives to recirculate to the public
copies of an amended or supplemented Prospectus or a delay as contemplated by
the provisions of Section 10.
(c) The Optional Common Shares; the Second Closing Date. In
addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Company and certain of the Selling Stockholders hereby grant an option to
the several Underwriters to purchase, severally and not jointly, up to an
aggregate of 600,000 Optional Common Shares from the Company and certain of the
Selling Stockholders at the purchase price per share to be paid by the
Underwriters for the Firm Common Shares. The option granted hereunder is for use
by the Underwriters solely in covering any over-allotments in connection with
the sale and distribution of the Firm Common Shares. The option granted
hereunder may be exercised at any time (but not more than once) upon notice by
the Representatives to the Company and certain of the Selling Stockholders,
which notice may be given at any time within 30 days from the date of this
Agreement. Such notice shall set forth (i) the aggregate number of Optional
Common Shares as to which the Underwriters are exercising the option, (ii) the
names and denominations in which the certificates for the Optional Common Shares
are to be registered and (iii) the time, date and place at which such
certificates will be delivered (which time and date may be simultaneous with,
but not earlier than, the First Closing Date; and in such case the term "First
Closing Date" shall refer to the time and date of delivery of certificates for
the Firm Common Shares and the Optional Common Shares). Such time and date of
delivery, if subsequent to the First Closing Date, is called the "Second Closing
Date" and shall be determined by the Representatives and shall not be earlier
than three nor later than five full business days after delivery of such notice
of exercise. If any Optional Common Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Optional Common
Shares (subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total
number of Optional Common Shares to be purchased as the number of Firm Common
Shares set forth on Schedule A opposite the name of such Underwriter bears to
----------
the total number of Firm Common Shares. The Representatives may cancel the
option at any time prior to its expiration by giving written notice of such
cancellation to the Company.
(d) Public Offering of the Common Shares. The Representatives
hereby advise the Company and the Selling Stockholders that the Underwriters
intend to offer for sale to the
12.
public, as described in the Prospectus, their respective portions of the Common
Shares as soon after this Agreement has been executed and the Registration
Statement has been declared effective as the Representatives, in its sole
judgment, has determined is advisable and practicable.
(e) Payment for the Common Shares. Payment for the Common Shares
sold by the Company shall be made at the First Closing Date (and, if applicable,
at the Second Closing Date) by wire transfer of immediately available funds to
the order of the Company. Payment for the Common Shares sold by the Selling
Stockholders shall be made at the First Closing Date (and, if applicable, at the
Second Closing Date ) by wire transfer of immediately available funds to the
order of the Custodian.
It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Common Shares and any Optional Common Shares the Underwriters have agreed
to purchase. BAS, individually and not as the Representatives of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations under
this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Common Shares to be sold by such Selling Stockholder to
the several Underwriters, or otherwise in connection with the performance of
such Selling Stockholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling Stockholder hereunder and to hold such amounts for the account of such
Selling Stockholder with the Custodian under the Custody Agreement.
(f) Delivery of the Common Shares. The Company and the Selling
Stockholders shall deliver, or cause to be delivered, to the Representatives for
the accounts of the several Underwriters certificates for the Firm Common Shares
to be sold by them at the First Closing Date, against the irrevocable release of
a wire transfer of immediately available funds for the amount of the purchase
price therefor. The Company and certain of the Selling Stockholders shall also
deliver, or cause to be delivered, to the Representatives for the accounts of
the several Underwriters, certificates for the Optional Common Shares the
Underwriters have agreed to purchase at the First Closing Date or the Second
Closing Date, as the case may be, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefor. The certificates for the Common Shares shall be in definitive form and
registered in such names and denominations as the Representatives shall have
requested at least two full business days prior to the First Closing Date (or
the Second Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the Second
Closing Date, as the case may be) at a location in New York City as the
Representatives may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
13.
(g) Delivery of Prospectus to the Underwriters. Not later than
12:00 p.m. on the second business day following the date the Common Shares are
first released by the Underwriters for sale to the public, the Company shall
deliver or cause to be delivered, copies of the Prospectus in such quantities
and at such places as the Representatives shall reasonably request.
Section 3. Additional Covenants of the Company.
A. Covenants of the Company. The Company further covenants and agrees with
each Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and Supplements.
During such period beginning on the date hereof and ending on the later of
the First Closing Date or such date, as in the opinion of counsel for the
Underwriters, the Prospectus is no longer required by law to be delivered
in connection with sales by an Underwriter or dealer (the "Prospectus
Delivery Period"), prior to amending or supplementing the Registration
Statement (including any registration statement filed under Rule 462(b)
under the Securities Act) or the Prospectus, the Company shall furnish to
the Representatives for review a copy of each such proposed amendment or
supplement, and the Company shall not file any such proposed amendment or
supplement to which the Representatives reasonably objects.
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representatives in writing (i) of the
receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any filing
of any post-effective amendment to the Registration Statement or any
amendment or supplement to any preliminary prospectus or the Prospectus,
(iii) of the time and date that any post-effective amendment to the
Registration Statement becomes effective and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of any
order preventing or suspending the use of any preliminary prospectus or the
Prospectus, or of any proceedings to remove, suspend or terminate from
listing or quotation the Common Stock from any securities exchange upon
which it is listed for trading or included or designated for quotation, or
of the threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any time,
the Company will use its best efforts to obtain the lifting of such order
at the earliest possible moment. Additionally, the Company agrees that it
shall comply with the provisions of Rules 424(b), 430A and 434, as
applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under such Rule 424(b) were
received in a timely manner by the Commission.
(c) Amendments and Supplements to the Prospectus and Other Securities
Act Matters. If, during the Prospectus Delivery Period, any event shall
occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if in the reasonable opinion of the Representatives or
counsel for the Underwriters it is otherwise necessary to amend or
14.
supplement the Prospectus to comply with law, the Company agrees to
promptly prepare, file with the Commission and furnish at its own expense
to the Underwriters and to dealers, amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) Copies of any Amendments and Supplements to the Prospectus. The
Company agrees to furnish the Representatives, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any
amendments and supplements thereto as the Representatives may reasonably
request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of)
the state securities or blue sky laws or Canadian provincial Securities
laws of those jurisdictions designated by the Representatives, shall comply
with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the Common
Shares. The Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service
of process in any such jurisdiction where it is not presently qualified or
where it would be subject to taxation as a foreign corporation. The Company
will advise the Representatives promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the
Common Shares for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to obtain
the withdrawal thereof at the earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds from
the sale of the Common Shares sold by it in the manner described under the
caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Stock.
(h) Earnings Statement. As soon as practicable, the Company will
make generally available to its security holders and to the Representatives
an earnings statement (which need not be audited) covering the twelve-month
period ending December 31, 2000 that satisfies the provisions of Section
11(a) of the Securities Act.
(i) Periodic Reporting Obligations. During the Prospectus Delivery
Period the Company shall file, on a timely basis, with the Commission and
the Nasdaq National Market all reports and documents required to be filed
under the Exchange Act. Additionally, the Company shall report the use of
proceeds from the issuance of the Common Shares as may be required under
Rule 463 under the Securities Act.
15.
(j) Agreement Not To Offer or Sell Additional Securities. During
the period ending on the close of trading December 15, 2000, the Company
will not, without the prior written consent of BAS (which consent may be
withheld at the sole discretion of BAS), directly or indirectly, sell,
offer, contract or grant any option to sell, pledge, transfer or establish
an open "put equivalent position" within the meaning of Rule 16a-1(h) under
the Exchange Act, or otherwise dispose of or transfer, or announce the
offering of, or file any registration statement under the Securities Act in
respect of, any shares of Common Stock, options or warrants to acquire
shares of the Common Stock or securities exchangeable or exercisable for or
convertible into shares of Common Stock (other than as contemplated by this
Agreement with respect to the Common Shares); provided, however, that the
Company may issue shares of its Common Stock or options to purchase its
Common Stock, or Common Stock upon exercise of options, pursuant to any
stock option, stock bonus or other stock plan or arrangement described in
the Prospectus, but only if the holders of such shares, options, or shares
issued upon exercise of such options, agree in writing not to sell, offer,
dispose of or otherwise transfer any such shares or options during such 180
day period without the prior written consent of BAS (which consent may be
withheld at the sole discretion of the BAS).
(k) Future Reports to the Representatives. During the period of
five years hereafter the Company will furnish to the Representatives at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇: (i) as soon as practicable
after the end of each fiscal year, copies of the Annual Report of the
Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows
for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement,
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report
on Form 8-K or other report filed by the Company with the Commission, the
NASD or any securities exchange; and (iii) as soon as available, copies of
any report or communication of the Company mailed generally to holders of
its capital stock.
B. Covenants of the Selling Stockholders. Each Selling Stockholder further
covenants and agrees, severally and not jointly, with each Underwriter:
(a) Agreement Not to Offer or Sell Additional Securities. Such
Selling Stockholder will not, without the prior written consent of BAS
(which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell (including
without limitation any short sale), pledge, transfer, establish an open
"put equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of any shares of Common Stock, options
or warrants to acquire shares of Common Stock, or securities exchangeable
or exercisable for or convertible into shares of Common Stock currently or
hereafter owned either of record or beneficially (as defined in Rule 13d-3
under Securities Exchange Act of 1934, as amended) by the undersigned, or
publicly announce the undersigned's intention to do any of the foregoing,
for a period commencing on the date hereof and continuing through the close
of trading on December 15, 2000.
16.
(b) Delivery of Forms W-8 and W-9. To deliver to the Representative
prior to the First Closing 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).
BAS, on behalf of the several Underwriters, may, in its sole
discretion, waive in writing the performance by the Company or any Selling
Stockholder of any one or more of the foregoing covenants or extend the time for
their performance.
Section 4. Payment of Expenses. The Company agrees to pay all costs, fees and
expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses of
the Company's counsel, independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), each preliminary prospectus and the Prospectus, and
all amendments and supplements thereto, and this Agreement, (vi) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares for offer
and sale under the state securities or blue sky laws or the provincial
securities laws of Canada, and, if requested by the Representatives, preparing
and printing a "Blue Sky Survey" or memorandum, and any supplements thereto,
advising the Underwriters of such qualifications, registrations and exemptions,
(vii) the filing fees incident to, and the reasonable fees and expenses of
counsel for the Underwriters in connection with, the NASD's review and approval
of the Underwriters' participation in the offering and distribution of the
Common Shares, (viii) the fees and expenses associated with listing the Common
Shares on the Nasdaq National Market, (ix) all fees and expenses of the Selling
Stockholders' counsel, and (x) all other fees, costs and expenses referred to in
Item 13 of Part II of the Registration Statement. Except as provided in this
Section 4, Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay
their own expenses, including the fees and disbursements of their counsel.
Section 5. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Common Shares as
provided herein on the First Closing Date and, with respect to the Optional
Common Shares, the Second Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Company
Selling Stockholders set forth in Section 1(A) hereof and the Selling
Stockholders set forth in Section 1(B) hereof as of the date hereof and as of
the First Closing Date as though then made and, with respect to the Optional
Common Shares, as of the Second Closing Date as though then made, to the timely
performance by the Company and the Selling Stockholders of their respective
covenants and other obligations hereunder, and to each of the following
additional conditions:
17.
(a) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from Ernst & Young LLP, independent
public or certified public accountants for the Company, a letter dated the
date hereof addressed to the Underwriters and the Board of Directors of the
Company, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type
ordinarily included in accountant's "comfort letters" to underwriters,
delivered according to Statement of Auditing Standards No. 72 (or any
successor bulletin), with respect to the audited and unaudited financial
statements and certain financial information contained in the Registration
Statement and the Prospectus (and the Representatives shall have received
an additional 2 conformed copies of such accountants' letter).
(b) Compliance with Registration Requirements; No Stop Order; No
Objection from NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A under the
Securities Act) in the manner and within the time period required by
Rule 424(b) under the Securities Act; or the Company shall have filed
a post-effective amendment to the Registration Statement containing
the information required by such Rule 430A, and such post-effective
amendment shall have become effective; or, if the Company elected to
rely upon Rule 434 under the Securities Act and obtained the
Representative's consent thereto, the Company shall have filed a Term
Sheet with the Commission in the manner and within the time period
required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in
effect and no proceedings for such purpose shall have been instituted
or, to the knowledge of the Company and the Representatives,
threatened by the Commission; and
(iii) the NASD shall have raised no objection to the fairness
and reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change. For the period from and after the
date of this Agreement and prior to the First Closing Date and, with
respect to the Optional Common Shares, the Second Closing Date:
(i) in the reasonable judgment of the Representatives there
shall not have occurred any Material Adverse Change.
(d) Opinion of Counsel for the Company. On each of the First
Closing Date and the Second Closing Date, the Representatives shall have
received an opinion of each of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and
Bay Venture Counsel, counsel for the Company, dated as of such Closing
Date, substantially in the form attached as Exhibit A
---------
18.
and Exhibit B, respectively (and the Representatives shall have received
---------
an additional 2 conformed copies of such counsel's legal opinion).
(e) Opinion of Counsel for the Selling Stockholders. On each of the
First Closing Date and the Second Closing Date, the Representatives shall
have received the favorable opinion of Bay Venture Counsel, counsel for the
Selling Stockholders, dated as of such Closing Date, substantially in the
form attached as Exhibit C (and the Representatives shall have received an
---------
additional 2 conformed copies of such counsel's legal opinion).
(f) Opinion of Foreign Counsel for the Company. On each of the
First Closing Date and the Second Closing Date, the Representatives shall
have received the favorable opinion of ▇▇▇▇▇▇▇, Behar & Co., foreign
counsel for the Company, dated as of such Closing Date, to the effect that:
(i) Vyyo Limited has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own or lease, as the case may be, and
to operate its properties and conduct its business as described in the
Prospectus, and has all necessary authorizations in Israel to enable
it to do business as a foreign corporation in those jurisdictions in
which it conducts business and which are described in the Prospectus;
and
(ii) All the outstanding shares of capital stock of Vyyo Limited
have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of Vyyo Limited
are owned by the Company either directly or through wholly owned
subsidiary free and clear of any perfected security interest and, to
the knowledge of such counsel, after due inquiry, any other security
interest, claim, lien or encumbrance.
(g) Opinion of Patent Counsel for the Company. On each of the First
Closing Date and the Second Closing Date, the Representatives shall have
received the favorable opinion of Crosby, Heafy, ▇▇▇▇▇ & May, patent
counsel for the Company, dated as of such Closing Date, the form of which
is attached as Exhibit D (and the Representatives shall have received an
---------
additional 2 conformed copies of such counsel's legal opinion).
(h) Opinion of Counsel for the Underwriters. On each of the First
Closing Date and the Second Closing Date the Representatives shall have
received the favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel
for the Underwriters, dated as of such Closing Date, with respect to the
matters set forth in paragraphs (i), (vii) (with respect to subparagraph
(i) only, (viii), (ix), (x) (xi) and (xiii) (with respect to the captions
"Description of Capital Stock" and "Underwriting" under subparagraph (i)
only), (xii), and the next-to-last paragraph of Exhibit A (and the
---------
Representatives shall have received an additional 2 conformed copies of
such counsel's legal opinion).
(i) Officers' Certificate. On each of the First Closing Date and
the Second Closing Date, the Representatives shall have received a written
certificate executed by
19.
the Chairman of the Board, Chief Executive Officer or President of the
Company and the Chief Financial Officer or Chief Accounting Officer of the
Company, dated as of such Closing Date, to the effect set forth in
subsections (b)(ii) of this Section 5, and further to the effect that, to
their knowledge:
(i) for the period from and after the date of this Agreement
and prior to such Closing Date, there has not occurred any Material
Adverse Change;
(ii) the representations, warranties and covenants of the
Company set forth in Section 1(A) of this Agreement are true and
correct in all material respects with the same force and effect as
though expressly made on and as of such Closing Date, and
(iii) the Company has complied in all material respects with all
the agreements hereunder and satisfied all the conditions on its part
to be performed or satisfied hereunder at or prior to such Closing
Date.
(j) Bring-down Comfort Letter. On each of the First Closing Date
and the Second Closing Date, the Representatives shall have received from
Ernst & Young LLP, independent public or certified public accountants for
the Company, a letter dated such date, in form and substance reasonably
satisfactory to the Representatives, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection (a)
of this Section 5, except that the specified date referred to therein for
the carrying out of procedures shall be no more than three business days
prior to the First Closing Date or Second Closing Date, as the case may be
(and the Representatives shall have received an additional 2 conformed
copies of such accountants' letter).
(k) Selling Stockholder's Certificate. On each of the First Closing
Date and the Second Closing Date the Representatives shall receive a
written certificate executed by the Attorney-in-Fact of each Selling
Stockholder, dated as of such Closing Date, to the effect that:
(i) The representations, warranties and covenants of such
Selling Stockholder set forth in Section 1(B) of this Agreement are
true and correct with the same force and effect as though expressly
made by such Selling Stockholder on and as of such Closing Date; and
(ii) Such Selling Stockholder has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date.
(l) Selling Stockholders' Documents. On the date hereof, the
Company and the Selling Stockholders shall have furnished for review by the
Representatives copies of the Powers of Attorney and Custody Agreements
executed by each of the Selling Stockholders and such further information,
certificates and documents as the Representatives may reasonably request.
20.
(m) Lock-Up Agreement. On the date hereof, the Company shall have
furnished to the Representatives an agreement in the form of Exhibit E
---------
hereto from "each director, officer and each beneficial owner of Common
Stock" (as defined and determined according to Rule 13d-3 under the
Exchange Act, except that a ninety day period shall be used rather than the
sixty day period set forth therein) and such agreement shall be in full
force and effect on each of the First Closing Date and the Second Closing
Date.
(n) Additional Documents. On or before each of the First Closing
Date and the Second Closing Date, the Representatives and counsel for the
Underwriters shall have received such information, documents and opinions
as they may reasonably require for the purposes of enabling them to pass
upon the issuance and sale of the Common Shares as contemplated herein, or
in order to evidence the accuracy of any of the representations and
warranties, or the satisfaction of any of the conditions or agreements,
herein contained.
If any condition specified in this Section 5 is not satisfied when and
as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Stockholders at any
time on or prior to the First Closing Date and, with respect to the Optional
Common Shares, at any time prior to the Second Closing Date, which termination
shall be without liability on the part of any party to any other party, except
that Section 4, Section 6, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
Section 6. Reimbursement of Underwriters' Expenses. If this Agreement is
terminated by the Representatives pursuant to Section 5, Section 7, Section 10
or Section 11, or if the sale to the Underwriters of the Common Shares on the
First Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse the Representatives
and the other Underwriters (or such Underwriters as have terminated this
Agreement with respect to themselves), severally, upon demand for all out-of-
pocket expenses that shall have been reasonably incurred by the Representatives
and the Underwriters in connection with the proposed purchase and the offering
and sale of the Common Shares, including but not limited to the reasonable fees
and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.
Section 7. Effectiveness of this Agreement.
This Agreement shall not become effective until the later of (i) the
execution of this Agreement by the parties hereto and (ii) notification by the
Commission to the Company and the Representatives of the effectiveness of the
Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any
party by notice to each of the other parties hereto, and any such termination
shall be without liability on the part of (a) the Company to any Underwriter,
except that the Company shall be obligated to reimburse the expenses of the
Representatives and the Underwriters pursuant to Sections 4 and 6 hereof, (b)
any Underwriter to the Company, or (c) any party hereto to any other party
except
21.
that the provisions of Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
Section 8. Indemnification.
(a) Indemnification of the Underwriters.
(1) The Company and the Company Selling Stockholders agree,
severally and not jointly, to 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 and the Exchange Act
against any loss, claim, damage, liability or expense, as incurred, to
which such Underwriter or such controlling person may become subject, under
the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement
of any litigation, if such settlement is effected with the written consent
of the Company and the Company Selling Stockholders), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A or Rule 434 under the
Securities Act, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading; or (ii) upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; and to reimburse each Underwriter and each such
controlling person for any and all expenses reasonably incurred (including
the reasonable fees and disbursements of counsel chosen by BAS) as such
expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising
or paying any such loss, claim, damage, liability, expense or action;
provided, however, that the foregoing indemnity agreement shall not apply
to any loss, claim, damage, liability or expense to the extent, but only to
the extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and
in conformity with written information furnished to the Company or the
Company Selling Stockholders by the Representatives expressly for use in
the Registration Statement, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto); provided, further, that with
respect to any preliminary prospectus, the foregoing indemnity agreement
shall not inure to the benefit of any Underwriter from whom the person
asserting any loss, claim, damage, liability or expense purchased Common
Shares, or any person controlling such Underwriter, if copies of the
Prospectus were timely delivered to the Underwriter pursuant to Section 2
and a copy of the Prospectus (as then amended or supplemented if the
Company or the Company Selling Stockholders shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Common Shares to such person, and if the Prospectus (as so amended or
22.
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or expense; and provided, further, the Company and each
of the Underwriters agrees with each of the Company Selling Shareholders
that any claim of such Underwriter against such Company Selling Shareholder
for indemnification, reimbursement or advancement of expenses pursuant to
this Section 8(a) or for breach of any representation or warranty in
Section 1 hereof shall first be sought by such Underwriter to be satisfied
in full by the Company and, subject to the limitation on the aggregate
liability of each Company Selling Shareholder set forth below, shall be
satisfied by the Company Selling Shareholders only to the extent that such
claim has not been satisfied in full by the Company. The liability of each
Company Selling Shareholder under this Agreement shall be limited to an
amount as set forth in Section 8(e) below. The indemnity agreement set
forth in this Section 8(a) shall be in addition to any liabilities that the
Company or the Company Selling Stockholders may otherwise have.
(2) Each of the Selling Stockholders (other than the Company
Selling Stockholders) agree, severally and not jointly, to 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 and the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Underwriter or such
controlling person may become subject, under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Selling Stockholders
(other than the Company Selling Stockholders)), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A or Rule 434 under the
Securities Act, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading; or (ii) upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, to the extent, but only to the extent in the
case of (i) and (ii) herein, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information relating to such Selling Stockholder (other than the Company
Selling Stockholders) furnished to the Company by such Selling Stockholder
(other than the Company Selling Stockholders) expressly for use therein,
and to reimburse each Underwriter and each such controlling person for any
and all expenses reasonably incurred (including the reasonable fees and
disbursements of counsel chosen by BAS) as such expenses are reasonably
incurred by such Underwriter or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action;
23.
provided, however, that the foregoing indemnity agreement shall not apply
to any loss, claim, damage, liability or expense to the extent, but only to
the extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and
in conformity with written information furnished to the Selling
Stockholders (other than the Company Selling Stockholders) by the
Representatives expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); provided, further, that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the
benefit of any Underwriter from whom the person asserting any loss, claim,
damage, liability or expense purchased Common Shares, or any person
controlling such Underwriter, if copies of the Prospectus were timely
delivered to the Underwriter pursuant to Section 2 and a copy of the
Prospectus (as then amended or supplemented if the Selling Stockholders
(other than the Company Selling Stockholders) shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Common Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or expense; and provided, further, the Company and each
of the Underwriters agrees with each of the Selling Shareholders (other
than the Company Selling Stockholders) that any claim of such Underwriter
against such Selling Shareholder (other than the Company Selling
Stockholders) for indemnification, reimbursement or advancement of expenses
pursuant to this Section 8(a) or for breach of any representation or
warranty in Section 1 hereof shall first be sought by such Underwriter to
be satisfied in full by the Company and, subject to the limitation on the
aggregate liability of each Selling Shareholder (other than the Company
Selling Stockholders) set forth below, shall be satisfied by the Selling
Shareholders (other than the Company Selling Stockholders) only to the
extent that such claim has not been satisfied in full by the Company. The
liability of each Selling Shareholder (other than the Company Selling
Stockholders) under this Agreement shall be limited to an amount as set
forth in Section 8(e) below. The indemnity agreement set forth in this
Section 8(a) shall be in addition to any liabilities that the Selling
Stockholders (other than the Company Selling Stockholders) may otherwise
have.
(b) Indemnification of the Company, its Directors and Officers.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act, and
the Selling Stockholders against any loss, claim, damage, liability or
expense, as incurred, to which the Company, or any such director, officer
or controlling person and the Selling Stockholders may become subject,
under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the
written consent of such Underwriter), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment
24.
or supplement thereto), or arises out of or is based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any preliminary prospectus, the Prospectus (or any
amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by the Representatives
expressly for use therein; and to reimburse the Company, or any such
director, officer or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer or
controlling person or the Selling Stockholders in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. The Company and the Selling
Stockholders hereby acknowledges that the only information that the
Underwriters have furnished to the Company expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) are the statements set forth (A) as
the last paragraphs on the inside front cover page of the Prospectus
concerning stabilization and passive market making by the Underwriters and
(B) in the table in the first paragraph and as the second paragraph second
and eleventh paragraphs under the caption "Underwriting" in the Prospectus;
and the Underwriters confirm that such statements are correct. The
indemnity agreement set forth in this Section 8(b) shall be in addition to
any liabilities that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
for contribution or otherwise than under the indemnity agreement contained
in this Section 8 or to the extent it is not prejudiced as a proximate
result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect, jointly
with all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and
to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified
party
25.
under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i)
the indemnified party shall have employed separate counsel in accordance
with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses
of more than one separate counsel (together with local counsel), approved
by the indemnifying party (BAS in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action, in each of
which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 8(c) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement, compromise or consent to
the entry of judgment in any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been
a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent includes
an unconditional release of such indemnified party from all liability on
claims that are the subject matter of such action, suit or proceeding and
(ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act by or on behalf of an indemnified party.
(e) Notwithstanding the foregoing, the liability of each Selling
Stockholder under such Selling Stockholder's representations and warranties
contained in Section 1 hereof, under the indemnity and contribution
agreements contained in this Section 8, and this Agreement shall be limited
to an amount equal to the initial public offering price of the Securities
sold by each Selling Stockholder to the Underwriters less the discounts and
commisions paid for such Securities. The Company and each Selling
Stockholder may agree, as among themselves and without limiting the rights
of the Underwriters under this Agreement, as to the respective amounts of
such liability for which they each shall be responsible.
26.
Section 9. Contribution.
If the indemnification provided for in Section 8 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company or the Selling Stockholders, as the case may
be, on the one hand, and the Underwriters, on the other hand, from the offering
of the Common Shares pursuant to this Agreement 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 or the Selling
Stockholders, as the case may be, on the one hand, and the Underwriters, on the
other hand, in connection with the statements or omissions or inaccuracies in
the representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company or the Selling
Stockholders, as the case may be, on the one hand, and the Underwriters, on the
other hand, in connection with the offering of the Common Shares pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Common Shares pursuant to this
Agreement (before deducting expenses) received by the Company or the Selling
Stockholders, as the case may be, and the total underwriting discount received
by the Underwriters, in each case as set forth on the front cover page of the
Prospectus (or, if Rule 434 under the Securities Act is used, the corresponding
location on the Term Sheet) bear to the aggregate initial public offering price
of the Common Shares as set forth on such cover. The relative fault of the
Company or the Selling Stockholders, as the case may be, on the one hand, and
the Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholders, as the case may
be, on the one hand, or the Underwriters, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9
were 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 account of the equitable considerations referred to in this Section 9.
27.
Notwithstanding the provisions of this Section 9, no Underwriter shall
be required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. 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
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
----------
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company with the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Company.
Section 10. Default of One or More of the Several Underwriters. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the several Underwriters shall fail or refuse to purchase Common Shares
that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
----------
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Common Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination. In
any such case either the Representatives or the Company shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
28.
Section 11. Termination of this Agreement. Prior to the First Closing Date
this Agreement may be terminated by the Representatives by notice given to the
Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
Nasdaq National Market, or trading in securities generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any of federal, New York,
Delaware or California authorities; (iii) there shall have occurred any outbreak
or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial
change in United States' or international political, financial or economic
conditions, as in the judgment of the Representatives is material and adverse
and makes it impracticable to market the Common Shares in the manner and on the
terms described in the Prospectus or to enforce contracts for the sale of
securities; (iv) in the judgment of the Representatives there shall have
occurred any Material Adverse Change; or (v) the Company shall have sustained a
loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Representatives may interfere materially
with the conduct of the business and operations of the Company regardless of
whether or not such loss shall have been insured. Any termination pursuant to
this Section 11 shall be without liability on the part of (a) the Company to any
Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 4 and
6 hereof, (b) any Underwriter to the Company, or (c) of any party hereto to any
other party except that the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
Section 12. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, as the case may be, and will
survive delivery of and payment for the Common Shares sold hereunder and any
termination of this Agreement.
Section 13. Notices. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
29.
With a copy to:
Banc of America Securities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to the Company:
Vyyo Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to the Selling Stockholders:
[ ]
With a copy to:
Bay Venture Counsel, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
Section 14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Common Shares as such from any of the Underwriters merely by reason of
such purchase.
30.
Section 15. Partial Unenforceability. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
Section 16. (a) Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
(b) Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the
federal courts of the United States of America located in the City and
County of San Francisco or the courts of the State of California in each
case located in the City and County of San Francisco (collectively, the
"Specified Courts"), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a "Related Judgment"), as to
which such jurisdiction is non-exclusive) of such courts in any such suit,
action or proceeding. Service of any process, summons, notice or document
by mail to such party's address set forth above shall be effective service
of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to
the laying of venue of any suit, action or other proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such suit, action or other
proceeding brought in any such court has been brought in an inconvenient
forum.
(c) Waiver of Immunity. With respect to any Related Proceeding,
each party irrevocably waives, to the fullest extent permitted by
applicable law, all immunity (whether on the basis of sovereignty or
otherwise) from jurisdiction, service of process, attachment (both before
and after judgment) and execution to which it might otherwise be entitled
in the Specified Courts, and with respect to any Related Judgment, each
party waives any such immunity in the Specified Courts or any other court
of competent jurisdiction, and will not raise or claim or cause to be
pleaded any such immunity at or in respect of any such Related Proceeding
or Related Judgment, including, without limitation, any immunity pursuant
to the United States Foreign Sovereign Immunities Act of 1976, as amended.
Section 17. Failure of One or More of the Selling Stockholders to Sell and
Deliver Common Shares. If one or more of the Selling Stockholders shall fail to
sell and deliver to the Underwriters the Common Shares to be sold and delivered
by such Selling Stockholders at the First Closing Date pursuant to this
Agreement, then the Underwriters may at their option, by written notice from the
Representative to the Company and the Selling stockholders, either (i) terminate
this Agreement without any liability on the part of any Underwriter or, except
as provided in Sections 4, 6, 8 and 9 hereof, the Company or the Selling
Stockholders, or (ii) purchase the shares which the Company and other Selling
Stockholders have agreed to sell
31.
and deliver in accordance with the terms hereof. If one or more of the Selling
Stockholders shall fail to sell and deliver to the Underwriters the Common
Shares to be sold and delivered by such Selling Stockholders pursuant to this
Agreement at the First Closing Date or the Second Closing Date, then the
Underwriters shall have the right, by written notice from the Representative to
the Company and the Selling Stockholders, to postpone the First Closing Date or
the Second Closing Date, as the case may be, but in no event for longer than
seven days in order that the required changes, if any, to the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected.
Section 18. General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the Section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
32.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
VYYO INC.
By:
-------------------------------------
[Title]
SELLING STOCKHOLDERS
By:
-------------------------------------
[Title]
The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Representatives in San Francisco, California as of the date first above
written.
BANC OF AMERICA SECURITIES LLC
CIBC WORLD MARKETS CORP.
▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇ & COMPANY, INC.
▇.▇. ▇▇▇▇▇▇▇▇▇ + CO., INC.
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
BANC OF AMERICA SECURITIES LLC
By: -------------------------------
Authorized Signatory
33.
SCHEDULE A
Number of Firm
Common Shares to
Underwriters be Purchased
------------ ----------------
---------------------
Total
=====================
Schedule A-1
SCHEDULE B
Number of Firm Number of Optional
Name of Common Shares Common Shares
Selling Stockholder To Be Sold To Be Sold
------------------- -------------- ------------------
Schedule B-1
EXHIBIT A
Opinion of counsel for the Company to be delivered pursuant to Section
5(d) of the Underwriting Agreement.
References to the Prospectus in this Exhibit A include any supplements
thereto at the Closing Date.
(i) The form of certificate used to evidence the Shares is in due
and proper form and complies in all material respects with all applicable
requirements of the Certificate of Incorporation and the Bylaws of the
Company and the General Corporation Law of the State of Delaware;
(ii) The issuance of the Shares will not be subject to any
preemptive right or similar right arising by operation of the Certificate
of Incorporation or the Bylaws of the Company of the General Corporation
Law of the State of Delaware, in each case as currently in effect;
(iii) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company;
(iv) The Shares to be purchased by the Underwriters from the Company
have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when certificates therefore have been issued
and delivered by the Company pursuant to the Underwriting Agreement against
payment of the consideration set forth therein, will be validly issued,
fully paid and nonassessable;
(v) The Registration Statement and the Prospectus, as of their
respective effective or issue dates appeared o their face to be
appropriately responsive in all material respects to the applicable
requirements of the Act and the Rules and Regulations, except that, in each
case, we express no opinion as to the financial statements, schedules and
other financial and statistical data included therein or excluded therefrom
or the exhibits thereto, and we do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus;
(vi) The statements (A) in the Prospectus under the captions
"Description of Capital Stock" and, to the extent of the description of the
Underwriting Agreement, the first, second, third and fourteenth paragraphs
under the caption "Underwriting" and (B) in Items 14 and 15 of the
Registration Statement, in each case insofar as such statements constitute
summaries of the legal matters, the provisions of the Certificate of
Incorporation or the Bylaws, documents or proceedings referred to therein
fairly summarize the matters referred to therein in all material respects;
(vii) Except as described of disclosed in the Prospectus, to our
knowledge, there are no legal or governmental actions, suits or proceedings
pending or threatened
Exhibit A-1
which are required to be described or disclosed in the Prospectus;
(viii) No Governmental Approval or consent, or registration or
approval of or with the Commission is required to be made or obtained by
the Company for the execution and delivery by the Company of the
Underwriting Agreement of the issuance and sale of the Shares by the
Company pursuant to the Underwriting Agreement, except as have been
obtained and made;
(ix) The execution and delivery of the Underwriting Agreement by the
Company and the issuance and sale of the Shares will not (i) contravene the
Certificate of Incorporation of the Bylaws of the Company; (ii) constitute
a violation of or default under the terms of any Applicable Contract except
to the extent disclosed in the Prospectus; or (iii) to the best of our
knowledge, violate any Applicable Law or Applicable Order. As used in such
opinion, (i) the term "Applicable Law" means those laws of the State of New
York, the State of Delaware, the State of California and the United States
of America that, in each case, in such counsel's experience, are normally
applicable to transactions of the type contemplated by the Underwriting
Agreement (except for United States, state and foreign securities or Blue
Sky laws, anti-fraud laws and rules and regulations of the National
Association of Securities Dealers, Inc.), but without such counsel having
made any special investigation regarding any other laws; (ii) the term
"Governmental Authorities" means any federal, New York, California or
Delaware executive, legislative, judicial, administrative or regulatory
body; (iii) the term "Applicable Order" means those judgements, orders or
decrees of any Governmental Authorities specifically identified to such
counsel by the Company to be applicable to the Company, as identified on
Schedule __ thereto and (iv) the term "Governmental Approval" means any
consent, approval, license, authorization or validation of, or filing,
qualification or registration with, any Governmental Authority required to
be made or obtained by the Company pursuant to Applicable Laws, other than
any consent, approval, license, authorization, validation, filing,
qualification or registration which may have become applicable as a result
of the Underwriters' involvement in the transactions contemplated by the
Underwriting Agreement or because of the Underwriters' legal or regulatory
status or because of any other facts specifically pertaining to the
Underwriters;
(x) The Company is not, and after receipt of payment for the Offered
Shares will not be an "investment company" as defined in the Investment
Company Act of 1940;
(xi) Except as disclosed in the Registration Statement of the
Prospectus, to our knowledge, no persons have registration or other similar
rights to have any equity or debt securities of the Company registered for
sale under the Registration Statement or included in the offering
contemplated by the Underwriting Agreement under any Applicable Contract
except for such rights as have been duly waived.
Exhibit A-2
EXHIBIT B
Opinion of counsel for the Company to be delivered pursuant to
Section 5(d) of the Underwriting Agreement.
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware;
(ii) The Company has the requisite corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under the Underwriting Agreement;
(iii) The Company is duly qualified as a foreign corporation and is
in good standing in the State of California and in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse
Change;
(iv) The authorized capital stock of the Company (including the
Common Stock) conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus under the caption
"Description of Capital Stock";
(v) All of the outstanding shares of Common Stock of the Company
as identified in the Prospectus have been duly authorized and validly
issued, and are fully paid and nonassessable.
(vi) The statements under the Prospectus caption "Shares Eligible
for Future Sale", insofar as such statements constitute a summary of
matters of law, fairly summarize such matters of law in all material
respects;
(vii) To our knowledge, other than as described in the Registration
Statement of Prospectus, there are no agreements, contracts, indentures,
leases or other written instruments that are required to be described in
the Registration Statement or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
(viii) To our knowledge, the Company is not in violation of the
Certificate of Incorporation or Bylaws, except in each case for such
violations as would not, individually or in the aggregate, result in a
Material Adverse Change.
Exhibit B-1
EXHIBIT C
Opinion of counsel for the Selling Stockholders to be delivered
pursuant to Section 5(e) of the Underwriting Agreement.
(i) The Shares to be sold by the Selling Stockholders are duly
authorized and validly issued and fully paid and nonassessable, and to the
best of our knowledge, have not been, and are not being, issued in
violation of any preemptive right, registration right, co-sale right, right
of first refusal, or other similar right, and the stockholders of the
Company have no preemptive or, to the best of our knowledge, other rights
to purchase any of these Shares that have not been waived or that have not
terminated upon or prior to the date hereof;
(ii) Each Selling Stockholder which is not a natural person has
full right, power and authority to enter into and to perform its
obligations under the Power of Attorney and Custody Agreement to executed
and delivered by it in connection with the transactions contemplated
therein; the Power of Attorney and Custody Agreement of each Selling
Stockholder that is not a natural person has been duly authorized by such
Selling Stockholder; the Power of Attorney and the Custody Agreement of
each Selling Stockholder has been duly executed and delivered by or on
behalf of such Selling Stockholder; and the Power of Attorney and, assuming
due authorization, execution and delivery of the Custody Agreement by the
Custodian, the Custody Agreement of each Selling Stockholder constitutes
the valid and binding agreement of each such Selling Stockholder,
enforceable in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting creditor's rights
generally and subject to general equitable principles and to limitations on
the availability of equitable relief, including specific performance;
(iii) Each of the Selling Stockholders has full right, power, and
authority to enter into and to perform its obligations under the
Underwriting Agreement and to sell, transfer, assign and deliver the Shares
to be sold by such Selling Stockholder under the Underwriting Agreement;
(iv) The Underwriting Agreement has been duly authorized by each
Selling Stockholder that is not a natural person and has been duly executed
and delivered by or on behalf of each Selling Stockholder and, assuming due
authorization, execution and delivery by you is valid and binding agreement
of such Selling Stockholder, enforceable in accordance with its terms,
except insofar as the indemnification and contribution provisions hereunder
may be limited by applicable law and except as the enforcement hereof may
be limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium, or other similar laws relating to or affecting creditor's
rights generally and subject to general principles and to limitations on
the availability of equitable relief, including specific performance; and
(v) Upon delivery of and payment for the Shares sold by each
Selling Shareholder as contemplated by the Underwriting Agreement; the
Underwriters will take
Exhibit C-1
such Shares free and clear of any adverse claim. Assuming the Underwriters
have purchased such Shares in good faith and without notice of adverse
claims.
Exhibit C-2
EXHIBIT D
Opinion of patent counsel for the Company to be delivered pursuant to
Section 5(g) of the Underwriting Agreement.
Such counsel are familiar with the technology used by the Company in
its business and the manner of its use thereof and have read the Registration
Statement and the Prospectus, including particularly the portions of the
Registration Statement and the Prospectus referring to patents, trade secrets,
trademarks, service marks or other proprietary information or materials and:
(ix) The Company is listed in the records of the United States
Patent and Trademark Office as the holder of record of the patents listed
on a schedule to such opinion (the "Patents") and each of the applications
listed on a schedule to such opinion (the "Applications"). To the knowledge
of such counsel, there are no claims of third parties to any ownership
interest or lien with respect to any of the Patents or Applications. Such
counsel is not aware of any material defect in form in the preparation or
filing of the Applications on behalf of the Company. To the knowledge of
such counsel, the Applications are being pursued by the Company. To the
knowledge of such counsel, the Company owns as its sole property the
Patents and pending Applications;
(x) The Company is listed in the records of the appropriate
foreign offices as the sole holder of record of the foreign patents listed
on a schedule to such opinion (the "Foreign Patents") and each of the
applications listed on a schedule to such opinion (the "Foreign
Applications"). Such counsel knows of no claims of third parties to any
ownership interest or lien with respect to the Foreign Patents or Foreign
Applications. Such counsel is not aware of any material defect of form in
the preparation or filing of the Foreign Applications on behalf of the
Company. To the knowledge of such counsel, the Foreign Applications are
being pursued by the Company. To the knowledge of such counsel, the Company
owns as its sole property the Foreign Patents and pending Foreign
Applications;
Such counsel knows of no reason why the Patents or Foreign Patents are
not valid as issued. Such counsel has no knowledge of any reason why any patent
to be issued as a result of any Application or Foreign Application would not be
valid or would not afford the Company useful patent protection with respect
thereto;
As to the statements under the captions "Risk Factors -- Our
Profitability Could Suffer If Third Parties Infringe Upon Our Proprietary
Technology" and "Business -- Intellectual Property," nothing has come to the
attention of such counsel which caused them to believe that the above-mentioned
sections of the Registration Statement and any amendment or supplement thereto
made available and reviewed by such counsel, at the time the Registration
Statement became effective and at all times subsequent thereto up to and on the
Closing Date and on any later date on which Option Shares are to be purchased,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; and
Exhibit D-1
Such counsel knows of no material action, suit, claim or proceeding
relating to patents, patent rights or licenses, trademarks or trademark rights,
copyrights, collaborative research, licenses or royalty arrangements or
agreements or trade secrets, know-how or proprietary techniques, including
processes and substances, owned by or affecting the business or operations of
the Company which are pending or threatened against the Company or any of its
officers or directors.
Exhibit D-2
EXHIBIT E
[Date]
Banc of America Securities LLC
[Co-Managers]
[As Representatives of the Several Underwriters]
[c/o Banc of America Securities LLC]
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: ______________________________(the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
Representatives[s] of the underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company [by,
among other things, raising additional capital for its operations]. The
undersigned acknowledges that you and the other underwriters are relying on the
representations and agreements of the undersigned contained in this letter in
carrying out the Offering and in entering into underwriting arrangements with
the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of BAS (which consent
may be withheld in its sole discretion), directly or indirectly, sell, offer,
contract or grant any option to sell (including without limitation any short
sale), pledge, transfer, establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, or otherwise
dispose of any shares of Common Stock, options or warrants to acquire shares of
Common Stock, or securities exchangeable or exercisable for or convertible into
shares of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended) by the undersigned, or publicly announce the undersigned's
intention to do any of the foregoing, for a period commencing on the date hereof
and continuing through the close of trading on December 15, 2000. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of shares
of Common Stock or securities convertible into or exchangeable or exercisable
for Common Stock held by the undersigned except in compliance with the foregoing
restrictions.
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common Stock
owned either of record or beneficially by the undersigned, including any rights
to receive notice of the Offering.
Exhibit E-1
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal Representatives, and assigns of the
undersigned.
---------------------------------------
Printed Name of Holder
By:
-----------------------------------
Signature
---------------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
Exhibit E-2