5,100,000 SHARES (1)
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
________________ __, 1998
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇ BROTHERS INC.
As Representatives of the several Underwriters
c/o BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, Inc., a Delaware corporation (the "Company"), and
certain stockholders of the Company named in Schedule B hereto (hereafter called
the "Selling Stockholders") address you as the Representatives of each of the
persons, firms and corporations listed in Schedule A hereto (herein collectively
called the "Underwriters") and hereby confirm their respective agreements with
the several Underwriters as follows:
1. DESCRIPTION OF SHARES. The Company proposes to issue and sell
3,650,000 shares of its authorized and unissued Common Stock, par value $.01 per
share, to the several Underwriters. The Selling Stockholders, acting severally
and not jointly, propose to sell an aggregate of 1,450,000 shares of the
Company's authorized and outstanding Common Stock, par value $.01 per share, to
the several Underwriters. The 3,650,000 shares of Common Stock, par value $.01
per share, of the Company to be sold by the Company are hereinafter called the
"Company Shares" and the 1,450,000 shares of Common Stock, par value $.01 per
share, to be sold by the Selling Stockholders are hereinafter called the
"Selling Stockholder Shares." The Company Shares and the Selling Stockholder
Shares are hereinafter collectively referred to as the "Firm Shares." The
Company and a Selling Stockholder also propose to grant, severally and not
jointly, to the Underwriters an option to purchase up to 765,000 additional
shares of the Company's Common Stock, par value $.01 per share (the "Option
Shares"), as provided in Section 7 hereof. As used in this Agreement, the term
"Shares" shall include the Firm Shares and the Option Shares. All shares of
Common Stock, par value $.01 per share, of the Company to be outstanding after
giving effect to the sales contemplated hereby, including the Shares, are
hereinafter referred to as "Common Stock."
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND THE
SELLING STOCKHOLDERS.
I. The Company represents and warrants to and agrees with each
Underwriter that:
(a) A registration statement on Form S-1 (File No. 333-48399)
with respect to the Shares, including a prospectus subject to completion, has
been prepared by the Company in conformity with the requirements
---------------------
(1) Plus an option to purchase up to 765,000 additional shares from the Company
and a Selling Stockholder of the Company to cover over-allotments.
of the Securities Act of 1933, as amended (the "Act"), and the applicable rules
and regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Act and has been filed with the
Commission; such amendments to such registration statement, such amended
prospectuses subject to completion and such abbreviated registration statements
pursuant to Rule 462(b) of the Rules and Regulations as may have been required
prior to the date hereof have been similarly prepared and filed with the
Commission; and the Company will file such additional amendments to such
registration statement, such amended prospectuses subject to completion and such
abbreviated registration statements as may hereafter be required. Copies of
such registration statement and amendments, of each related prospectus subject
to completion (the "Preliminary Prospectuses") and of any abbreviated
registration statement pursuant to Rule 462(b) of the Rules and Regulations have
been delivered to you. The Company meets the requirements for filing a
registration statement on Form S-1 under the Act.
If the registration statement relating to the Shares has been
declared effective under the Act by the Commission, the Company will prepare
and promptly file with the Commission the information omitted from the
registration statement pursuant to Rule 430A(a) or, if BancAmerica ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, on behalf of the several Underwriters, shall agree to the
utilization of Rule 434 of the Rules and Regulations, the information
required to be included in any term sheet filed pursuant to Rule 434(b) or
(c), as applicable, of the Rules and Regulations pursuant to subparagraph
(1), (4) or (7) of Rule 424(b) of the Rules and Regulations or as part of a
post-effective amendment to the registration statement (including a final
form of prospectus). If the registration statement relating to the Shares
has not been declared effective under the Act by the Commission, the Company
will prepare and promptly file an amendment to the registration statement,
including a final form of prospectus, or, if BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
on behalf of the several Underwriters, shall agree to the utilization of Rule
434 of the Rules and Regulations, the information required to be included in
any term sheet filed pursuant to Rule 434(b) or (c), as applicable, of the
Rules and Regulations. The term "Registration Statement" as used in this
Agreement shall mean such registration statement, including financial
statements, schedules and exhibits, in the form in which it became or
becomes, as the case may be, effective (including, if the Company omitted
information from the registration statement pursuant to Rule 430A(a) or files
a term sheet pursuant to Rule 434 of the Rules and Regulations, the
information deemed to be a part of the registration statement at the time it
became effective pursuant to Rule 430A(b) or Rule 434(d) of the Rules and
Regulations) and, in the event of any amendment thereto or the filing of any
abbreviated registration statement pursuant to Rule 462(b) of the Rules and
Regulations relating thereto after the effective date of such registration
statement, shall also mean (from and after the effectiveness of such
amendment or the filing of such abbreviated registration statement) such
registration statement as so amended, together with any such abbreviated
registration statement. The term "Prospectus" as used in this Agreement
shall mean the prospectus relating to the Shares as included in such
Registration Statement at the time it becomes effective (including, if the
Company omitted information from the Registration Statement pursuant to Rule
430A(a) of the Rules and Regulations, the information deemed to be a part of
the Registration Statement at the time it became effective pursuant to Rule
430A(b) of the Rules and Regulations); PROVIDED, HOWEVER, that if in reliance
on Rule 434 of the Rules and Regulations and with the consent of BancAmerica
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, on behalf of the several Underwriters, the Company shall
have provided to the Underwriters a term sheet pursuant to Rule 434(b) or
(c), as applicable, prior to the time that a confirmation is sent or given
for purposes of Section 2(10)(a) of the Act, the term "Prospectus" shall mean
the "prospectus subject to completion" (as defined in Rule 434(g) of the
Rules and Regulations) last provided to the Underwriters by the Company and
circulated by the Underwriters to all prospective purchasers of the Shares
(including the information deemed to be a part of the Registration Statement
at the time it became effective pursuant to Rule 434(d) of the Rules and
Regulations). Notwithstanding the foregoing, if any revised prospectus shall
be provided to the Underwriters by the Company for use in connection with the
offering of the Shares that differs from the prospectus referred to in the
immediately preceding sentence (whether or not such revised prospectus is
required to be filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Underwriters
for such use. If in reliance on Rule 434 of the Rules and Regulations and
with the consent of BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, on behalf of the several
Underwriters, the Company shall have provided to the Underwriters a term
sheet pursuant to Rule 434(b) or (c), as applicable, prior to the time that a
confirmation is sent or given for purposes of Section 2(10)(a) of the Act,
the Prospectus and the term sheet, together, will not be materially different
from the prospectus in the Registration Statement.
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(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or instituted proceedings
for that purpose, and each such Preliminary Prospectus has conformed in all
material respects to the requirements of the Act and the Rules and
Regulations and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and at the time the Registration Statement became or
becomes, as the case may be, effective and at all times subsequent thereto up
to and on the Closing Date (hereinafter defined) and on any later date on
which Option Shares are to be purchased, (i) the Registration Statement and
the Prospectus, and any amendments or supplements thereto, contained and will
contain all material information required to be included therein by the Act
and the Rules and Regulations and will in all material respects conform to
the requirements of the Act and the Rules and Regulations, (ii) the
Registration Statement, and any amendments or supplements thereto, did not
and will not include any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (iii) the Prospectus, and any
amendments or supplements thereto, did not and will not include any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED, HOWEVER, that none of the
representations and warranties contained in this subparagraph (b) shall apply
to information contained in or omitted from the Registration Statement or
Prospectus, or any amendment or supplement thereto, in reliance upon, and in
conformity with, written information furnished to the Company by such
Underwriter specifically for use in the preparation thereof.
(c) Each of the Company and Antinori Software, Inc., a
Georgia corporation (the "Subsidiary"), has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Georgia with full power and authority (corporate and other) to own,
lease and operate its properties and conduct its business as described in the
Prospectus; the Company owns all of the outstanding capital stock of the
Subsidiary free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest; each of the Company and the
Subsidiary is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which the ownership or leasing of
its properties or the conduct of its business requires such qualification,
except where the failure to be so qualified or be in good standing would not
have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and the
Subsidiary, considered as one enterprise; no proceeding has been instituted
in any such jurisdiction, revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or qualification; each of
the Company and the Subsidiary is in possession of and operating in
compliance with all authorizations, licenses, certificates, consents, orders
and permits from state, federal and other regulatory authorities which are
material to the conduct of the business of the Company and the Subsidiary,
considered as one enterprise, all of which are valid and in full force and
effect; each material contract or other instrument to which the Company or
the Subsidiary is a party or by which their respective properties or business
is or may be bound or affected has been duly and validly executed by the
Company and is in full force and effect in all material respects and is
enforceable against the parties thereto in accordance with its terms, except
as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles;
neither the Company nor the Subsidiary is in violation of its respective
charter or bylaws or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
material bond, debenture, note or other evidence of indebtedness, or in any
material lease, contract, indenture, mortgage, deed of trust, loan agreement,
joint venture or other agreement or instrument to which the Company or the
Subsidiary is a party or by which it or the Subsidiary or their respective
properties may be bound; and neither the Company nor the Subsidiary is in
material violation of any law, order, rule, regulation, writ, injunction,
judgment or decree of any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or the Subsidiary
or over their respective properties of which it has knowledge. The Company
does not own or have any ownership interest in, directly or indirectly, any
corporation, association or other entity other than the Subsidiary and
INFITEQ, LLC.
(d) The Company has full legal right, power and authority to
enter into this Agreement and perform the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement on the part of the Company,
enforceable in accordance with its terms,
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except as rights to indemnification or contribution hereunder may be limited
by applicable law or public policy and except as the enforcement hereof may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally or
by general equitable principles; the performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a
material breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any bond, debenture, note or other evidence
of indebtedness, or under any lease, contract, indenture, mortgage, deed of
trust, loan agreement, license agreement, joint venture or other agreement or
instrument to which the Company or the Subsidiary is a party or by which it
or the Subsidiary or their respective properties may be bound, (ii) the
charter or bylaws of the Company or the Subsidiary, or (iii) any law, order,
rule, regulation, writ, injunction, judgment or decree of any court,
government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or the Subsidiary or over their respective
properties. No consent, approval, authorization or order of or qualification
with any court, government or governmental agency or body, domestic or
foreign, having jurisdiction over the Company or the Subsidiary or over their
respective properties is required for the execution and delivery of this
Agreement and the consummation by the Company or the Subsidiary of the
transactions herein contemplated, except such as may be required under the
Act or under state or other securities or Blue Sky laws, all of which
requirements have been satisfied in all material respects.
(e) There is not any pending or, to the best of the Company's
knowledge, threatened action, suit, claim or proceeding against the Company,
the Subsidiary or any of their respective officers or any of their respective
properties, assets or rights before any court, government or governmental
agency or body, domestic or foreign, having jurisdiction over the Company or
the Subsidiary or over their respective officers or properties or otherwise
which (i) could result in any material adverse change in the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and the Subsidiary, considered as one enterprise, or
might materially and adversely affect their properties, assets or rights,
(ii) could prevent consummation of the transactions contemplated hereby or
(iii) is required to be disclosed in the Registration Statement or Prospectus
and is not so disclosed; and there are no agreements, contracts, leases or
documents of the Company or the Subsidiary of a character required to be
described or referred to in the Registration Statement or Prospectus or to be
filed as an exhibit to the Registration Statement by the Act or the Rules and
Regulations which have not been accurately described in all material respects
in the Registration Statement or Prospectus or filed as exhibits to the
Registration Statement.
(f) All outstanding shares of capital stock of the Company
(including, as of the Closing Date, the Selling Stockholder Shares) have been
duly authorized and validly issued and are fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, were
not issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities, and the authorized and
outstanding capital stock of the Company is as set forth in the Prospectus
under the caption "Capitalization" and conforms in all material respects to
the statements relating thereto contained in the Registration Statement and
the Prospectus (and such statements correctly state the substance of the
instruments defining the capitalization of the Company); the Company Shares
and the Option Shares to be purchased from the Company have been duly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company against payment
therefor in accordance with the terms of this Agreement, will be duly and
validly issued and fully paid and nonassessable, and will be sold free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest; and no preemptive right, co-sale right, registration right, right
of first refusal or other similar right of stockholders to which the Company
is a party exists with respect to any of the Company Shares or Option Shares
to be purchased from the Company hereunder or the issuance and sale thereof
other than those that have been satisfied or expressly waived prior to the
date hereof and those that will automatically expire upon and will not apply
to the consummation of the transactions contemplated on the Closing Date. No
further approval or authorization of any stockholder, the Board of Directors
of the Company or others is required for the issuance and sale or transfer of
the Shares except as may be required under the Act, the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or under state or other
securities or Blue Sky laws. All issued and outstanding shares of capital
stock of the Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable, and were not issued in violation of or subject
to any preemptive right, or other rights to subscribe for or purchase shares
and are owned by the Company free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest. Except as disclosed in
the Prospectus and the financial
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statements of the Company, and the related notes thereto, included in the
Prospectus, neither the Company nor the Subsidiary has outstanding any
options to purchase, or any preemptive rights or other rights to subscribe
for or to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock or any
such options, rights, convertible securities or obligations. The description
of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised
thereunder, set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.
(g) Ernst & Young LLP, which has examined the consolidated
financial statements of the Company, together with the related schedules and
notes, as of January 31, 1997 and 1998 and for each of the years in the three
(3) years ended January 31, 1998 filed with the Commission as a part of the
Registration Statement, which are included in the Prospectus, are independent
accountants within the meaning of the Act and the Rules and Regulations; the
audited consolidated financial statements of the Company, together with the
related schedules and notes, and the unaudited consolidated financial
information, forming part of the Registration Statement and Prospectus,
fairly present the financial position and the results of operations of the
Company and the Subsidiary at the respective dates and for the respective
periods to which they apply; and all audited consolidated financial
statements of the Company, together with the related schedules and notes, and
the unaudited consolidated financial information, filed with the Commission
as part of the Registration Statement, have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved except as may be otherwise stated therein. The selected and
summary financial and statistical data included in the Registration Statement
present fairly the information shown therein and have been compiled on a
basis consistent with the audited financial statements presented therein. No
other financial statements or schedules are required to be included in the
Registration Statement.
(h) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus, there has
not been (i) any material adverse change in the condition (financial or
otherwise), earnings, operations, business or business prospects of the
Company and the Subsidiary, considered as one enterprise, (ii) any
transaction that is material to the Company and the Subsidiary, considered as
one enterprise, except transactions entered into in the ordinary course of
business, (iii) any obligation, direct or contingent, that is material to the
Company and the Subsidiary, considered as one enterprise, incurred by the
Company or the Subsidiary, except obligations incurred in the ordinary course
of business, (iv) any change in the capital stock or outstanding indebtedness
of the Company or the Subsidiary that is material to the Company and the
Subsidiary, considered as one enterprise, (v) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company or the
Subsidiary, or (vi) any loss or damage (whether or not insured) to the
property of the Company or the Subsidiary which has been sustained which has
a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and the
Subsidiary, considered as one enterprise.
(i) Except as set forth in the Registration Statement and
Prospectus, (i) each of the Company and the Subsidiary has good and
marketable title to all properties and assets described in the Registration
Statement and Prospectus as owned by it, free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest, other than such
as would not have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the
Company and the Subsidiary, considered as one enterprise, (ii) the agreements
to which the Company or the Subsidiary is a party described in the
Registration Statement and Prospectus are valid agreements, enforceable by
the Company and the Subsidiary (as applicable), except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles and, to the best of the
Company's knowledge, the other contracting party or parties thereto are not
in material breach or material default under any of such agreements, and
(iii) each of the Company and the Subsidiary has valid and enforceable leases
for all properties described in the Registration Statement and Prospectus as
leased by it, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles. Except as set forth in the Registration Statement and
Prospectus, the
5
Company owns or leases all such properties as are necessary to its operations
as now conducted or as proposed to be conducted.
(j) The Company and the Subsidiary have timely filed all
necessary federal, state and foreign income and franchise tax returns and
have paid all taxes shown thereon as due, and there is no tax deficiency that
has been or, to the best of the Company's knowledge, might be asserted
against the Company or the Subsidiary, except where the failure to file such
tax returns or pay such taxes or the existence of such tax deficiency would
not have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and the
Subsidiary, considered as one enterprise; and all tax liabilities are
adequately provided for on the books of the Company and the Subsidiary.
(k) Except as described in the Registration Statement and the
Prospectus, neither the Company nor the Subsidiary has any employee benefit
plans (including, without limitation, profit sharing plans) or deferred
compensation arrangements.
(l) The Company and the Subsidiary maintain insurance with
insurers of recognized financial responsibility of the types and in the
amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and
personal property owned or leased by the Company or the Subsidiary against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect; neither
the Company nor the Subsidiary has been refused any insurance coverage sought
or applied for; and neither the Company nor the Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would
not materially and adversely affect the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and the
Subsidiary, considered as one enterprise.
(m) To the best of the Company's knowledge, no labor
disturbance by the employees of the Company or the Subsidiary exists or is
imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers,
subassemblers, value added resellers, subcontractors, independent software
vendors, original equipment manufacturers, authorized dealers or distributors
that might be expected to result in a material adverse change in the
condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and the Subsidiary, considered as one
enterprise. No collective bargaining agreement exists with any of the
Company's employees and, to the Company's knowledge, no such agreement is
imminent.
(n) Each of the Company and the Subsidiary owns or possesses
adequate rights to use all patents, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names and copyrights which are
necessary to conduct its businesses as described in the Registration
Statement and Prospectus; the expiration of any patents, patent rights, trade
secrets, trademarks, service marks, trade names or copyrights would not have
a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and the
Subsidiary, considered as one enterprise; the Company has not received any
notice of, and has no knowledge of, any infringement of or conflict with
asserted rights of the Company by others with respect to any patent, patent
rights, inventions, trade secrets, know-how, trademarks, service marks, trade
names or copyrights; and the Company has not received any notice of, and has
no knowledge of, any infringement of or conflict with asserted rights of
others with respect to any patent, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names or copyrights which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, might have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the
Company and the Subsidiary, considered as one enterprise.
(o) The statements in the Prospectus, under the heading "Certain
Transactions," set forth all existing agreements, arrangements, understandings
or transactions or proposed agreements, arrangements,
6
understandings or transactions, between or among the Company and the
Subsidiary, on the one hand, and any officer, director or stockholder of the
Company or the Subsidiary, or with any partner, affiliate or associate of any
of the foregoing persons or entities, on the other hand, required to be set
forth or described thereunder.
(p) The Common Stock has been approved for quotation on The
Nasdaq National Market, subject to official notice of issuance.
(q) The Company has been advised concerning the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder, and has in the past conducted, and intends in the
future to conduct, its affairs in such a manner as to ensure that it will not
become an "investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act and such rules and regulations.
(r) The Company has not distributed and will not distribute
prior to the later of (i) the Closing Date, or any date on which Option
Shares are to be purchased, as the case may be, and (ii) completion of the
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than any Preliminary Prospectuses, the
Prospectus, the Registration Statement and other materials, if any, permitted
by the Act.
(s) Neither the Company nor the Subsidiary has at any time
during the last five (5) years (i) made any unlawful contribution to any
candidate for foreign office or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar public
or quasi-public duties, other than payments required or permitted by the laws
of the United States or any jurisdiction thereof.
(t) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(u) Each officer and director of the Company who owns shares
of Common Stock or options to purchase shares of Common Stock that will vest
within 180 days of the date of this Agreement, each Selling Stockholder and
each other beneficial owner of 1,000 or more shares of Common Stock and/or
options to purchase shares of Common Stock that will vest within 180 days of
the date of this Agreement has agreed in writing that such person will not,
for a period of 180 days from the date that the Registration Statement is
declared effective by the Commission (the "Lock-up Period"), offer to sell,
contract to sell, or otherwise sell, dispose of, loan, pledge or grant any
rights with respect to (collectively, a "Disposition") any shares of Common
Stock, any options or warrants to purchase any shares of Common Stock or any
securities convertible into or exchangeable for shares of Common Stock
(collectively, "Securities") now owned or hereafter acquired directly by such
person or with respect to which such person has or hereafter acquires the
power of disposition, otherwise than (i) as a bona fide gift or gifts,
PROVIDED the donee or donees thereof agree in writing to be bound by this
restriction, (ii) as a distribution to partners or stockholders of such
person, PROVIDED that the distributees thereof agree in writing to be bound
by the terms of this restriction, or (iii) with the prior written consent of
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (which consent has been given with respect to
the pledge of any shares of Common Stock that were purchased pursuant to the
Company's "Stock Option Loan Program" described in the Registration Statement
or any other loan program approved in writing by BancAmerica ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇). The foregoing restriction has been expressly agreed to preclude
the holder of the Securities from engaging in any hedging or other
transaction which is designed to or reasonably expected to lead to or result
in a Disposition of Securities during the Lock-up Period, even if such
Securities would be disposed of by someone other than such holder. Such
prohibited hedging or other transactions would include, without limitation,
any short sale (whether or not against the box) or any purchase, sale or
grant of any right (including, without limitation, any put or call option)
with respect to any Securities or with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from Securities. Such person has also agreed
and consented to the entry of stop transfer instructions with the Company's
transfer agent against the transfer of the Securities held by such person
except in
7
compliance with this restriction. Furthermore, each such person has also
agreed that, without the prior written consent of BancAmerica ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, such person will not, during the period ending with the conclusion
of the Lock-Up Period, make any demand for or exercise any right with respect
to, the registration of any Securities, except pursuant to the Registration
Statement to the extent set forth in Schedule B hereto. The Company has
provided to counsel for the Underwriters a complete and accurate list of all
securityholders of the Company and the number and type of securities held by
each securityholder. The Company has provided to counsel for the
Underwriters true, accurate and complete copies of all of the agreements
pursuant to which its officers (to the extent that they are stockholders of
the Company), directors (to the extent that they are stockholders of the
Company) and stockholders have agreed to such or similar restrictions (the
"Lock-up Agreements") presently in effect or effected hereby. The Company
hereby represents and warrants that, prior to the conclusion of the Lock-Up
Period, it will not release any of its officers, directors or other
stockholders from any Lock-up Agreements currently existing or hereafter
effected without the prior written consent of BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(v) Except as set forth in the Registration Statement and
Prospectus, (i) the Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental Laws")
which are applicable to its business, (ii) the Company has received no notice
from any governmental authority or third party of an asserted claim under
Environmental Laws, which claim is required to be disclosed in the
Registration Statement and the Prospectus, (iii) the Company will not be
required to make future material capital expenditures to comply with
Environmental Laws and (iv) no property which is owned, leased or occupied by
the Company has been designated as a Superfund site pursuant to the
Comprehensive Response, Compensation, and Liability Act of 1980, as amended
(42 U.S.C. Section 9601, ET SEQ.), or otherwise designated as a contaminated
site under applicable state or local law.
(w) The Company and the Subsidiary maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's
general or specific authorization, and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(x) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of the members of the families of
any of them, except as disclosed in the Registration Statement and the
Prospectus.
(y) The Company has not incurred any liability for any
finder's fees or similar payments in connection with the transactions
contemplated herein.
(z) The Company's products are designed to be in compliance
with all federal, state and local banking laws and regulation and similar
laws and regulations of other countries.
(aa) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government of
Cuba or with any person or affiliate located in Cuba.
(ab) The Company has given notice of the filing of the
Registration Statement and the offering contemplated thereby as required by
the Shareholders Agreements, dated January 29, 1997, by and among the Company
and certain of its stockholders.
II. Each Selling Stockholder, severally and not jointly,
represents and warrants to and agrees with each Underwriter that:
8
(a) Such Selling Stockholder on the Closing Date and on any
later date on which Option Shares are purchased will have valid marketable
title to the Shares to be sold by such Selling Stockholder under this
Agreement, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest other than pursuant to this
Agreement; and upon delivery of such Shares hereunder and payment of the
purchase price as herein contemplated, each of the Underwriters will obtain
valid marketable title to the Shares purchased by it from such Selling
Stockholder, free and clear of any pledge, lien, security interest pertaining
to such Selling Stockholder or such Selling Stockholder's property,
encumbrance, claim or equitable interest, including any liability for estate
or inheritance taxes, or any liability to or claims of any creditor, devisee,
legatee or beneficiary of such Selling Stockholder.
(b) Such Selling Stockholder has duly authorized (if
applicable), executed and delivered, in the form heretofore furnished to the
Representatives, an irrevocable Custody Agreement and Power of Attorney (the
"Selling Stockholder Agreement") appointing ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇ as attorneys-in-fact (collectively, the "Attorneys"
and individually, an "Attorney") and a Letter of Transmittal and Custody
Agreement (the "Custody Agreement") with ChaseMellon Shareholder Services,
L.L.C., as custodian (the "Custodian"); the Selling Stockholder Agreement of
each Selling Stockholder constitutes a valid and binding agreement on the
part of such Selling Stockholder, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles; and
each of such Selling Stockholder's Attorneys, acting alone, is authorized to
execute and deliver this Agreement and the certificate referred to in Section
6(h) hereof on behalf of such Selling Stockholder, to determine the purchase
price to be paid by the several Underwriters to such Selling Stockholder as
provided in Section 3 hereof, to authorize the delivery of the Selling
Stockholder Shares and the Option Shares to be sold by such Selling
Stockholder under this Agreement and to duly endorse (in blank or otherwise)
the certificate or certificates representing such Shares or a stock power or
powers with respect thereto, to accept payment therefor, and otherwise to act
on behalf of such Selling Stockholder in connection with this Agreement.
(c) All consents, approvals, authorizations and orders
required for the execution and delivery by such Selling Stockholder of the
Selling Stockholder Agreement, the execution and delivery by or on behalf of
such Selling Stockholder of this Agreement and the sale and delivery of the
Selling Stockholder Shares and the Option Shares to be sold by such Selling
Stockholder under this Agreement (other than, at the time of the execution
hereof (if the Registration Statement has not yet been declared effective by
the Commission), the issuance of the order of the Commission declaring the
Registration Statement effective and such consents, approvals, authorizations
or orders as may be necessary under state or other securities or Blue Sky
laws or under the rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD")) have been obtained and are in full
force and effect; such Selling Stockholder, if other than a natural person,
has been duly organized and is validly existing in good standing under the
laws of the jurisdiction of its organization as the type of entity that it
purports to be; and such Selling Stockholder has full legal right, power and
authority to enter into and perform its obligations under this Agreement and
such Selling Stockholder Agreement, and to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder under this Agreement.
(d) Such Selling Stockholder will not, during the Lock-up
Period, effect the Disposition of any Securities now owned or hereafter
acquired directly by such Selling Stockholder or with respect to which such
Selling Stockholder has or hereafter acquires the power of disposition,
otherwise than (i) as a bona fide gift or gifts, PROVIDED the donee or donees
thereof agree in writing to be bound by this restriction, (ii) as a
distribution to partners or stockholders of such Selling Stockholder,
PROVIDED that the distributees thereof agree in writing to be bound by the
terms of this restriction, or (iii) with the prior written consent of
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (which consent has been given with respect to
the pledge of any shares of Common Stock that were purchased by such Selling
Stockholder pursuant to the Company's "Stock Option Loan Program" described
in the Registration Statement or any other loan program approved in writing
by BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇). The foregoing restriction is expressly
agreed to preclude the holder of the Securities from engaging in any hedging
or other transaction which is designed to or reasonably expected to lead to
or result in a Disposition of Securities during the Lock-up Period, even if
such Securities would be disposed of by someone other than the Selling
Stockholder. Such prohibited hedging or other transactions
9
would including, without limitation, any short sale (whether or not against
the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index)
that includes, relates to or derives any significant part of its value from
Securities. Such Selling Stockholder also agrees and consents to the entry
of stop transfer instructions with the Company's transfer agent against the
transfer of the securities held by such Selling Stockholder except in
compliance with this restriction. Furthermore, such Selling Stockholder also
agrees that, without the prior written consent of BancAmerica ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, such Selling Stockholder will not, during the period ending with
the conclusion of the Lock-Up Period, make any demand for or exercise any
right with respect to, the registration of any Securities, except pursuant to
the Registration Statement to the extent set forth in Schedule B hereto.
(e) Certificates in negotiable form for all Shares to be sold
by such Selling Stockholder under this Agreement, together with a stock power
or powers duly endorsed in blank by such Selling Stockholder, have been
placed in custody with the Custodian for the purpose of effecting delivery
hereunder, except for the Selling Stockholder Shares to be sold by ▇▇▇ ▇.
▇▇▇▇▇ which certificates and stock power will be delivered by ▇▇. ▇▇▇▇▇ or on
his behalf to the Underwriters at the time of the Closing.
(f) This Agreement has been duly authorized by each Selling
Stockholder that is not a natural person and has been duly executed and
delivered by or on behalf of such Selling Stockholder and is a valid and
binding agreement of such Selling Stockholder, enforceable in accordance with
its terms, except as rights to indemnification or contribution hereunder may
be limited by applicable law or public policy and except as the enforcement
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally or
by general equitable principles; and the performance of this Agreement and
the consummation of the transactions herein contemplated will not (i) result
in a material breach or violation of any of the terms and provisions of or
constitute a default under any bond, debenture, note or other evidence of
indebtedness, or under any lease, contract, indenture, mortgage, deed of
trust, loan agreement, joint venture or other agreement or instrument to
which such Selling Stockholder is a party or by which such Selling
Stockholder, or any Shares to be sold by such Selling Stockholder hereunder,
may be bound or, (ii) to the best of such Selling Stockholders' knowledge,
result in any violation of any law, order, rule, regulation, writ,
injunction, judgment or decree of any court, government or governmental
agency or body, domestic or foreign, having jurisdiction over such Selling
Stockholder or over the properties of such Selling Stockholder, or (iii) if
such Selling Stockholder is other than a natural person, result in any
violation of any provisions of the charter, bylaws or other organizational
documents of such Selling Stockholder.
(g) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
(h) Such Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
(i) All information furnished by or on behalf of such Selling
Stockholder relating to such Selling Stockholder, in his or its capacity as
such, and the Selling Stockholder Shares that is contained in the
representations and warranties of such Selling Stockholder in such Selling
Stockholder's Selling Stockholder Agreement or set forth in the Registration
Statement or the Prospectus is, and at the time the Registration Statement
became or becomes, as the case may be, effective and at all times subsequent
thereto up to and on the Closing Date, and on any later date on which Option
Shares are to be purchased, was or will be, true, correct and complete in all
material respects, and does not, and at the time the Registration Statement
became or becomes, as the case may be, effective and at all times subsequent
thereto up to and on the Closing Date, and on any later date on which Option
Shares of such Selling Stockholder are to be purchased, will not, contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make such information not misleading.
10
(j) Such Selling Stockholder (other than ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇) will review the Prospectus and such Selling Stockholder will
comply with all agreements and satisfy all conditions on his or its part to
be complied with or satisfied pursuant to this Agreement on or prior to the
Closing Date, or any later date on which Option Shares of such Selling
Stockholder are to be purchased, as the case may be, and will advise one of
its Attorneys and BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ prior to the Closing Date or
such later date on which Option Shares are to be purchased, as the case may
be, if any statement to be made on behalf of such Selling Stockholder in the
certificate contemplated by Section 6(h) would be inaccurate if made as of
the Closing Date or such later date on which Option Shares of such Selling
Stockholder are to be purchased, as the case may be.
(k) Such Selling Stockholder does not have, or has waived
prior to the date hereof, any preemptive right, co-sale right or right of
first refusal or other similar right to purchase any of the Shares that are
to be sold by the Company or any of the other Selling Stockholders to the
Underwriters pursuant to this Agreement; such Selling Stockholder does not
have, or has waived prior to the date hereof, any registration right or other
similar right to participate in the offering made by the Prospectus, other
than such rights of participation as have been satisfied by the participation
of such Selling Stockholder in the transactions to which this Agreement
relates in accordance with the terms of this Agreement; and such Selling
Stockholder does not own any warrants, options or similar rights to acquire,
and does not have any right or arrangement to acquire, any capital stock,
rights, warrants, options or other securities from the Company, other than
those referred to in the Registration Statement and the Prospectus.
(l) Except as disclosed to the Underwriters in writing, such
Selling Stockholder is not directly or indirectly an affiliate of or
associate with any member of the NASD.
(m) In addition to the other representations and warranties
set forth in this Section 2.II, each of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, severally and not jointly, further represents and warrants that, to
the best of their respective knowledge, the representations and warranties of
the Company set forth in Section 2.I of this Agreement are true and correct
in all material respects.
(n) In addition to the other representations and warranties
set forth in this Section 2.II, each of ▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇
[and SAIC], severally and not jointly, further represents and warrants that,
to their respective knowledge, each Preliminary Prospectus, as of its date,
has not included any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and at the time the
Registration Statement became or becomes, as the case may be, effective and
at all times subsequent thereto up to and on the Closing Date and on any
later date on which Option Shares are to be purchased, the Registration
Statement, and any amendments or supplements thereto, did not and will not
include any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus, and any amendments or supplements
thereto, did not and will not include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that none of the representations and warranties contained
in this subparagraph (n) shall apply to information contained in or omitted
from the Registration Statement or Prospectus, or any amendment or supplement
thereto, in reliance upon, and in conformity with, written information
furnished to the Company by such Underwriter specifically for use in the
preparation thereof.
3. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company and the Selling
Stockholders agree, severally and not jointly, to sell to the Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company and the Selling Stockholders, respectively, at a purchase price of
$__.__ per share, the respective number of Company Shares as hereinafter set
forth and Selling Stockholder Shares set forth opposite the names of the
Company and the Selling Stockholders in Schedule B hereto. The obligation of
each Underwriter to the Company and to each Selling Stockholder shall be to
purchase from the Company or such Selling Stockholder that number of Company
Shares or Selling Stockholder Shares, as the case may be, which (as nearly as
practicable, as
11
determined by you) is in the same proportion to the number of Company Shares
or Selling Stockholder Shares, as the case may be, set forth opposite the
name of the Company or such Selling Stockholder in Schedule B hereto as the
number of Firm Shares which is set forth opposite the name of such
Underwriter in Schedule A hereto (subject to adjustment as provided in
Section 10) is to the total number of Firm Shares to be purchased by all the
Underwriters under this Agreement.
The certificates in negotiable form for the Selling
Stockholder Shares have been placed in custody (for delivery under this
Agreement) under the Selling Stockholder Agreement, except for the Selling
Stockholder Shares to be sold by ▇▇▇ ▇. ▇▇▇▇▇ which certificates, together
with duly endorsed stock ▇▇▇▇▇▇, ▇▇▇▇ be delivered by ▇▇. ▇▇▇▇▇ or on his
behalf to the Underwriters at the time of the Closing. Each Selling
Stockholder agrees that the certificates for the Selling Stockholder Shares
of such Selling Stockholder are subject to the interests of the Underwriters
hereunder, that the arrangements made by such Selling Stockholder for the
custody of the Selling Stockholder Shares, including the Selling Stockholder
Agreement, is to that extent irrevocable and that the obligations of such
Selling Stockholder hereunder shall not be terminated by the act of such
Selling Stockholder or by operation of law, whether by the death or
incapacity of such Selling Stockholder or the occurrence of any other event,
except as specifically provided herein or in the Selling Stockholder
Agreement. If any Selling Stockholder should die or be incapacitated, or if
any other such event should occur, before the delivery of the certificates
for the Selling Stockholder Shares hereunder, the Selling Stockholder Shares
to be sold by such Selling Stockholder shall, except as specifically provided
herein or in the Selling Stockholder Agreement, be delivered by the Custodian
in accordance with the terms and conditions of this Agreement as if such
death, incapacity or other event had not occurred, regardless of whether the
Custodian shall have received notice of such death or other event.
Delivery of definitive certificates for the Firm Shares to be
purchased by the Underwriters pursuant to this Section 3 shall be made
against payment of the purchase price therefor by the several Underwriters by
certified or official bank check or checks drawn in same-day funds or by wire
transfer in same-day funds, payable to the order of the Company with regard
to the Shares being purchased from the Company, and to the order of the
Custodian for the respective accounts of the Selling Stockholders with regard
to the Shares being purchased from such Selling Stockholders, at the offices
of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
(or at such other place as may be agreed upon among the Representatives and
the Company), at 7:00 A.M., San Francisco time (a) on the third (3rd) full
business day following the first day that Shares are traded, (b) if this
Agreement is executed and delivered after 1:30 P.M., San Francisco time, the
fourth (4th) full business day following the day that this Agreement is
executed and delivered or (c) at such other time and date not later than
seven (7) full business days following the first day that Shares are traded
as the Representatives and the Company may determine (or at such time and
date to which payment and delivery shall have been postponed pursuant to
Section 10 hereof), such time and date of payment and delivery being herein
called the "Closing Date"; PROVIDED, HOWEVER, that if the Company has not
made available to the Representatives copies of the Prospectus within the
time provided in Section 4(d) hereof (through no fault of the
Representatives), the Representatives may, in their sole discretion, postpone
the Closing Date until no later than two (2) full business days following
delivery of copies of the Prospectus to the Representatives. The
certificates for the Firm Shares to be so delivered will be made available to
you at such office or such other location including, without limitation, in
New York City, as you may reasonably request for checking at least one (1)
full business day prior to the Closing Date and will be in such names and
denominations as you may request, such request to be made at least two (2)
full business days prior to the Closing Date. If the Representatives so
elect, delivery of the Firm Shares may be made by credit through full fast
transfer to the accounts at The Depository Trust Company designated by the
Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated
to) make payment of the purchase price on behalf of any Underwriter or
Underwriters whose check or checks shall not have been received by you prior
to the Closing Date for the Firm Shares to be purchased by such Underwriter
or Underwriters. Any such payment by you shall not relieve any such
Underwriter or Underwriters of any of its or their obligations hereunder.
12
After the Registration Statement becomes effective, the several
Underwriters intend to make an initial public offering (as such term is
described in Section 11 hereof) of the Firm Shares at an initial public offering
price of $__.__ per share. After the initial public offering, the several
Underwriters may, in their discretion, vary the public offering price.
The information set forth in the last paragraph on the front
cover page (insofar as such information relates to the Underwriters), on the
inside front cover concerning stabilization and over-allotment by the
Underwriters, and under the second, seventh, eighth and ninth paragraphs
under the caption "Underwriting" in any Preliminary Prospectus and in the
Prospectus constitutes the only information furnished by the Underwriters to
the Company for inclusion in any Preliminary Prospectus, the Prospectus or
the Registration Statement, and you, on behalf of the respective
Underwriters, represent and warrant to the Company and the Selling
Stockholders that the statements made therein do not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the
time and date that this Agreement is executed and delivered by the parties
hereto, to become effective as promptly as possible; the Company will use its
best efforts to cause any abbreviated registration statement pursuant to Rule
462(b) of the Rules and Regulations as may be required subsequent to the date
the Registration Statement is declared effective to become effective as
promptly as possible; the Company will notify you, promptly after it shall
receive notice thereof, of the time when the Registration Statement, any
subsequent amendment to the Registration Statement or any abbreviated
registration statement has become effective or any supplement to the
Prospectus has been filed; if the Company omitted information from the
Registration Statement at the time it was originally declared effective in
reliance upon Rule 430A(a) of the Rules and Regulations, the Company will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed, within the time period prescribed, with the
Commission pursuant to subparagraph (1) or (4) of Rule 424(b) of the Rules
and Regulations or as part of a post-effective amendment to such Registration
Statement as originally declared effective which is declared effective by the
Commission; if the Company files a term sheet pursuant to Rule 434 of the
Rules and Regulations, the Company will provide evidence satisfactory to you
that the Prospectus and term sheet meeting the requirements of Rule 434(b) or
(c), as applicable, of the Rules and Regulations, have been filed, within the
time period prescribed, with the Commission pursuant to subparagraph (7) of
Rule 424(b) of the Rules and Regulations; if for any reason the filing of the
final form of Prospectus is required under Rule 424(b)(3) of the Rules and
Regulations, it will provide evidence satisfactory to you that the Prospectus
contains such information and has been filed with the Commission within the
time period prescribed; it will notify you promptly of any request by the
Commission for the amending or supplementing of the Registration Statement or
the Prospectus or for additional information; promptly upon your request, it
will prepare and file with the Commission any amendments or supplements to
the Registration Statement or Prospectus which, in the opinion of counsel for
the several Underwriters ("Underwriters' Counsel"), may be necessary or
advisable in connection with the distribution of the Shares by the
Underwriters; it will promptly prepare and file with the Commission, and
promptly notify you of the filing of, any amendments or supplements to the
Registration Statement or Prospectus which may be necessary to correct any
statements or omissions, if, at any time when a prospectus relating to the
Shares is required to be delivered under the Act, any event shall have
occurred as a result of which the Prospectus or any other prospectus relating
to the Shares as then in effect would include any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; in case any Underwriter is required to deliver a
prospectus nine (9) months or more after the effective date of the
Registration Statement in connection with the sale of the Shares, it will
prepare promptly upon request, but at the expense of such Underwriter, such
amendment or amendments to the Registration Statement and such prospectus or
prospectuses as may be necessary to permit compliance with the requirements
of Section 10(a)(3) of the Act; and it will file no amendment or supplement
to the Registration Statement or Prospectus, or, prior to the end of the
period of time in which a prospectus relating to the Shares is required to be
delivered under the Act, which shall not
13
previously have been submitted to you a reasonable time prior to the proposed
filing thereof or to which you shall reasonably object in writing, subject,
however, to compliance with the Act and the Rules and Regulations and the
provisions of this Agreement.
(b) The Company will advise you, promptly after it shall
receive notice or obtain knowledge, of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or of
the initiation or threat of any proceeding for that purpose; and it will
promptly use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order
should be issued.
(c) The Company will use its best efforts to qualify the
Shares for offering and sale under the securities laws of such jurisdictions
as you may designate and to continue such qualifications in effect for so
long as may be required for purposes of the distribution of the Shares,
except that the Company shall not be required in connection therewith or as a
condition thereof to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction in which it is not
otherwise required to be so qualified or to so execute a general consent to
service of process. In each jurisdiction in which the Shares shall have been
qualified as above provided, the Company will make and file such statements
and reports in each year as are or may be required by the laws of such
jurisdiction.
(d) The Company will furnish to you, as soon as available,
and, in the case of the Prospectus and any term sheet or abbreviated term
sheet under Rule 434, in no event later than the first (1st) full business
day following the first day that Shares are traded, copies of the
Registration Statement (three of which will be signed and which will include
all exhibits), each Preliminary Prospectus, the Prospectus and any amendments
or supplements to such documents, including any prospectus prepared to permit
compliance with Section 10(a)(3) of the Act, all in such quantities as you
may from time to time reasonably request. Notwithstanding the foregoing, if
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, on behalf of the several Underwriters, shall
agree to the utilization of Rule 434 of the Rules and Regulations, the
Company shall provide to you copies of a Preliminary Prospectus updated in
all respects through the date specified by you in such quantities as you may
from time to time reasonably request.
(e) The Company will make generally available to its
securityholders as soon as practicable, but in any event not later than the
forty-fifth (45th) day following the end of the fiscal quarter first
occurring after the first anniversary of the effective date of the
Registration Statement, an earnings statement (which will be in reasonable
detail but need not be audited) complying with the provisions of Section
11(a) of the Act and covering a twelve (12) month period beginning after the
effective date of the Registration Statement.
(f) During a period of three (3) years after the date hereof,
the Company will furnish to its stockholders as soon as practicable after the
end of each respective period, annual reports (including financial statements
audited by independent certified public accountants) within one hundred
twenty (120) days after the end of each fiscal year and will make available
unaudited quarterly reports of operations for each of the first three
quarters of the fiscal year within sixty (60) days after the end of each
fiscal quarter, and will furnish to you and the other several Underwriters
hereunder, upon request (i) concurrently with furnishing such reports to its
stockholders, statements of operations of the Company for each of the first
three (3) quarters in the form furnished to the Company's stockholders, (ii)
concurrently with furnishing to its stockholders, a balance sheet of the
Company as of the end of such fiscal year, together with statements of
operations, of stockholders' equity, and of cash flows of the Company for
such fiscal year, accompanied by a copy of the certificate or report thereon
of independent certified public accountants, (iii) as soon as they are
available, copies of all reports (financial or other) mailed to stockholders,
(iv) as soon as they are available, copies of all reports and financial
statements furnished to or filed with the Commission, any securities exchange
or the NASD, and (v) every material press release and every material news
item or article in respect of the Company or its affairs which was generally
released to stockholders. During such three (3) year period, if the Company
shall have active subsidiaries, the foregoing financial statements shall be
on a consolidated basis to the extent that the accounts of the Company and
such subsidiaries are consolidated, and shall be accompanied by similar
financial statements for any significant subsidiary which is not so
consolidated.
14
(g) The Company will apply the net proceeds from the sale of the
Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar (which may
be the same entity as the transfer agent) for its Common Stock.
(i) If at any time during the ninety (90) day period after
the Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in your
opinion the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus), the Company
will, after written notice from you advising the Company to the effect set
forth above, forthwith consult with you concerning the substance of and
advisability of disseminating a press release or other public statement
responding to or commenting on such rumor, publication or event.
(j) For a period of twenty-five (25) days following the date
the Registration Statement is declared effective by the Commission, the
Company will not issue any press release or engage in any other publicity
without the Representatives' prior written consent, other than normal
customary releases issued in the ordinary course of the Company's business or
those releases required by law.
(k) During the Lock-up Period, the Company will not, without
the prior written consent of BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, effect the
Disposition of, directly or indirectly, any Securities other than the sale of
the Company Shares and the Option Shares to be sold by the Company hereunder
and the Company's issuance of options or Common Stock under the Company's
presently authorized 1994 Long Term Incentive Plan, the Company's Director
Stock Option Plan or pursuant to certain options granted to non-employee
directors of the Company (collectively, the "Option Arrangements").
(l) During a period of ninety (90) days from the effective
date of the Registration Statement, the Company will not file a registration
statement registering shares under the Option Plan or other employee benefit
plan.
(n) The Company will conduct its affairs in such a manner to
ensure that the Company will not be an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act.
5. EXPENSES.
(a) The Company and the Selling Stockholders agree with each
Underwriter that the Company and the Selling Stockholders will pay and bear
all costs and expenses in connection with the preparation, printing and
filing of the Registration Statement (including financial statements,
schedules and exhibits), Preliminary Prospectuses and the Prospectus and any
amendments or supplements thereto; the printing of this Agreement, the
Agreement Among Underwriters, the Selected Dealer Agreement, the Preliminary
Blue Sky Survey and any Supplemental Blue Sky Survey, the Underwriters'
Questionnaire and Power of Attorney, and any instruments related to any of
the foregoing; the issuance and delivery of the Shares hereunder to the
several Underwriters, including transfer taxes, if any; the cost of all
certificates representing the Shares and transfer agents' and registrars'
fees; the fees and disbursements of counsel for the Company; all fees and
other charges of the Company's independent certified public accountants; the
cost of furnishing to the several Underwriters copies of the Registration
Statement (including appropriate exhibits), Preliminary Prospectus and the
Prospectus, and any amendments or supplements to any of the foregoing; NASD
filing fees and the cost of qualifying the Shares under the laws of such
jurisdictions as you may designate (including filing fees and fees and
disbursements of Underwriters' Counsel in connection with such NASD filings
and Blue Sky qualifications); and all other expenses directly incurred by the
Company and the Selling Stockholders in connection with the performance of
their obligations hereunder. Any additional expenses incurred as a result of
the sale of the Shares by the Selling
15
Stockholders will be borne collectively by the Company and the Selling
Stockholders or as otherwise may be mutually agreed to by them, but shall not
be, in any event, borne by the Underwriters. The provisions of this Section
5(a) are intended to relieve the Underwriters from the payment of the
expenses and costs which the Selling Stockholders and the Company hereby
agree to pay, but shall not affect any agreement which the Selling
Stockholders and the Company may make, or may have made, for the sharing of
any of such expenses and costs. Such agreements shall not impair the
obligations of the Company and the Selling Stockholders hereunder to the
several Underwriters.
(b) If the transactions contemplated hereby are not
consummated by reason of any failure, refusal or inability on the part of the
Company or any Selling Stockholder to perform any agreement on their
respective parts to be performed hereunder or to fulfill any condition of the
Underwriters' obligations hereunder, or if the Company shall terminate this
Agreement pursuant to Section 11(a) hereof, or if the Underwriters shall
terminate this Agreement pursuant to Section 11(b)(i), the Company will
reimburse the several Underwriters for all out-of-pocket expenses (including
fees and disbursements of Underwriters' Counsel) incurred by the Underwriters
in investigating or preparing to market or marketing the Shares. Subject to
the provisions of Section 8, the Underwriters agree to pay, whether or not
the transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the performance of the
obligations of the Underwriters under this Agreement that are not payable by
the Company or the Selling Stockholders pursuant to Section 5(a) above or the
first sentence of this Section 5(b), including, without limitation, the fees
and disbursements of counsel for the Underwriters.
(c) In addition to its other obligations under Section 8(a)
hereof, the Company agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding described in
Section 8(a) hereof, it will reimburse the Underwriters on a monthly basis
for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Company's obligation to reimburse
the Underwriters for such expenses and the possibility that such payments
might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is
so held to have been improper, the Underwriters shall promptly return such
payment to the Company together with interest, compounded daily, determined
on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) listed from time to time in The
Wall Street Journal which represents the base rate on corporate loans posted
by a substantial majority of the nation's thirty (30) largest banks (the
"Prime Rate"). Any such interim reimbursement payments which are not made to
the Underwriters within thirty (30) days of a request for reimbursement shall
bear interest at the Prime Rate from the date of such request.
(d) In addition to their other obligations under Section 8(b)
hereof, each Selling Stockholder agrees that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other proceeding
described in Section 8(b) hereof relating to such Selling Stockholder, it
will reimburse the Underwriters on a monthly basis for all reasonable legal
or other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety
and enforceability of such Selling Stockholder's obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction;
PROVIDED, that if such claim, action, investigation or other proceeding is
within the purview of Section 8(a) hereof, the Underwriters shall first
demand interim reimbursement from the Company pursuant to Section 5(c)
hereof, and shall have failed to be so reimbursed in full within thirty (30)
days of such demand, prior to invoking its rights against such Selling
Stockholder pursuant to this Section 5(d). To the extent that any such
interim reimbursement payment is so held to have been improper, the
Underwriters shall promptly return such payment to the Selling Stockholders,
together with interest, compounded daily, determined on the basis of the
Prime Rate. Any such interim reimbursement payments which are not made to
the Underwriters within thirty (30) days of a request for reimbursement shall
bear interest at the Prime Rate from the date of such request.
(e) In addition to their other obligations under Section 8(c)
hereof, the Underwriters severally and not jointly agree that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other
16
proceeding described in Section 8(c) hereof, they will reimburse the Company
and each Selling Stockholder on a monthly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety
and enforceability of the Underwriters' obligation to reimburse the Company
and each such Selling Stockholder for such expenses and the possibility that
such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Company and each such Selling
Stockholder shall promptly return such payment to the Underwriters together
with interest, compounded daily, determined on the basis of the Prime Rate.
Any such interim reimbursement payments which are not made to the Company and
each such Selling Stockholder within thirty (30) days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request.
(f) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections
5(c), 5(d) and 5(e) hereof, including the amounts of any requested
reimbursement payments, the method of determining such amounts and the basis
on which such amounts shall be apportioned among the reimbursing parties,
shall be settled by arbitration conducted under the provisions of the
Constitution and Rules of the Board of Governors of the New York Stock
Exchange, Inc. or pursuant to the Code of Arbitration Procedure of the NASD.
Any such arbitration must be commenced by service of a written demand for
arbitration or a written notice of intention to arbitrate, therein electing
the arbitration tribunal. In the event the party demanding arbitration does
not make such designation of an arbitration tribunal in such demand or
notice, then the party responding to said demand or notice is authorized to
do so. Any such arbitration will be limited to the operation of the interim
reimbursement provisions contained in Sections 5(c), 5(d) and 5(e) hereof and
will not resolve the ultimate propriety or enforceability of the obligation
to indemnify for expenses which is created by the provisions of Sections
8(a), 8(b) and 8(c) hereof or the obligation to contribute to expenses which
is created by the provisions of Section 8(e) hereof.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Shares as provided
herein shall be subject to the accuracy, as of the date hereof and the
Closing Date and any later date on which Option Shares are to be purchased,
as the case may be, of the representations and warranties of the Company and
the Selling Stockholders herein, to the performance by the Company and the
Selling Stockholders of their respective obligations hereunder and to the
following additional conditions:
(a) The Registration Statement shall have become effective
not later than 2:00 P.M., San Francisco time, on the date following the date
of this Agreement, or such later date as shall be consented to in writing by
you; and no stop order suspending the effectiveness thereof shall have been
issued and no proceedings for that purpose shall have been initiated or, to
the knowledge of the Company, any Selling Stockholder or any Underwriter,
threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
Underwriters' Counsel.
(b) All corporate proceedings and other legal matters in
connection with this Agreement, the form of Registration Statement and the
Prospectus, and the registration, authorization, issue, sale and delivery of
the Shares, shall have been reasonably satisfactory to Underwriters' Counsel,
and such counsel shall have been furnished with such papers and information
as they may reasonably have requested to enable them to pass upon the matters
referred to in this Section.
(c) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, or any later date on which Option
Shares are to be purchased, as the case may be, there shall not have been any
change in the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and the Subsidiary, considered
as one enterprise, from that set forth in the Registration Statement or
Prospectus, which, in your reasonable judgment, is material and adverse and
that makes it, in your reasonable judgment, impracticable or inadvisable to
proceed with the public offering of the Shares as contemplated by the
Prospectus.
17
(d) You shall have received on the Closing Date and on any
later date on which Option Shares that are Company Shares are to be
purchased, as the case may be, the following opinion of respective counsel
for the Company and the Selling Stockholders, dated the Closing Date or such
later date on which Option Shares are to be purchased addressed to the
Underwriters and with reproduced copies or signed counterparts thereof for
each of the Underwriters, to the effect that:
(i) Each of the Company and the Subsidiary, which
is the only "significant subsidiary" of the Company (as
defined in Regulation S-X of the Act), has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation;
(ii) Each of the Company and the Subsidiary has the
corporate power and authority to own, lease and operate its
respective properties and to conduct its business as described
in the Prospectus;
(iii) The Company is duly qualified to do business as
a foreign corporation and is in good standing in the State of
Texas, and based solely upon an examination of an officer's
certificate (which such firm shall state that it believes it
is justified in relying upon) and certificates of governmental
authorities, each of the Company and the Subsidiary is duly
qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the ownership or
leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified or be in good standing would not have a material
adverse effect on the condition (financial or otherwise),
earnings, operations or business of the Company and the
Subsidiary, considered as one enterprise. To such counsel's
knowledge, the Company does not own or have any ownership
interest in, directly or indirectly, any corporation,
association or other entity other than the Subsidiary and
INFITEQ, LLC;
(iv) All issued and outstanding shares of capital
stock of the Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable, and to such
counsel's knowledge, have not been issued in violation of or
subject to any preemptive right, co-sale right, registration
right, right of first refusal or other similar right and are
owned by the Company free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest;
(v) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus under
the caption "Capitalization" as of the dates stated therein,
and the issued and outstanding shares of capital stock of the
Company (including the Selling Stockholder Shares) have been
duly and validly issued, are nonassessable and, to such
counsel's knowledge, are fully paid;
(vi) The Firm Shares or the Option Shares, as the
case may be, to be issued by the Company pursuant to the terms
of this Agreement have been duly authorized and, upon issuance
and delivery against payment therefor in accordance with the
terms hereof, will be duly and validly issued and fully paid
and nonassessable, and will not have been issued in violation
of or subject to any preemptive right, co-sale right,
registration right, right of first refusal or other similar
right;
(vii) The Company has the corporate power and
authority to enter into this Agreement and to issue, sell and
deliver to the Underwriters the Shares to be issued and sold
by it hereunder;
(viii) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has
been duly executed and delivered by the Company and, assuming
due authorization, execution and delivery by you, is a valid
and binding agreement of the Company, enforceable in
accordance with its terms, except that no opinion need be
expressed as to indemnification or contribution provisions and
except as enforceability may be limited by bankruptcy,
18
insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally or by
general equitable principles;
(ix) The Registration Statement has been duly
authorized and executed by the Company and the filing of such
document with the Commission has been duly authorized by the
Company;
(x) Based upon the oral advice of the Commission,
the Registration Statement has become effective under the Act
and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
are pending or threatened under the Act;
(xi) The Registration Statement and the Prospectus,
and each amendment or supplement thereto (other than the
financial statements, and the notes and schedules thereto, and
other financial and statistical information derived therefrom
as to which such counsel need express no opinion), as of the
effective date of the Registration Statement, complied as to
form in all material respects with the requirements of the Act
and the applicable Rules and Regulations;
(xii) The information in the Prospectus under the
caption "Description of Capital Stock," to the extent that it
constitutes matters of law or legal conclusions, has been
reviewed by such counsel and is a fair summary in all material
respects of such matters and conclusions; and the form of
certificate evidencing the Common Stock and filed as an
exhibit to the Registration Statement complies with Delaware
law;
(xiii) The description in the Registration Statement
and the Prospectus of the charter and bylaws of the Company
are accurate and fairly present the information required to be
presented by the Act and the applicable Rules and Regulations;
(xiv) To such counsel's knowledge, there are no
agreements, contracts, leases or documents to which the
Company is a party of a character required to be described or
referred to in the Registration Statement or Prospectus or to
be filed as an exhibit to the Registration Statement which are
not described or referred to therein or filed as required;
(xv) The performance of this Agreement and the
consummation of the transactions herein contemplated (other
than performance of the Company's indemnification obligations
hereunder, concerning which no opinion need be expressed) will
not (a) result in any violation of the Company's charter or
bylaws or (b) result in a material breach or violation of any
of the terms and provisions of, or constitute a default under,
any bond, debenture, note or other evidence of indebtedness,
or any lease, contract, indenture, mortgage, deed of trust,
loan agreement, joint venture or other agreement or instrument
to which the Company is a party or by which its properties are
bound and which is listed as an exhibit to or otherwise
referred to in the Registration Statement or is otherwise
identified on a schedule certified by an officer of the
Company, or any applicable statute, rule or regulation or, to
the best of such counsel's knowledge, any order, writ or
decree of any court, government or governmental agency or body
having jurisdiction over the Company or the Subsidiary, or
over any of their properties or operations;
(xvi) No consent, approval, authorization or order
of or qualification with any court, government or governmental
agency or body having jurisdiction over the Company or the
Subsidiary or over any of their respective properties or
operations is necessary in connection with the consummation by
the Company of the transactions herein contemplated, except
such as have been obtained under the Act or such as may be
required under state or other securities or Blue Sky laws
19
in connection with the purchase and the distribution of the
Shares by the Underwriters, as to which such counsel need not
express an opinion;
(xvii) To such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened
against the Company or the Subsidiary of a character required
to be disclosed in the Registration Statement or the
Prospectus by the Act or the Rules and Regulations, other than
those described therein;
(xviii) To such counsel's knowledge, neither the
Company nor the Subsidiary is presently (a) in material
violation of its respective charter or bylaws or (b) in
material breach of any applicable statute, rule or regulation
known to such counsel or, to such counsel's knowledge, any
order, writ or decree of any court or governmental agency or
body having jurisdiction over the Company or the Subsidiary,
or over any of their properties or operations;
(xix) To such counsel's knowledge, except as set
forth in the Registration Statement and Prospectus, no holders
of Common Stock or other securities of the Company have
registration rights with respect to securities of the Company
and, except as set forth in the Registration Statement and
Prospectus, all holders of securities of the Company having
rights known to such counsel to registration of such shares of
Common Stock or other securities, because of the filing of the
Registration Statement by the Company have, with respect to
the offering contemplated thereby, waived such rights or such
rights have expired by reason of lapse of time following
notification of the Company's intent to file the Registration
Statement or have included securities in the Registration
Statement pursuant to the exercise of and in full satisfaction
of such rights;
(xx) The Shares have been duly approved for
inclusion on the Nasdaq National Market, subject to the
consummation of the transactions contemplated by this
Agreement and to official notice of issuance;
(xxi) The Company is not, and, assuming the
application of the net proceeds from the sale of the Shares as
described in the Prospectus under the caption "Use of
Proceeds," will not become, an "investment company" subject to
registration under the 1940 Act;
(xxii) 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 Selling Stockholder
Agreement to be executed and delivered by it or him in
connection with the transactions contemplated herein; the
Selling Stockholder Agreement of each Selling Stockholder that
is not a natural person has been duly authorized by such
Selling Stockholder; the Selling Stockholder Agreement of each
Selling Stockholder has been duly executed and delivered by or
on behalf of such Selling Stockholder; and the Power of
Attorney and Custody Agreement of each Selling Stockholder
constitutes the valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by
general equitable principles;
(xxiii) Each of the Selling Stockholders has full
power, authority and to such counsel's knowledge, right to
enter into and to perform its obligations under this Agreement
and to sell, transfer, assign and deliver the Shares to be
sold by such Selling Stockholder hereunder;
(xxiv) This Agreement has been duly authorized by each
Selling Stockholder that is not a natural person and has been
duly executed and delivered by or on behalf of each Selling
Stockholder; and
20
(xxv) Upon the delivery of and payment for the Shares
as contemplated in this Agreement, each of the Underwriters
will receive valid marketable title to the Shares purchased by
it from such Selling Stockholder, free and clear of any
pledge, lien, security interest, encumbrance, claim or
equitable interest. In rendering such opinion, such counsel
may assume that the Underwriters are without notice of any
defect in the title of the Shares being purchased from the
Selling Stockholders.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, Underwriters' Counsel and the independent
certified public accountants of the Company, at which such conferences the
contents of the Registration Statement and Prospectus and related matters
were discussed, and although they have not independently verified the
accuracy, fairness or completeness of the statements contained in the
Registration Statement or the Prospectus, nothing has come to the attention
of such counsel which leads them to believe that, at the time the
Registration Statement became effective and at all times subsequent thereto
up to and on the Closing Date and on any later date on which Option Shares
are to be purchased, the Registration Statement and any amendment or
supplement thereto (other than the financial statements and the notes and
schedules thereto and other financial and statistical information derived
therefrom, as to which such counsel need express no comment) contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or at the Closing Date or any later date on which the Option
Shares are to be purchased, as the case may be, the Registration Statement,
the Prospectus and any amendment or supplement thereto (except as aforesaid)
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States or the States of Texas and
Delaware upon opinions of local counsel, and as to questions of fact upon
representations or certificates of officers of the Company, the Selling
Stockholders or officers of the Selling Stockholders (when the Selling
Stockholder is not a natural person), and of government officials, in which
case their opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or inaccuracy in any such opinion,
representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of
the Underwriters, and to Underwriters' Counsel.
(e) You shall have received on the Closing Date and on any later
date on which Option Shares are to be purchased, as the case may be, an
opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, in form and substance
satisfactory to you, with respect to the sufficiency of all such corporate
proceedings and other legal matters relating to this Agreement and the
transactions contemplated hereby as you may reasonably require, and the
Company shall have furnished to such counsel such documents as they may have
requested for the purpose of enabling them to pass upon such matters.
(f) You shall have received on the Closing Date and on any later
date on which Option Shares are to be purchased, as the case may be, a letter
from Ernst & Young LLP addressed to the Underwriters, dated the Closing Date
or such later date on which Option Shares are to be purchased, as the case
may be, confirming that they are independent certified public accountants
with respect to the Company within the meaning of the Act and the applicable
published Rules and Regulations and based upon the procedures described in
such letter delivered to you concurrently with the execution of this
Agreement (herein called the "Original Letter"), but carried out to a date
not more than five (5) business days prior to the Closing Date or such later
date on which Option Shares are to be purchased, as the case may be, (i)
confirming, to the extent true, that the statements and conclusions set forth
in the Original Letter are accurate as of the Closing Date or such later date
on which Option Shares are to be purchased, as the case may be, and (ii)
setting forth any revisions and additions to the statements and conclusions
set forth in the Original Letter which are necessary to reflect any changes
in the facts described in the Original Letter since the date of such letter,
or to reflect the availability of more recent financial statements, data or
information. The letter shall not disclose any change in the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and the
21
Subsidiary, considered as one enterprise from that set forth in the
Registration Statement or Prospectus, which, in your reasonable judgment, is
material and adverse and that makes it, in your reasonable judgment,
impracticable or inadvisable to proceed with the public offering of the
Shares as contemplated by the Prospectus. The Original Letter from Ernst &
Young LLP shall be addressed to or for the use of the Underwriters in form
and substance satisfactory to the Underwriters and shall (i) represent, to
the extent true, that they are independent certified public accountants with
respect to the Company within the meaning of the Act and the applicable
published Rules and Regulations, (ii) set forth their opinion with respect to
their examination of the consolidated balance sheet of the Company as of
January 31, 1998 and related consolidated statements of operations,
stockholders' equity, and cash flows for the twelve (12) months ended January
31, 1998, and (iii) address other matters agreed upon by Ernst & Young LLP
and you. In addition, you shall have received from Ernst & Young LLP a
letter addressed to the Company and made available to you for the use of the
Underwriters stating that their review of the Company's system of internal
accounting controls, to the extent they deemed necessary in establishing the
scope of their examination of the Company's consolidated financial statements
as of January 31, 1998, did not disclose any weaknesses in internal controls
that they considered to be material weaknesses.
(g) You shall have received on the Closing Date and on any later
date on which Option Shares are to be purchased, as the case may be, a
certificate of the Company, dated the Closing Date or such later date on
which Option Shares are to be purchased, as the case may be, signed by the
Chief Executive Officer and Chief Financial Officer of the Company, to the
effect that, and you shall be satisfied that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the Closing
Date or any later date on which Option Shares are to be purchased,
as the case may be, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date or any later
date on which Option Shares are to be purchased, as the case may be;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the
Act;
(iii) When the Registration Statement became effective and
at all times subsequent thereto up to the delivery of such
certificate, the Registration Statement and the Prospectus, and any
amendments or supplements thereto, contained all material
information required to be included therein by the Act and the
Rules and Regulations and in all material respects conformed to the
requirements of the Act and the Rules and Regulations, the
Registration Statement, and any amendment or supplement thereto,
did not and does not include any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, the
Prospectus, and any amendment or supplement thereto, did not and
does not include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and, since the effective date of the Registration
Statement, there has occurred no event required to be set forth in
an amended or supplemented Prospectus which has not been so set
forth; and
(iv) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus,
there has not been (a) any material adverse change in the condition
(financial or otherwise), earnings, operations, business or
business prospects of the Company and the Subsidiary, considered as
one enterprise, (b) any transaction that is material to the Company
and the Subsidiary, considered as one enterprise, except
transactions entered into in the ordinary course of business, (c)
any obligation, direct or contingent, that is material to the
Company and the Subsidiary, considered as one enterprise, incurred
by the Company or the Subsidiary, except obligations incurred in
the ordinary course of business, (d) any change in the capital
stock or outstanding indebtedness of the Company or the Subsidiary
that is material to the Company and the
22
Subsidiary, considered as one enterprise, (e) any dividend or
distribution of any kind declared, paid or made on the capital
stock of the Company or the Subsidiary, or (f) any loss or damage
(whether or not insured) to the property of the Company or the
Subsidiary which has been sustained or will have been sustained
which has a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of
the Company and the Subsidiary, considered as one enterprise.
(h) You shall be satisfied that, and you shall have received a
certificate, dated the Closing Date, or any later date on which Option Shares
are to be purchased, as the case may be, from the Attorneys for each Selling
Stockholder to the effect that, as of the Closing Date, or any later date on
which Option Shares are to be purchased, as the case may be, they have not
been informed that:
(i) The representations and warranties made by such Selling
Stockholder herein are not true or correct in any material respect
on the Closing Date or on any later date on which Option Shares are
to be purchased, as the case may be; or
(ii) Such Selling Stockholder has not complied in any material
respect with any obligation or failed to satisfy in any material
respect any condition which is required to be performed or
satisfied on the part of such Selling Stockholder at or prior to
the Closing Date or any later date on which Option Shares are to be
purchased, as the case may be.
(i) The Company shall have obtained and delivered to you an
agreement from each officer and director of the Company who owns shares of
Common Stock or options to purchase shares of Common Stock that will vest
within 180 days of the date of this Agreement, each Selling Stockholder and
each other beneficial owner of 1,000 or more shares of Common Stock and/or
options to purchase shares of Common Stock that will vest within 180 days of
the date of this Agreement officer in writing prior to the date hereof that
such person will not, during the Lock-up Period, effect the Disposition of
any Securities now owned or hereafter acquired directly by such person or
with respect to which such person has or hereafter acquires the power of
disposition, otherwise than (i) as a bona fide gift or gifts, PROVIDED the
donee or donees thereof agree in writing to be bound by this restriction,
(ii) as a distribution to partners or stockholders of such person, PROVIDED
that the distributees thereof agree in writing to be bound by the terms of
this restriction, or (iii) with the prior written consent of BancAmerica
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (which consent has been given with respect to the pledge
of any shares of Common Stock that were purchased pursuant to the Company's
"Stock Option Loan Program" described in the Registration Statement or any
other loan program approved in writing by BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇).
The foregoing restriction shall have been expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction
which is designed to or reasonably expected to lead to or result in a
Disposition of Securities during the Lock-up Period, even if such Securities
would be disposed of by someone other than the such holder. Such prohibited
hedging or other transactions would including, without limitation, any short
sale (whether or not against the box) or any purchase, sale or grant of any
right (including, without limitation, any put or call option) with respect to
any Securities or with respect to any security (other than a broad-based
market basket or index) that includes, relates to or derives any significant
part of its value from Securities. Such person will have also agreed and
consented to the entry of stop transfer instructions with the Company's
transfer agent against the transfer of the Securities held by such person
except in compliance with this restriction. Furthermore, such person will
have also agreed that, without the prior written consent of BancAmerica
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, such person will not, during the period ending with the
conclusion of the Lock-Up Period, make any demand for or exercise any right
with respect to, the registration of any Securities, except pursuant to the
Registration Statement to the extent set forth in Schedule B hereto.
(j) The Company and the Selling Stockholders shall have furnished
to you such further certificates and documents as you shall reasonably
request (including certificates of officers of the Company, the Selling
Stockholders or officers of the Selling Stockholders (when the Selling
Stockholder is not a natural person)) as to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
herein, as to the
23
performance by the Company and the Selling Stockholders of their respective
obligations hereunder and as to the other conditions concurrent and precedent
to the obligations of the Underwriters hereunder.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably
satisfactory to Underwriters' Counsel. The Company and the Selling
Stockholders will furnish you with such number of conformed copies of such
opinions, certificates, letters and documents as you shall reasonably request.
7. OPTION SHARES.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Company and the Selling Stockholder that is identified in Schedule B
hereto, severally and not jointly, hereby grant to the several Underwriters,
for the purpose of covering over-allotments in connection with the
distribution and sale of the Firm Shares only, a nontransferable option to
purchase up to 62,033 and 702,967 Option Shares, respectively, at the
purchase price per share for the Firm Shares set forth in Section 3 hereof.
Such option may be exercised by the Representatives on behalf of the several
Underwriters on one (1) or more occasions in whole or in part during the
period of thirty (30) days after the date on which the Firm Shares are
initially offered to the public, by giving written notice to the Company and
such Selling Stockholder. Any exercise of the option granted to the
Underwriters pursuant to this Section 7 shall first be applied to the Option
Shares offered by the Selling Stockholder, with any Option Shares in excess
of 702,967 Option Shares to be sold to the Underwriters by the Company. The
number of Option Shares to be purchased by each Underwriter upon the exercise
of such option shall be the same proportion of the total number of Option
Shares to be purchased by the several Underwriters pursuant to the exercise
of such option as the number of Firm Shares purchased by such Underwriter
(set forth in Schedule A hereto) bears to the total number of Firm Shares
purchased by the several Underwriters (set forth in Schedule A hereto),
adjusted by the Representatives in such manner as to avoid fractional shares.
Delivery of definitive certificates for the Option Shares to be
purchased by the several Underwriters pursuant to the exercise of the option
granted by this Section 7 shall be made against payment of the purchase price
therefor by the several Underwriters by certified or official bank check or
checks drawn in same-day funds or by wire transfer in same-day funds, payable
to the order of the Company (to the extent that the Option Shares are sold by
the Company) and the Custodian (to the extent that the Option Shares are sold
by the Selling Stockholder) for the account of the Selling Stockholder. Such
delivery and payment shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, or at such other place
as may be mutually agreed upon among the Representatives, the Selling
Stockholder and the Company (i) on the Closing Date, if written notice of the
exercise of such option is received by the Company at least two (2) full
business days prior to the Closing Date, or (ii) on a date which shall not be
later than the third (3rd) full business day following the date the Company
and the Selling Stockholder (directly or indirectly through the Custodian)
receive written notice of the exercise of such option, if such notice is
received by the Company and the Selling Stockholder (directly or indirectly
through the Custodian) less than two (2) full business days prior to the
Closing Date.
The certificates for the Option Shares to be so delivered will be
made available to you at such office or such other location including,
without limitation, in New York City, as you may reasonably request for
checking at least one (1) full business day prior to the date of payment and
delivery and will be in such names and denominations as you may request, such
request to be made at least two (2) full business days prior to such date of
payment and delivery. If the Representatives so elect, delivery of the
Option Shares may be made by credit through full fast transfer to the
accounts at The Depository Trust Company designated by the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated
to) make payment of the purchase price on behalf of any Underwriter or
Underwriters whose funds shall not have been received by you prior to the
date of payment and delivery for the Option Shares to be
24
purchased by such Underwriter or Underwriters. Any such payment by you shall
not relieve any such Underwriter or Underwriters of any of its or their
obligations hereunder.
(b) Upon exercise of any option provided for in Section 7(a)
hereof, the obligations of the several Underwriters to purchase such Option
Shares will be subject (as of the date hereof and as of the date of payment
and delivery for such Option Shares) to the accuracy of and compliance with
the representations, warranties and agreements of the Company and the Selling
Stockholder herein, to the accuracy of the statements of the Company, the
Selling Stockholder and officers of the Company made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholder of their respective obligations hereunder, to the conditions set
forth in Section 6 hereof, and to the condition that all proceedings taken at
or prior to the payment date in connection with the sale and transfer of such
Option Shares shall be satisfactory in form and substance to you and to
Underwriters' Counsel, and you shall have been furnished with all such
documents, certificates and opinions as you may request in order to evidence
the accuracy and completeness of any of the representations, warranties or
statements, the performance of any of the covenants or agreements of the
Company and the Selling Stockholder or the satisfaction of any of the
conditions herein contained.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject (including, without
limitation, in its capacity as an Underwriter or as a "qualified independent
underwriter" within the meaning of Schedule E of the Bylaws of the NASD),
under the Act, the Exchange Act or otherwise, specifically including, but not
limited to, losses, claims, damages or liabilities (or actions in respect
thereof) arising out of or based upon (i) any breach of any representation,
warranty, agreement or covenant of the Company herein contained, (ii) any
untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(iii) any untrue statement or alleged untrue statement of any material fact
contained in any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each Underwriter for any legal
or other expenses reasonably incurred by it in connection with investigating
or defending any such loss, claim, damage, liability or action; PROVIDED,
HOWEVER, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, such Preliminary
Prospectus or the Prospectus, or any such amendment or supplement thereto, in
reliance upon, and in conformity with, written information relating to any
Underwriter furnished to the Company by such Underwriter, directly or through
you, specifically for use in the preparation thereof; and, PROVIDED, FURTHER,
that the indemnity agreement provided in this Section 8(a) with respect to
any Preliminary Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any losses, claims, damages, liabilities or
actions based upon any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state therein a material
fact purchased Shares, if a copy of a subsequent Preliminary Prospectus in
which such untrue statement or alleged untrue statement or omission or
alleged omission was corrected had not been sent or given to such person
prior to the time that such person purchased such Shares, unless such failure
is the result of noncompliance by the Company with Section 4(d) hereof.
The indemnity agreement in this Section 8(a) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each person,
if any, who controls any Underwriter within the meaning of the Act or the
Exchange Act. This indemnity agreement shall be in addition to any
liabilities which the Company or such Selling Stockholders may otherwise have.
25
(b) Each Selling Stockholder, severally and not jointly, agrees to
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may
become subject (including, without limitation, in its capacity as an
Underwriter or as a "qualified independent underwriter" within the meaning of
Schedule E or the Bylaws of the NASD) under the Act, the Exchange Act or
otherwise, specifically including, but not limited to, losses, claims,
damages or liabilities (or actions in respect thereof) arising out of or
based upon (i) any breach of any representation, warranty, agreement or
covenant of such Selling Stockholder herein contained, (ii) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(iii) any untrue statement or alleged untrue statement of any material fact
contained in any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in the case of
subparagraphs (ii) and (iii) of this Section 8(b) to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company or such Underwriter by such
Selling Stockholder, directly or through such Selling Stockholder's
representatives, specifically for use in the preparation thereof, and agrees
to reimburse each Underwriter for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, damage, liability or action; PROVIDED, HOWEVER, that the Company shall
not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, such Preliminary Prospectus or the Prospectus, or
any such amendment or supplement thereto, in reliance upon, and in conformity
with, written information relating to any Underwriter furnished to the
Company by such Underwriter, directly or through you, specifically for use in
the preparation thereof; and, PROVIDED, FURTHER, that the indemnity agreement
provided in this Section 8(a) with respect to any Preliminary Prospectus
shall not inure to the benefit of any Underwriter from whom the person
asserting any losses, claims, damages, liabilities or actions based upon any
untrue statement or alleged untrue statement of a material fact or omission
or alleged omission to state therein a material fact purchased Shares, if a
copy of a subsequent Preliminary Prospectus in which such untrue statement or
alleged untrue statement or omission or alleged omission was corrected had
not been sent or given to such person prior to the time that such person
purchased such Shares, unless such failure is the result of noncompliance by
the Company with Section 4(d) hereof.
The indemnity agreement in this Section 8(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each person, if
any, who controls any Underwriter within the meaning of the Act or the Exchange
Act. This indemnity agreement shall be in addition to any liabilities which
such Selling Stockholder may
26
otherwise have. Notwithstanding, no Selling Stockholder shall be liable
hereunder to the Underwriters for the obligations owed by any other Selling
Stockholder to the Underwriters.
(c) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company and each Selling Stockholder against
any losses, claims, damages or liabilities, joint or several, to which the
Company or such Selling Stockholder may become subject under the Act or
otherwise, specifically including, but not limited to, losses, claims,
damages or liabilities (or actions in respect thereof) arising out of or
based upon (i) any breach of any representation, warranty, agreement or
covenant of such Underwriter herein contained, (ii) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in the case of subparagraphs (ii)
and (iii) of this Section 8(c) to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter, directly or through you,
specifically for use in the preparation thereof, and agrees to reimburse the
Company and each such Selling Stockholder for any legal or other expenses
reasonably incurred by the Company and each such Selling Stockholder in
connection with investigating or defending any such loss, claim, damage,
liability or action.
The indemnity agreement in this Section 8(c) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each officer
of the Company who signed the Registration Statement and each director of the
Company, each Selling Stockholder and each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Act or the
Exchange Act. This indemnity agreement shall be in addition to any
liabilities which each Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8 unless the indemnifying party is materially
prejudiced by such failure to be timely notified. In case any such action is
brought against any indemnified party, and it notified the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it shall elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; PROVIDED, HOWEVER, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties 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 the indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with appropriate
local counsel) approved by the indemnifying party representing all the
indemnified parties under Section 8(a), 8(b) or 8(c) hereof who are parties to
such action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; PROVIDED,
27
that in no event shall the indemnifying party be liable to such indemnified
party for any legal fees or expenses in excess of reasonable legal fees and
expenses. In no event shall any indemnifying party be liable in respect of
any amounts paid in settlement of any action unless the indemnifying party
shall have approved the terms of such settlement; PROVIDED that such consent
shall not be unreasonably withheld. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnification could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on all
claims that are the subject matter of such proceeding and does not include
any statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of such indemnified party.
(e) In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this Section
8 but it is judicially determined (by the entry of a final judgment or decree
by a court of competent jurisdiction and the expiration of time to appeal or
the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 8 provides
for indemnification in such case, all the parties hereto shall contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that, except
as set forth in Section 8(f) hereof, the Underwriters severally and not
jointly are responsible pro rata for the portion represented by the
percentage that the underwriting discount bears to the initial public
offering price, and the Company and the Selling Stockholders are responsible
for the remaining portion, PROVIDED, HOWEVER, that (i) no Underwriter shall
be required to contribute any amount in excess of the amount by which the
underwriting discount applicable to the Shares purchased by such Underwriter
exceeds the amount of damages which such Underwriter has otherwise required
to pay and (ii) no person guilty of a fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who is not guilty of such fraudulent misrepresentation. The
contribution agreement in this Section 8(e) shall extend upon the same terms
and conditions to, and shall inure to the benefit of, each person, if any,
who controls any Underwriter, the Company or any Selling Stockholder within
the meaning of the Act or the Exchange Act and each officer of the Company
who signed the Registration Statement and each director of the Company.
(f) The liability of each Selling Stockholder under the
representations, warranties and agreements contained herein and under the
indemnity and contribution agreements contained in the provisions of this
Section 8 shall be limited to an amount equal to the initial public offering
price of the Selling Stockholder Shares sold by such Selling Stockholder to
the Underwriters minus the amount of the underwriting discount paid thereon
to the Underwriters by such Selling Stockholder. The Company and such
Selling Stockholders may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to the respective amounts
of such liability for which they each shall be responsible; and nothing
contained herein shall be construed to alter any pre-existing arrangements
between the Company and any such Selling Stockholder with respect to their
responsibility for liability.
(g) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation,
the provisions of this Section 8, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 8
fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and Prospectus as required
by the Act.
9. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties, covenants and agreements of the
Company, the Selling Stockholders and the Underwriters herein or in certificates
delivered pursuant hereto, and the indemnity and contribution agreements
contained in Section 8 hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any person controlling any Underwriter within the meaning of the Act or the
Exchange Act, or by or on behalf of the Company or any Selling Stockholder, or
any of their officers, directors or controlling persons within the meaning of
28
the Act or the Exchange Act, and shall survive the delivery of the Shares to
the several Underwriters hereunder or termination of this Agreement.
10. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters
shall fail to take up and pay for the number of Firm Shares agreed by such
Underwriter or Underwriters to be purchased hereunder upon tender of such
Firm Shares in accordance with the terms hereof, and if the aggregate number
of Firm Shares which such defaulting Underwriter or Underwriters so agreed
but failed to purchase does not exceed 10% of the Firm Shares, the remaining
Underwriters shall be obligated, severally in proportion to their respective
commitments hereunder, to take up and pay for the Firm Shares of such
defaulting Underwriter or Underwriters.
If any Underwriter or Underwriters so defaults and the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters
agreed but failed to take up and pay for exceeds 10% of the Firm Shares, the
remaining Underwriters shall have the right, but shall not be obligated, to
take up and pay for (in such proportions as may be agreed upon among them)
the Firm Shares which the defaulting Underwriter or Underwriters so agreed
but failed to purchase. If such remaining Underwriters do not, at the
Closing Date, take up and pay for the Firm Shares which the defaulting
Underwriter or Underwriters so agreed but failed to purchase, the Closing
Date shall be postponed for twenty-four (24) hours to allow the several
Underwriters the privilege of substituting within twenty-four (24) hours
(including non-business hours) another underwriter or underwriters (which may
include any nondefaulting Underwriter) satisfactory to the Company. If no
such underwriter or underwriters shall have been substituted as aforesaid by
such postponed Closing Date, the Closing Date may, at the option of the
Company, be postponed for a further twenty-four (24) hours, if necessary, to
allow the Company the privilege of finding another underwriter or
underwriters, satisfactory to you, to purchase the Firm Shares which the
defaulting Underwriter or Underwriters so agreed but failed to purchase. If
it shall be arranged for the remaining Underwriters or substituted
underwriter or underwriters to take up the Firm Shares of the defaulting
Underwriter or Underwriters as provided in this Section 10, (i) the Company
shall have the right to postpone the time of delivery for a period of not
more than seven (7) full business days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement, supplements to
the Prospectus or other such documents which may thereby be made necessary,
and (ii) the respective number of Firm Shares to be purchased by the
remaining Underwriters and substituted underwriter or underwriters shall be
taken as the basis of their underwriting obligation. If the remaining
Underwriters shall not take up and pay for all such Firm Shares so agreed to
be purchased by the defaulting Underwriter or Underwriters or substitute
another underwriter or underwriters as aforesaid and the Company shall not
find or shall not elect to seek another underwriter or underwriters for such
Firm Shares as aforesaid, then this Agreement shall terminate.
In the event of any termination of this Agreement pursuant to the
preceding paragraph of this Section 10, neither the Company nor any Selling
Stockholder shall be liable to any Underwriter (except as provided in Sections 5
and 8 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this Agreement, to
purchase the number of Firm Shares agreed by such Underwriter to be purchased
hereunder, which Underwriter shall remain liable to the Company, the Selling
Stockholders and the other Underwriters for damages, if any, resulting from such
default) be liable to the Company or any Selling Stockholder (except to the
extent provided in Sections 5 and 8 hereof).
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section 10.
29
11. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at the earlier of (i) 6:30
A.M., San Francisco time, on the first business day following the effective date
of the Registration Statement, or (ii) the time of the initial public offering
of any of the Shares by the Underwriters after the Registration Statement
becomes effective. The time of the initial public offering shall mean the time
of the release by you, for publication, of the first newspaper advertisement
relating to the Shares, or the time at which the Shares are first generally
offered by the Underwriters to the public by letter, telephone, telegram or
telecopy, whichever shall first occur. By giving notice as set forth in
Section 12 before the time this Agreement becomes effective, you, as
Representatives of the several Underwriters, or the Company, may prevent this
Agreement from becoming effective without liability of any party to any other
party, except as provided in Sections 4(i), 5 and 8 hereof.
(b) You, as Representatives of the several Underwriters, shall have
the right to terminate this Agreement by giving notice as hereinafter specified
at any time on or prior to the Closing Date or on or prior to any later date on
which Option Shares are to be purchased, as the case may be, (i) if the Company
or any Selling Stockholder shall have failed, refused or been unable to perform
any agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled is not fulfilled,
including, without limitation, any change in the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and the Subsidiary, considered as one enterprise from that set forth in the
Registration Statement or Prospectus, which, in your sole judgment, is material
and adverse, or (ii) if additional material governmental restrictions, not in
force and effect on the date hereof, shall have been imposed upon trading in
securities generally or minimum or maximum prices shall have been generally
established on the New York Stock Exchange or on the American Stock Exchange or
in the over the counter market by the NASD, or trading in securities generally
shall have been suspended on either such exchange or in the over the counter
market by the NASD, or if a banking moratorium shall have been declared by
federal, New York or California authorities, or (iii) if the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as to interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss shall have
been insured, or (iv) if there shall have been a material adverse change in the
general political or economic conditions or financial markets as in your
reasonable judgment makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Shares, or (v) if there shall have been an
outbreak or escalation of hostilities or of any other insurrection or armed
conflict or the declaration by the United States of a national emergency which,
in the reasonable opinion of the Representatives, makes it impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated by
the Prospectus. In the event of termination pursuant to subparagraph (i) above,
the Company shall remain obligated to pay costs and expenses pursuant to
Sections 4(i), 5 and 8 hereof. Any termination pursuant to any of subparagraphs
(ii) through (v) above shall be without liability of any party to any other
party except as provided in Sections 5 and 8 hereof.
If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section 11, you shall promptly
notify the Company by telephone, telecopy or telegram, in each case confirmed by
letter. If the Company shall elect to prevent this Agreement from becoming
effective, the Company shall promptly notify you by telephone, telecopy or
telegram, in each case, confirmed by letter.
12. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall be
mailed, delivered, telegraphed (and confirmed by letter) or telecopied (and
confirmed by letter) to you c/o BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopier number (415)
781-0278, Attention: General Counsel; if sent to the Company, such notice shall
be mailed, delivered, telegraphed (and confirmed by letter) or telecopied (and
confirmed by letter) to ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman
and Chief Executive Officer; if sent to one or more of the Selling Stockholders,
such notice shall be sent
30
mailed, delivered, telegraphed (and confirmed by letter) or telecopied (and
confirmed by letter) to the respective address for such Selling Stockholder
or Selling Stockholders as set forth in their respective Selling Stockholder
Agreements.
13. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters and the Company and the Selling Stockholders and
their respective executors, administrators, successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person or entity, other than the parties hereto and their respective
executors, administrators, successors and assigns, and the controlling persons
within the meaning of the Act or the Exchange Act, officers and directors
referred to in Section 8 hereof, any legal or equitable right, remedy or claim
in respect of this Agreement or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of the parties hereto and their respective executors,
administrators, successors and assigns and said controlling persons and said
officers and directors, and for the benefit of no other person or entity. No
purchaser of any of the Shares from any Underwriter shall be construed a
successor or assign by reason merely of such purchase.
In all dealings with the Company and the Selling Stockholders under
this Agreement, you shall act on behalf of each of the several Underwriters, and
the Company and the Selling Stockholders shall be entitled to act and rely upon
any statement, request, notice or agreement made or given by you jointly or by
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on behalf of you.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
15. COUNTERPARTS. This Agreement may be signed in several counterparts,
each of which will constitute an original.
[Signature page follows]
31
If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholders and the several Underwriters, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company, the Selling
Stockholders and the several Underwriters.
Very truly yours,
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, INC.
By
-------------------------------------------
SELLING STOCKHOLDERS
By
-------------------------------------------
Attorney-in-Fact for the Selling
Stockholders named in Schedule B hereto
Accepted as of the date first above written:
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇ BROTHERS INC.
On their behalf and on behalf of each of the
several Underwriters named in Schedule A hereto.
By BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By
-------------------------------------------
Authorized Signatory
SCHEDULE A
Number of
Firm Shares
To Be
Underwriters Purchased
--------------------------------- --------------------
[ ]
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ . . . . . . . . . . .
[ ]
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC . . . . . . . . . . . . . . . .
[ ]
▇▇▇▇▇▇ Brothers Inc. . . . . . . . . . . . . . . . .
[ ]
[underwriter] . . . . . . . . . . . . . . . . . . . .
[ ]
Total . . . . . . . . . . . . . . . . . . . . .
-------
-------
SCHEDULE B
Number of
Company
Shares To
Be Sold
----------------
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, Inc.................................... [ ]2
-------
Number of
Selling
Stockholder
Shares
Name of Selling Stockholder To Be Sold
--------------------------------------------------------------------------
[Stockholder] ...........................................
[Stockholder] ........................................... [ ]
[Stockholder] ........................................... [ ]
[Stockholder] ........................................... [ ]3
[Stockholder] ........................................... [ ]
-----------
Total ............................................... [ ]
-----------
-----------
-----------------------
(2) In addition to the shares shown, ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, Inc. also will include
62,033 shares of Common Stock for sale to the Underwriters upon exercise of the
over-allotment option in accordance with Section 7 of the Underwriting
Agreement.
(3) In addition to the shares shown, this Selling Stockholder also will include
702,967 shares of Common Stock for sale to the Underwriters upon exercise of the
over-allotment option in accordance with Section 7 of the Underwriting
Agreement.