OVERLAND DATA, INC.
3,105,000 SHARES
COMMON STOCK ($0.001 PAR VALUE)
UNDERWRITING AGREEMENT
___________, 1997
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
CRUTTENDEN ▇▇▇▇ INCORPORATED
c/o Jefferies & Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
As Representatives of the Several Underwriters
Ladies and Gentlemen:
Overland Data, Inc., a California corporation (the "Company"), and the
shareholders of the Company named in SCHEDULE I hereto (collectively called the
"Selling Shareholders"), hereby confirm their agreement with both of you and
each of the other Underwriters named in SCHEDULE II hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 2(b) hereof), for whom both of you are acting as
representatives (in such capacity, the "Representatives") with respect to the
purchase by the Underwriters, acting severally and not jointly, of 3,105,000
shares of Common Stock of the Company, no par value per share (the "Common
Stock") from the Company (said 3,105,000 shares of Common Stock are herein
called the "Underwritten Stock"). The Company proposes to sell to the
Underwriters, acting severally and not jointly, up to 405,000 additional shares
of Common Stock (said 405,000 shares of Common Stock being herein called the
"Option Stock" and the Option Stock with the Underwritten Stock is herein
collectively called the "Stock"). The Common Stock is more fully described in
the Registration Statement and the Prospectus hereinafter mentioned.
The Company and the Selling Shareholders severally hereby confirm the
agreements made with respect to the purchase of the Stock by the several
Underwriters. You represent and warrant that you have been authorized by each
of the other Underwriters to enter into this Agreement on their behalf and to
act for them in the manner herein provided.
The terms which follow, when used in this Agreement, shall have the
meanings indicated. "Preliminary Prospectus" shall mean any preliminary
prospectus referred to in Section 1(a)(i) below and any preliminary prospectus
included in the Registration Statement on the date that the Registration
Statement becomes effective (the "Effective Date") that omits Rule 430A
Information (as defined below). "Registration Statement" shall mean the
registration statement referred to in Section 1(a)(i) below, including financial
statements, schedules and exhibits, as amended at the Representation Date (as
defined below) or, if not effective at the Representation Date, in the form in
which it shall become effective, or any term sheet filed with the United States
Securities and Exchange Commission (the "Commission") pursuant to Rule 434 of
the rules and regulations (the "Act Regulations") promulgated under the
Securities Act of 1933, as amended (the "Act"), 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 Act Regulations, and, in the event of any
amendment thereto or the filing of any abbreviated registration statement,
pursuant to Rule 462(b) of the Act 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 and, in the event any post-effective
amendment thereto becomes effective prior to the Closing Date (as defined in
Section 2 hereof), shall also mean such registration statement as so amended.
Such term shall include Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule 430A (as defined below). The prospectus
constituting a part of the Registration Statement (including the Rule 430A
Information), as from time to time amended or supplemented, is hereinafter
referred to as the "Prospectus," except that if any revised prospectus shall be
provided to the Underwriters by the Company which differs from the prospectus on
file at the Commission at the Effective Date, whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424 of the
Act Regulations, the term "Prospectus" shall refer to each such revised
prospectus from and after the time it is first provided to the Underwriters for
such use; PROVIDED, HOWEVER, that if in reliance on Rule 434 of the Act
Regulations and with the consent of Jefferies & Company, Inc., 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 Act
Regulations) last provided to the Underwriters by the Company and circulated by
the Underwriters to all prospective purchasers of the Stock (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 Act 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
Stock 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 Act 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 Act Regulations and with the consent of Jefferies & Company,
2.
Inc., 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. "Rule 158," "Rule 424," "Rule 430A" and "Rule
434" refer to such rules under the Act Regulations. "Rule 430A Information"
means information with respect to the Stock and the offering thereof permitted
to be omitted from the Registration Statement when it becomes effective pursuant
to Rule 430A.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each of the Underwriters as of
the date hereof (such date being referred to as the "Representation Date"), as
follows:
(i) A Registration Statement on Form S-1 (File
No. 333-18583) with respect to the Stock, including a prospectus subject to
completion, has been prepared by the Company in conformity with the
requirements of the Act, and the Act Regulations 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 Act 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 Preliminary Prospectus and of any
Rule 434 term sheet and of any abbreviated registration statement pursuant
to Rule 462(b) of the Act Regulations have been delivered to you.
(ii) 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 Act 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, (a) the Registration Statement and the
Prospectus, and any amendments and supplements thereto and any abbreviated
registration statements, contained and will contain all material
information required to be included therein by the Act and the Act
Regulations and will in all material respects conform to the requirements
of the Act and the Act Regulations; (b) 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
3.
statements therein not misleading; and (c) the Prospectus, and any
amendments and supplements thereto and any abbreviated registration
statements, 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; that the Company makes no representations, or warranties or
agreements as to the information provided in writing to the Company by or
on behalf of the Underwriters expressly for use in the Registration
Statement or the Prospectus, and the Company agrees that the only
information provided in writing by or on behalf of the Underwriters to the
Company expressly for use in the Registration Statement or the Prospectus
is that information contained in the section of the Prospectus entitled
"Underwriting" and the last paragraph of text on the cover page of the
Prospectus.
(iii) (a) Each of the Company, Overland Data (Europe) Limited,
a private company formed under the Companies Act of 1985 in the United
Kingdom, and Overland Data Export Limited, a company formed under the
Companies Act of Barbados (collectively referred to herein as the
"Subsidiaries") is a corporation duly incorporated and validly existing in
good standing under the laws of its state or jurisdiction of incorporation,
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus; (b) each of the Company and the Subsidiaries
is duly qualified to transact business and is in good standing in each
jurisdiction or place where it owns or leases property or conducts business
so as to require qualification; (c) the Company does not own or control,
directly or indirectly, any corporation, association, partnership, limited
liability company, joint venture or other entity other than the
Subsidiaries; and (d) each of the Subsidiaries does not own or control,
directly or indirectly, any corporation, association, partnership, limited
liability, joint venture or other entity.
(iv) Each of the Company and the Subsidiaries has all
necessary authorizations, approvals, orders, licenses, certificates,
franchises and permits of and from all regulatory or governmental
officials, bodies and tribunals ("Permits") to own or lease its respective
properties and to conduct its businesses as described in the Registration
Statement and Prospectus, and none of the Company nor any of the
Subsidiaries has received any notice or threat of proceedings relating to
the revocation or modification of any such Permits; each of the Company and
the Subsidiaries has fulfilled and performed all of its respective current
obligations with respect to such Permits, and no event has occurred which
allows, or after notice or lapse of time, or both, would allow, revocation
or termination thereof or results in any other material impairment of the
rights of the holder of any such Permit, subject in each case to such
qualification as may be set forth in the Registration Statement and
Prospectus; and, except as described therein, such Permits contain no
restrictions that are materially burdensome to the Company nor the
Subsidiaries; and each of the Company and the Subsidiaries is in compliance
with all applicable laws, rules, regulations, orders and
4.
consents. The property and businesses of the Company and the Subsidiaries
conform in all material respects to the descriptions thereof contained in
the Registration Statement and the Prospectus.
(v) Except as set forth in the Registration Statement and
Prospectus, (a) each of the Company and the Subsidiaries 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 Subsidiaries considered as one enterprise,
whether or not occurring in the ordinary course of business (a "Material
Adverse Event"); (b) the agreements to which the Company or any of the
Subsidiaries is a party described in the Registration Statement and
Prospectus are valid agreements, enforceable against (and, to the best of
the Company's knowledge enforceable by) the Company and the Subsidiaries
(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 (c) each of the
Company and the Subsidiaries 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 otherwise disclosed in the Registration
Statement and Prospectus, each of the Company and the Subsidiaries own or
lease all such properties as are necessary to its operations as now
conducted or as proposed in the Registration Statement and Prospectus to be
conducted.
(vi) 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, except as rights to
indemnification hereunder may be limited by applicable law 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, the issue and sale of the Stock and the
consummation of any other matters herein contemplated will not result in a
material breach or violation of any of the terms and provisions of, or
constitute a default under, (a) 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 the Company or any of the Subsidiaries is a party or by which it or
any of the Subsidiaries
5.
or their respective properties may be bound; (b) the charter or bylaws of
the Company or any of the Subsidiaries; or (c) any law, statute, order,
rule, regulation, writ, injunction, judgment or decree applicable to the
Company or any of the Subsidiaries or their respective properties of any
court, government or governmental agency or body, domestic or foreign. No
consent, approval, authorization or order of or qualification with any
court, government or governmental agency or body, domestic or foreign, with
the ability to bind or restrict the Company or any of the Subsidiaries or
their respective properties, is required for the execution and delivery of
this Agreement and the consummation by the Company or any of the
Subsidiaries of the transactions herein contemplated, except such as may be
required under the Act and state securities laws, all of which requirements
have been satisfied in all material respects.
(vii) Each of the Company and the Subsidiaries owns or
possesses adequate rights to use all patents, patent applications, 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 might not result in a Material Adverse Event; each of
the Company and the Subsidiaries have not received any notice of, and have
no knowledge of, any infringement of or conflict with asserted rights of
the Company by others with respect to any patent, patent applications,
patent rights, inventions, trade secrets, know-how, trademarks, service
marks, trade names or copyrights; and each of the Company and the
Subsidiaries have not received any notice of, and have 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 result
in a Material Adverse Event.
(viii) All outstanding shares of capital stock of the
Company (including the shares to be sold by the Selling Shareholders)
(a) have been duly authorized and validly issued and are fully paid
and nonassessable; (b) have been issued in compliance with all federal
and state securities laws; and (c) no further approval or
authorization of any shareholder, the Board of Directors of the
Company or others is required for the issuance and sale or transfer of
the Stock hereunder;
(ix) (a) There are no outstanding securities convertible
into or exchangeable for, and no outstanding options, warrants or
other rights to purchase, any shares of the capital stock of the
Company or the Subsidiaries, nor any agreements or commitments to
issue any of the same; (b) there are no registration rights,
preemptive rights or other rights to subscribe for or to purchase the
securities of the Company or the Subsidiaries that have not been
complied with or expressly waived prior to the date hereof, or any
contracts or
6.
commitments to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations; (c) there are no
restrictions upon the voting or transfer of, any capital stock pursuant to
the Company's or the Subsidiaries' certificates or articles of
incorporation or by-laws or any agreement or other instrument to which the
Company or the Subsidiaries is a party; and (d) the Stock when issued and
delivered against payment therefor in accordance with the terms of this
Agreement, will be duly and validly issued, fully paid and nonassessable,
and will be sold free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest.
(x) The authorized and outstanding capital stock of the
Company is as set forth in the Registration Statement and the
Prospectus under the caption "Capitalization" and conforms 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); and
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 Registration Statement and
the Prospectus accurately and fairly presents the information required
to be shown with respect to such plans, arrangements, options and
rights.
(xi) All issued and outstanding shares of capital stock
of the Subsidiaries 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.
(xii) Price Waterhouse LLP (a) has examined the consolidated
financial statements of the Company, together with the related schedules
and notes for each of the years in the three (3) year period ended
March 31, 1996; and (b) has performed the procedures set out in Statement
on Accounting Standards No. 71 ("SAS 71") for a review of the interim
financial information for each of the three (3) month periods ended
September 30, 1995 and 1996 and December 31, 1995 and 1996, filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, (except for the interim financial information for the periods
ended September 30, 1995 and 1996, which are not included in the final
Prospectus), are independent accountants within the meaning of the Act and
the Act 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 its subsidiaries at the respective
dates and for the respective periods to which they apply; and all audited
consolidated financial statements
7.
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 and the Prospectus 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.
(xiii) Each of the Company and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (a) transactions are executed in accordance with
management's general or specific authorizations; (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (c) access to assets is permitted only in accordance
with management's general or specific authorization; and (d) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xiv) The statistical, industry and market-related data
included in the Registration Statement and the Prospectus is reliable and
accurate in all material respects.
(xv) Each of the Company and the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses.
Such insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company, the
Subsidiaries and their businesses. Neither the Company nor the
Subsidiaries has received written notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures will
have to be made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof.
(xvi) The Company, nor any of the Subsidiaries, are not, and
after application of the proceeds from the sale of the Company Shares will
not be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations promulgated thereunder.
(xvii) Neither of the Company nor any of the Subsidiaries is
(a) in violation of its respective charter or by-laws, or of any law,
ordinance, administrative or governmental rule or regulation applicable to
the Company or the Subsidiaries or of any franchise, license, permit,
judgment or any decree of any court or governmental
8.
agency or body having jurisdiction over the Company or the Subsidiaries; or
(b) in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease, bond, debenture, bank loan, credit
agreement or other agreement, instrument or evidence of indebtedness to
which the Company or the Subsidiaries is a party or by which any of them
may be bound, or to which any of the property or assets of the Company or
the Subsidiaries is subject.
(xviii) There is not any pending or, to the best of the
Company's knowledge, any threatened action, suit, claim or proceeding
against the Company, any of the Subsidiaries or any of their respective
officers or directors (and which are related to the Company or such
Subsidiaries) or any of the respective properties, assets or rights of the
Company or any of the Subsidiaries before any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over
the Company or any of the Subsidiaries or over their respective officers or
properties or otherwise which (a) might result in a Material Adverse Event,
except as disclosed in the Registration Statement; (b) might prevent
consummation of the transactions contemplated hereby; or (c) 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 any of the Subsidiaries 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 the
Registration Statement or Prospectus or filed as exhibits to the
Registration Statement.
(xix) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus, there
has not been (a) a Material Adverse Event; (b) any transaction that is
material to the Company and the Subsidiaries 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 Subsidiaries considered as one enterprise, incurred by the Company
or the Subsidiaries, except obligations incurred in the ordinary course of
business; (d) any change in the capital stock or outstanding indebtedness
of the Company or any of the Subsidiaries that is material to the Company
and the Subsidiaries considered as one enterprise; (e) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company or any of the Subsidiaries; or (f) any loss or damage (whether or
not insured) to the property of the Company or any of the Subsidiaries
which has been sustained or will have been sustained which would result in
a Material Adverse Event.
(xx) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto or in any
abbreviated Registration Statement), subsequent to the respective dates as
of which such information is given in
9.
the Registration Statement and the Prospectus (or any amendment or
supplement thereto or in any abbreviated Registration Statement), neither
the Company nor any of the Subsidiaries has issued any securities, or
incurred any material liability or obligations, direct or contingent, or
entered into any transaction not in the ordinary course of business, or
entered into any transaction with an affiliate (as the term "affiliate" is
defined in Rule 405 promulgated by the Commission pursuant to the Act) of
the Company or the Subsidiaries which would otherwise be required to be
disclosed in the Registration Statement or the Prospectus, declared or paid
any dividend on its stock, or made any other distribution to any of its
shareholders except as disclosed in the Registration Statement or the
Prospectus, and there has not been any material change in the capital stock
or other equity, or material increase in the short-term debt or long-term
debt, of the Company or the Subsidiaries or any development involving or
which may reasonably be expected to result in a Material Adverse Event.
(xxi) None of the Company, the Subsidiaries nor any of the
Company's officers, directors, employees or agents nor any of the Selling
Shareholders has distributed and, prior to the later to occur of (a) the
Closing Date; or (b) completion of the distribution of the Stock, will not
distribute without your prior written consent any offering material in
connection with the offering and sale of the Stock other than the
Registration Statement, the Prospectus or other materials, if any,
permitted by the Act and the Act Regulations.
(xxii) To the Company's knowledge, neither the Company nor any
of the Subsidiaries nor any Selling Shareholder, director, officer,
employee or agent of the Company or any of the Subsidiaries has made any
payment of funds of the Company or the Subsidiaries in violation of any law
or rule or regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Registration Statement or the
Prospectus.
(xxiii) There is (a) no unfair labor practice complaint pending
or, to the best knowledge of the Company, threatened against the Company or
any of the Subsidiaries before the National Labor Relations Board or any
state or local labor relations board, and no significant grievance or
significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or the Subsidiaries,
or, to the best knowledge of the Company, threatened against any of them;
(b) no strike, labor dispute, slowdown or stoppage pending against the
Company or the Subsidiaries, or, to the best knowledge of the Company,
threatened against the Company; and (c) to the best knowledge of the
Company, no union representation question existing with respect to the
employees of the Company or the Subsidiaries and, to the best knowledge of
the Company, no union organizing activities are taking place, except (with
respect to any matter specified in clause (a), (b) or (c) above, singly or
in the aggregate) such as could not reasonably be expected to result in a
Material Adverse Event.
10.
(xxiv) The Company and the Subsidiaries 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 any of the Subsidiaries that might result in a
Material Adverse Event; and all tax liabilities are adequately provided for
on the books of the Company and the Subsidiaries.
(xxv) Neither the Company nor any of the Subsidiaries is in
Violation of any federal, state, local or foreign laws or regulations
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water,
land surface or subsurface strata), including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products ("Materials of
Environmental Concern"), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern (collectively,
"Environmental Laws"), which Violation could be reasonably expected to
result in a Material Adverse Event. As used herein, "Violation" includes,
but is not limited to, noncompliance with any permit or other governmental
authorization required under applicable Environmental Laws and
noncompliance with the terms and conditions of any such permit or
authorization. In addition, (a) neither the Company nor any of the
Subsidiaries has received any communication, whether from a governmental
authority, citizens' group, employee or otherwise, alleging that the
Company or any of the Subsidiaries is not in full compliance with any
Environmental Laws or permit or authorization required under applicable
Environmental Laws where such failure to comply may be reasonably expected
to result in a Material Adverse Event; and (b) there are no circumstances
that may be reasonably anticipated to prevent or interfere with such full
compliance in the future.
(xxvi) There is no claim, action, cause of action,
investigation or written notice by any person or entity alleging potential
liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries or penalties)
arising out of, based on or resulting from (a) the presence, or release
into the environment, of any Material of Environmental Concern at any
location owned or operated by the Company or any of the Subsidiaries; or
(b) circumstances forming the basis of any Violation, or alleged violation,
of any Environmental Law (collectively, "Environmental Claims") pending or
threatened against the Company or any of the Subsidiaries or against any
person or entity whose liability for any Environmental Claim the Company or
any of the Subsidiaries has retained or assumed either contractually or by
operation of law which liability or violation could be reasonably expected
to result in a Material Adverse Event.
11.
(xxvii) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal of any
Material of Environmental Concern, that could form the basis of any
Environmental Claim against the Company or the Subsidiaries, or against any
person or entity whose liability for any Environmental Claim the Company or
any of the Subsidiaries has retained or assumed, either contractually or by
operation of law, which claim could be reasonably expected to result in a
Material Adverse Event.
(xxviii) The Company and the Subsidiaries have complied with and
will be in compliance with the provisions of that certain Florida act
relating to doing business with Cuba, codified as Section 517.075 of the
Florida statutes, and the rules and regulations promulgated thereunder or
is exempt therefrom.
(xxix) The Company, its Subsidiaries, its directors and its
officers, have not taken and will not take, directly or indirectly, any
action designed to, or that might be reasonably expected to, cause or
result in stabilization or manipulation of the price of the Stock.
Additionally, the Company, its Subsidiaries, its directors and its officers
have not distributed and will not distribute prior to the later of (a) the
Closing Date, or any date on which Option Stock are to be purchased, as the
case may be, and (b) completion of the distribution of the Stock, any
offering material in connection with the offering and sale of the Stock
other than any Preliminary Prospectuses, the Prospectus, the Registration
Statement and other materials, if any, permitted by the Act.
(xxx) Neither the Company, any of its subsidiaries, nor any
director or officer has, at any time during the last five (5) years,
(a) made any unlawful contribution to any candidate for foreign office or
failed to disclose fully any contribution in violation of law; or (b) 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 Kingdom, Barbados
and the United States or any jurisdiction thereof.
(xxxi) The Stock is duly authorized for listing, subject to
official notice of issuance, on the Nasdaq National Stock Market (herein
called "Nasdaq").
(xxxii) 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.
12.
(xxxiii) The Company will use its best efforts to cause all
directors, officers, and certain other beneficial owners of shares of
Common Stock or securities convertible or exchangeable into Common Stock
(listed on SCHEDULE III attached hereto) to agree that, without the prior
written consent of Jefferies & Company, Inc., he, she or it will not,
without the prior written consent of Jefferies & Company, Inc., during the
period ending 180 days after the date of the Prospectus, (1) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase
any option to contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (2) enter into any swap or similar
agreement that transfers, in whole or in part, the economic risk of
ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise. The foregoing provisions
shall not apply to (A) the Common Stock to be sold to the Underwriters
pursuant to this agreement; (B) options granted by the Company to purchase
Common Stock granted under its option plans described in the Registration
Statement; and (C) transfers, without consideration, of the Common Stock or
any securities convertible into, or exercisable or exchangeable for Common
Stock to family members or to one or more trusts established for the
benefit of one or more family members are permitted at any time, provided
that the transferee execute and deliver to ▇▇▇▇▇▇▇▇▇ & Company, Inc., an
agreement whereby the transferee agrees to be bound by all of the foregoing
terms and provisions.
In addition, such holder will agree that, without the prior
written consent of Jefferies & Company, Inc. on behalf of the Underwriters,
it will not, from the date hereof through the period ending 180 days after
the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable for Common Stock. For purposes of this
Section 3 and subparagraph (a)(ii) of Section 5, a holder shall be deemed
to beneficially own shares of Common Stock that are issuable upon the
exercise of options, warrants or other rights to acquire Common Stock on or
before 180 days following the Closing Date.
(b) Each of the Selling Shareholders, severally and not jointly,
hereby represents and warrants as follows:
(i) Such Selling Shareholder has, and on the Closing Date will
have, good and marketable title to all the shares of Stock proposed to be
sold by such Selling Shareholder hereunder, with full right, power and
authority to enter into this Agreement and to sell, assign, transfer and
deliver the same hereunder, free and clear of all liens, encumbrances,
equities, security interests and claims whatsoever, subject, in the case of
each Selling Shareholder, to the rights of Norwest Bank Minnesota, N.A., as
Custodian (herein called the "Custodian"), and that upon the delivery of
and
13.
payment for such shares of the Underwritten Stock hereunder, the several
Underwriters will acquire good and marketable title thereto, free and clear
of all liens, encumbrances, equities, security interests and claims or
other defects of title whatsoever.
(ii) Such Selling Shareholder has executed and delivered an
irrevocable power of attorney (the "Power of Attorney") and caused to be
executed and delivered on his behalf a Custody Agreement (hereinafter
collectively referred to as the "Shareholders Agreement") and in connection
herewith such Selling Shareholder further represents, warrants and agrees
that such Selling Shareholder has deposited in custody, under the
Shareholders Agreement, with the Custodian, certificates in negotiable form
for the Underwritten Stock to be sold hereunder by such Selling
Shareholder, for the purpose of further delivery pursuant to this
Agreement. Such Selling Shareholder agrees that the Underwritten Stock to
be sold by such Selling Shareholder on deposit with the Custodian is
subject to the interests of the Underwriters, that the arrangements made
for such custody are to that extent irrevocable, and that the obligations
of such Selling Shareholder hereunder shall not be terminated, except as
provided in this Agreement or in the Shareholders Agreement, by any act of
such Selling Shareholder, by operation of law, by the death or incapacity
of such Selling Shareholder or by the occurrence of any other event. If
the Selling Shareholder should die or become incapacitated, or if any other
event should occur, before the delivery of the Underwritten Stock
hereunder, the certificates evidencing Common Stock then on deposit with
the Agent shall be delivered by the Agent in accordance with the terms and
conditions of this Agreement as if such death, incapacity or other event
had not occurred, regardless of whether or not the Agent shall have
received notice thereof. This Agreement and the Shareholders Agreement
have been duly executed and delivered by or on behalf of such Selling
Shareholder and the form of such Shareholders Agreement has been delivered
to you.
(iii) All consents, approvals, authorizations and orders
required for the execution and delivery by such Selling Shareholder of the
Power of Attorney and the Custodian Agreement, the execution and delivery
by or on behalf of such Selling Shareholder of this Agreement and the sale
and delivery of the Selling Shareholder Shares 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 securities laws) have been obtained and are in full force and
effect; such Selling Shareholder, 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 Shareholder has full legal right, power and
authority to enter into and perform its obligations under this Agreement
and such Power of Attorney and Custodian Agreement, and to sell, assign,
transfer and
14.
deliver the Underwritten Stock to be sold by such Selling Shareholder under
this Agreement.
(iv) Each Selling Shareholder will deliver to the
Representatives on or prior to the Closing Date a properly completed and
executed United States Treasury Department Form W-9 (or other applicable
form or statement provided by the Treasury Department regulations in lieu
thereof).
(v) The consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms and provisions
of or constitute a default under 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 Shareholder is a party or by which such
Selling Shareholder, or any shares to be sold by such hereunder, may be
bound or, to the best of such Selling Shareholders' knowledge, result in
any violation of any law, order, rule, regulation, writ, injunction,
judgement or decree of any court, government or governmental agency or
body, domestic or foreign, having jurisdiction over such Selling
Shareholder or over the properties of such Selling Shareholder, or, if such
Selling Shareholder is other than a natural person, result in any violation
of any provisions of the charter, bylaws or other organizational documents
of such Selling Shareholder.
(vi) Such Selling Shareholder has not taken and will not
take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of any Stock.
(vii) To the best of such Selling Shareholder's knowledge
(without having conducted any independent investigation or inquiry), the
Preliminary Prospectus and the Prospectus do not as of the date hereof
include any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein not misleading in
light of the circumstances under which they are made; and neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, do not include as of the date hereof, any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(viii) Such Selling Shareholder 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 Stock that is
to be sold by the Company or any of the other Selling Shareholders to the
Underwriters pursuant to this Agreement; such Selling Shareholder 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
15.
such rights of participation as have been satisfied by the participation of
such Selling Shareholder in the transactions to which this Agreement
relates in accordance with the terms of this Agreement; and such Selling
Shareholder 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 described in the Registration Statement and the
Prospectus.
(ix) Such Selling Shareholder is not aware (without having
conducted any independent investigation or inquiry) that any of the
representations and warranties of the Company set forth in Section 1(a)
above is untrue or inaccurate in any material respect.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) Subject to the terms and conditions set forth herein, the Company and
each of the Selling Shareholders agree to sell to each Underwriter, severally
and not jointly, and, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, each
Underwriter, severally and not jointly, agrees to purchase from the Company at
$___ per share the number of shares of Underwritten Stock set forth opposite its
name in SCHEDULE II plus any additional number of shares of Underwritten Stock
that such Underwriter may be obligated to purchase pursuant to Section 9 below.
The initial public offering price per share for the Underwritten Stock shall be
$____.
(b) In addition, subject to the terms and conditions set forth herein, the
Company hereby grants an option to the Underwriters, severally and not jointly,
to purchase from them up to 405,000 shares of Option Stock at the purchase price
per share paid by the Underwriters set forth in Section 2(a) hereof. The
Company and the Underwriters hereby agree that in the event that the
Underwriters propose to purchase any shares of Option Stock, the Company will be
entitled to elect by written notice to the Representatives and the Custodian, to
sell any portion of such number of Option Stock to the Underwriters as it shall
specify in such notice, and the Company shall sell such portion, if any, of the
Option Stock as is so specified by the Company. The option granted by the
Company both pursuant to this Section 2(b) (collectively, the "Over-Allotment
Option") will expire automatically at the close of business on the 30th calendar
day after (i) the Effective Date, if the Company has elected not to rely upon
Rule 430A under the Act Regulations; or (ii) the Representation Date, if the
Company has elected to rely upon Rule 430A under the Act Regulations, and may be
exercised in whole or in part at the Closing Date and at one date subsequent to
the Closing Date but prior to the expiration of such option only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Underwritten Stock upon notice by the Representatives to
the Company setting forth the number of shares of Option Stock as to which the
several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Stock. Any such date (the "Option Closing
Date") shall be determined by the Representatives and may be the same date as
(but not earlier than) the Closing Date, but in no
16.
event shall such Option Closing Date be earlier than two full business days nor
later than seven full business days after the giving of notice of the exercise
of such option to the Company, unless otherwise agreed upon by the
Representatives and the Company. If the Over-Allotment Option is exercised as
to all or any portion of the Option Stock, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
shares of Option Stock as to which the Over-Allotment Option is being exercised
which the number of shares of Underwritten Stock set forth opposite its name in
SCHEDULE II bears to the total number of shares of Underwritten Stock, except as
otherwise agreed upon between the Representatives and the Company, subject in
each case to such adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of, the
Underwritten Stock to be purchased by the several Underwriters shall be made at
such place as shall be agreed upon by the Representatives and, the Company at
10:00 A.M., New York City time, (a) on the third (3rd) full business day
following the first (1st) 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 and the Selling Shareholders may determine (or
at such time and date to which payment and delivery shall have been postponed
pursuant to Section ___ 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 ___ hereof, 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. In
addition, if the Underwriters purchase any or all of the Option Stock, payment
of the purchase price and delivery of certificates for such Option Stock shall
be made at such place as shall be agreed upon by the Representatives and the
Company on the Option Closing Date as specified in the relevant notice from the
Representatives to the Company.
Payment shall be made to the Company and the Selling Shareholders by
wire transfer of same-day federal funds payable to the Company and the Selling
Shareholders, respectively, against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Stock to be
purchased by them. Certificates for the Stock shall be in such denominations
and registered in such names as the Representatives may request in writing at
least two (2) business days before the Closing Date or the Option Closing Date,
as the case may be. The certificates for the Stock will be made available for
examination and packaging by the Representatives not later than 1:00 P.M. New
York City time on the last business day prior to the Closing Date or the Option
Closing Date, as the case may be, at the offices of the transfer agent for the
Common Stock in New York, New York.
SECTION 3. COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.
17.
(a) The Company covenants with each Underwriter as follows:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Representation Date, and
any amendment thereof, to become effective as promptly as possible after
the filing thereof. The Company will not file any amendment to the
Registration Statement or amendment or supplement to the Prospectus, any
Rule 434 Act Regulation term sheet or any 462(b) Act Regulation abbreviated
Registration Statement, to which the Representatives shall reasonably
object in writing after a reasonable opportunity to review such amendment
or supplement. Subject to the foregoing sentences in this clause (i), if
the Registration Statement has become or becomes effective pursuant to
Rule 430A, or filing of the Prospectus or supplement to the Prospectus is
otherwise required under Rule 424(b), the Company will cause the Prospectus
to be completed, or such supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence reasonably satisfactory to the
Representatives of such timely filing. The Company promptly will advise
the Representatives (a) when the Registration Statement, if not effective
at the Representation Date, and any amendment thereto, shall have become
effective; (b) when the Prospectus, and any supplement thereto, shall have
been filed (if required) with the Commission pursuant to Rule 424(b);
(c) when any amendment to the Registration Statement shall have been filed
or become effective; (d) of any request by the Commission for any amendment
of or supplement to the Registration Statement or any Prospectus or for any
additional information; (e) of the receipt by the Company of any
notification of, or if the Company otherwise has knowledge of, the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose; and (f) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Stock for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Stock
is required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to
amend the Registration Statement or amend or supplement the Prospectus to
comply with the Act or the Act Regulations, the Company promptly will
prepare and file with the Commission, subject to the second sentence of
Section 3(i), an amendment or supplement which will correct such statement
or omission or effect such compliance.
18.
(iii) The Company consents to the use of the Prospectus in
accordance with the provisions of the Act and with the securities or Blue
Sky laws of the jurisdictions in which Stock is offered by the Underwriters
and by all dealers to whom Stock may be sold, both in connection with the
offering and sale of the Stock and for such period of time thereafter as
the Prospectus is required by the Act to be delivered in connection with
the sales by any Underwriters or dealer. The Company will comply with all
requirements imposed upon it by the Act, as now and hereafter amended, so
far as necessary to permit the continuance of sales of or dealing in the
Stock in accordance with the provisions hereof and of the Prospectus.
(iv) Not later than the 45th day following the end of the
fourth fiscal quarter first occurring after the "effective date" (as
defined in Rule 158 under the Act) of the Registration Statement (the
"Effective Date"), the Company will mail and make generally available to
its security holders a consolidated earning statement covering a period of
at least twelve (12) months beginning with the first full calendar quarter
following the Effective Date which shall satisfy the provisions of
Section 11(a) of the Act and Rule 158 thereunder and shall advise you in
writing when such statement has been made so available.
(v) The Company will furnish to the Representatives, without
charge, one signed copy of the Registration Statement (including exhibits
thereto) and, so long as delivery of a prospectus by the Underwriters or a
dealer may be required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and all amendments and supplements thereto as
the Representatives may reasonably request.
(vi) The Company will apply the net proceeds from the sale of
the Stock to be sold hereunder in accordance with the description set forth
in the "Use of Proceeds" section of the Prospectus.
(vii) The Company will cooperate with the Representatives and
their counsel in connection with endeavoring to obtain and maintain the
qualification or registration, or exemption from qualification, of the
Stock for offer and sale under the applicable securities or Blue Sky laws
of such states and other jurisdictions of the United States as the
Representatives may designate; provided, that in no event shall the Company
be obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action which would subject it to taxation
or general service of process in any jurisdiction where it is not now so
subject.
(viii) During a period of five (5) years commencing with the
date hereof, the Company will furnish to the Representatives, and to each
Underwriter who may so request in writing, copies of all periodic and
special reports furnished to shareholders of the Company and of all
information, documents and reports filed with
19.
Commission pursuant to the Act or the Securities Exchange Act of 1934, as
amended (herein called the "Exchange Act").
(ix) The Company agrees that it will not, without the prior
written consent of Jefferies & Company, Inc., during the period ending 180
days after the date of the Prospectus, (a) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option to
contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock; (b) enter into any swap or similar agreement
that transfers, in whole or in part, the economic risk of ownership of the
Common Stock; or (c) release any security holder (or his, her or its
transferee), from any "lock-up" provision or agreement contained in that
Investor Rights Agreement dated as of May 21, 1993, whether any such
transaction described in clause (a), (b) or (c) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing provisions shall not apply to (A) the Common Stock to be sold
to the Underwriters pursuant to this agreement; and (B) options granted by
the Company to purchase Common Stock granted under its option plans
described in the Registration Statement. For purposes of this paragraph a
sale, offer, or other disposition shall be deemed to include any sale to an
institution which can, following such sale, sell Common Stock in reliance
on Rule 144A.
(x) If at any time during the 25-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 for the 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, consult with you regarding the need to disseminate a press
release or other public statement responding to or commenting on such
rumor, publication or event.
(b) The Selling Shareholders covenant with each Underwriter as follows:
(i) No Selling Shareholder will distribute during the
applicable statutory period, any offering material in connection with the
offering and sale of the Stock other than the Registration Statement, the
Preliminary Prospectus, the Prospectus or other materials, if any,
permitted by the Act.
(ii) Each Selling Shareholder will immediately notify the
Representatives if there is any change in the representations and
warranties set forth in Section 1(b).
20.
(iii) Without the prior written consent of Jefferies &
Company, Inc., he, she or it will not, during the period ending 180 days
after the date of the Prospectus, (a) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option to
contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock; or (b) enter into any swap or similar
agreement that transfers, in whole or in part, the economic risk of
ownership of the Common Stock, whether any such transaction described in
clause (a) or (b) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise. The foregoing provisions
shall not apply to (A) the Common Stock to be sold to the Underwriters
pursuant to this Agreement; (B) options granted by the Company to purchase
Common Stock granted under its option plans described in the Registration
Statement; and (C) transfers, without consideration, of the Common Stock or
any securities convertible into, or exercisable or exchangeable for Common
Stock to family members or to one or more trusts established for the
benefit of one or more family members are permitted at any time, provided
that the transferee execute and deliver to Jefferies & Company, Inc., an
agreement whereby the transferee agrees to be bound by all of the foregoing
terms and provisions.
In addition, such Selling Shareholder agrees that, without the
prior written consent of ▇▇▇▇▇▇▇▇▇ & Company, Inc. on behalf of the
Underwriters, he, she or it will not, from the date hereof through the
period ending 180 days after the date of the Prospectus, make any demand
for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable for Common
Stock.
SECTION 4. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated, the Company
will pay (directly or by reimbursement), and will be responsible for, all costs
and expenses incident to the performance of the obligations of the Company and
the Selling Shareholders under this Agreement, including but not limited to
expenses related to the following, if incurred, (a) the printing and filing of
the Registration Statement as originally filed and of each amendment thereto;
(b) the printing and/or copying of this Agreement; (c) the preparation, issuance
and delivery of the Stock to the Underwriters, including capital duties, stamp
duties and transfer taxes, if any, payable upon issuance of any of the Stock or
the sale of the Stock to the Underwriters; (d) the fees and disbursements of the
Company's counsel and accountants; (e) the qualification of the Stock under
state securities laws, including filing fees and the reasonable fees and
disbursements of counsel for the Representatives in connection therewith and in
connection with the preparation of any Blue Sky survey and any supplemental Blue
Sky survey; (f) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally
21.
filed and of each amendment thereto, of the Preliminary Prospectus and of the
Prospectus and any amendments or supplements thereto; (g) the printing and/or
copying and delivery to the Underwriters of copies of the Blue Sky survey and
any supplemental Blue Sky survey; (h) the fees and expenses incurred in
connection with the listing of the stock on any national securities exchange or
Nasdaq; and (i) the fees payable to the National Association of Securities
Dealers, Inc.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Sections 5 or 8 hereof, the Company shall reimburse the
Representatives and the other Underwriters for all of their reasonable out-of-
pocket expenses, including the reasonable fees and disbursements their
attorneys.
SECTION 5. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS.
(a) The obligation of the Underwriters to purchase the Stock hereunder is
subject to the continued accuracy of the representations and warranties of the
Company and each of the Selling Shareholders contained herein as of the date
hereof and as of the Closing Date (and, if applicable, as of the Option Closing
Date), to the accuracy of the statements of the Company and the Selling
Shareholders made in any certificate or certificates pursuant to the provisions
hereof as of the date hereof and as of the Closing Date (and, if applicable, as
of the Option Closing Date), to the performance by the Company of its
obligations hereunder, and to the following further conditions:
(i) The Registration Statement shall have become effective
not later than 5:30 P.M. New York City time on the date hereof, or at such
later date as may be approved by the Representatives, the Company and the
Selling Shareholders and shall remain effective at the Closing Date and at
the Option Closing Date. No stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
therefor initiated or, to the knowledge of the Company or the
Representatives, 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.
(ii) 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.
(iii) Subsequent to the execution and delivery of this
Agreement, and prior to the Closing Date, there shall not have been a
Material Adverse Event, which, in your sole judgment,
22.
is material and adverse and that makes it, in your sole judgment,
impracticable or inadvisable to proceed with the public offering of the
Shares as contemplated by the Prospectus.
(iv) The Company shall have furnished to the Representatives
the opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Company, addressed to the
Underwriters and dated as of the Closing Date, substantially in the form
attached hereto as SCHEDULE IV, with such changes as may be reasonably
requested by the Representatives, and if Option Stock is purchased at any
date after the Closing Date, an additional opinion from ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
addressed to the Underwriters and dated the Option Closing Date, confirming
that the statements expressed as of the Closing Date in such opinion remain
valid as of the Option Closing Date.
(v) The Selling Shareholders shall have furnished to the
Representatives the opinion of ▇▇▇▇ & ▇▇▇▇, counsel to the Selling
Shareholders, addressed to the Underwriters and dated as of the Closing
Date, and substantially in the form attached hereto as SCHEDULE V, with
such changes as may be reasonably requested by the Representatives.
(vi) The Company shall have furnished to the Representatives,
intellectual property counsel for the Company, the opinion of Knobbe,
Martens, ▇▇▇▇▇ & Bear, substantially in the form attached hereto as
SCHEDULE VI dated as of the Closing Date, and if Option Stock is purchased
at any date after the Closing Date, an additional opinion from Knobbe,
Martens, ▇▇▇▇▇ & Bear addressed to the Underwriters and dated the Option
Closing Date confirming that the Statements expressed as of the Closing
Date in such opinion remain valid as of the Option Closing Date.
(vii) ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, shall have furnished to the Underwriters an opinion with
respect to such matters as may be reasonably requested by the
Representatives, dated as of the Closing Date, and if Option Stock is
purchased at any date after the Closing Date, an additional opinion
addressed to the Underwriters and dated the Option Closing Date confirming
that the statements expressed as of the Closing Date in such opinion remain
valid as of the Option Closing Date.
(viii) The Company shall furnish the Representatives a
certificate, signed by the President and the Chief Financial Officer of the
Company, dated the Closing Date (and, if applicable, the Option Closing
Date), to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus, any supplement or
amendment to the Prospectus and this Agreement and that, to their
knowledge:
(A) the representations and warranties of the Company
contained in this Agreement are true and correct on and as of the
Closing Date,
23.
and, if applicable, on and as of the Option Closing Date and the
Company has complied with all the agreements and satisfied all the
conditions under this Agreement on its part to be performed or
satisfied at or prior to the Closing Date (and, if applicable, at or
prior to the Option Closing Date);
(B) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the knowledge of the Company,
threatened; and
(C) since the date of the most recent financial statements
included in the Prospectus, there has been no Material Adverse Event.
(ix) The Selling Shareholders will furnish to the
Representatives 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 Shareholder 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:
(A) The representations and warranties made by such
Selling Shareholder 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
(B) Such Selling Shareholder has not complied with any
obligation or satisfied any condition which is required to be
performed or satisfied on the part of such Selling Shareholder at or
prior to the Closing Date or any later date on which Option Shares are
to be purchased, as the case may be.
(x) At the Effective Date, the Representation Date and at the
Closing Date (and, if applicable, at the Option Closing Date), Price
Waterhouse LLP shall have furnished to the Underwriters a letter or
letters, dated respectively as of the Effective Date, the Representation
Date and the Closing Date (and, if applicable, the Option Closing Date), in
form and substance reasonably satisfactory to the Underwriters, covering
the time periods and relating to the procedures referred to in Section
2(ix) hereof and containing statements and information of the type
customarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain other information contained
in the Registration Statement and the Prospectus.
(xi) Prior to the Closing Date, the Stock shall have been duly
authorized for listing on the Nasdaq upon official notice of issuance.
24.
(xii) On or prior to the Closing Date, you shall have received
from all of the persons and entities set forth on SCHEDULE III attached
hereto, executed lock-up agreements.
(xiii) If any condition specified in this Section 5 shall not
have been fulfilled in all material respects when and as required to be
fulfilled, this Agreement may be terminated by the Representatives by
written notice to the Company at or prior to the Closing Date.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, shall be satisfied that they comply in form and scope.
SECTION 6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and its affiliates and their respective officers, shareholders,
counsel, agents, employees, directors and any person who controls each
Underwriter or any of their respective affiliates within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and the respective
officers, shareholders, counsel, agents, employees and directors of such persons
(each Underwriter and each such other person or entity being referred to herein
as an "Indemnified Person"), to the fullest extent lawful from and against any
loss, expense, liability or claim (including the reasonable cost of
investigating such claim) which, jointly or severally, the Indemnified Persons
may incur under the Act, the Exchange Act or otherwise, as such expenses are
incurred, insofar as such loss, expense, liability or claim (i) arises out of or
is based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration Statement
as amended by any post-effective amendment thereof) or in a Prospectus
(including any Preliminary Prospectus); (ii) arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
either such Registration Statement or the Prospectus or necessary to make the
statements made therein not misleading in light of the circumstances under which
they were made, except insofar as any such loss, expense, liability or claim
arises out of or is based upon any untrue statement or omission or alleged
untrue statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information provided in writing to the
Company by or on behalf of the Underwriters, expressly for use in the
Registration Statement or the Prospectus, and the Company agrees that the only
such information provided in writing by or on behalf of the Underwriters,
expressly for use in the Registration Statement or the Prospectus, is that
information contained in the section of the Prospectus entitled "Underwriting,"
the last paragraph of text on the cover page of the Prospectus and the paragraph
regarding stabilization appearing on the inside front cover page of the
Prospectus; provided, that the indemnity agreement contained in this
Section 6(a) with respect to any Preliminary Prospectus or amended Preliminary
Prospectus shall not inure to the
25.
benefit of the Indemnified Person from whom the person asserting any such loss,
expense, liability or claim purchased the Stock which is the subject thereof, if
the Prospectus corrected any such alleged untrue statement or omission and if
such Underwriter failed to send or give a copy of the Prospectus to such person
at or prior to the written confirmation of the sale of Stock to such person,
provided that the Company has delivered the Prospectus to the Underwriters in
sufficient quantity not less than one full business day prior to the sale to the
person asserting such claim; or (iii) any act or failure to act or any alleged
act or failure to act by any Underwriter in connection with, or relating in any
manner to, the Stock or the offering contemplated hereby, and which is included
as part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii) above
(PROVIDED that the Company shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence or willful misconduct). The
foregoing indemnity agreement shall be in addition to any liability which the
Company may otherwise have.
Subject to the provisions of Section 6(f) hereof with respect to the
Selling Shareholders, the Selling Shareholders severally (but not jointly) agree
to indemnify, defend and hold harmless each Indemnified Person, to the fullest
extent lawful from and against any loss, expense, liability or claim (including
the reasonable cost of investigating such claim) which, jointly or severally,
the Indemnified Persons may incur under the Act, the Exchange Act or otherwise,
as such expenses are incurred, insofar as such loss, expense, liability or claim
(i) arises out of or is based upon any untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof) or in a Prospectus (including
any Preliminary Prospectus); (ii) arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or the Prospectus or necessary to make the statements
made therein not misleading in light of the circumstances under which they were
made, except insofar as any such loss, expense, liability or claim arises out of
or is based upon any untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted therefrom in reliance upon and
in conformity with the information provided in writing to the Company by or on
behalf of the Underwriters, expressly for use in the Registration Statement or
the Prospectus, and the Selling Shareholders agree that the only such
information provided in writing by or on behalf of the Underwriters, expressly
for use in the Registration Statement or the Prospectus, is that information
contained in the section of the Prospectus entitled "Underwriting," the last
paragraph of text on the cover page of the Prospectus and the paragraph
regarding stabilization appearing on the inside front cover page of the
Prospectus; or (iii) any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner to, the
Stock or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (PROVIDED that the
Company shall not be liable under this clause (iii) to the extent that it
26.
is determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct). Provided, however, that (i) the
indemnity agreement contained in this Section 6(a) with respect to any
Preliminary Prospectus or amended Preliminary Prospectus shall not inure to the
benefit of the Indemnified Person from whom the person asserting any such loss,
expense, liability or claim purchased the Stock which is the subject thereof, if
the Prospectus corrected any such alleged untrue statement or omission and if
such Underwriter failed to send or give a copy of the Prospectus, excluding any
documents incorporated by reference, to such person at or prior to the written
confirmation of the sale of Stock to such person, provided that the Company has
delivered the Prospectus to the Underwriters in quantity not less than one full
business day prior to the sale to the person asserting such claim and (ii) each
Selling Shareholder shall only be liable under this Section 6(a) with respect to
(A) information pertaining to such Selling Shareholder furnished by or behalf of
such Selling Shareholder expressly for use in the Registration Statement or the
Prospectus or any amendment thereof or supplement thereto, or (B) facts that
would constitute a breach of any representation or warranty of such Selling
Shareholder set forth in Section 1(b) hereof.
If any action or proceeding (including any government investigation)
is brought or asserted against any Underwriter or their respective officers,
shareholders, employees, directors or any person who controls any of the
Underwriters (as described above) in respect of which indemnity may be sought
against the Company or the Selling Shareholders pursuant to this Section 6(a),
such Underwriter shall promptly notify the Company or the Selling Shareholder in
writing of the institution of such action (provided, that the failure to give
such notice shall not relieve the Company or the Selling Shareholder of any
liability which it may have pursuant to this Agreement, unless it shall have
been determined by a court of competent jurisdiction by final judgment that such
failure has resulted in the forfeiture of substantive rights or defenses by the
indemnifying party) and the Company or the Selling Shareholder shall assume the
defense of such action, including the employment of counsel and payment of
reasonable expenses. Such Underwriter or such officer, shareholder, employee,
director or person who controls the Underwriter (as described) shall have the
right to employ its or their own counsel in any such case and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or of such persons unless: (i) the Company shall
have failed to assume the defense of such action or proceeding or the Company or
the Selling Shareholder shall have failed to employ counsel reasonably
satisfactory to the Underwriter in any such action; or (ii) such Indemnified
Party or parties shall have been advised by counsel that there may be one or
more defenses available to it or them that are different from or additional to
those available to the Company or the Selling
27.
Shareholder (in which case, if such indemnified party or parties notifies the
Company or the Selling Shareholder in writing that it elects to employ separate
counsel at the expense of the Company or the Selling Shareholder, the Company or
the Selling Shareholder shall not have the right to assume the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the Company or the Selling Shareholder
and paid as incurred; provided, that the Company or the Selling Shareholder
shall be responsible for the fees and expenses of only one counsel for all
Indemnified Parties hereunder. Anything in this paragraph to the contrary
notwithstanding, the Company or the Selling Shareholder shall not be liable for
any settlement of any such claim or action effected without its prior written
consent, which consent shall not be unreasonably withheld.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company and its directors, officers, shareholders, counsel, agents
and employees and any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act and the Selling
Shareholders from and against any loss, expense, liability or claim (including
the reasonable cost of investigation) which, jointly or severally, the Company
or any such person may incur under the Act, the Exchange Act or otherwise, as
such expenses are incurred insofar as such loss, expense, liability or claim
arises out of or is based upon any untrue statement or omission or alleged
untrue statement or omission which has been made in or omitted from the
Registration Statement (or in the Registration Statement as amended by any post-
effective amendment thereof) or in the Prospectus (including any Preliminary
Prospectus) in reliance upon and in conformity with the information relating to
the Underwriters furnished in writing by or on behalf of the Underwriters to the
Company. The Company agrees that the only information provided in writing by or
on behalf of the Underwriters to the Company, expressly for use in the
Registration Statement or the Prospectus, is that information contained in the
section of the Prospectus entitled "Underwriting," the statements appearing as
the last paragraph of text on the cover page of the Prospectus and the paragraph
regarding stabilization appearing on the inside front cover page of the
Prospectus.
If any action is brought against the Company or any Selling
Shareholder or any person in respect of which indemnity may be sought against
any Underwriter pursuant to the foregoing paragraph, the Company or such person
shall promptly notify such Underwriter in writing of the institution of such
action (provided, that the failure to give such notice shall not relieve such
Underwriter of any liability which it may have pursuant to this Agreement,
unless it shall have been determined by a court of competent jurisdiction by
final judgment that such failure has resulted in the forfeiture of substantive
rights or defenses by the indemnifying party) and the Underwriters shall assume
the defense of such action, including the employment of counsel and payment of
reasonable expenses. The Company or such person shall have the right to employ
its or their own counsel in any such case and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the Company or such person unless: (i) such Underwriters shall have failed to
assume the defense of the action or shall have failed to employ counsel
reasonably satisfactory to the Company or such person in any such action; or
(ii) such indemnified party or parties shall have been advised by counsel that
there may be one or more defenses available to it or them that are different
from or additional to those available to such Underwriters (in which case, if
such indemnified party or parties notifies the Underwriters in writing that it
elects to employ separate counsel at the expense of the Underwriters, such
Underwriters shall not have the right to assume the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
28.
and expenses shall be borne by the Underwriters and paid as incurred; provided,
that the Underwriters shall be responsible for the fees and expenses of only one
counsel for all indemnified parties. Anything in this paragraph to the contrary
notwithstanding, the Underwriters shall not be liable for any settlement of any
such claim or action effected without the written consent of such Underwriter,
which consent shall not be unreasonably withheld.
(c) If the indemnification provided for in this Section 6 is unavailable
to an indemnified party under subsection (a) or (b) of this Section 6 in respect
of any losses, damages, expenses, liabilities or claims referred to therein,
then the indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders, on the one hand, and each
Underwriter, on the other hand, from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Shareholders, on the one hand, and each Underwriter, on the other
hand, in connection with the statements or omissions which resulted in such
losses, expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholders, on the one hand, and each Underwriter, on the other hand, shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of underwriting discounts and commissions but before deducting expenses)
received by the Company and the Selling Shareholders bear to the total
underwriting discounts and commissions received under the Agreement by each
Underwriter. The relative fault of the Company and the Selling Shareholders, on
the one hand, and of each Underwriter, on the other hand, shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates to
information supplied by the Company and the Selling Shareholders or by such
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, expenses, liabilities and
claims referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any claim or action.
(d) The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 6
were determined by PRO RATA allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in
Section 6(c) above. Notwithstanding the provisions of this Section 6, each
Underwriter shall not be required to contribute any amount in excess of the
underwriting discounts and commissions received by it. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
29.
(e) The indemnity and contribution agreements contained in this Section 6
shall remain in full force and effect irrespective of any investigation made by
or on behalf of the Underwriters, or any of their officers, employees,
directors, shareholders, counsel, agents or any person who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, by or on behalf of the Company, its directors, officers, counsel,
agents, employees or any person who controls the Company, within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act or by or on behalf of
the Selling Shareholders, and shall survive any termination of this Agreement or
the issuance and delivery of the Stock. The Company, the Selling Shareholders
and each Underwriter agree promptly to notify the others of the commencement of
any litigation or proceeding against it and, in the case of the Company, against
any of its respective officers and directors in connection with the issuance and
sale of the Stock, or in connection with the Registration Statement or
Prospectus.
(f) The liability of each Selling Shareholder under such Selling
Shareholder's representations and warranties in Section 1(b) hereof, and under
the indemnity, contribution and reimbursement agreements contained in Section 6
hereof shall be limited to an amount equal to the net proceeds received by such
Selling Shareholder from the public offering price of any Stock actually sold by
such Selling Shareholder hereunder. The Company and the Selling Shareholders
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, including, without
limitation, allocating between the Company and the Selling Shareholders the
liability resulting in a breach of the representations and warranties of the
Company and the Selling Shareholders hereunder.
SECTION 7. SURVIVAL. All representations, warranties and agreements
contained in this Agreement, or contained in certificates of officers of the
Company submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of the several
Underwriters or any of their respective officers, employees, directors,
shareholders or person who controls any Underwriter, or by or on behalf of the
Company and shall survive delivery of the Stock to and payment for the Stock by
the several Underwriters.
SECTION 8. TERMINATION OF AGREEMENT.
30.
(a) The Representatives shall have the right to terminate this Agreement
by giving notice as hereinafter specified in Section 10 hereof at any time at or
prior to the Closing Date or on or prior to any later date(s) on which Option
Stock may be purchased, as the case may be, (i) if the Company or any Selling
Shareholder 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
Subsidiaries 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 or one of
the Subsidiaries 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
Stock as contemplated by the Prospectus.
(b) If this Agreement is terminated pursuant to this Section or any other
provision of this Agreement, such termination shall be without liability of any
party to any other party except as provided in Sections 4 and 6.
SECTION 9. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or
more of the Underwriters shall fail at the Closing Date (or the Option Closing
Date) to purchase the shares of Underwritten Stock which it or they are
obligated to purchase under this Agreement (the "Defaulted Stock"), the
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted Stock in
such amounts as may be agreed upon and upon the terms herein set forth. If,
however, the Representatives shall not have completed such arrangements within
such 24-hour period, then:
(a) If the number of shares of Defaulted Stock does not exceed 10% of the
total number of shares of Underwritten Stock, the non-defaulting Underwriters
shall be obligated to purchase the full amount thereof in the proportions that
their respective underwriting
31.
obligations hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) If the number of shares of Defaulted Stock exceeds 10% of the
Underwritten Stock, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company.
No action taken pursuant to this Section 9 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, the Representatives and the Company shall have
the right to postpone the Closing Date for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements.
SECTION 10. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Representatives shall be directed to ▇▇▇▇▇▇▇▇▇ & Company, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇ ▇.
▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Notices to the Company shall be directed to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Overland Data,
Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; with a copy to ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. Notices to the Selling Shareholders shall
be directed to ▇▇▇▇ ▇▇▇▇▇▇, Esq., ▇▇▇▇ & ▇▇▇▇.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Company, the Selling Shareholders and
their respective executors, administrators, assigns, successors and legal
representatives. Nothing expressed or mentioned in this Agreement is intended
or shall be construed to provide any person, firm or corporation, other than the
Underwriters, the Company, the Selling Shareholders and their respective
successors and legal representatives and the controlling persons and officers,
employees, directors and shareholders referred to in Sections 6 and 7 and their
respective heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein or
therein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriters, the
Company, the Selling Shareholders and their respective successors and legal
representatives, and said controlling persons, shareholders, officers and
directors and their respective heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Stock from the
Underwriters shall be deemed to be a successor or assign by reason merely of
such purchase.
32.
SECTION 12. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State.
33.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
OVERLAND DATA, INC.
By:
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title: Chief Executive Officer
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SELLING SHAREHOLDERS
By:
------------------------------------------
Name:
------------------------------------------
Title: Attorney-in-fact
CONFIRMED AND ACCEPTED, as of the date first above written:
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
CRUTTENDEN ▇▇▇▇ INCORPORATED
By:
-----------------------------
Name:
-----------------------------
For themselves and as Representatives of the other Underwriters named in this
Agreement
SCHEDULE I
Schedule of Selling Shareholders
Selling Shareholder Number of
------------------- Shares of
Firm Stock
----------
TOTAL . . . . . . . . . . . . . . . . . . . . . . 500,000
1.
SCHEDULE II
Schedule of Underwriters and
Number of Shares To Be Purchased
Underwriter Number of
----------- Firm Shares
To Be Purchased
---------------
▇▇▇▇▇▇▇▇▇ & Company, Inc. . . . . . . . . . . . . . . . .
Cruttenden ▇▇▇▇ Incorporated. . . . . . . . . . . . . . .
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . 3,105,000
1.
Underwriter Number of
----------- Option Shares
To Be Purchased
---------------
▇▇▇▇▇▇▇▇▇ & Company, Inc. . . . . . . . . . . . . . . . .
Cruttenden ▇▇▇▇ Incorporated. . . . . . . . . . . . . . .
TOTAL . . . . . . . . . . . . . . . . . . . . . . 405,000
2.
SCHEDULE III
Schedule of Lock-up Agreement Signatories
▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. and Barsha M. Long
Matrix Partners II, L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
The ▇▇▇▇▇▇ Organization III L.P.
▇▇▇▇▇▇ ▇. Scroop
Seagate Technologies, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
1.
SCHEDULE IV
Form of Opinion to be Rendered by
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Counsel to the Company
(i) Each of the Company and the Subsidiaries 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 Subsidiaries has the corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus;
(iii) Each of the Company and the Subsidiaries is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction, if any, in which the ownership or leasing of its properties or the
conduct of its business requires such qualification. The Company does not own
or control, directly or indirectly, any corporation, association, partnership,
limited liability company, joint venture or other entity other than Overland
Data (Europe) Limited and Overland Data Export Limited (the "Subsidiaries") and
the Subsidiaries do not own or control, directly or indirectly, any corporation,
association, partnership, limited liability company, joint venture or other
entity;
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Registration Statement and the Prospectus under
the caption "Capitalization" as of the dates stated therein;
(v) The issued and outstanding shares of capital stock of the
Company (including the Selling Shareholder shares) have been duly and validly
issued and are fully paid and nonassessable and 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 the Underwritten Stock
or the Option Stock, as the case may be, to be issued by the Company pursuant to
the terms of the Underwriting Agreement has been duly authorized and, upon
issuance and delivery against payment therefor in accordance with the terms of
the Underwriting Agreement, 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;
(vi) Except as set forth in the Registration Statement and
Prospectus, no holders of Common Stock or any other securities of the Company
have registration rights with respect to any securities of the Company and,
except as set forth in the
1.
Registration Statement and Prospectus, all holders of securities of the Company
having registration rights 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;
(vii) All issued and outstanding shares of capital stock of the
Subsidiaries of the Company have been duly authorized and validly issued and are
fully paid and nonassessable, and 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;
(viii) The Company has the corporate power and authority to enter
into the Underwriting Agreement and to issue, sell and deliver to the
Underwriters the Stock to be issued and sold by it thereunder;
(ix) The Underwriting 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 insofar as indemnification provisions may be
limited by applicable law and except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting creditors' rights generally or by general equitable principles;
(x) 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
(including supporting schedules) and financial data 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 Registration Statement and the
Prospectus, to the extent that it constitutes matters of law or legal
conclusions, has been reviewed by such counsel and is a fair summary of such
matters and conclusions; and the forms
2.
of certificates evidencing the Common Stock and filed as exhibits to the
Registration Statement comply with California law;
(xiii) The description in the Registration Statement and the
Prospectus of the charter and bylaws of the Company and of statutes are accurate
and fairly present the information required to be presented by the Act and the
applicable Rules and Regulations;
(xiv) 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 the Underwriting 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 or any
of its Subsidiaries' charter or bylaws or (b) to such counsel's knowledge,
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 known to such
counsel to which the Company or any of its Subsidiaries is a party or by which
its properties are bound, or any applicable statute, rule or regulation known to
such counsel or, to such counsel's knowledge, any order, writ or decree of any
court, government or governmental agency or body having jurisdiction over the
Company or any of the Subsidiaries, 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 any of the Subsidiaries, or over any of their
properties or operations is necessary in connection with the consummation by the
Company of the transactions contemplated with the Underwriting Agreement, except
such as have been obtained under the Act or such as may be required under state
or other securities or Blue Sky laws in connection with the purchase and the
distribution of the Shares by the Underwriters;
(xvii) There are no legal or governmental proceedings pending or
threatened against the Company or any of the Subsidiaries 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; and
3.
(xviii) Neither the Company nor any of the Subsidiaries is presently
(a) in violation of its respective charter or bylaws, or (b) in 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 any of the Subsidiaries,
or over any of their properties or operations.
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 including
supporting schedules 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.
4.
SCHEDULE V
Form of Opinion to be Rendered by ▇▇▇▇ & ▇▇▇▇,
Selling Shareholders' Counsel
1. Each of the Selling Shareholders has full right, power and
authority to enter into and to perform his, her or its obligations under the
Underwriting Agreement and to sell, transfer, assign and deliver the Shares to
be sold by such Selling Shareholder;
2. The Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Shareholders, and, with respect
to any Selling Shareholder which is not a natural person, all necessary
corporate action on the part of the Selling Shareholder has been taken. The
sale and delivery of the Shares by the Selling Shareholders, the consummation of
the transactions contemplated by the Underwriting Agreement and the performance
by each of the Selling Shareholders which is not a natural person of its
obligations under the Underwriting Agreement have been duly authorized by all
necessary corporate action on the part of each of such Selling Shareholders;
3. Each Selling Shareholder which is not a natural person has full
right, power and authority to enter into and to perform its obligations under
the Power of Attorney and Custody Agreement to be executed and delivered by it
in connection with the transactions contemplated by the Underwriting Agreement;
the Power of Attorney and Custody Agreement of each Selling Shareholder that is
not a natural person has been duly authorized by such Selling Shareholder;
4. The Power of Attorney and Custody Agreement of each Selling
Shareholder that is a natural person has been duly executed and delivered by or
on behalf of such Selling Shareholder; and the Power of Attorney and Custody
Agreement of each Selling Shareholder that is a natural person constitutes the
valid and binding agreement of such Selling Shareholder, 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;
5. No filling with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or governmental
authority or agency (other than the issuance of the order of the Commission
declaring the Registration Statement effective and such authorizations,
approvals, or consents as may be necessary under state securities laws or
similar securities laws of any foreign jurisdiction, as to which we express no
opinion), is necessary or required to be obtained by the Selling Shareholders
for the performance by the Selling Shareholders of their obligations under the
Underwriting Agreement or in connection with the offer, sale or delivery of the
Shares by the Selling Shareholders;
1.
6. Neither the execution and delivery of the Underwriting Agreement
by the Selling Shareholders, the sale and delivery of the Shares by the Selling
Shareholders, the consummation of the transactions contemplated by the
Underwriting Agreement nor the performance by the Selling Shareholders of their
obligations thereunder, will, whether with or without the giving of notice or
passage of time or both, (i) conflict with, constitute a breach of or default
under, or result in the creation or imposition of any tax, lien, charge or
encumbrance upon the Shares pursuant to, the terms of any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease or other
instrument or agreement known to us and to which any of the Selling Shareholders
is a party or by which it may be bound, or to which any of the property or
assets of any of the Selling Shareholders may be subject, or (ii) violate any
provision of the charter documents of any of the Selling Shareholders which is
not a natural person, or any law, regulation, judgment, order or decree known to
us to be applicable to the Selling Shareholders, of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction over
the Selling Shareholders or any of their respective properties;
7. Each of the Selling Shareholders has valid and marketable title
to the Shares to be sold by it pursuant to the Underwriting Agreement, free and
clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind, and has full right, power and authority to sell,
transfer and deliver the Shares pursuant to the Underwriting Agreement. Upon
delivery of a certificate or certificates for the Shares pursuant to the
Underwriting Agreement, the Selling Shareholders will transfer to the
Underwriters who have purchased the Shares pursuant to the Underwriting
Agreement (without notice of any defect in the title of the Selling Shareholders
and who are otherwise bona fide purchasers for purposes of the Uniform
Commercial Code) valid and marketable title to the Shares, free and clear of any
pledge, lien, security interest, charge, claim, equity or encumbrance of any
kind; and
8. Each of the Selling Shareholders does not have, or has waived
prior to the date hereof, any registration right, 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
Shareholders to the Underwriters pursuant to the Underwriting Agreement; each of
the Selling Shareholders 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 Shareholder in the transactions
to which the Underwriting Agreement relates in accordance with the terms of the
Underwriting Agreement; and such Selling Shareholder 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 described in the Registration Statement and
the Prospectus.
2.
SCHEDULE VI
Form of Opinion to be Rendered
by Knobbe, Martens, ▇▇▇▇▇ & Bear,
Patent Counsel to the Company
I have served as Patent Counsel of Overland Data, Inc., a company
organized under the laws of California (the ``Company''), and have had
responsibility for certain matters involving the preparation and prosecution of
patent applications in the United States. I have also assisted the Company in
connection with certain patent matters in foreign countries. This opinion is
rendered to you pursuant to Section 5 of the Underwriting Agreement, dated as of
_____________, 1997, among the Company, the Selling Shareholders and the
Underwriters named in Schedule II thereto.
In acting in my position as Patent Counsel of the Company, I have
examined such documents of the Company and such certificates of the Company and
have considered such questions of law as I deemed relevant. In rendering this
opinion, I have assumed the genuineness of all signatures on all documents and
certificates submitted to me, the conformity to the original documents of all
documents and certificates submitted to me as certified, reproduced, conformed
or photostatic copies of valid, existing documents and the authenticity of all
documents and certificates submitted to me as originals.
Based upon the foregoing but subject to the matters set forth in the
last paragraph hereof, I am of the opinion that:
(1) The statements in the Registration Statement on Form S-1, as
amended (File No. 333-18583), filed by the Company with the Securities and
Exchange Commission (the "Commission") on December 24, 1996, and the final
Prospectus in the form filed with the Commission on _______________, 1997,
pursuant to Rule 424(b)(__) under the Act under the captions "Risk Factors -
Technology and Intellectual Property," "Business -- Proprietary Rights" and
"Business - Research and Development," to the extent that they constitute
summaries of the legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such legal matters,
documents or proceedings and fairly summarize the matters referred to therein.
(2) To the best of my knowledge and other than as set forth in the
Prospectus, there are no pending or threatened (i) claims relating to patents,
patent rights, inventions, trade secrets, know-how and proprietary techniques,
including processes and substances, trademarks, service marks, trade names and
copyrights described or referred to in the Prospectus as owned or used by it or
which are necessary for the conduct of its business (the "Intellectual
Property") or (ii) legal or governmental proceedings alleging that the
1.
Company is not in compliance with any applicable laws, regulations, governmental
licenses, permits, consents, orders or approval relating to the Intellectual
Property, to which the Company is or may become a party or to which any of the
properties of the Company is or may become subject which, if adversely decided,
would have a material adverse effect on the Company.
(3) To the best of my knowledge and except as otherwise stated in the
Prospectus, the use, in connection with the business and operations of the
Company, of such Intellectual Property does not infringe or conflict with actual
or asserted rights of any third party with respect to such Intellectual
Property, except where such infringement or conflict would not have a material
adverse effect on the Company.
(4) Except as otherwise stated in the Prospectus, the Company owns or
is licensed, or otherwise has the right to use, all of the Intellectual
Property, except where the failure to so own, to be so licensed or to so have
the right would not have a material adverse effect on the Company.
(5) To the best of my knowledge, the Company has disclosed to the
United States Patent and Trademark Office ("PTO") all prior art references
considered by the Company to be pertinent to the Company's pending patent
applications; to the best of my knowledge, all information submitted to the PTO
in the relevant applications, and in connection with the prosecution of the
relevant applications, was accurate; to the best of my knowledge, the Company
has not made any misrepresentation or concealed any material fact from the PTO
in any of such applications, or in connection with the prosecution of such
applications.
In the above opinions, the expression "best of my knowledge" means,
with reference to matters of fact, that after an examination of documents in my
files and considering my actual knowledge, but not including any constructive or
imputed notice of any information, I find no reason to believe that the opinions
expressed herein are factually incorrect. Beyond that I have made no
independent investigation for the purpose of rendering an opinion with respect
to such matters.
I am not called upon to express, and do not express, any view, opinion
or belief as to non-patent related information, the financial statements,
schedules, statistical data and other financial data contained in the
Registration Statement or the Prospectus.
This opinion is furnished by me, as Patent Counsel of the Company to
you, the Underwriters, and is solely for your benefit.
2.
