2,500,000 Shares
Common Stock
($0.001 Par Value)
UNDERWRITING AGREEMENT
_________, 1999
UNDERWRITING AGREEMENT
___________, 0000
XXXXXXX DILLON READ LLC
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
XXXXX XXXXX XXXXXX & COMPANY
c/o WARBURG DILLON READ LLC
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Netopia, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell and the persons named in Schedule D annexed hereto (the "Selling
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Stockholders") propose to sell to the underwriters named in Schedule A annexed
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hereto (the Underwriters) an aggregate of 2,500,000 shares (the "Firm Shares")
of Common Stock, $0.001 par value (the "Common Stock"), of the Company, of which
2,300,000 shares are to be issued and sold by the Company and an aggregate of
200,000 shares are to be sold by the Selling Stockholders in the respective
amounts set forth under the caption "Firm Shares" in Schedule D annexed hereto.
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In addition, solely for the purpose of covering over-allotments, the Company
proposes to grant to the Underwriters the option to purchase from the Company up
to an additional 375,000 shares of Common Stock (the "Additional Shares") in the
respective amounts set forth under the caption "Additional Shares" in Schedule B
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hereto. The Firm Shares and the Additional Shares are hereinafter collectively
sometimes referred to as the "Shares." The Shares are described in the
Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the Commission) a registration statement on Form S-3 , (File No. 333-82255)
including a prospectus, relating to the Shares, which incorporates by reference
documents which the Company has filed or will file in accordance with the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively called the "Exchange Act"). The Company
has furnished to you, for use by the Underwriters and by dealers, copies of one
or more preliminary prospectuses and the documents incorporated by reference
therein (each thereof, including the documents incorporated therein by
reference, being herein called a "Preliminary Prospectus") relating to the
Shares. Except where the context otherwise requires, the registration
statement, as amended when it becomes effective, including all documents filed
as a part thereof or incorporated by reference therein, and including any
information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 424(b) under the Act and deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430(A) under the Act and
also including any registration statement filed pursuant to Rule 462(b) under
the Act, is herein called the Registration Statement, and the prospectus,
including all documents incorporated therein by reference, in the form filed by
the Company with the Commission pursuant to Rule 424(b) under the Act on or
before the second business day after the date hereof (or such earlier time as
may be required under the Act) or, if no such filing is required, the form of
final
prospectus included in the Registration Statement at the time it became
effective, is herein called the Prospectus.
The Company, the Selling Stockholders and the Underwriters agree as
follows:
1. Sale and Purchase. Upon the basis of the warranties and
-----------------
representations and subject to the terms and conditions herein set forth, the
Company and each of the Selling Stockholders, severally and not jointly, agree
to sell to the respective Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase from the Company and each Selling
Stockholder the respective number of Firm Shares (subject to such adjustment as
you may determine to avoid fractional shares) which bears the same proportion to
the number of Firm Shares to be sold by the Company or by such Selling
Stockholders, as the case may be, as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule A annexed hereto bears to the
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total number of Firm Shares to be sold by the Company and the Selling
Stockholders, in each case at a purchase price of $[ ] per Share. The Company
and the Selling Stockholders are advised by you that the Underwriters intend (i)
to make a public offering of all of their respective portions of the Firm Shares
as soon after the effective date of the Registration Statement as in your
judgment is advisable and (ii) initially to offer the Firm Shares upon the terms
set forth in the Prospectus. You may from time to time increase or decrease the
public offering price after the initial public offering to such extent as you
may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company, ratably
in accordance with the number of Firm Shares to be purchased by each of them
(subject to such adjustment as you shall determine to avoid fractional shares),
all or a portion of the Additional Shares as may be necessary to cover over-
allotments made in connection with the offering of the Firm Shares, at the same
purchase price per share to be paid by the Underwriters to the Company for the
Firm Shares. This option may be exercised by you on behalf of the several
Underwriters at any time (but not more than once) on or before the thirtieth day
following the date hereof, by written notice to the Company. Such notice shall
set forth the aggregate number of Additional Shares as to which the option is
being exercised, and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the additional time of
purchase); provided, however, that the additional time of purchase shall not be
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earlier than the time of purchase (as defined below) nor earlier than the second
business day/1/ after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
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number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares).
Pursuant to powers of attorney, which shall be satisfactory to counsel
for the Underwriters, granted by each Selling Stockholder, [ ] and [ ]
will act as representatives of the Selling Stockholders. The foregoing
representatives (the Representatives of the Selling Stockholders) are
authorized, on behalf of each Selling
____________________
/1/ As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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Stockholder, to execute any documents necessary or desirable in connection with
the sale of the Shares to be sold hereunder by each Selling Stockholder, to make
delivery of the certificates of such Shares, to receive the proceeds of the sale
of such Shares, to give receipts for such proceeds, to pay therefrom the
expenses to be borne by each Selling Stockholder in connection with the sale and
public offering of the Shares, to distribute the balance of such proceeds to
each Selling Stockholder in proportion to the number of Shares sold by each
Selling Stockholder, to receive notices on behalf of each Selling Stockholder
and to take such other action as may be necessary or desirable in connection
with the transactions contemplated by this Agreement.
2. Payment and Delivery. Payment of the purchase price for the Firm
--------------------
Shares shall be made to the Company and each of the Selling Stockholders by
Federal Funds wire transfer, against delivery of the certificates for the Firm
Shares to you through the facilities of the Depository Trust Company (DTC) for
the respective accounts of the Underwriters. Such payment and delivery shall be
made at 10:00 A.M., New York City time, on [ ], 1999 (unless another time
shall be agreed to by you, the Company and the Representatives of the Selling
Stockholders or unless postponed in accordance with the provisions of Section 10
hereof). The time at which such payment and delivery are actually made is
hereinafter sometimes called the time of purchase. Certificates for the Firm
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify no later than the second business day
preceding the time of purchase. For the purpose of expediting the checking of
the certificates for the Firm Shares by you, the Company and the Selling
Shareholders agree to make such certificates available to you for such purpose
at least one full business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall
be delivered to you in definitive form in such names and in such denominations
as you shall specify no later than the second business day preceding the
additional time of purchase. For the purpose of expediting the checking of the
certificates for the Additional Shares by you, the Company agrees to make such
certificates available to you for such purpose at least one full business day
preceding the additional time of purchase.
3. Representations and Warranties of the Company. The Company
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represents and warrants to each of the Underwriters that:
(a) the Company has not received, and has no notice of, any order
of the Commission preventing or suspending the use of any Preliminary
Prospectus, or instituting proceedings for that purpose, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects to
the requirements of the Act when the Registration Statement became effective,
the Registration Statement and the Prospectus will fully comply in all material
respects with the provisions of the Act, and the Registration Statement does not
and will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement have been so described or filed; provided, however, that
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the Company makes no warranty or representation with respect to
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any statement contained in the Registration Statement or the Prospectus in
reliance upon and in conformity with information concerning the Underwriters and
furnished in writing by or on behalf of any Underwriter through you to the
Company expressly for use in the Registration Statement or the Prospectus; the
documents incorporated by reference in the Prospectus, at the time they were
filed with the Commission, complied in all material respects with the
requirements of the Act and the Exchange Act, and do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and the Company has not
distributed any offering material in connection with the offering or sale of the
Shares other than the Registration Statement, the Preliminary Prospectus, the
Prospectus or any other materials, if any, permitted by the Act;
(b) the information set forth in the section of the Registration
Statement and the Prospectus entitled "Capitalization" is true and correct; all
of the issued and outstanding shares of capital stock including Common Stock of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable , have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right;
(c) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full power and authority to own, lease and operate its properties
and conduct its business as described in the Registration Statement;
(d) the Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or leasing
of its properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on the business, properties, financial condition, prospects or results of
operation of the Company and its Subsidiaries (as hereinafter defined) taken as
a whole (a "Material Adverse Effect"). The Company has no subsidiaries (as
defined in the Rules and Regulations) other than Netopia FSC, Inc., a U.S.
Virgin Islands corporation ("Netopia FSC"), Farallon Computing SARL, a French
corporation (Farallon Computing) and Netopia Development GMBH, a German
corporation ("Netopia Development") (collectively, the "Subsidiaries"); none of
the Subsidiaries is a "significant subsidiary" of the Company, as such term is
defined in Regulation S-X under the Act; other than the Subsidiaries, the
Company does not own, directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other entity;
complete and correct copies of the charter documents, certificates or articles
of incorporation and of the bylaws of the Company and the Subsidiaries and all
amendments thereto have been delivered to you, and except as set forth in the
exhibits to the Registration Statement no changes therein will be made
subsequent to the date hereof and prior to the Closing Date or, if later, the
Option Closing Date; each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its 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; each Subsidiary is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction where the ownership or
leasing of the properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not have a Material
Adverse Effect; all of the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and (except as otherwise described in this Section 3(d)) are
owned by the Company subject to no security
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interest, other encumbrance or adverse claims; no options, warrants or other
rights to purchase, agreements or other obligations to issue or other rights to
convert any obligation into shares of capital stock or ownership interests in
the Subsidiaries are outstanding.
(e) the Company and each of its Subsidiaries are in compliance in
all material respects with the laws, orders, rules, regulations and directives
issued or administered by each jurisdiction in which they conduct their
respective businesses, except where non-compliance could singly or in the
aggregate result in a Material Adverse Effect;
(f) neither the Company nor any of its Subsidiaries is in breach,
in any material respect, of, or in default under (nor has any event occurred
which with notice, lapse of time, or both would result in any breach, in any
material respect, of, or constitute a default, in any material respect, under),
its respective charter or by-laws or in the performance or observance of any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which any of them or any
of their properties is bound, and the execution, delivery and performance of
this Agreement, the issuance and sale of the Shares and the consummation of the
transactions contemplated hereby will not conflict with, or result in any
breach, in any material respect, of or constitute a default, in any material
respect, under (nor constitute any event which with notice, lapse of time, or
both would result in any breach, in any material respect, of, or constitute a
default, in any material respect, under), any provisions of the charter or by-
laws, of the Company or any of its Subsidiaries or under any provision of any
license, indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which any of them or their respective properties may be bound or affected, or
under any federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company or any of its Subsidiaries;
(g) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable in accordance with its terms;
(h) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained in the
Registration Statement and Prospectus and the certificates for the Shares are in
due and proper form and the holders of the Shares will not be subject to
personal liability by reason of being such holders;
(i) the Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be duly
and validly issued and fully paid and non-assessable;
(j) no approval, authorization, consent or order of or filing
with any national, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the issuance and sale
of the Shares or the consummation by the Company of the transaction as
contemplated hereby other than registration of the Shares under the Act and any
necessary qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters or under
the rules and regulations of the National Association of Securities Dealers,
Inc. (NASD);
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(k) except to the extent set forth in the Prospectus, no person
has the right, contractual or otherwise, to cause the Company to issue to it, or
register pursuant to the Act, any shares of capital stock of the Company upon
the issue and sale of the Shares to the Underwriters hereunder, nor does any
person have preemptive rights, co-sale rights, rights of first refusal or other
rights to purchase any of the Shares other than those that have been expressly
waived prior to the dates hereof;
(l) KPMG LLP, whose reports on the consolidated financial
statements of the Company and its Subsidiaries are filed with the Commission as
part of the Registration Statement and Prospectus, are independent public
accountants as required by the Act;
(m) each of the Company and its Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation or
rule, and has obtained all necessary authorizations, consents and approvals from
other persons, in order to conduct its respective business; neither the Company
nor any of its Subsidiaries is in violation of, or in default under, any such
license, authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable to
the Company or any of its Subsidiaries the effect of which could have a Material
Adverse Effect;
(n) all legal or governmental proceedings, contracts, leases or
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration Statement
have been so described or filed as required;
(o) except to the extent set forth in the Prospectus, there are
no actions, suits, claims, investigations or proceedings pending or threatened
to which the Company or any of its Subsidiaries or any of their respective
officers is a party or of which any of their respective properties is subject at
law or in equity, or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency which
could result in a judgment, decree or order having a Material Adverse Effect or
a material adverse effect on the consummation of the transaction contemplated
hereby;
(p) the audited financial statements included in the Registration
Statement and the Prospectus present fairly the consolidated financial position
of the Company and its Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and its
Subsidiaries for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis during the periods involved;
(q) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been (i)
any material adverse change, or any development which, in the Company's
reasonable judgment, is likely to cause a material adverse change, in the
business, properties or assets described or referred to in the Registration
Statement, or the results of operations, condition (financial or otherwise),
business or operations of the Company and its Subsidiaries taken as a whole,
(ii) any transaction which is material to the Company or its Subsidiaries,
except transactions in the ordinary course of business, (iii) any obligation,
direct or contingent, which is material to the Company and its Subsidiaries
taken as a whole, incurred by the Company or its Subsidiaries, except
obligations incurred in the ordinary course of business, (iv) any change in the
capital
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stock or outstanding indebtedness of the Company or its Subsidiaries or (v) any
dividend or distribution of any kind declared, paid or made on the capital stock
of the Company. Neither the Company nor its Subsidiaries has any material
contingent obligation which is not disclosed in the Registration Statement.
(r) the Company has obtained the agreement of each of its
directors and officers and the stockholders listed on Schedule B not to sell,
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offer to sell, contract to sell, hypothecate, grant any option to sell or
otherwise dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or warrants or
other rights to purchase Common Stock for a period of 90 days after the date of
the Prospectus;
(s) the Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
4. Representations and Warranties of the Selling Stockholders. Each
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Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter that:
(a) such Selling Stockholder now is and at the time of delivery
of such Shares (whether the time of purchase or additional time of purchase, as
the case may be) will be, the lawful owner of the number of Shares to be sold by
such Selling Stockholder pursuant to this Agreement and has and, at the time of
delivery thereof, will have valid and marketable title to such Shares, and upon
delivery of and payment for such Shares (whether at the time of purchase or the
additional time of purchase, as the case may be), the Underwriters will acquire
valid and marketable title to such Shares free and clear of any claim, lien,
encumbrance, security interest, community property right, restriction on
transfer or other defect in title;
(b) such Selling Stockholder has and at the time of delivery of
such Shares (whether the time of purchase or additional time of purchase, as the
case may be) will have, full legal right, power and capacity, and any approval
required by law (other than those imposed by the Act and the securities or blue
sky laws of certain jurisdictions), to sell, assign, transfer and deliver such
Shares in the manner provided in this Agreement;
(c) this Agreement and the Custody Agreement among [ ], as
custodian, and the Selling Stockholders (the "Custody Agreement") have been duly
executed and delivered by such Selling Stockholder and each is a legal, valid
and binding agreement of such Selling Stockholder enforceable in accordance with
its terms;
(d) when the Registration Statement becomes effective and at all
times subsequent thereto through the latest of the time of purchase, additional
time of purchase or the termination of the offering of the Shares, the
information in the Registration Statement and Prospectus, and any supplements or
amendments thereto, pertaining to such Selling Stockholder in the Prospectus is
complete and accurate in all material respects;
(e) such Selling Stockholder has duly and irrevocably authorized
the Representatives of the Selling Stockholders, on behalf of such Selling
Stockholder, to execute and deliver this Agreement and any other document
necessary or desirable in connection with the transactions contemplated thereby
and to deliver the Shares to be sold by such Selling Stockholder and receive
payment therefor pursuant hereto;
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(f) the sale of such Selling Stockholder's Shares pursuant to
this Agreement is not prompted by any information concerning the Company which
is not set forth in the Prospectus; and
(g) the Significant Selling Stockholder identified in Schedule D
(the "Significant Selling Stockholder") represents and warrants to each
Underwriter that, to the knowledge of the Significant Selling Stockholder
(without having conducted any investigation or inquiry) that the representations
and warranties of the Company contained in Section 3 hereof are true and
accurate in all material respects.
5. Certain Covenants of the Company. The Company hereby agrees:
--------------------------------
(a) to furnish such information as may be required and otherwise
to cooperate in qualifying the Shares for offering and sale under the securities
or blue sky laws of such states as you may designate and to maintain such
qualifications in effect so long as required for the distribution of the Shares;
provided that the Company shall not be required to qualify as a foreign
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corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;
(b) to make available to the Underwriters in New York City, as
soon as practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many copies of
the Prospectus (or of the Prospectus as amended or supplemented if the Company
shall have made any amendments or supplements thereto after the effective date
of the Registration Statement) as the Underwriters may request for the purposes
contemplated by the Act;
(c) to advise you promptly and (if requested by you) to confirm
such advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment thereto becomes effective and (ii) if Rule
430A under the Act is used, when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Act (which the Company agrees to file in a
timely manner under such Rules);
(d) to advise you promptly, confirming such advice in writing, of
any request by the Commission for amendments or supplements to the Registration
Statement or Prospectus or for additional information with respect thereto, or
of notice of institution of proceedings for, or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the lifting or
removal of such order as soon as possible; to advise you promptly of any
proposal to amend or supplement the Registration Statement or Prospectus
including by filing any documents that would be incorporated therein by
reference and to file no such amendment or supplement to which you shall object
in writing;
(e) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the Commission in
order to comply with the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in connection with
the offering or sale of the shares, and to promptly notify you of such filing;
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(f) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act;
(g) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement (i)
copies of any reports or other communications which the Company shall send to
its stockholders or shall from time to time publish or publicly disseminate,
(ii) copies of all annual, quarterly and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar form as may be
designated by the Commission, (iii) copies of documents or reports filed with
any national securities exchange on which any class of securities of the Company
is listed, and (iv) such other information as you may reasonably request
regarding the Company or its Subsidiaries, in each case as soon as such
communications, documents or information becomes available;
(h) to advise the Underwriters promptly of the happening of any
event known to the Company within the time during which a Prospectus relating to
the Shares is required to be delivered under the Act which, in the judgment of
the Company, would require the making of any change in the Prospectus then being
used, or in the information incorporated therein by reference, so that the
Prospectus would not include an untrue statement of material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading, and, during such
time, to prepare and furnish, at the Company's expense, to the Underwriters
promptly such amendments or supplements to such Prospectus as may be necessary
to reflect any such change and to furnish you a copy of such proposed amendment
or supplement before filing any such amendment or supplement with the
Commission;
(i) to furnish to its shareholders, as soon as practicable after
it is required to be filed with the Commission under the Exchange Act, an annual
report (including a balance sheet and statements of income, shareholders' equity
and of cash flow of the Company for such fiscal year, accompanied by a copy of
the certificate or report thereon of nationally recognized independent certified
public accountants;
(j) to furnish to you four (4) signed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments thereto
(including all exhibits thereto and documents incorporated by reference therein)
and sufficient conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters;
(k) to furnish to you as early as practicable prior to the time
of purchase and the additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim consolidated financial statements, if any, of the Company and
its Subsidiaries which have been read by the Company's independent certified
public accountants, as stated in their letter to be furnished pursuant to
Section 8(c) hereof;
(l) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the Prospectus;
(m) not to issue, sell, offer or agree to sell, contract to
sell, grant any option to sell or otherwise dispose of, directly or indirectly,
any shares of Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock or warrants or other rights to purchase Common
Stock or any other Securities of the Company that are
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substantially similar to Common Stock or permit the registration under the Act
of any shares of Common Stock, except for the registration of the Shares and the
sales to the Underwriters pursuant to this Agreement and except for issuances of
Common Stock upon the exercise of outstanding options, warrants and debentures
described in the Registration Statement or Prospectus or, in the case of
options, granted pursuant to an employee benefit plan described in the
Registration Statement or Prospectus, for a period of 90 days after the date
hereof, without the prior written consent of the Managing Underwriters; and
(n) to use all commercially reasonable efforts to cause the
Common Stock to be listed for quotation on the Nasdaq National Market System
("Nasdaq").
6. Certain Covenants of the Company and the Selling Stockholders.
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The Company and each of the Selling Stockholders agree with each Underwriter as
follows:
(a) the Company will pay all expenses, fees and taxes (other
than any transfer taxes and fees and disbursements of counsel for the
Underwriters except as set forth under Section 7 hereof or (iii) or (iv) below)
in connection with (i) the preparation and filing of the Registration Statement,
each Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii) the
issuance, sale and delivery of the Shares by the Company and the Selling
Stockholders, (iii) the word processing and/or printing of this Agreement, any
Agreement Among Underwriters, any dealer agreements, any Statements of
Information, the Custody Agreement and the Powers of Attorney and the
reproduction and/or printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state laws and the
determination of their eligibility for investment under state law as aforesaid
(including the legal fees and filing fees and other disbursements of counsel to
the Underwriters) and the printing and furnishing of copies of any blue sky
surveys or legal investment surveys to the Underwriters and to dealers, (v) any
listing of the Shares on any securities exchange or qualification of the Shares
for quotation on Nasdaq and any registration thereof under the Exchange Act,
(vi) the filing for review of the public offering of the Shares by the National
Association of Securities Dealers, Inc. (the NASD), and (vii) the performance of
the Company's and the Selling Stockholders' other obligations hereunder; and
(b) the Company and the Selling Stockholders will not issue,
sell, grant any option to sell or otherwise dispose of, directly or indirectly,
any shares of Common Stock or securities convertible into or exchangeable for
Common Stock or warrants or other rights to purchase Common Stock or, in the
case of the Company, permit the registration under the Act of any shares of
Common Stock, except for the registration of the Shares and the sales to the
Underwriters pursuant to this Agreement and except for issuances of Common Stock
upon the exercise of outstanding options, warrants and debentures, for a period
of 90 days after the date of the Prospectus, without the prior written consent
of the Managing Underwriters.
7. Reimbursement of Underwriters' Expenses. If the Shares are not
---------------------------------------
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 10 hereof or the default by one or more
of the Underwriters in its or their respective obligations hereunder, the
Company shall, in addition to paying the amounts described in Section 6(a)
hereof, reimburse the Underwriters for all of their out-of-pocket expenses,
including the fees and disbursements of their counsel.
10
8. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Stockholders on the
date hereof and at the time of purchase (and the several obligations of the
Underwriters at the additional time of purchase are subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Stockholders on the date hereof and at the time of purchase (unless previously
waived) and at the additional time of purchase, as the case may be), the
performance by the Company and the Selling Stockholders of their obligations
hereunder and to the following additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and
at the additional time of purchase, as the case may be, an opinion of Gunderson,
Dettmer, Stough, Villeneuve, Franklin & Xxxxxxxxx, LLP, counsel for the Company,
addressed to the Underwriters, and dated the time of purchase or the additional
time of purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form satisfactory to Xxxxxxx, Phleger & Xxxxxxxx LLP,
counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as herein contemplated;
(ii) each of the Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its respective jurisdiction of incorporation with full corporate power and
authority to own, lease and operate its respective properties and to
conduct its respective business;
(iii) the Company and its Subsidiaries are duly qualified or
licensed to do business in California, Illinois, Kansas, Maryland, Texas,
Utah and Virginia;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Shares have been duly authorized and, when issued
and delivered to and paid for by the Underwriters, will be duly and validly
and issued and will be fully paid and non-assessable;
(vi) the Company has an authorized capitalization as set
forth in the Registration Statement and the Prospectus; to the knowledge of
such counsel, the outstanding shares of capital stock of the Company have
been duly and validly authorized and issued, and are fully paid,
nonassessable and free of statutory and, to the knowledge of such counsel,
contractual preemptive rights; the Shares when issued will be free of
statutory and, to the knowledge of such counsel, contractual preemptive
rights, resale rights, rights of first refusal and similar rights;
(vii) other than the Subsidiaries, to the knowledge of such
counsel, the Company does not own or control, directly or indirectly, any
corporation, association or other entity;
11
(viii) the capital stock of the Company, including the
Shares, conforms to the description thereof, insofar as such description
relates to legal matters, contained in the Registration Statement and
Prospectus;
(ix) the Registration Statement and the Prospectus (except
as to the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act;
(x) the Registration Statement has become effective under
the Act and, to the best of such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened under the Act
and any required filing of the Prospectus and, to the knowledge of such
counsel, any supplement thereto pursuant to Rule 424 under the Act has been
made in the manner and within the time period required by such Rule 424;
(xi) no approval, authorization, consent or order of or
filing with any national, state or local governmental or regulatory
commission, board, body, authority or agency is required in connection with
the issuance and sale of the Shares and consummation by the Company of the
transaction as contemplated hereby other than registration of the Shares
under the Act (except such counsel need express no opinion as to any
necessary qualification under the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters);
(xii) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby do not and will not conflict with, or
result in any breach of, or constitute a default under (nor constitute any
event which with notice, lapse of time, or both, would result in any breach
of or constitute a default under), any provisions of the charter or by-laws
of the Company or any of its Subsidiaries or under any provision of any
license, indenture, mortgage, deed of trust, bank loan, credit agreement or
other evidence of indebtedness, or any lease, contract or other agreement
or instrument filed or incorporated by reference as an exhibit to the
Registration Statement, or, to our knowledge, under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any of its Subsidiaries;
(xiii) to such counsel's knowledge, the Company is not in
violation of its charter or by-laws or is in breach of, or in default under
(nor has any event occurred which with notice, lapse of time, or both would
result in any breach of, or constitute a default under), any license,
indenture, mortgage, deed of trust, bank loan or any other agreement or
instrument filed or incorporated by reference as an exhibit to the
Registration Statement or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Company or any of its Subsidiaries;
(xiv) to such counsel's knowledge, there are no contracts,
licenses, agreements, leases or documents of a character which are required
to be filed as exhibits to the Registration Statement or to be summarized
or described in the Prospectus which have not been so filed, summarized or
described;
(xv) to such counsel's knowledge, there are no actions,
suits, claims, investigations or proceedings pending, threatened or
contemplated to which the
12
Company or any of its properties is subject at law or in equity or before
or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency which are required to be
described in the Prospectus but are not so described;
(xvi) the documents incorporated by reference in the
Registration Statement and Prospectus, when they were filed (or, if an
amendment with respect to any such document was filed when such amendment
was filed) with the Commission, complied as to form in all material
respects with the Exchange Act (except as to the financial statements and
schedules and other financial and statistical data contained or
incorporated by reference therein as to which such counsel need express no
opinion);
(xvii) the Company will not, upon consummation of the
transactions contemplated by this Agreement, be an "investment company," or
a "promoter" or "principal underwriter" for, a "registered investment
company," as such terms are defined in the Investment Company Act of 1940,
as amended;
(xviii) such counsel have participated in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants of the Company and representatives of the
Underwriters at which the contents of the Registration Statement and
Prospectus were discussed and, although such counsel is not passing upon
and does not assume responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
Prospectus (except as and to the extent stated in subparagraphs (vi) and
(viii) above), on the basis of the foregoing nothing has come to the
attention of such counsel that causes them to believe that the Registration
Statement or any amendment thereto at the time such Registration Statement
or amendment became effective contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto at the date of such Prospectus or such
supplement, and at all times up to and including the time of purchase or
additional time of purchase, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to the
financial statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus).
(b) The Selling Stockholders shall furnish to you at the time of
purchase and at the additional time of purchase, as the case may be, an opinion
of Fenwick & West LLP, counsel for the Selling Stockholders, addressed to the
Underwriters, and dated the time of purchase or the additional time of purchase,
as the case may be, with reproduced copies for each of the other Underwriters,
and in form and substance satisfactory to Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriters, stating that:
(i) this Agreement and the Custody Agreement have been duly
executed and delivered by or on behalf of each of the Selling Stockholders;
(ii) each Selling Stockholder has full legal right and
power, and has obtained any authorization or approval required by law
(other than those imposed by the Act and the securities or blue sky laws of
certain jurisdictions), to sell,
13
assign, transfer and deliver the Shares to be sold by such Selling
Stockholder in the manner provided in this Agreement;
(iii) delivery of certificates for the Shares by each
Selling Stockholder pursuant hereto will pass valid and marketable title
thereto to the Underwriters, free and clear of any claim, lien,
encumbrance, security interest, community property right, restriction on
transfer or other defect in title;
(iv) each of the Representatives of the Selling
Stockholders has been duly authorized by each Selling Stockholder to
execute and deliver on behalf of such Selling Stockholder this Agreement
and any other document necessary or desirable in connection with the
transactions contemplated hereby and to deliver the Shares to be sold by
such Selling Stockholder; and
(v) to the best of such counsel's knowledge, the
statements in the Prospectus under the caption "Principal and Selling
Stockholders" insofar as such statements constitute a summary of the
matters referred to therein present fairly the information called for with
respect to such matters.
(c) The Company shall furnish to you at the time of purchase and
at the additional time of purchase, as the case may be, an opinion of the
general counsel of the Company, addressed to the Underwriters, and dated the
time of purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form satisfactory to
Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the Underwriters, in the form
attached hereto as Schedule C.
----------
(d) You shall have received from KPMG LLP, letters dated,
respectively, the date of this Agreement and the time of purchase and additional
time of purchase, as the case may be, and addressed to the Underwriters (with
reproduced copies for each of the Underwriters) in the forms heretofore approved
by the Underwriters.
(e) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion of
Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, as to the
matters referred to in subparagraphs (iv), (v), (viii) (with respect to the
Shares only), (ix) and (x) of paragraph (a) of this Section 8.
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which the
contents of the Registration Statement and Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus (except as to matters
referred to with respect to the Shares under subparagraph (viii) of paragraph
(a) of this Section 8), on the basis of the foregoing (relying as to materiality
to a large extent upon the opinions of officers and other representatives of the
Company), no facts have come to the attention of such counsel which lead them to
believe that the Registration Statement or any amendment thereto at the time
such Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus as of its date or any
14
supplement thereto as of its date contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (it being understood that such counsel need
express no comment with respect to the financial statements and schedules and
other financial and statistical data included in the Registration Statement or
Prospectus).
(f) No amendment or supplement to the Registration Statement or
Prospectus, including documents deemed to be incorporated by reference therein,
shall be filed prior to the time the Registration Statement becomes effective to
which you object in writing.
(g) The Registration Statement shall become effective, or if
Rule 430A under the Act is used, the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Act, at or before 5:00 P.M., New
York City time, on the date of this Agreement, unless a later time (but not
later than 5:00 P.M., New York City time, on the second full business day after
the date of this Agreement) shall be agreed to by the Company, the
Representatives of the Selling Stockholders and you in writing or by telephone,
confirmed in writing; provided, however, that the Company, the Representatives
-------- -------
of the Selling Stockholders and you and any group of Underwriters, including
you, who have agreed hereunder to purchase in the aggregate at least 50% of the
Firm Shares may from time to time agree on a later date.
(h) Prior to the time of purchase or the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under the Act
or proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto, or modifications thereof, if
any, shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and (iii) the Prospectus and all amendments or
supplements thereto, or modifications thereof, if any, shall not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading.
(i) Between the time of execution of this Agreement and the time
of purchase or the additional time of purchase, as the case may be, (i) no
material and unfavorable change, financial or otherwise (other than as referred
to in the Registration Statement and Prospectus), in the business, condition or
prospects of the Company and its Subsidiaries taken as a whole shall occur or
become known and (ii) no transaction which is material and unfavorable to the
Company shall have been entered into by the Company or any of its Subsidiaries.
(j) The Company will, at the time of purchase or additional time
of purchase, as the case may be, deliver to you a certificate of two of its
executive officers to the effect that the representations and warranties of the
Company as set forth in this Agreement are true and correct as of each such
date, that the Company shall perform such of its obligations under this
Agreement as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be and the conditions
set forth in paragraphs (h) and (i) of this Section 8 have been met.
(k) You shall have received signed letters, dated the date of
this Agreement, from each of the Selling Stockholders and each of the directors
and officers of the Company and each of the stockholders listed on Schedule B
----------
to the effect that such persons
15
shall not sell, offer or agree to sell, contract to sell, grant any option to
sell or otherwise dispose of, directly or indirectly, any shares of Common Stock
of the Company or securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to the Common Stock for
a period of 90 days after the date of the Prospectus without WDR's prior written
consent.
(l) The Company and the Selling Stockholders shall have
furnished to you such other documents and certificates as to the accuracy and
completeness of any statement in the Registration Statement and the Prospectus
as of the time of purchase and the additional time of purchase, as the case may
be, as you may reasonably request.
(m) The Shares shall have been approved for listing for
quotation on Nasdaq, subject only to notice of issuance at or prior to the time
of purchase or the additional time of purchase, as the case may be.
(n) The Selling Stockholders will at the time of purchase and
the additional time of purchase, as the case may be deliver to you a certificate
of the Representatives of the Selling Stockholders to the effect that the
representations and warranties of the Selling Stockholders set forth in this
Agreement are true and correct as of each such date.
9. Effective Date of Agreement; Termination. This Agreement shall
----------------------------------------
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statement
and Prospectus, (y) there has been any material adverse and unfavorable change,
financial or otherwise (other than as referred to in the Registration Statement
and Prospectus), in the operations, business, condition or prospects of the
Company and its Subsidiaries taken as a whole, which would, in your judgment or
in the judgment of such group of Underwriters, make it impracticable to market
the Shares, or, if, at any time prior to the time of purchase or, with respect
to the purchase of any Additional Shares, the additional time of purchase, as
the case may be, trading in securities on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been suspended
or limitations or minimum prices shall have been established on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market or if
a banking moratorium shall have been declared either by the United States or New
York State authorities, or if the United States shall have declared war in
accordance with its constitutional processes or there shall have occurred any
material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on the
financial markets of the United States as, in your judgment or in the judgment
of such group of Underwriters, to make it impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 9, the Company, the Representatives of the Selling
Stockholders and each other Underwriter shall be notified promptly by letter or
telegram.
16
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company or the
Selling Stockholders, as the case may be, shall be unable to comply with any of
the terms of this Agreement, the Company or the Selling Stockholders, as the
case may be, shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 6(a), 7 and 11 hereof), and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 11 hereof) or to one another
hereunder.
10. Increase in Underwriters' Commitments. Subject to Sections 8 and
-------------------------------------
9, if any Underwriter shall default in its obligation to take up and pay for the
Firm Shares to be purchased by it hereunder (otherwise than for reasons
sufficient to justify the termination of this Agreement under the provisions of
Section 9 hereof) and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set opposite the
names of such non-defaulting Underwriters in Schedule A.
----------
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company and the Selling Stockholders agree with the non-
defaulting Underwriters that they will not sell any Firm Shares hereunder unless
all of the Firm Shares are purchased by the Underwriters (or by substituted
Underwriters selected by you with the approval of the Company or selected by the
Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this agreement shall refer to and
include any Underwriter substituted under this Section 10 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
----------
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the five business
day period stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
be terminated without further act or deed and without any liability on the part
of the Company to any non-defaulting Underwriter and without any liability on
the part of any non-defaulting Underwriter to the Company. Nothing in this
paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
17
11. Indemnity and Contribution.
--------------------------
(a)
(i) The Company agrees to indemnify, defend and hold
harmless each Underwriter, its partners, directors and officers, and any
person who controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns of
all of the foregoing persons from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation and
reasonable legal fees and expenses as provided below) which, jointly or
severally, any such Underwriter or any such person may incur under the Act,
the Exchange Act, the Common Law or otherwise, insofar as such loss,
damage, expense, liability or claim 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 by the Company) or in a Prospectus
(the term Prospectus for the purpose of this Section 11 being deemed to
include any Preliminary Prospectus, the Prospectus and the Prospectus as
amended or supplemented by the Company), or 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 Prospectus or necessary to
make the statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing by or
on behalf of any Underwriter through you to the Company expressly for use
with reference to such Underwriter in such Registration Statement or such
Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information
required to be stated in such Registration Statement or Prospectus or
necessary to make such information not misleading; provided, however, that
the indemnity agreement contained in this Section 10(a) with respect to any
Preliminary Prospectus shall not inure to benefit of any Underwriter from
whom the person asserting any such losses, claims, damages, liabilities or
expenses purchase the Shares which is the subject thereof (or to the
benefit of any person, controlling such Underwriter) if at or prior to the
written confirmation of the sale of such shares, a copy of the Prospectus
(or the Prospectus as amended or supplemented) was not sent or delivered to
such person and the untrue statement or omission of a material fact
contained in such Preliminary Prospectus was corrected in the Prospectus
(or the Prospectus as amended or supplemented).
(ii) Each Selling Stockholder, severally and not jointly,
agrees to indemnify, defend and hold harmless each Underwriter, its
partners, directors and officers, and any person who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, and the successors and assigns of all of the foregoing
persons from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation and reasonable legal fees
and expenses as provided below) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the Exchange Act,
the Common Law or otherwise, insofar as such loss, damage, expense,
liability or claim 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 by the Company) or in a Prospectus (the term
Prospectus for the purpose of this Section 11 being deemed to include any
Preliminary Prospectus, the
18
Prospectus and the Prospectus as amended or supplemented by the Company),
or 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 Prospectus or necessary to make the statements made therein not
misleading, except insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of any Underwriter through
you to the Company expressly for use with reference to such Underwriter in
such Registration Statement or such Prospectus or arises out of or is based
upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
Statement or Prospectus or necessary to make such information not
misleading; provided, however, that the indemnity agreement contained in
this Section 10(a) with respect to any Preliminary Prospectus shall not
inure to benefit of any Underwriter from whom the person asserting any such
losses, claims, damages, liabilities or expenses purchase the Shares which
is the subject thereof (or to the benefit of any person, controlling such
Underwriter) if at or prior to the written confirmation of the sale of such
shares, a copy of the Prospectus (or the Prospectus as amended or
supplemented) was not sent or delivered to such person and the untrue
statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented).
(iii) If any action, suit or proceeding (together, a
"Proceeding") is brought against an Underwriter or any such person in
respect of which indemnity may be sought against the Company or any Selling
Stockholder pursuant to the foregoing paragraphs (I) and (ii), such
Underwriter or such person shall promptly notify the Company and the
Representatives of the Selling Stockholders in writing of the institution
of such Proceeding and the Company or such Selling Stockholder, as the case
may be, shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to
-------- -------
so notify the Company or the Representative of the Selling Stockholders
shall not relieve the Company or any Selling Stockholder from any liability
which the Company may have to any Underwriter or any such person or
otherwise, unless the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially
prejudiced by the failure to give such notice. Such Underwriter or such
controlling person shall have the right to employ its or their own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or of such person unless the employment of such
counsel shall have been authorized in writing by the Company or such
Selling Stockholder in connection with the defense of such Proceeding or
the Company or such Selling Stockholder shall not have, within a reasonable
period of time in light of the circumstances, employed counsel to have
charge of the defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in
conflict with those available to the Company or such Selling Stockholder
(in which case the Company or such Selling Stockholder shall not have the
right to direct the defense of such Proceeding on behalf of the indemnified
party or parties), in any of which events the reasonable fees and expenses
of such counsel shall be borne by the Company or such Selling Stockholder,
as the case may be, and paid as incurred (it being understood, however,
that the Company or such Selling Stockholder shall not be liable for the
expenses of more than one separate counsel (in addition to any local
counsel) in any one Proceeding or series of related Proceedings in the same
jurisdiction representing
19
the indemnified parties who are parties to such Proceeding). The Company or
such Selling Stockholder shall not be liable for any settlement of any such
Proceeding effected without its written consent but if settled with the
written consent of the Company or such Selling Stockholder, the Company or
such Selling Stockholder agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability by
reason of such settlement. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to
the date of such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify, defend and hold harmless the Company, its directors and officers,
each Selling Stockholder and any person who controls the Company or any Selling
Stockholder within the meaning of Section 15 of the Act, or Section 20 of the
Exchange Act from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation and reasonable legal fees and
expenses as provided below) which, jointly or severally, the Company, any
Selling Stockholder or any such person may incur under the Act, the Exchange
Act, or Common Law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of such Underwriter through you
to the Company expressly for use with reference to such Underwriter in the
Registration Statement (or in the Registration Statement as amended by or on
behalf of any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information required to be
stated in such Registration Statement or Prospectus or necessary to make such
information not misleading.
If any Proceeding is brought against the Company, any Selling
Stockholder or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the immediately preceding paragraph, the
Company, such Selling Stockholder or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses, provided, however, that the omission to so
-------- -------
notify such Underwriter shall not relieve such Underwriter, from any liability
which such Underwriter may have to the Company, any Selling Stockholder or any
such person or otherwise. The Company, such Selling Stockholder or such person
shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Company, such
Selling Stockholder or
20
such person unless the employment of such counsel shall have been authorized in
writing by such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have employed counsel to have charge of the defense
of such Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to or in conflict with those available to such Underwriter
(in which case such Underwriter shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties, but such
Underwriter may employ counsel and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such Underwriter),
in any of which events such fees and expenses shall be borne by such Underwriter
and paid as incurred (it being understood, however, that such Underwriter shall
not be liable for the expenses of more than one separate counsel (in addition to
any local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). No Underwriter shall be liable for any settlement of any such
Proceeding effected without the written consent of such Underwriter but if
settled with the written consent of such Underwriter, such Underwriter agrees to
indemnify and hold harmless the Company, any Selling Stockholder and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 11 in respect of any losses, damage, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other hand from the offering of the Shares
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
each of the Company and the Selling Stockholders, respectively, on the one hand
and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by each of the Company and the Selling Stockholders,
respectively, on the one hand and the Underwriters on the other shall be deemed
to be in the same respective proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by each of the Company and the Selling Stockholders, respectively, and
the total underwriting discounts and commissions received by the Underwriters,
bear to the aggregate public offering price is the shares. The relative fault
of
21
the Company and the Selling Stockholders on the one hand and of the Underwriters
on the other 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, by the
Selling Stockholders or by the Underwriters 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, damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to defend or
defending any claim or Proceeding.
(d) The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 11 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
subsection (c) above. Notwithstanding the provisions of this Section 11, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by such Underwriter
and distributed to the public were offered to the public exceeds the amount of
any damage which such Underwriter has otherwise been required to pay by reason
of such untrue statement or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 11 are several in proportion
to their respective underwriting commitments and not joint.
(e) Notwithstanding any provision to the contrary herein, the
liability of each Selling Stockholder under the representations, warranties,
agreements and reimbursement provisions contained herein and under the indemnity
and contribution agreements contained in the provisions of this Section 11 shall
be limited to an amount equal to the initial public offering price of the
Selling Stockholder Shares sold by such Selling Stockholder to the Underwriters
minus the amount of the underwriting discount paid thereon to the Underwriters
by such Selling Stockholder. The Company and such Selling Stockholders may
agree, as among themselves and without limiting the rights of the Underwriters
under this Agreement, as to the respective amounts of such liability for which
they each shall be responsible.
(f) The indemnity and contribution agreements contained in this
Section 11 and the covenants, warranties and representations of the Company and
the Selling Stockholders contained in this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter, its directors and officers or any person (including each partner,
officer or director of such person) who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or on
behalf of the Company, its directors or officers, any Selling Stockholder or any
person who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and shall survive any termination of this
Agreement or the issuance and delivery of the Shares. The Company, each Selling
Stockholder and each Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the Company,
against any of the Company's officers or directors in connection with the
Registration Statement or Prospectus or the transactions contemplated thereby.
22
(g) Notwithstanding any other provisions of this Section 11, the
parties agree that as between the Company and the Selling Stockholders, the
Company shall be primarily liable to pay all indemnity, contribution,
reimbursement or other obligations of the Company and any Selling Stockholders
that may arise under this Section 11 (other than with respect to breaches of a
Selling Stockholder's representations and warranties under paragraphs (a) -(f)
of Section 4); and except with respect to breaches of a Selling Stockholder's
representations and warranties under paragraphs (a) - (f) of Section 4, no
Selling Stockholder shall be liable to pay, by way of indemnity, contribution or
otherwise, any amount to any Underwriter, or any other person entitled to be
indemnified under Section 11(a)(ii), unless such Underwriter or other person has
first made demand upon the Company for such amounts and the Company refuses or
fails to pay such amounts.
12. Notices. Except as otherwise herein provided, all statements,
-------
requests notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Warburg Dillon Read LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department, if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at 0000 Xxxxxxx
Xxxxxx Xxxx, Xxxxxxx, XX 00000, Attention: Xxxxx Xxxxx and, if to any of the
Selling Stockholders, shall be sufficient in all respects if delivered or sent
to the Representatives of the Selling Stockholders at Fenwick & West LLP,
Attention: Xxxxx Xxxxx, at Xxx Xxxx Xxxx Xxxxxx, Xxxx Xxxx, XX 00000.
13. Governing Law; Construction. This Agreement and any claim,
---------------------------
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
14. Submission to Jurisdiction. Except as set forth below, no Claim
--------------------------
may be commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against Warburg Dillon Read LLC or any
indemnified party. Each of Warburg Dillon Read LLC and the Company (on its
behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement. The Company agrees that a
final judgment in any such action, proceeding or counterclaim brought in any
such court shall be conclusive and binding upon the Company and may be enforced
in any other courts in the jurisdiction of which the Company is or may be
subject, by suit upon such judgment.
15. Parties at Interest. The Agreement herein set forth has been and
-------------------
is made solely for the benefit of the Underwriters, the Company, the Selling
Stockholders and to the extent provided in Section 11 hereof the controlling
persons, directors and officers referred to in Such Section, and their
respective successors, assigns, heirs, pursuant representatives and executors
and administrators. No other person, partnership, association or corporation
23
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
16. Counterparts. This Agreement may be signed by the parties in one
------------
or more counterparts which together shall constitute one and the same agreement
among the parties.
17. Successors and Assigns. This Agreement shall be binding upon the
----------------------
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
18. Miscellaneous. Warburg Dillon Read LLC, an indirect, wholly owned
-------------
subsidiary of UBS AG, is not a bank and is separate from any affiliated bank,
including any U.S. branch or agency of Warburg Dillon Read LLC. Because Warburg
Dillon Read LLC is a separately incorporated entity, it is solely responsible
for its own contractual obligations and commitments, including obligations with
respect to sales and purchases of securities. Securities sold, offered or
recommended by Warburg Dillon Read LLC are not deposits, are not insured by the
Federal Deposit Insurance Corporation, are not guaranteed by a branch or agency,
and are not otherwise an obligation or responsibility of a branch or agency.
24
If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholders and the Underwriters, please so indicate in
the space provided below for the purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the Company, the Selling
Stockholders and the Underwriters, severally.
Very truly yours,
NETOPIA, INC.
By: __________________________
Title:
THE SELLING STOCKHOLDERS NAMED IN SCHEDULE D
----------
ATTACHED HERETO
By: __________________________
Attorney-in-Fact
Accepted and agreed to as of the date first
above written, on behalf of themselves and
the other several Underwriters named in
Schedule A
----------
WARBURG DILLON READ LLC
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
XXXXX XXXXX XXXXXX & COMPANY
WARBURG DILLON READ LLC
By: _________________________
Title:
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
By: _________________________
Title:
XXXXX XXXXX XXXXXX & COMPANY
By: _________________________
Title:
25
SCHEDULE A
----------
Number of
Underwriter Firm Shares
----------- -----------
WARBURG DILLON READ LLC
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
XXXXX XXXXX XXXXXX & COMPANY
---------------
Total................
===============
A-1
SCHEDULE B
----------
LOCK-UP LETTER STOCKHOLDERS
B-1
SCHEDULE C
----------
OPINION OF GENERAL COUNSEL
[_________________________] shall state that he served as general
counsel to the Company, and shall opine that:
1. To the best of such counsel's knowledge and belief, the statements
in the Registration Statement and the Prospectus under the captions [__________]
are accurate and complete statements or summaries of the matters therein set
forth. Nothing has come to such counsel's attention that causes them to believe
that the above-described portions of the Registration Statement at the time such
Registration Statement became effective contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto, at the date of such Prospectus or such
supplement, contained an untrue statement of material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
2. To the best of such counsel's knowledge and belief, (a) there are
no legal or governmental proceedings pending relating to patent rights, trade
secrets, trademarks, service marks or other proprietary information or materials
of the Company, and (b) no such proceedings are threatened or contemplated by
governmental authorities or others.
3. Such counsel does not know of any contracts or other documents,
relating to the Company's patents, trade secrets, trademarks, service marks or
other proprietary information or materials, of a character required to be filed
as an exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus, that are not filed or described as
required.
4. To the best of such counsel's knowledge and belief, (a) the
Company is not infringing or otherwise violating any patents, trade secrets,
trademarks, service marks or other proprietary information or materials of
others, and (b) there are no infringements by others of any of the Company's
patents, trade secrets, trademarks, service marks or other proprietary
information or materials which in such counsel's judgment could affect
materially the use thereof by the Company.
5. Such counsel has no knowledge of any facts which would preclude
the Company from having valid license rights or clear title to the patents
referenced in the Prospectus. Such counsel has no knowledge that the Company
lacks or will be unable to obtain any rights or licenses to use all patents and
other material intangible property and assets necessary to conduct the business
now conducted or proposed to be conducted by the Company as described in the
Prospectus, except as described in the Prospectus. Counsel is unaware of any
facts which form a basis for a finding of unenforceability or invalidity of any
of the Company's patents and other material property and assets.
6. (a) Though such counsel has not verified the accuracy or
completeness of the statements contained in the Prospectus, nothing has come to
the attention of such counsel that causes them to believe that, such
Registration Statement, at the time the
D-1
Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or at the time of
purchase, or additional time of purchase, as the case may be, the Prospectus (a)
under the caption [__________], and (b) under the caption [_____________],
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Such counsel may state that, in rendering their opinion, they have
relied on certain factual representations of the Company and that they have not
independently verified the accuracy and completeness of such representations.
D-2
SCHEDULE D
----------
SELLING STOCKHOLDERS
Shareholder Firm Shares
----------- -----------
Xxxxx X. Xxxxx/*/ 115,000
Serus, LLC 85,000
Total 200,000
___________________
/*/ Denotes a Significant Selling Stockholder.
D-1
