Exhibit 1.01
2,300,000 Shares
MACROVISION CORPORATION
Common Stock
UNDERWRITING AGREEMENT
January __, 1997
▇▇▇▇▇▇▇▇▇▇ SECURITIES
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇ & COMPANY
As Representatives of the several Underwriters
c/▇ ▇▇▇▇▇▇▇▇▇▇ SECURITIES
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
SECTION 1
INTRODUCTORY
Macrovision Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell 1,450,000 shares of its authorized but unissued Common Stock,
par value $0.001 per share (the "Common Stock"), and certain stockholders of the
Company named in Schedule B annexed hereto (the "Selling Stockholders") propose
to sell an aggregate of 850,000 shares of the Company's issued and outstanding
Common Stock to the several underwriters named in Schedule A annexed hereto (the
"Underwriters"), for whom you are acting as Representatives. These 2,300,000
shares together are herein called the "Firm Common Shares." In addition, the
Company proposes to grant to the Underwriters an option to purchase up to
345,000 additional shares of Common Stock (the "Optional Common Shares"), as
provided in Section 5 hereof. The Firm Common Shares and, to the extent such
option is exercised, the Optional Common Shares are hereinafter collectively
referred to as the "Common Shares."
You have advised the Company and the Selling Stockholders that the
Underwriters propose to make a public offering of their respective portions of
the Common Shares on the effective date of the registration statement
hereinafter referred to, or as soon thereafter as in your judgment is advisable.
The Company and each of the Selling Stockholders hereby confirm their
respective agreements with respect to the purchase of the Common Shares by the
Underwriters as follows:
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the several Underwriters that:
(a) A registration statement on Form SB-2 (File No. 333-___________) with
respect to the Common Shares has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The Company has prepared and has filed or proposes to file prior to
the effective date of such registration statement an amendment or amendments to
such registration statement, which amendment or amendments have been or will be
similarly prepared. There have been delivered to you two signed copies of such
registration statement and amendments, together with two copies of each exhibit
filed therewith. Conformed copies of such registration statement and amendments
(but without exhibits) and of the related preliminary prospectus have been
delivered to you in such reasonable quantities as you have requested for each of
the Underwriters. The Company will next file with the Commission one of the
following: (i) prior to effectiveness of such registration statement, a further
amendment thereto, including the form of final prospectus, or (ii) a final
prospectus in accordance with Rules 430A and 424(b) of the Rules and
Regulations. As filed, such amendment and form of final prospectus, or such
final prospectus, shall include all Rule 430A Information and, except to the
extent that you shall agree to a modification, shall be in all substantive
respects in the form furnished to you prior to the date and time that this
Agreement was executed and delivered by the parties hereto, or, to the extent
not completed at such date and time, shall contain only such specific additional
information and other changes (beyond that contained in the latest Preliminary
prospectus) as the Company shall have previously advised you would be included
or made therein.
The term "Registration Statement" as used in this Agreement shall mean such
registration statement at the time such registration statement becomes effective
and, in the event that any post-effective amendment thereto becomes effective
prior to the First Closing Date (as hereinafter defined), shall also mean such
registration statement as so amended; provided, however, that such term shall
also include (i) all Rule 430A Information deemed to be included in such
registration statement at the time such registration statement becomes effective
as provided by Rule 430A of the Rules and Regulations and (ii) a registration
statement, if any, filed pursuant to Rule 462(b) of the Rules and Regulations
relating to the Common Shares. The term "Preliminary Prospectus" shall mean any
preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean the prospectus relating to the Common Shares
in the form in which it is first filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations or, if no filing pursuant to
Rule 424(b) of the Rules and Regulations is required, shall mean the form of
final prospectus included in the Registration Statement at the time such
registration statement becomes effective. The term "Rule 430A Information"
means information with respect to the Common Shares and the offering thereof
permitted to be omitted from the
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Registration Statement when it becomes effective pursuant to Rule 430A of the
Rules and Regulations.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus, and each Preliminary Prospectus has
conformed in all material respects to the requirements of the Act and the
Rules and Regulations and, as of its date, has not included any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; and at the time the Registration Statement
becomes effective, and at all times subsequent thereto up to and including
each Closing Date hereinafter mentioned, the Registration Statement and the
Prospectus, and any amendments or supplements thereto, will contain all
material statements and information required to be included therein by the
Act and the Rules and Regulations and will in all material respects conform
to the requirements of the Act and the Rules and Regulations, and neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, will include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, no representation or
warranty contained in this subsection 2(b) shall be applicable to information
contained in or omitted from any Preliminary Prospectus, the Registration
Statement, the Prospectus or any such amendment or supplement in reliance
upon and in conformity with written information furnished to the Company by
or on behalf of any Underwriter, directly or through the Representative,
specifically for use in the preparation thereof.
(c) The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Exhibit 21.01 to the Registration Statement. The Company and each of its
subsidiaries have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective jurisdictions
of incorporation, with full power and authority (corporate and other) to own and
lease their properties and conduct their respective businesses as described in
the Prospectus; the Company owns all of the outstanding capital stock of its
subsidiaries free and clear of all claims, liens, charges and encumbrances; the
Company and each of its subsidiaries are in possession of and operating in
compliance with all authorizations, licenses, permits, consents, certificates
and orders material to the conduct of their respective businesses, all of which
are valid and in full force and effect; the Company and each of its subsidiaries
are duly qualified to do business and in good standing as foreign corporations
in each jurisdiction in which the ownership or leasing of properties or the
conduct of their respective businesses requires such qualification, except for
jurisdictions in which the failure to so qualify would not have a material
adverse effect upon the Company and its subsidiaries, taken as a whole; and no
proceeding has been instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification.
(d) As of September 30, 1996, the Company had an authorized and
outstanding capital stock as set forth under the heading "Capitalization" in the
Prospectus, subject to the assumptions set forth therein; the issued and
outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights
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to subscribe for or purchase securities, and conform in all material respects
to the description thereof contained in the Prospectus. All issued and
outstanding shares of capital stock of each subsidiary of the Company have
been duly authorized and validly issued and are fully paid and nonassessable.
Except as disclosed in or contemplated by the Prospectus and the financial
statements of the Company, and the related notes thereto, included in the
Prospectus, neither the Company nor any subsidiary has outstanding any
options to purchase, or any preemptive rights or other rights to subscribe
for or to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock or any
such options, rights, convertible securities or obligations. The description
of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised
thereunder, set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.
(e) The Common Shares to be sold by the Company have been duly authorized
and, when issued, delivered and paid for in the manner set forth in this
Agreement, will be validly issued, fully paid and nonassessable, and will
conform in all material respects to the description thereof contained in the
Prospectus. No preemptive rights or other rights to subscribe for or purchase
exist with respect to the issuance and sale of the Common Shares by the Company
pursuant to this Agreement. No stockholder of the Company has any right which
has not been waived to require the Company to register the sale of any shares
owned by such stockholder under the Act in the public offering contemplated by
this Agreement. No further approval or authority of the stockholders or the
Board of Directors of the Company will be required for the transfer and sale of
the Common Shares to be sold by the Selling Stockholders or the issuance and
sale of the Common Shares to be sold by the Company as contemplated herein.
(f) The Company has full legal right, power and authority to enter into
this Agreement and perform the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by the Company and constitutes
a valid and binding obligation of the Company in accordance with its terms. The
making and performance of this Agreement by the Company and the consummation of
the transactions herein contemplated will not violate any provisions of the
certificate of incorporation or bylaws, or other organizational documents, of
the Company or any of its subsidiaries, and will not conflict with, result in
the breach or violation of, or constitute, either by itself or upon notice or
the passage of time or both, a default under any agreement, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other instrument to which
the Company or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries or any of its respective properties may be bound or
affected, any statute or any authorization, judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative agency or other
governmental body applicable to the Company or any of its subsidiaries or any of
their respective properties, which breach, violation or default could have a
material adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the execution
and delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement, except for compliance with the Act, the
Securities Exchange Act of 1934, as
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amended (the "Exchange Act"), the Blue Sky laws applicable to the public
offering of the Common Shares by the several Underwriters and the clearance
of such offering with the National Association of Securities Dealers, Inc.
(the "NASD").
(g) KPMG Peat Marwick LLP and Ernst & Young LLP, who have expressed
their opinions with respect to the consolidated financial statements filed
with the Commission as a part of the Registration Statement and included in
the Prospectus and in the Registration Statement, are independent accountants
as required by the Act and the Rules and Regulations. The Company maintains
a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparations of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorizations; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(h) The consolidated financial statements of the Company and its
subsidiaries, and the related notes thereto, included in the Registration
Statement and the Prospectus present fairly in all material respects the
financial position of the Company and its subsidiaries as of the respective
dates of such financial statements, and the results of operations and changes in
financial position of the Company and its subsidiaries for the respective
periods covered thereby. Such statements and related notes have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis as certified by the independent accountants named in
subsection 2(g). No other financial statements or schedules are required to be
included in the Registration Statement. The consolidated financial data set
forth in the Prospectus under the captions "Summary Financial Data,"
"Capitalization" and "Selected Consolidated Financial Data" fairly present in
all material respects the information set forth therein on the basis stated in
the Registration Statement.
(i) Except as disclosed in the Prospectus, and except as to violations,
defaults or breaches which individually or in the aggregate would not be
material to the Company and its subsidiaries, taken as a whole, neither the
Company nor any of its subsidiaries is in violation or default of any provision
of its certificate of incorporation or bylaws, or other organizational
documents, or is in breach of or default with respect to any provision of any
agreement, judgment, decree, order, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which it is a party or by
which it or any of its properties are bound; and there does not exist any state
of facts which constitutes an event of default on the part of the Company or any
such subsidiary as defined in such documents or which, with notice or lapse of
time or both, would constitute such an event of default.
(j) There are no contracts or other documents required to be described in
the Registration Statement or to be filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations which have not been
described or filed as required. The contracts so described in the Prospectus
are in full force and effect on the date hereof; and neither the Company nor any
of its
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subsidiaries, nor to the best of the Company's knowledge, any other party is
in breach of or default under any of such contracts.
(k) Except as described in the Registration Statement and the
Prospectus, there are no legal or governmental actions, suits or proceedings
pending or, to the best of the Company's knowledge, threatened to which the
Company or any of its subsidiaries is or may be a party or of which property
owned or leased by the Company or any of its subsidiaries is or may be the
subject, or related to environmental or discrimination matters, which
actions, suits or proceedings might, individually or in the aggregate,
prevent or adversely affect the transactions contemplated by this Agreement
or result in a material adverse change in the condition (financial or
otherwise), properties, business or results of operations of the Company and
its subsidiaries, taken as a whole; and no labor disturbance by the employees
of the Company or any of its subsidiaries exists or is imminent which might
be expected to affect materially and adversely such condition, properties,
business or results of operations. Neither the Company nor any of its
subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
(l) The Company or the applicable subsidiary has good and marketable title
to all the properties and assets reflected as owned in the financial statements
hereinabove described (or elsewhere in the Prospectus), subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except (i) those, if any,
reflected in such financial statements (or elsewhere in the Prospectus), or
(ii) those which are not material in amount and do not adversely affect the use
made and proposed to be made of such property by the Company and its
subsidiaries. The Company or the applicable subsidiary holds its leased
properties under valid and binding leases, with such exceptions as are not
materially significant in relation to the business of the Company and its
subsidiaries, taken as a whole. Except as disclosed in the Prospectus, the
Company owns or leases all such properties as are necessary to its operations as
now conducted or as proposed to be conducted.
(m) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) the Company and its
subsidiaries have not incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or
written agreement or other transaction which is not in the ordinary course of
business or which could result in a material reduction in the future net
income of the Company and its subsidiaries, taken as a whole; (ii) the
Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance;
(iii) the Company has not paid or declared any dividends or other
distributions with respect to its capital stock and the Company and its
subsidiaries are not in default in the payment of principal or interest on
any outstanding material debt obligations; (iv) there has not been any change
in the capital stock (other than upon the sale of the Common Shares
hereunder) or indebtedness material to the Company and its subsidiaries,
taken as a whole (other than in the ordinary course of business); and (v)
there has not been any material adverse change in the condition (financial or
otherwise), business, properties or results of operations of the Company and
its subsidiaries, taken as a whole.
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(n) The Company and its subsidiaries own all patents, trademarks,
trademark registrations, service marks, service ▇▇▇▇ registrations, trade
names, mask works, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by it or necessary to conduct
their businesses as now conducted. As of the date the Registration
Statement became effective, the descriptions of the patents and patent
applications set forth in the Registration Statement and the Prospectus under
the captions "Risk Factors --Dependence on Proprietary Technology and
"Business -- Intellectual Property Rights" do not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made therein, in light of the circumstances under which
they were made, not misleading. Except as otherwise set forth in the
Registration Statement and the Prospectus, the expiration of any patent
rights, trademarks, trade names, mask works, copyrights, licenses would not
have a material adverse effect on the condition (financial or otherwise),
business, results of operations of the Company or its subsidiaries, taken as
a whole. The Company has no knowledge of any infringement or other violation
by it or its subsidiaries of any patent rights, trademark, trade name rights,
mask works, copyrights, licenses, trade secret or other similar rights of
others, and there is no claim being made against the Company or its
subsidiaries regarding any patent, trademark, trade name, mask work,
copyright, license, trade secret or other infringement which could have a
material adverse effect on the condition (financial or otherwise), business,
results of operations of the Company and its subsidiaries, taken as a whole.
(o) The Company has not been advised, and has no reason to believe, that
either it or any of its subsidiaries is not conducting business in compliance
with all applicable laws, rules and regulations of the jurisdictions in which it
is conducting business, including, without limitation, all applicable local,
state and federal environmental laws and regulations; except where failure to be
so in compliance would not materially adversely affect the condition (financial
or otherwise), business or results of operations of the Company and its
subsidiaries, taken as a whole.
(p) The Company and its subsidiaries have filed all necessary federal,
state and foreign income and franchise tax returns and have paid all taxes shown
as due thereon; and the Company has no knowledge of any tax deficiency which has
been or might be asserted or threatened against the Company or its subsidiaries
which could materially and adversely affect the business, operations or
properties of the Company and its subsidiaries, taken as a whole.
(q) The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(r) The Company has not distributed and will not distribute prior to the
First Closing Date any offering material in connection with the offering and
sale of the Common Shares other than the Prospectus, the Registration Statement
and the other materials permitted by the Act.
(s) Each of the Company and its subsidiaries maintains insurance of the
types and in the amounts generally deemed adequate for its business, including,
but not limited to, insurance covering real and personal property owned or
leased by the Company and its subsidiaries against theft, damage, destruction,
acts of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
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(t) Neither the Company nor any of its subsidiaries has at any time
during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state
governmental officer or official, or other person charged with similar public
or quasi-public duties, other than payments required or permitted by the laws
of the United States or any jurisdiction thereof.
(u) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Common Shares.
SECTION 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE SELLING STOCKHOLDERS
(a) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, the several Underwriters that:
(i) Such Selling Stockholder has, and on the First Closing
Date hereinafter mentioned will have, good and marketable title to the Common
Shares proposed to be sold by such Selling Stockholder hereunder on such
Closing Date and full right, power and authority to enter into this Agreement
and to sell, assign, transfer and deliver such Common Shares hereunder, free
and clear of all voting trust arrangements, liens, encumbrances, equities,
security interests, restrictions and claims whatsoever; and upon delivery of
and payment for such Common Shares hereunder, the Underwriters will acquire
good and valid title thereto, free and clear of all liens, encumbrances,
equities, claims, restrictions, security interests, voting trusts or other
defects of title whatsoever, provided that the Underwriters are purchasing
such Common Shares in good faith and without notice of any adverse claim.
(ii) Such Selling Stockholder has executed and delivered a
Power of Attorney and a Custody Agreement (hereinafter collectively referred
to as the "Stockholders Agreement") and in connection herewith such Selling
Stockholder further represents, warrants and agrees that such Selling
Stockholder has deposited in custody, under the Stockholders Agreement, with
the agent named therein (the "Agent") as custodian, certificates in
negotiable form for the Common Shares to be sold hereunder by such Selling
Stockholder, for the purpose of further delivery pursuant to this Agreement.
Such Selling Stockholder agrees that the Common Shares to be sold by such
Selling Stockholder on deposit with the Agent are subject to the interests of
the Company and the Underwriters, that the arrangements made for such custody
are to that extent irrevocable, and that the obligations of such Selling
Stockholder hereunder shall not be terminated, except as provided in this
Agreement or in the Stockholders Agreement, by any act of such Selling
Stockholder, by operation of law, by the death or incapacity of such Selling
Stockholder or by the occurrence of any other event. If the Selling
Stockholder should die or become incapacitated, or if any other event should
occur, before the delivery of the Common Shares hereunder, the documents
evidencing Common Shares
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then on deposit with the Agent shall be delivered by the Agent in accordance
with the terms and conditions of this Agreement as if such death, incapacity
or other event had not occurred, regardless of whether or not the Agent shall
have received notice thereof. This Agreement and the Stockholders Agreement
have been duly executed and delivered by or on behalf of such Selling
Stockholder and the form of such Stockholders Agreement has been delivered to
you.
(iii) The performance of this Agreement and the
Stockholders Agreement and the consummation of the transactions contemplated
hereby and by the Stockholders Agreement will not result in a breach or
violation by such Selling Stockholder of any of the terms or provisions of,
or constitute a default by such Selling Stockholder under, any indenture,
mortgage, deed of trust, trust (constructive or other), loan agreement,
lease, franchise, license or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder or any of
its properties is bound, any statute, or any judgment, decree, order, rule or
regulation of any court or governmental agency or body applicable to such
Selling Stockholder or any of its properties, in which such breach, violation
or default would adversely affect the ability to such Selling Stockholder to
perform its obligations pursuant to this Agreement or the Stockholders
Agreement or could otherwise have a material adverse effect on such Selling
Stockholder.
(iv) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Common Shares.
(v) Such Selling Stockholder has reviewed the Registration
Statement and Prospectus, and, although such Selling Stockholder has not
independently verified the accuracy or completeness of the information
contained therein (other than the information regarding such Selling
Stockholder and its affiliates, if any, set forth under the captions
"Management,""Certain Transactions" and "Principal and Selling
Stockholders"), nothing has come to the attention of such Selling Stockholder
that would lead such Selling Stockholder to believe that (A) on the effective
date thereof the Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading
or (B) on the date of the Prospectus, the Prospectus contained and, on the
Closing Date, contains any untrue statement of a material fact or omitted or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(vi) Such Selling Stockholder's decision to sell the Common
Shares that may be sold by it pursuant to this Agreement is not prompted by
any adverse information regarding the Company which is not disclosed in the
Registration Statement and the Prospectus.
(b) Each of the Selling Stockholders agrees with the Company and the
Underwriters not to directly or indirectly, sell, offer, contract or grant
any option to sell, make any short sale (including without limitation any
"short vs. the box"), pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Securities Exchange
Act of 1934, as
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amended, or otherwise dispose of any shares of Common Stock, options or
warrants to acquire shares of Common Stock, or securities exchangeable or
exercisable for or convertible into shares of Common Stock currently or
hereafter owned either of record or beneficially (as defined in Rule 13d-3
under Securities Exchange Act of 1934, as amended) by the such Selling
Stockholder, or publicly announce such Selling Stockholder's intention to do
any of the foregoing, for a period commencing on the date hereof and
continuing to a date 180 days after the first date any of the Common Shares
are released by you for sale to the public, except that, each of the Selling
Stockholders may sell or otherwise transfer shares of Common Stock (i)
pursuant to this Agreement or (ii) as a BONA FIDE gift or gifts, provided
that undersigned provides prior written notice of such gift or gifts to you,
and the donee or donees thereof agree to be bound by the restrictions set
forth herein. Each of the Selling Stockholders also agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent and
registrar against the transfer of any of the Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock held by the
undersigned except in compliance with the foregoing restrictions.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS
The Representatives, on behalf of the several Underwriters, represent
and warrant to the Company and to the Selling Stockholders that the
information set forth (i) on the cover page of the Prospectus with respect to
price, underwriting discounts and commissions and terms of offering and (ii)
under "Underwriting" in the Prospectus was furnished to the Company by and on
behalf of the Underwriters for use in connection with the preparation of the
Registration Statement and the Prospectus and is correct in all material
respects. The Representatives represent and warrant that they have been
authorized by each of the other Underwriters as the Representatives to enter
into this Agreement on its behalf and to act for it in the manner herein
provided.
SECTION 5
PURCHASE, SALE AND DELIVERY OF COMMON SHARES
On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, (i) the
Company agrees to issue and sell to the Underwriters 1,450,000 of the Firm
Common Shares and (ii) the Selling Stockholders agree, severally and not
jointly, to sell to the Underwriters in the respective amounts set forth in
Schedule B hereto, an aggregate of 850,000 of the Firm Common Shares. The
Underwriters agree, severally and not jointly, to purchase from the Company
and the Selling Stockholders, respectively, the number of Firm Common Shares
described below. The purchase price per share to be paid by the several
Underwriters to the Company and to the Selling Stockholders, respectively,
shall be $_____ per share.
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The obligation of each Underwriter to the Company shall be to purchase
from the Company that number of full shares which (as nearly as practicable,
as determined by you) bears to 1,450,000 the same proportion as the number of
shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Common Shares. The obligation of each
Underwriter to the Selling Stockholders shall be to purchase from the Selling
Stockholders that number of full shares which (as nearly as practicable, as
determined by you) bears to 850,000 the same proportion as the number of
shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Common Shares.
Delivery of certificates for the Firm Common Shares to be purchased by
the Underwriters shall be made as directed by Representatives and payment
therefor shall be made at the offices of Fenwick & West LLP, Two Palo Alto
Square, Palo Alto, California (or such other place as may be agreed upon by
the Company and the Representatives) at such time and date, not later than
the third (or, if the Firm Common Shares are priced as contemplated by Rule
15c6-1(c) of the Exchange Act, after 4:30 p.m. Washington, D.C. time, the
fourth) full business day following the first date that any of the Common
Shares are released by you for sale to the public, as you shall designate by
at least 48 hours prior notice to the Company (or at such other time and
date, not later than one week after such third or fourth, as the case may be,
full business day as may be agreed upon by the Company and the
Representatives) (the "First Closing Date"); provided, however, that if the
Prospectus is at any time prior to the First Closing Date recirculated to the
public, the First Closing Date shall occur upon the later of the third or
fourth, as the case may be, full business day following the first date that
any of the Common Shares are released by you for sale to the public or the
date that is 48 hours after the date that the Prospectus has been so
recirculated.
Delivery of certificates for the Firm Common Shares shall be made by or
on behalf of the Company and the Selling Stockholders to you, for the
respective accounts of the Underwriters with respect to the Firm Common
Shares to be sold by the Company and by the Selling Stockholders against
payment by you, for the accounts of the several Underwriters, of the purchase
price therefor by certified or official bank checks payable to the order of
the Company and of the Agent in proportion to the number of Firm Common
Shares to be sold by the Company and the Selling Stockholders, respectively.
The certificates for the Firm Common Shares shall be registered in such names
and denominations as you shall have requested at least two full business days
prior to the First Closing Date, and shall be made available for checking and
packaging on the business day preceding the First Closing Date at a location
in New York, New York, as may be designated by you. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein
set forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to 345,000 Optional Common Shares at
the purchase price per share to be paid for the Firm Common Shares, for use
solely in covering any over-allotments made by you for the account of the
Underwriters in the sale and distribution of the Firm Common Shares. In the
event that the Underwriters elect to purchase less than all of the Optional
Common Shares, the number of Optional Common Shares to be purchased by each
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Underwriter shall be determined by multiplying the aggregate number of
Optional Common Shares to be sold by the Company pursuant to such notice of
exercise by a fraction, the numerator of which is the number of Firm Common
Shares to be purchased by such Underwriter as set forth opposite its name in
SCHEDULE A and the denominator of which is 2,300,000 (subject to such
adjustments to eliminate any fractional share purchases as you in your
discretion may make). The option granted hereunder may be exercised at any
time (but not more than once) within 30 days after the first date that any of
the Common Shares are released by you for sale to the public, upon notice by
you to the Company setting forth the aggregate number of Optional Common
Shares as to which the Underwriters are exercising the option, the names and
denominations in which the certificates for such shares are to be registered
and the time and place at which such certificates will be delivered. Such
time of delivery (which may not be earlier than the First Closing Date),
being herein referred to as the "Second Closing Date," shall be determined by
you, but if at any time other than the First Closing Date shall not be
earlier than the third (or, if the Firm Common Shares are priced as
contemplated by Rule 15c6-1(c) of the Exchange Act, after 4:30 p.m.
Washington, D.C. time, the fourth) full business day after delivery of such
notice of exercise. Certificates for the Optional Common Shares will be made
available for checking and packaging on the business day preceding the Second
Closing Date at a location in New York, New York, as may be designated by
you. The manner of payment for and delivery of the Optional Common Shares
shall be the same as for the Firm Common Shares purchased from the Company as
specified in the two preceding paragraphs. At any time before lapse of the
option, you may cancel such option by giving written notice of such
cancellation to the Company. If the option is canceled or expires
unexercised in whole or in part, the Company will deregister under the Act
the number of Optional Common Shares as to which the option has not been
exercised.
You have advised the Company and the Selling Stockholders that each
Underwriter has authorized you to accept delivery of its Common Shares, to
make payment and to receipt therefor. You, individually and not as the
Representatives of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by you by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but
any such payment shall not relieve such Underwriter from any of its
obligations under this Agreement.
Subject to the terms and conditions hereof, the Underwriters propose to
make a public offering of their respective portions of the Common Shares as
soon after the effective date of the Registration Statement as in the
judgment of the Representatives is advisable and at the public offering price
set forth on the cover page of and on the terms set forth in the Prospectus.
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SECTION 6
COVENANTS OF THE COMPANY
The Company covenants and agrees that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereto, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective. If the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Rules and Regulations, or the filing of the
Prospectus is otherwise required under Rule 424(b) of the Rules and Regulations,
the Company will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to you of such timely
filing. The Company will promptly advise you in writing (i) of the receipt of
any comments of the Commission, (ii) of any request of the Commission for
amendment of or supplement to the Registration Statement (either before or after
it becomes effective), any Preliminary Prospectus or the Prospectus or for
additional information, (iii) when the Registration Statement shall have become
effective and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the institution
of any proceedings for that purpose. If the Commission shall enter any such
stop order at any time, the Company will use its best efforts to obtain the
lifting of such order at the earliest possible moment. The Company will not
file any amendment or supplement to the Registration Statement (either before or
after it becomes effective), any Preliminary Prospectus or the Prospectus of
which you have not been furnished with a copy a reasonable time prior to such
filing or to which you reasonably object or which is not in compliance with the
Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly upon
your request, a registration statement pursuant to Rule 462(b) of the Rules and
Regulations related to the Common Shares and any amendments or supplements to
the Registration Statement or the Prospectus which in your judgment may be
necessary or advisable to enable the several Underwriters to continue the
distribution of the Common Shares and will use its best efforts to cause the
same to become effective as promptly as possible. The Company will fully and
completely comply with the provisions of Rule 430A of the Rules and Regulations
with respect to information omitted from the Registration Statement in reliance
upon such Rule.
(c) If at any time within the nine-month period referred to in
Section 10(a)(3) of the Act during which a prospectus relating to the Common
Shares is required to be delivered under the Act any event occurs, as a result
of which the Prospectus, including any amendments or supplements, would include
an untrue statement of a material fact, or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or if it is necessary at any time to amend the Prospectus, including
any amendments or supplements, to comply with the Act or the Rules and
Regulations, the Company will promptly advise you thereof and will promptly
prepare and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment or
supplement which will effect such compliance and
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will use its best efforts to cause the same to become effective as soon as
possible; and, in case any Underwriter is required to deliver a prospectus
after such nine-month period, the Company upon request, but at the expense of
such Underwriter, will promptly prepare such amendment or amendments to the
Registration Statement and such Prospectus or Prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of
the Act.
(d) As soon as practicable, but not later than 45 days after the end of
the first quarter ending after one year following the "effective date of the
Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of 12
consecutive months beginning after the effective date of the Registration
Statement which will satisfy the provisions of the last paragraph of
Section 11(a) of the Act.
(e) During such period as a prospectus is required by law to be delivered
in connection with sales by an Underwriter or dealer, the Company, at its
expense, but only for the nine-month period referred to in Section 10(a) (3) of
the Act, will furnish to you and the Selling Stockholders or mail to your order
copies of the Registration Statement, the Prospectus, the Preliminary Prospectus
and all amendments and supplements to any such documents in each case as soon as
available and in such quantities as you and the Selling Stockholders may
reasonably request, for the purposes contemplated by the Act.
(f) The Company shall cooperate with you and your counsel in order to
qualify or register the Common Shares for sale under (or obtain exemptions from
the application of) the Blue Sky laws of such jurisdictions as you designate,
will comply with such laws and will continue such qualifications, registrations
and exemptions in effect so long as reasonably required for the distribution of
the Common Shares. The Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise you promptly of the
suspension of the qualification or registration of (or any such exemption
relating to) the Common Shares for offering, sale or trading in any jurisdiction
or any initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification, registration
or exemption, the Company, with your cooperation, will use its best efforts to
obtain the withdrawal thereof.
(g) During the period of five years hereafter, the Company will furnish to
the Representatives and, upon request of the Representatives, to each of the
other Underwriters: (i) as soon as practicable after the end of each fiscal
year, copies of the Annual Report to Stockholders of the Company containing the
balance sheet of the Company as of the close of such fiscal year and statements
of income, stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Report on Form 8-K or other
report filed by the Company with the Commission, the NASD or any securities
exchange; and (iii) as soon as available, copies of any other report or
communication of the Company mailed generally to holders of its Common Stock.
-14-
(h) During the period of 180 days after the first date that any of the
Common Shares are released by you for sale to the public, without the prior
written consent of either ▇▇▇▇▇▇▇▇▇▇ Securities or each of the Representatives
(which consent may be withheld at the sole discretion of ▇▇▇▇▇▇▇▇▇▇ Securities
or the Representatives, as the case may be), the Company will not issue, offer,
sell, grant options to purchase or otherwise dispose of any of the Company's
equity securities or any other securities convertible into or exchangeable with
its Common Stock or other equity security other than (i) the Company's (1)
issuance of Common Stock upon the exercise of warrants and stock options that
are presently outstanding and described as such in the Prospectus or which may
be issued hereafter under the option plans described in the Registration
Statement and the Prospectus and (2) grant of options pursuant to the option
plans described in the Registration Statement and the Prospectus, (ii) the
Company's issuance of Common Stock under the employee stock purchase plan
described in the Registration Statement and the Prospectus, (iii) the Company's
issuance of warrants to purchase up to _______ shares of Common Stock (and the
issuance of Common Stock upon exercise thereof) upon the terms described in the
Registration Statement and the Prospectus and (iv) the Company's issuance of
shares of Common Stock in an acquisition of another corporation or entity
provided that (1) such shares represent less than [20%] of the Company's then
outstanding shares of Common Stock and (2) the individuals or entities to whom
such shares are issued agree that such shares may not be resold during the 180
days following the first date that any of the shares of Common Stock are
released by the Underwriters for sale to the public.
(i) The Company will apply the net proceeds of the sale of the Common
Shares sold by it substantially in accordance with its statements under the
caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to qualify or register its
Common Stock for sale in non-issuer transactions under (or obtain exemptions
from the application of) the Blue Sky laws of the State of California (and
thereby permit market making transactions and secondary trading in the Common
Stock in California), will comply with such Blue Sky laws and will continue such
qualifications, registrations and exemptions in effect for a period of five
years after the date hereof.
(k) The Company will use its best efforts to designate the Common Stock
for quotation as a national market system security on the NASD Automated
Quotation System.
You, on behalf of the Underwriters, may, in your sole discretion, waive in
writing the performance by the Company of any one or more of the foregoing
covenants or extend the time for their performance.
SECTION 7
PAYMENT OF EXPENSES
Whether or not the transactions contemplated hereunder are consummated or
this Agreement becomes effective or is terminated, the Company and, unless
otherwise paid by the Company, the Selling Stockholders agree to pay in such
proportions as they may agree upon among themselves all
-15-
costs, fees and expenses incurred in connection with the performance of their
obligations hereunder and in connection with the transactions contemplated
hereby, including without limiting the generality of the foregoing, (i) all
expenses incident to the issuance and delivery of the Common Shares
(including all printing and engraving costs), (ii) all fees and expenses of
the registrar and transfer agent of the Common Stock, (iii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and
sale of the Common Shares to the Underwriters, (iv) all fees and expenses of
the Company's counsel and the Company's independent accountants, (v) all
costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement, each
Preliminary Prospectus and the Prospectus (including all exhibits and
financial statements) and all amendments and supplements provided for herein,
this Agreement, the Agreement Among Underwriters, the Selected Dealers
Agreement, the Underwriters' Questionnaire, the Underwriters' Power of
Attorney and the Blue Sky memorandum, (vi) all filing fees, reasonable
attorneys' fees and expenses incurred by the Company or the Underwriters in
connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares for
offer and sale under the state or Canadian Blue Sky laws, (vii) the filing
fee, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with the National Association of Securities Dealers, Inc. and
(viii) all other fees, costs and expenses referred to in Item 25 of the
Registration Statement. The Underwriters may deem the Company to be the
primary obligor with respect to all costs, fees and expenses to be paid by
the Company and by the Selling Stockholders. Except as provided in this
Section 7, Section 9 and Section 11 hereof, the Underwriters shall pay all of
their own expenses, including the fees and disbursements of their counsel
(excluding those relating to qualification, registration or exemption under
the Blue Sky laws and the Blue Sky memorandum referred to above). This
Section 7 shall not affect any agreements relating to the payment of expenses
between the Company and the Selling Stockholders.
The Selling Stockholders will pay (directly or by reimbursement) all fees
and expenses incident to the performance of their obligations under this
Agreement which are not otherwise specifically provided for herein, including
but not limited to (i) any fees and expenses of counsel for any Selling
Stockholders other than Fenwick & West LLP and Wise & ▇▇▇▇▇▇▇ LLP and (ii) all
expenses and taxes incident to the sale and delivery of the Common Shares to be
sold by such Selling Stockholders to the Underwriters hereunder.
SECTION 8
CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS
The obligations of the several Underwriters to purchase and pay for the
Firm Common Shares on the First Closing Date and the Optional Common Shares on
the Second Closing Date shall be subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Stockholders herein
set forth as of the date hereof and as of the First Closing Date or the Second
Closing Date, as the case may be, to the accuracy of the statements of Company
officers and the Selling Stockholders made pursuant to the provisions hereof, to
the performance by the Company
-16-
and the Selling Stockholders of their respective obligations hereunder, and
to the following additional conditions:
(a) The Registration Statement shall have become effective not later than
5:00 p.m. (or in the case of a registration statement filed pursuant to
Rule 462(b) of the Rules and Regulations relating to the Common Shares, not
later than 10:00 p.m.), Washington, D.C. Time, on the date of this Agreement, or
at such later time as shall have been consented to by you; if the filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b) of
the Rules and Regulations, the Prospectus shall have been filed in the manner
and within the time period required by Rule 424(b) of the Rules and Regulations;
and prior to such Closing Date, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or shall be pending or, to the knowledge of
the Company, the Selling Stockholders or you, shall be contemplated by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall have been
complied with to your reasonable satisfaction.
(b) You shall be reasonably satisfied that since the respective dates as
of which information is given in the Registration Statement and Prospectus,
(i) there shall not have been any change in the capital stock of the Company or
any of its subsidiaries or any material change in the indebtedness (other than
in the ordinary course of business) of the Company or any of its subsidiaries
other than as set forth in or contemplated by the Registration Statement and the
Prospectus, (ii) except as set forth in or contemplated by the Registration
Statement or the Prospectus, no material verbal or written agreement or other
transaction shall have been entered into by the Company or any of its
subsidiaries, which is not in the ordinary course of business or which could
result in a material reduction in the future earnings of the Company and its
subsidiaries, taken as a whole, (iii) no loss or damage (whether or not insured)
to the property of the Company or any of its subsidiaries shall have been
sustained which materially and adversely affects the condition (financial or
otherwise), business or results of operations of the Company and its
subsidiaries, taken as a whole, (iv) no legal or governmental action, suit or
proceeding affecting the Company or any of its subsidiaries which is materially
adverse to the Company and its subsidiaries, taken as a whole, or which
adversely affects or may affect the transactions contemplated by this Agreement
shall have been instituted or threatened and (v) there shall not have been any
material adverse change in the condition (financial or otherwise), business,
management or results of operations of the Company and its subsidiaries, taken
as a whole, which makes it impractical or inadvisable in the reasonable judgment
of the Representatives to proceed with the public offering or purchase the
Common Shares as contemplated hereby.
(c) There shall have been furnished to you, as Representatives of the
Underwriters, on each Closing Date, in form and substance reasonably
satisfactory to you, except as otherwise expressly provided below:
(i) An opinion of Wise & ▇▇▇▇▇▇▇ LLP, counsel for the Company,
addressed to the Underwriters and dated the First Closing Date, or the
Second Closing Date, as the case may be, to the effect that:
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(1) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, is duly qualified
to do business as a foreign corporation and is in good standing in all
other jurisdictions where the ownership or leasing of properties or
the conduct of its business requires such qualification, except for
jurisdictions in which the failure to so qualify would not have a
material adverse effect on the Company and its subsidiaries, and has
full corporate power and authority to own its properties and conduct
its business as described in the Registration Statement;
(2) The authorized, issued and outstanding capital stock of
the Company is as set forth under the caption "Capitalization" in the
Prospectus; all necessary and proper corporate proceedings have been
taken in order to authorize validly such authorized Common Stock; all
outstanding shares of Common Stock (including the Firm Common Shares
and any Optional Common Shares) have been duly and validly issued, are
fully paid and nonassessable, were issued in compliance with federal
and state securities laws, to such counsel's knowledge were not issued
in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase any securities and conform in all material
respects to the description thereof contained in the Prospectus;
without limiting the foregoing, to such counsel's knowledge there are
no preemptive or other rights to subscribe for or purchase any of the
Common Shares to be sold by the Company hereunder;
(3) All of the issued and outstanding shares of the
Company's subsidiaries have been duly and validly authorized and
issued, are fully paid and nonassessable and are owned beneficially by
the Company free and clear of all liens, encumbrances, equities,
claims, security interests, voting trusts or other defects of title
whatsoever;
(4) The certificates evidencing the Common Shares to be
delivered hereunder are in due and proper form under Delaware law, and
when duly countersigned by the Company's transfer agent and registrar,
and delivered to you or upon your order against payment of the agreed
consideration therefor in accordance with the provisions of this
Agreement, the Common Shares represented thereby will be duly
authorized and validly issued, fully paid and nonassessable, will not
have been issued in violation of or subject to any preemptive rights
or other rights known to such counsel to subscribe for or purchase
securities and will conform in all respects to the description thereof
contained in the Prospectus;
(5) Except as disclosed in or specifically contemplated by
the Prospectus, to such counsel's knowledge, there are no outstanding
options, warrants or other rights calling for the issuance of, and no
commitments, plans or arrangements to issue, any shares of capital
stock of the Company or any security convertible into or exchangeable
for capital stock of the Company;
-18-
(6) The execution and performance of this Agreement and the
consummation of the transactions herein contemplated will not conflict
with, result in the breach of, or constitute, either by itself or upon
notice or the passage of time or both, a default under, any agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit
or other instrument known to such counsel to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of its or their property may be bound or affected
which is material to the Company and its subsidiaries, or violate any
of the provisions of the certificate of incorporation or bylaws, or
other organizational documents, of the Company or any of its
subsidiaries or, so far as is known to such counsel, violate any
statute, judgment, decree, order, rule or regulation of any court or
governmental body having jurisdiction over the Company or any of its
subsidiaries or any of its or their property;
(7) Neither the Company nor any subsidiary is in violation
of its certificate of incorporation or bylaws, or other organizational
documents, or to such counsel's knowledge, in breach of or default
with respect to any provision of any agreement, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other
instrument known to such counsel to which the Company or any such
subsidiary is a party or by which it or any of its properties may be
bound or affected, except where such default would not materially
adversely affect the Company and its subsidiaries;
(8) To such counsel's knowledge, no holders of securities
of the Company have rights which have not been waived or satisfied to
the registration of shares of Common Stock or other securities,
because of the filing of the Registration Statement by the Company or
the offering contemplated hereby;
(9) The information set forth in the Prospectus under the
captions "Risk Factors - Factors Inhibiting Takeover," "Risk Factors -
Shares Eligible for Future Sale," "Capitalization," "Business -
Intellectual Property Rights," "Management - Executive Compensation,"
"Management - Director Compensation," "Management - Employee Benefit
Plans," "Management - Indemnification of Directors and Executive
Officers and Limitation of Liability," "Certain Transactions,"
"Principal and Selling Stockholders," "Description of Capital Stock"
and "Shares Eligible for Future Sale," insofar as such information
relates to issuances of securities of the Company or purports to
summarize provisions of any contract, plan or law, fairly describes
such issuances or provisions.
In rendering such opinion, such counsel may rely as to matters of
local law or the laws of a state other than California or the corporate law
of the State of Delaware, on opinions of local counsel, and as to matters
of fact, on certificates of officers of the Company and of governmental
officials, without verification except as specified, in which case their
opinion is to state that they are so doing and that the Underwriters and
their counsel are justified in relying on such opinions or certificates.
Such counsel shall also include a statement to the effect that nothing has
come to such counsel's attention that would lead such counsel to
-19-
believe that either at the effective date of the Registration Statement or
at the applicable Closing Date the Registration Statement or the
Prospectus, or any such amendment or supplement, contains any untrue
statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(ii) An opinion of Fenwick & West LLP, special counsel to the
Company and the Selling Stockholders (other than Selling Stockholder
Pacific Media Development, Inc. ("Pacific Media")), addressed to the
Underwriters and dated the First Closing Date, or the Second Closing Date,
as the case may be, to the effect that:
(1) The Registration Statement has become effective under
the Act, and, to such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement or preventing the use
of the Prospectus has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated by the Commission;
any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) of the Rules and Regulations has been made in
the manner and within the time period required by such Rule 424(b);
(2) The Registration Statement, the Prospectus and each
amendment or supplement thereto (except for the financial statements
included therein and the financial data derived therefrom, as to which
such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the Rules and
Regulations;
(3) To such counsel's knowledge, there are no franchises,
leases, contracts, agreements or documents of a character required to
be disclosed in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
disclosed or filed, as required;
(4) To such counsel's knowledge, there are no legal or
governmental actions, suits or proceedings pending or threatened
against the Company which are required to be described in the
Prospectus which are not described as required;
(5) The Company has full right, power and authority to
enter into this Agreement and to sell and deliver the Common Shares to
be sold by it to the several Underwriters; this Agreement has been
duly and validly authorized by all necessary corporate action by the
Company, has been duly and validly executed and delivered by and on
behalf of the Company, and is a valid and binding agreement of the
Company in accordance with its terms, except as enforceability may be
limited by general equitable principles, bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally and except as to those provisions relating to indemnity or
contribution for liabilities arising under the Act as to which no
opinion need be expressed; and no approval, authorization, order,
consent, registration, filing, qualification, license or permit of or
with any court, regulatory, administrative or other
-20-
governmental body is required for the execution and delivery of this
Agreement by the Company or the performance by the Company of its
obligations pursuant to this Agreement, except such as have been
obtained and are in full force and effect under the Act and such as
may be required under applicable Blue Sky laws in connection with the
purchase and distribution of the Common Shares by the Underwriters
and the clearance of such offering with the NASD;
(6) To such counsel's knowledge, (a) this Agreement and the
Stockholders Agreement have been duly authorized, executed and
delivered by or on behalf of each of the Selling Stockholders (other
than Pacific Media) and (b) the Agent has been duly and validly
authorized to act as the custodian of the Common Shares to be sold by
each such Selling Stockholder; and the performance by the Selling
Stockholders (other than Pacific Media) of their respective
obligations pursuant to this Agreement and the Stockholders Agreement
will not result in a breach of, or constitute a default under, any
material indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other agreement
or instrument known to such counsel to which any of the Selling
Stockholders (other than Pacific Media) is a party or by which any of
the Selling Stockholders (other than Pacific Media) or any of their
properties may be bound, or violate any statute, judgment, decree,
order, rule or regulation known to such counsel of any court or
governmental body having jurisdiction over any of the Selling
Stockholders (other than Pacific Media) or any of their properties if
such breach or violation would adversely affect a Selling
Stockholder's ability to perform such Selling Stockholder's
obligations pursuant to this Agreement or the Stockholders Agreement;
and to such counsel's knowledge, no approval, authorization, order or
consent of any court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of this
Agreement or the Stockholders Agreement or the consummation by the
Selling Stockholders (other than Pacific Media) of the transactions
contemplated by this Agreement, except such as have been obtained and
are in full force and effect under the Act and such as may be required
under applicable Blue Sky laws in connection with the purchase and
distribution of the Common Shares by the Underwriters and the
clearance of such offering with the NASD;
(7) To such counsel's knowledge, the Selling Stockholders
(other than Pacific Media) have full right, power and authority to
enter into this Agreement and the Stockholders Agreement and to sell,
transfer and deliver the Common Shares to be sold on such Closing Date
by such Selling Stockholders hereunder and upon delivery of and
payment for the Common Shares to be sold by the Selling Stockholders
(other than Pacific Media) as provided in this Agreement and upon
registration of such Common Shares in the names of the Underwriters
(or their nominees) in the stock records of the Company, the
Underwriters will be the owners of such Common Shares, free and clear
of any adverse claim, provided that the Underwriters are purchasing
such Common Shares in good faith and without notice of any adverse
claim; and
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(8) To such counsel's knowledge, this Agreement and the
Stockholders Agreement are valid and binding agreements of each of the
Selling Stockholders (other than Pacific Media) in accordance with
their terms except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and
except with respect to those provisions relating to indemnities or
contributions for liabilities under the Act, as to which no opinion
need be expressed.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States, of the State of California
or the corporate laws of the State of Delaware upon opinions of local or
foreign counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to
the Representatives and to counsel for the Underwriters and the foregoing
opinion shall also state that counsel knows of no reason the Underwriters
are not entitled to rely upon the opinions of such local counsel. Counsel
may base the opinions set forth in paragraphs (6)-(8) above, solely upon
the representations and warranties contained in this Agreement, or
Stockholders Agreements executed by each Selling Securityholder, provided
that such counsel confirms that it has no reason to believe that such
representations or warranties are materially inaccurate.
In addition to the matters set forth above, counsel rendering the
foregoing opinion shall also include a statement to the effect that,
although it has not independently verified the accuracy or completeness of
the statements in the Registration Statement and the Prospectus, nothing
has come to the attention of such counsel that causes it to believe that
the Registration Statement (except as to the financial statements and the
financial data derived therefrom, as to which such counsel need not express
any opinion or belief) at the Effective Date contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
or that the Prospectus (except as to the financial statements and the
financial data derived therefrom, as to which such counsel need not express
any opinion or belief) at the Effective Date contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
or that the Prospectus (except as to the financial statements and the
financial data derived therefrom, as to which such counsel need not express
any opinion or belief) as of its date or at the Closing Date (or, if there
is a second closing, any later date on which Option Stock is purchased),
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statement
therein, in the light of the circumstances under which they were made, not
misleading. With respect to such statement, counsel may state that its
belief is based upon the procedures set forth therein, but is without
independent check or verification.
(iii) An opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq., counsel to
Pacific Media, addressed to the Underwriters and dated the First Closing
Date to the effect that:
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(1) To such counsel's knowledge, (a) this Agreement and the
Stockholders Agreement have been duly authorized, executed and
delivered by or on behalf of Pacific Media and (b) the Agent has been
duly and validly authorized to act as the custodian of the Common
Shares to be sold by Pacific Media; and the performance by Pacific
Media of its obligations pursuant to this Agreement and the
Stockholders Agreement will not result in a breach of, or constitute a
default under, any material indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease, franchise, license or
other agreement or instrument known to such counsel to which Pacific
Media is a party or by which Pacific Media or any of its properties
may be bound, or violate any statute, judgment, decree, order, rule or
regulation known to such counsel of any court or governmental body
having jurisdiction over Pacific Media or any of its properties if
such breach or violation would adversely affect a Pacific Media's
ability to perform such Pacific Media's obligations pursuant to this
Agreement or the Stockholders Agreement; and to such counsel's
knowledge, no approval, authorization, order or consent of any court,
regulatory body, administrative agency or other governmental body is
required for the execution and delivery of this Agreement or the
Stockholders Agreement or the consummation by the Pacific Media of the
transactions contemplated by this Agreement, except such as have been
obtained and are in full force and effect under the Act and such as
may be required under the rules of the NASD and applicable Blue Sky
laws;
(2) To such counsel's knowledge, Pacific Media has full
right, power and authority to enter into this Agreement and the
Stockholders Agreement and to sell, transfer and deliver the Common
Shares to be sold on such Closing Date by Pacific Media hereunder and
upon delivery of and payment for the Common Shares to be sold by
Pacific Media as provided in this Agreement and upon registration of
such Common Shares in the names of the Underwriters (or their
nominees) in the stock records of the Company, the Underwriters will
be the owners of such Common Shares, free and clear of any adverse
claim, provided that the Underwriters are purchasing such Common
Shares in good faith and without notice of any adverse claim; and
(3) To such counsel's knowledge, this Agreement and the
Stockholders Agreement are valid and binding agreements of Pacific
Media in accordance with their terms except as enforceability may be
limited by general equitable principles, bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally and except with respect to those provisions relating to
indemnities or contributions for liabilities under the Act, as to
which no opinion need be expressed.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States, of the State of California
or the corporate laws of the State of Delaware upon opinions of local or
foreign counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to
the Representatives and to counsel for the Underwriters and the foregoing
opinion shall also state
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that counsel knows of no reason the Underwriters are not entitled to rely
upon the opinions of such local counsel.
(iv) An opinion of Skjerven, Morrill, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, for the Company's intellectual property counsel, addressed to the
Underwriters and dated the First Closing Date or the Second Closing Date,
as the case may be, to the effect that:
(1) To such counsel's knowledge, the Company owns all
patents, trademarks, trademark registrations, service marks, service
▇▇▇▇ registrations, trade names, maskworks, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as
being owned by it or necessary for the conduct of its business, and
such counsel is not aware of any claim to the contrary or any
challenge by any other person to the ownership rights of the Company
with respect to the foregoing;
(2) No fact has come to such counsel's attention that would
lead such counsel to believe that the patents presently issued and
held by the Company are not valid and enforceable.
(3) Such counsel is not aware of any material fact with
respect to the patent applications of the Company presently on file
that (a) would preclude the issuance of patents with respect to such
applications or (b) would lead such counsel to believe that such
patents when issued would not be valid and enforceable.
(4) Such counsel is not aware of any legal actions, claims
or proceedings pending or threatened against the Company alleging that
the Company has infringed or currently is infringing or otherwise
violating any patents rights, trademarks, service marks, trade name
rights, maskworks, copyrights, licenses, inventions, trade secrets and
similar rights owned by any other person or entity and no fact has
come to such counsel's attention that any of the Company's present or
proposed products or processes described in the Prospectus have
infringed or currently infringe any patents, trademarks, trademark
registrations, service marks, service ▇▇▇▇ registrations, trade names,
maskworks, copyrights, licenses, inventions, trade secrets and rights
owned by any other person or entity.
(5) Such counsel has reviewed the descriptions of patents
and patent applications under the captions "Risk Factors -- Dependence
on Proprietary Technology" and "Business -- Intellectual Property
Rights" in the Registration Statement and Prospectus, and, to the
extent they constitute matters of law or legal conclusions, these
descriptions are true and correct in all material respects and fairly
present the patent situation of the Company; and
(6) Nothing has come to such counsel's attention that
causes such counsel to believe that, as of the date the Registration
Statement became effective and as of the date of such opinion, the
statements set forth under the captions "Risk Factors --
-24-
Dependence on Proprietary Technology" and "Business -- Intellectual
Property Rights" in the Registration Statement and Prospectus contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(v) Such opinion or opinions of Wilson, Sonsini, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ PC, counsel for the Underwriters dated the First Closing Date or the
Second Closing Date, as the case may be, with respect to the incorporation
of the Company, the sufficiency of all corporate proceedings and other
legal matters relating to this Agreement, the validity of the Common
Shares, the Registration Statement and the Prospectus and other related
matters as you may reasonably require, and the Company and the Selling
Stockholders shall have furnished to such counsel such documents and shall
have provided to them such papers and records as they may reasonably
request for the purpose of enabling them to pass upon such matters. In
connection with such opinions, such counsel may rely on representations or
certificates of officers of the Company and governmental officials.
(vi) A certificate of the Company executed by the Chairman of the
Board or President and the chief financial or accounting officer of the
Company, dated the First Closing Date or the Second Closing Date, as the
case may be, to the effect that:
(1) The representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of the
date of this Agreement and as of the First Closing Date or the Second
Closing Date, as the case may be, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied on or prior to such Closing Date;
(2) To their knowledge (a) the Commission has not issued
any order preventing or suspending the use of the Prospectus or any
Preliminary Prospectus filed as a part of the Registration Statement
or any amendment thereto; (b) no stop order suspending the
effectiveness of the Registration Statement has been issued; and
(c) no proceedings for that purpose have been instituted or are
pending or contemplated under the Act;
(3) Each of the respective signers of the certificate has
carefully examined the Registration Statement and the Prospectus; in
his opinion and to the best of his knowledge, neither the Registration
Statement nor the Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(4) Since the initial date on which the Registration
Statement was filed, no agreement, written or oral, transaction or
event has occurred which is required to be set forth in an amendment
to the Registration Statement or in a supplement to or
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amendment of any prospectus which has not been disclosed in such a
supplement or amendment;
(5) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as
disclosed in or contemplated by the Prospectus, (a) there has not been
any material adverse change or a development involving a material
adverse change in the condition (financial or otherwise), business,
properties, results of operations or management of the Company and its
subsidiaries, taken as a whole, (b) no legal or governmental action,
suit or proceeding is pending or threatened against the Company or any
of its subsidiaries which is material to the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, or which may
adversely affect the transactions contemplated by this Agreement, (c)
neither the Company nor any of its subsidiaries has entered into any
verbal or written agreement or other transaction which is not in the
ordinary course of business or which could result in a material
reduction in the future net income of the Company and its
subsidiaries, taken as a whole, or incurred any material liability or
obligation, direct, contingent or indirect, made any change in its
capital stock, made any material change in its short-term debt or
funded debt or repurchased or otherwise acquired any of the Company's
capital stock, and (d) the Company has not declared or paid any
dividend, or made any other distribution, upon its outstanding capital
stock payable to stockholders of record on a date prior to the First
Closing Date or Second Closing Date; and
(6) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus and except as
disclosed in or contemplated by the Prospectus, the Company and its
subsidiaries have not sustained a material loss or damage by strike,
fire, flood, windstorm, accident or other calamity (whether or not
insured).
(vii) On the First Closing Date or the Second Closing Date,
as the case may be, a certificate, dated such Closing Date and addressed to
you, signed by or on behalf of each of the Selling Stockholders to the
effect that the representations and warranties of such Selling Stockholder
in Section 3 of this Agreement are true and correct, as if made at and as
of the First Closing Date or the Second Closing Date, as the case may be,
and that such Selling Stockholder has complied with all the agreements and
satisfied all the conditions on his part to be performed or satisfied prior
to the First Closing Date or the Second Closing Date, as the case may be.
(viii) On the date on which this Agreement is executed and
also on the First Closing Date and the Second Closing Date a letter
addressed to you, as Representatives of the Underwriters, from KPMG Peat
Marwick, independent accountants, the first one to be dated the date of
this Agreement, the second one to be dated the First Closing Date and the
third one (in the event of a Second Closing) to be dated the Second Closing
Date, in form and substance reasonable satisfactory to you.
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(ix) On or before the First Closing Date, letters from each of
the Selling Stockholders, each holder of _____ percent or more of the
Company's Common Stock and each director and officer of the Company, in
form and substance satisfactory to you, confirming the undersigned will
not, without the prior written consent of ▇▇▇▇▇▇▇▇▇▇ Securities (which
consent may be withheld in its sole discretion), directly or indirectly,
sell, offer, contract or grant any option to sell, make any short sale
(including without limitation any "short vs. the box"), pledge, transfer,
establish an open "put equivalent position" within the meaning of
Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended, or
otherwise dispose of any shares of Common Stock, options or warrants to
acquire shares of Common Stock, or securities exchangeable or exercisable
for or convertible into shares of Common Stock currently or hereafter owned
either of record or beneficially (as defined in Rule 13d-3 under Securities
Exchange Act of 1934, as amended) by the undersigned, or publicly announce
the undersigned's intention to do any of the foregoing, for a period
commencing on the date hereof and continuing to a date 180 days after the
first date any of the Common Stock to be sold in the Offering is released
by you for sale to the public.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and to Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the Underwriters.
The Company shall furnish you with such manually signed or conformed copies of
such opinions, certificates, letters and documents as you reasonably request.
Any certificate signed by any officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the
statements made therein.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification by you as Representatives to the
Company and the Selling Stockholders without liability on the part of any
Underwriter or the Company, the Company or the Selling Stockholders except for
the expenses to be paid or reimbursed by the Company and by the Selling
Stockholders pursuant to Sections 7 and 9 hereof and except to the extent
provided in Section 11 hereof.
SECTION 9
REIMBURSEMENT OF UNDERWRITERS' EXPENSES
Notwithstanding any other provisions hereof, if this Agreement shall be
terminated by you pursuant to Section 8, or if the sale to the Underwriters of
the Common Shares at the First Closing is not consummated because of any
refusal, inability or failure on the part of the Company or the Selling
Stockholders to perform any agreement herein or to comply with any provision
hereof, the Company agrees to reimburse you and the other Underwriters upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by you and them in connection with the proposed purchase and the sale of the
Common Shares, including, but not limited to, reasonable fees and disbursements
of counsel, printing expenses, travel expenses, postage, telegraph charges and
telephone charges relating
-27-
directly to the offering contemplated by the Prospectus. Any such
termination shall be without liability of any party to any other party except
that the provisions of this Section, Section 7 and Section 11 shall at all
times be effective and shall apply.
SECTION 10
EFFECTIVENESS OF REGISTRATION STATEMENT
You, the Company and the Selling Stockholders will use your, its and their
respective best efforts to cause the Registration Statement to become effective,
to prevent the issuance of any stop order suspending the effectiveness of the
Registration Statement and, if such stop order be issued, to obtain as soon as
possible the lifting thereof.
SECTION 11
INDEMNIFICATION
(a) The Company, Pacific Media and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (each of Pacific Media
and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ may be referred to herein as an "Indemnifying Stockholder"
and collectively they may be referred to as the "Indemnifying Stockholders"),
severally and not jointly, agree to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of the
Act against any losses, claims, damages, liabilities or expenses, joint or
several, to which such Underwriter or such controlling person may become
subject, under the Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company and a majority in
interest of the Indemnifying Stockholders) insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state in
any of them a material fact required to be stated therein or necessary to make
the statements in any of them not misleading, or arise out of or are based in
whole or in part, in the case of the Company, on any inaccuracy in the
representations and warranties of the Company contained herein or any failure of
the Company to perform its obligations hereunder or under law or, in the case of
an Indemnifying Stockholder, on any inaccuracy in the representations or
warranties of such Indemnifying Stockholder contained herein or any failure of
such Indemnifying Stockholder to perform its obligations hereunder or under law;
and will reimburse each Underwriter and each such controlling person for any
legal and other expenses as such expenses are reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that neither the Company nor an
Indemnifying Stockholder will be liable in any such case to the extent that any
such loss, claim, damage, liability or expense arises out of or is based upon an
untrue
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statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto in reliance upon and in conformity with
the information furnished to the Company pursuant to Section 4 hereof; and
provided further that, with respect to any untrue statement or omission or
alleged untrue statement or omission made in any Preliminary Prospectus, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such loss, claim,
damage or liability purchased Common Shares (or to the benefit of any such
person controlling such Underwriter) to the extent that any such loss, claim,
damage, liability or expense of such Underwriter or controlling person results
from the fact that a copy of the Prospectus was not sent or given to such person
at or prior to the written confirmation of the sale of such Common Shares to
such person as required by the Act, and if the untrue statement or omission
concerned has been corrected in the Prospectus, unless such failure is the
result of noncompliance by the Company with Section 6(e) hereof.
Notwithstanding the foregoing, the Indemnifying Stockholders shall not be
required to provide indemnification pursuant to this Section 11(a) unless the
Underwriter or controlling person seeking indemnification shall have first made
a written demand for payment to the Company with respect to any losses, claims,
damages, liabilities or expenses for which the Company and the Indemnifying
Stockholders are required to indemnify the Underwriters pursuant to this
Section 11(a) and the Company shall have failed to make such demanded payment
within one hundred twenty (120) days after receipt thereof. The Company and the
Indemnifying Stockholders may agree, as among themselves and without limiting
the rights of the Underwriters under this Agreement, as to their respective
amounts of such liability for which they each shall be responsible. [The
Company and Pacific Media confirm that they have so agreed pursuant to a
Registration Right Agreement dated as of June 12, 1991.] In addition to its
other obligations under this Section 11(a), the Company and the Indemnifying
Stockholders, severally and not jointly, agree that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, or any inaccuracy in the representations and
warranties of the Company (in the case of the Company) or an Indemnifying
Stockholder (in the case of such Indemnifying Stockholder) herein or failure to
perform its obligations hereunder, all as described in this Section 11(a) and
subject to the limitations set forth in this Section 11(a), they will reimburse
each Underwriter on a quarterly basis for all reasonable legal or other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
or the Indemnifying Stockholders' obligation to reimburse each Underwriter for
such expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Company or the Indemnifying Stockholders as
applicable, together with interest, compounded daily, determined on the basis of
the prime rate (or other commercial lending rate for borrowers of the highest
credit standing) announced from time to time by Bank of America NT&SA, San
Francisco, California (the "Prime Rate"). Any such interim reimbursement
payments which are not made to an Underwriter within 30 days of a request for
reimbursement, shall bear interest at the Prime Rate from, in the case of the
Company, the date of such request and, in the case of the Indemnifying
Stockholders, one hundred twenty (120) days after the date of such request.
This indemnity
-29-
agreement will be in addition to any liability which the Company or the
Indemnifying Stockholders may otherwise have.
(b) Each of the Selling Stockholders other than the Indemnifying
Stockholders, severally and not jointly, agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of the Act against any losses, claims, damages, liabilities or
expenses, joint or several, to which such Underwriter or such controlling person
may become subject, under the Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the and the Selling Stockholders holding a majority of the Common
Shares being sold by the Selling Stockholders other than the Indemnifying
Stockholders pursuant to this Agreement), insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state in
any of them a material fact required to be stated therein or necessary to make
the statements in any of them not misleading in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
in reliance upon and in conformity with information furnished by such Selling
Stockholder, or (ii) arise out of or are based in whole or in part, on any
inaccuracy in the representations or warranties of such Selling Stockholder
contained herein or any failure of such Selling Stockholder to perform its
obligations hereunder or under law; and will reimburse each Underwriter and each
such controlling person for any legal and other expenses as such expenses are
reasonably incurred by such Underwriter or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that, with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any Preliminary Prospectus, the indemnity agreement contained
in this subsection (b) shall not inure to the benefit of any Underwriter from
whom the person asserting any such loss, claim, damage or liability purchased
Common Shares (or to the benefit of any such person controlling such
Underwriter) to the extent that any such loss, claim, damage, liability or
expense of such Underwriter or controlling person results from the fact that a
copy of the Prospectus was not sent or given to such person at or prior to the
written confirmation of the sale of such Common Shares to such person as
required by the Act, and if the untrue statement or omission concerned has been
corrected in the Prospectus, unless such failure is the result of noncompliance
by the Company with Section 6(e) hereof. In addition to its other obligations
under this Section 11(b), each Selling Stockholder other than the Indemnifying
Stockholders, severally and not jointly, agrees that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any such statement or omission, or any
alleged statement or omission, or any inaccuracy in the representations and
warranties of any Selling Stockholder (in the case of such Selling Stockholder)
herein or failure to perform its obligations hereunder, all as described in this
Section 11(b) and subject to the limitations set forth in this Section 11(b),
they will reimburse each Underwriter on a quarterly basis for all reasonable
legal or other expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other proceeding,
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notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Selling Stockholder's obligation to reimburse each
Underwriter for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, each Underwriter shall promptly return it to the Selling Stockholders,
as applicable, together with interest, compounded daily, determined on the basis
of the Prime Rate. Any such interim reimbursement payments which are not made
to an Underwriter within 30 days of a request for reimbursement, shall bear
interest at the Prime Rate from the date of such request. This indemnity
agreement will be in addition to any liability which the Selling Stockholders
may otherwise have.
(c) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, the Selling Stockholders and each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Act, against any
losses, claims, damages, liabilities or expenses, joint or several, to which the
Company, or any such director, officer, Selling Stockholder or controlling
person may become subject, under the Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with the information furnished to the Company pursuant to Section 4
hereof; and will reimburse the Company, or any such director, officer, Selling
Stockholder or controlling person for any legal and other expenses as such
expenses are reasonably incurred by the Company, or any such director, officer,
Selling Stockholder or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. In addition to its other obligations under this
Section 11(c), each Underwriter severally agrees that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 11(c) which relates to
information furnished to the Company pursuant to Section 4 hereof, it will
reimburse the Company (and, to the extent applicable, each officer, director,
Selling Stockholder or controlling person) on a quarterly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company (and, to
the extent applicable, each officer, director, Selling Stockholder or
controlling person) for such expenses and the possibility that such payments
might later be held to have been improper by a court of competent jurisdiction.
To the extent that any such interim reimbursement payment is so held to have
been improper, the Company (and, to the extent applicable, each officer,
director, Selling Stockholder or controlling person) shall
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promptly return it to the Underwriters together with interest, compounded
daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company (and, to the extent
applicable, each officer, director, controlling person or Selling
Stockholder) within 30 days of a request for reimbursement, shall bear
interest at the Prime Rate from the date of such request. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(d) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section or to the
extent that it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with all other indemnifying parties similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in accordance
with the proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel, approved by the Representatives in the case of
paragraph (a) or (b), representing the indemnified parties who are parties to
such action) or (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, in
each of which cases the reasonable fees and expenses of counsel shall be at the
expense of the indemnifying party.
(e) If the indemnification provided for in this Section 11 is required by
its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under paragraphs (a), (b),
(c) or (d) in respect of any losses, claims, damages, liabilities or expenses
referred to herein, then each applicable indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of any losses,
claims, damages, liabilities or expenses referred to herein (i) in such
proportion as is appropriate to reflect the relative benefits received by the
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Company and the Selling Stockholders, on the one hand, and the Underwriters, on
the other hand, from the offering of the Common 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 the Company and the
Selling Stockholders, on the one hand, and the Underwriters, on the other hand,
in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company and
the Selling Stockholders, on the one hand, and the Underwriters, on the other
hand, shall be deemed to be in the same proportion, in the case of the Company
and the Selling Stockholders, as the total price paid to the Company and to the
Selling Stockholders, respectively, for the Common Shares sold by them to the
Underwriters (net of underwriting commissions but before deducting expenses),
and in the case of the Underwriters as the underwriting commissions received by
them bears to the total of such amounts paid to the Company and to the Selling
Stockholders and received by the Underwriters as underwriting commissions. The
relative fault of the Company and the Selling Stockholders, on the one hand, and
the Underwriters, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact or the inaccurate
or the alleged inaccurate representation and/or warranty relates to information
supplied by the Company, the Selling Stockholders or 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, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in subparagraph (d) of this Section 11, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in subparagraph (d) of
this Section 11 with respect to notice of commencement of any action shall apply
if a claim for contribution is to be made under this subparagraph (e); provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under subparagraph (d) for purposes of
indemnification. The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 11 were determined solely by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding the
provisions of this Section 11, no Underwriter shall be required to contribute
any amount in excess of the amount of the total underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 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.
(f) It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in Sections 11(a), 11(b) and 11(c)
hereof, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
under the provisions of the Constitution and Rules of the
-33-
Board of Governors of the New York Stock Exchange, Inc. or pursuant to the
Code of Arbitration Procedure of the NASD. Any such arbitration must be
commenced by service of a written demand for arbitration or written notice of
intention to arbitrate, therein electing the arbitration tribunal. In the
event that the party demanding arbitration does not make such designation of
an arbitration tribunal in such demand or notice, then the party responding
to said demand or notice is authorized to do so. Such an arbitration would
be limited to the operation of the interim reimbursement provisions contained
in Sections 11(a), 11(b) and 11(c) hereof and would not resolve the ultimate
propriety or enforceability of the obligation to reimburse expenses which is
created by the provisions of such Sections 11(a), 11(b) and 11(c) hereof.
(g) The liability of a Selling Stockholder for a breach of a
representation or warranty set forth in Section 3 hereof or pursuant to this
Section 11 shall be limited to an amount equal to the product obtained by
multiplying the number of shares sold by such Selling Stockholder pursuant to
this Agreement by the price set forth in Section 5 above.
SECTION 12
DEFAULT OF UNDERWRITERS
It shall be a condition to this Agreement and the obligation of the Company
and the Selling Stockholders to sell and deliver the Common Shares hereunder,
and of each Underwriter to purchase the Common Shares in the manner as described
herein, that, except as hereinafter in this paragraph provided, each of the
Underwriters shall purchase and pay for all the Common Shares agreed to be
purchased by such Underwriter hereunder upon tender to the Representatives of
all such shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in their obligations to purchase Common Shares hereunder on
either the First or Second Closing Date and the aggregate number of Common
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase on such Closing Date does not exceed 10% of the total number of Common
Shares which the Underwriters are obligated to purchase on such Closing Date,
the non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Common Shares which such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of Common
Shares with respect to which such default occurs is more than the above
percentage and arrangements satisfactory to the Representatives and the Company
for the purchase of such Common Shares by other persons are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Company or the Selling
Stockholders except for the expenses to be paid by the Company and the Selling
Stockholders pursuant to Section 7 hereof and except to the extent provided in
Section 11 hereof.
In the event that Common Shares to which a default relates are to be
purchased by the non-defaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than five business days in
order that the necessary changes in the Registration Statement, Prospectus and
any
-34-
other documents, as well as any other arrangements, may be effected. As used
in this Agreement, the term "Underwriter" includes any person substituted for
an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
SECTION 13
EFFECTIVE DATE
This Agreement shall become effective immediately as to Sections 7, 9, 11,
13, 14 and 16 and, as to all other provisions, (i) if at the time of execution
of this Agreement the Registration Statement has not become effective, at 2:00
p.m., California time, on the first full business day following the
effectiveness of the Registration Statement, or (ii) if at the time of
execution of this Agreement the Registration Statement has been declared
effective, at 2:00 p.m., California time, on the first full business day
following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine on and by notice to the
Company or by release of any of the Common Shares for sale to the public. For
the purposes of this Section 13, the Common Shares shall be deemed to have been
so released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of telegrams (i)
advising Underwriters that the Common Shares are released for public offering
or (ii) offering the Common Shares for sale to securities dealers, whichever
may occur first.
SECTION 14
TERMINATION
Without limiting the right to terminate this Agreement pursuant to any
other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you and
the Selling Stockholders or by you by notice to the Company and the Selling
Stockholders at any time prior to the time this Agreement shall become
effective as to all its provisions, and any such termination shall be without
liability on the part of the Company or the Selling Stockholders to any
Underwriter (except for the expenses to be paid or reimbursed by the Company
and the Selling Stockholders pursuant to Sections 7 and 9 hereof and except to
the extent provided in Section 11 hereof) or of any Underwriter to the Company
or the Selling Stockholders (except to the extent provided in Section 11
hereof).
(b) This Agreement may also be terminated by you prior to the First
Closing Date by notice to the Company (i) if additional material governmental
restrictions, not in force and effect on the date hereof, shall have been
imposed upon trading in securities generally or minimum or maximum prices shall
have been generally established on the New York Stock Exchange or on the
American Stock Exchange or in the Nasdaq National Market, or trading in
securities generally shall have been
-35-
suspended on either such Exchange or in the Nasdaq National Market, or a
general banking moratorium shall have been established by federal, New York or
California authorities, (ii) if an outbreak of major hostilities or other
national or international calamity or any substantial change in political,
financial or economic conditions shall have occurred or shall have accelerated
or escalated to such an extent, as, in the reasonable judgment of the
Representatives, to affect materially and adversely the marketability of the
Common Shares, (iii) if any adverse event shall have occurred or shall exist
which makes untrue or incorrect in any material respect any statement or
information contained in the Registration Statement or Prospectus or which is
not reflected in the Registration Statement or Prospectus but should be
reflected therein in order to make the statements or information contained
therein not misleading in any material respect, or (iv) if there shall be any
action, suit or proceeding pending or threatened, or there shall have been any
development or prospective development involving particularly the business or
properties or securities of the Company or any of its subsidiaries or the
transactions contemplated by this Agreement, which, in the reasonable judgment
of the Representatives, may materially and adversely affect the business or net
income of the Company and its subsidiaries, taken as a whole, and makes it
impracticable or inadvisable to offer or sell the Common Shares. Any
termination pursuant to this subsection (b) shall without liability on the part
of any Underwriter to the Company or the Selling Stockholders or on the part of
the Company or the Selling Stockholders to any Underwriter (except for expenses
to be paid or reimbursed by the Company and the Selling Stockholders pursuant
to Sections 7 and 9 hereof and except to the extent provided in Section 11
hereof).
SECTION 15
FAILURE OF THE SELLING STOCKHOLDERS TO SELL AND DELIVER
If one or more of the Selling Stockholders shall fail to sell and deliver
to the Underwriters the Common Shares to be sold and delivered by such Selling
Stockholders at the First Closing Date under the terms of this Agreement, then
the Underwriters may at their option, by written notice from you to the Company
and the Selling Stockholders, either (i) terminate this Agreement without any
liability on the part of any Underwriter or, except as provided in Sections 7, 9
and 11 hereof, the Company or the Selling Stockholders, or (ii) purchase the
shares which the Company and other Selling Stockholders have agreed to sell and
deliver in accordance with the terms hereof. In the event of a failure by one
or more of the Selling Stockholders to sell and deliver as referred to in this
Section, either you or the Company shall have the right to postpone the Closing
Date for a period not exceeding seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected.
-36-
SECTION 16
REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY
The respective indemnities, agreements, representations, warranties and
other statements of the Company, of its officers, of the Selling Stockholders
and of the several Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholders,
as the case may be, and will survive delivery of and payment for the Common
Shares sold hereunder and any termination of this Agreement.
SECTION 17
NOTICES
All communications hereunder shall be in writing and, (a) if sent to the
Representatives shall be mailed, delivered or telegraphed and confirmed to you
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, with a copy to Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ PC, at ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Esq.; and (b) if sent to the Company shall be mailed, delivered or telegraphed
and confirmed to the Company at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ with a copy to Fenwick & West LLP, at
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
III, Esq. and (c) if sent to the Selling Stockholders shall be mailed,
delivered or telegraphed and confirmed to (i) the Company at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ with a
copy to Fenwick & West LLP, at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III, Esq. and (ii) Pacific Media
Development, Inc., ▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, 3-chome,
▇▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇: _________ with a copy
to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇, Esq., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Company, the Selling Stockholders or you may change the
address for receipt of communications hereunder by giving notice to the others.
SECTION 18
SUCCESSORS
This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Underwriters pursuant to Section 12
hereof, and to the benefit of the officers and directors and controlling
persons referred to in Section 11, and in each case their respective
successors, personal representatives and assigns, and no other person will have
any right or obligation hereunder. No such assignment shall relieve any party
of its obligations hereunder. The term
-37-
"successors" shall not include any purchaser of the Common Shares as such from
any of the Underwriters merely by reason of such purchase.
SECTION 19
REPRESENTATION OF UNDERWRITERS
You will act as Representatives for the several Underwriters in connection
with all dealings hereunder, and any action under or in respect of this
Agreement taken by you jointly or by ▇▇▇▇▇▇▇▇▇▇ Securities, as Representatives,
will be binding upon all the Underwriters.
SECTION 20
PARTIAL UNENFORCEABILITY
The invalidity or unenforceability of any Section, paragraph or provision
of this Agreement shall not affect the validity or enforceability of any other
Section, paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
SECTION 21
APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the laws pertaining to conflicts of laws) of the State
of California.
SECTION 22
GENERAL
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in several counterparts, each one of
which shall be an original, and all of which shall constitute one and the same
document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties
-38-
only and will not affect the construction or interpretation of this Agreement.
This Agreement may be amended or modified, and the observance of any term of
this Agreement may be waived, only by a writing signed by the Company, the
Selling Stockholders and you.
Any person executing and delivering this Agreement as Attorney-in-fact for
the Selling Stockholders represents by so doing that he has been duly appointed
as Attorney-in-fact by such Selling Stockholders pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-fact to take
such action. Any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on all the Selling Stockholders.
-39-
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon
it will become a binding agreement among the Company, the Selling Stockholders
and the several Underwriters including you, all in accordance with its terms.
Very truly yours,
MACROVISION CORPORATION
By: ____________________________
▇▇▇▇ ▇. ▇▇▇▇, Chairman of the
Board of Directors and Chief
Executive Officer
SELLING STOCKHOLDERS
By: ____________________________
(Attorney-in-fact)
The foregoing Underwriting Agreement
is hereby confirmed and accepted by
us in San Francisco, California as of
the date first above written.
▇▇▇▇▇▇▇▇▇▇ SECURITIES
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇ & COMPANY
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By ▇▇▇▇▇▇▇▇▇▇ SECURITIES
By: ______________________________
-40-
SCHEDULE A
Number of Firm
Common Shares
NAME OF UNDERWRITER TO BE PURCHASED
------------------- ---------------
▇▇▇▇▇▇▇▇▇▇ Securities. . . . . . . . . . . .
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC. . . . . . . . . . . .
▇▇▇▇▇ & Company. . . . . . . . . . . . . . .
_____
TOTAL. . . . . . . . . . . . . . . 2,300,000
---------
---------
A-1
SCHEDULE B
Number of Firm Common
Shares to be Sold by
Name of Selling Stockholder Selling Stockholders
--------------------------- ---------------------
Pacific Media Development, Inc............................ 555,555
▇▇▇▇▇ ▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇ as Trustees of the
Prinn Family Trust...................................... 25,416
▇▇▇▇ ▇. ▇▇▇▇▇ Trust....................................... 1,388
▇▇▇ ▇. ▇▇▇▇▇ Trust........................................ 1,388
▇▇▇▇▇▇ ▇. ▇▇▇▇............................................ 22,222
▇▇▇▇ ▇. ▇▇▇▇▇▇▇........................................... 2,500
[add others]
-------
TOTAL............................................... 850,000
-------
-------
B-1
