Underwriting Agreement - ATG Inc. and Van Kasper & Co.
ATG Inc.
(a California corporation)
1,700,000 Shares of Common Stock
UNDERWRITING AGREEMENT
____________, 1998
VAN KASPER & COMPANY
As Representative of the several
Underwriters named in Schedule I
600 California Street, Suite 1700
San Francisco, California 94108-2704
Ladies and Gentlemen:
ATG Inc., a California corporation (the "Company"), proposes to issue and
sell to the several Underwriters named in Schedule I hereto (the "Underwriters")
1,700,000 shares (the "Firm Shares") of the Company's no par value Common Stock
(the "Common Stock"). In addition, the Company also proposes to grant to the
Underwriters an option to purchase up to an additional 255,000 shares of the
Common Stock on the terms and for the purposes set forth in Section 2(b) (the
"Option Shares"). The Firm Shares and any Option Shares purchased pursuant to
this Agreement are referred to below as the "Shares". Van Kasper & Company is
acting as representative of the several Underwriters and in that capacity is
referred to in this Agreement as the "Representative".
The Company hereby confirms its agreements with the several Underwriters as
set forth below.
1. Representations and Warranties of the Company. The Company hereby
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represents and warrants to and agrees with each Underwriter as follows:
(a) A Registration Statement (Registration No. 333-______) on Form S-
1 under the Securities Act of 1933, as amended (the "Securities Act"), including
such amendments to such Registration Statement as may have been required to the
date of this Agreement, relating to the Shares has been prepared by the Company
under and in conformity with the provisions of the Securities Act, the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder and has been filed with the Commission.
After the execution of this Agreement, the Company will file with the Commission
either (i) if such Registration Statement, as it may have been amended, has been
declared by the Commission to be effective under the Securities Act, either (A)
if the Company relies on Rule 434 of the
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Rules and Regulations, a Term Sheet (defined below) relating to the Shares, that
identifies the Preliminary Prospectus (defined below) that it supplements and
contains such information as is required or permitted by Rules 434, 430A and
424(b) of the Rules and Regulations or (B) if the Company does not rely on Rule
434, a prospectus in the form most recently included in an amendment to such
Registration Statement (or, if no such amendment has been filed, in such
Registration Statement), with such changes or insertions as are required by Rule
430A of the Rules and Regulations or permitted by Rule 424(b) of the Rules and
Regulations, and in the case of either (i)(A) or (i)(B) of this sentence, as has
been provided to and approved by the Representative prior to the execution of
this Agreement, or (ii) if such Registration Statement, as it may have been
amended, has not been declared by the Commission to be effective pursuant to
Section 8 of the Securities Act, an amendment to such Registration Statement,
including a form of prospectus, a copy of which amendment has been furnished to
and approved by the Representative prior to the execution of this Agreement. As
used in this Agreement, the term "Registration Statement" means such
Registration Statement, including all financial schedules and exhibits thereto
and including any information omitted therefrom pursuant to Rule 430A of the
Rules and Regulations and included in the Prospectus (defined below), in the
form in which it became effective from and after the time it became effective,
and any Registration Statement filed pursuant to Rule 462(b) of the Rules and
Regulations with respect to the Common Stock (a "Rule 462(b) Registration
Statement"), and, in the event of any amendment thereto after the effective date
of such Registration Statement (the "Effective Date"), shall also mean (from and
after the effectiveness of such amendment) such registration statement as so
amended (including any 462(b) Registration Statement); the term "Preliminary
Prospectus" means each prospectus subject to completion filed with such
registration statement or any amendment thereto (including the prospectus
subject to completion, if any, included in the Registration Statement or any
amendment thereto at the time it was or is declared effective); the term
"Prospectus" means:
(A) if the Company relies on Rule 434, the Term Sheet relating
to the Shares that is first filed pursuant to Rule 424(b)(7), together with the
Preliminary Prospectus identified therein that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434, the prospectus
first filed with the Commission pursuant to Rule 424(b); or
(C) if the Company does not rely on Rule 434 and if no
prospectus is required to be filed pursuant to Rule 424(b), the prospectus
included in the Registration Statement;
provided, that if any revised prospectus that is provided to the Underwriters by
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the Company for "use in connection with the offering of the Shares" differs from
the
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prospectus on file with the Commission at the time the Registration Statement
became or becomes, as the case may be, effective, whether or not the revised
prospectus is required to be filed with the Commission pursuant to Rule
424(b)(3) of the Rules and Regulations, the term "Prospectus" shall mean such
revised prospectus from and after the time it is first provided to the
Underwriters for such use. The term "Term Sheet" as used in this Agreement means
any term sheet that satisfies the requirements of Rule 434. Any reference in
this Agreement to the "date" of a prospectus that includes a Term Sheet means
the date of such Term Sheet.
(b) No order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary Prospectus or
the Prospectus has been issued and no proceedings for that purpose are pending
or, to the best knowledge of the Company, threatened or contemplated by the
Commission; no order suspending the sale of the Shares in any jurisdiction has
been issued and no proceedings for that purpose are pending or, to the best
knowledge of the Company, threatened or contemplated, and any request of the
Commission for additional information (to be included in the Registration
Statement, any Preliminary Prospectus or the Prospectus or otherwise) has been
complied with.
(c) When the Preliminary Prospectus was filed with the Commission it
(i) contained all statements required to be contained therein and complied in
all respects with the requirements of the Securities Act, the Rules and
Regulations, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission thereunder (the "Exchange
Act Rules and Regulations") and (ii) did not include any untrue statement of a
material fact or omit 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. When the Registration Statement or any amendment thereto
was or is declared effective, it (i) contained or will contain all statements
required to be contained therein and complied or will comply in all respects
with the requirements of the Securities Act, the Rules and Regulations, the
Exchange Act and the Exchange Act Rules and Regulations and (ii) did not or will
not include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading. When the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission pursuant to Rule 424(b) (or, if the Prospectus or such amendment or
supplement is not required to be so filed, when the Registration Statement or
the amendment thereto containing such amendment or supplement to the Prospectus
was or is declared effective) and at all times subsequent thereto up to and
including the Closing Date (defined below) and any date on which Option Shares
are to be purchased, the Prospectus, as amended or supplemented at any such
time, (i) contained or will contain all statements required to be contained
therein and complied or will comply in all respects with the requirements of the
Securities Act, the Rules and Regulations, the Exchange Act and the Exchange Act
Rules and Regulations,
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and (ii) did not or will not include any untrue statement of a material fact or
omit 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. The foregoing provisions of this paragraph (c) do not apply to
statements or omissions made in any Preliminary Prospectus, the Registration
Statement or any amendment thereto or the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representative
specifically for use therein.
(d) The subsidiaries (each, a "Subsidiary" and collectively the
"Subsidiaries") of the Company and the jurisdiction of incorporation of each
Subsidiary are listed on Exhibit A hereto. As used in this Agreement, the word
"subsidiary" means any corporation, partnership, joint venture, limited
liability company or other entity of which the Company directly or indirectly
owns 50 percent or more of the equity or that the Company directly or indirectly
controls. The Company has no subsidiaries other than the Subsidiaries listed on
Exhibit A to this Agreement, and except as set forth on such Exhibit, the
Company owns 100 percent of the issued and outstanding stock of each of the
Subsidiaries. Exhibit B hereto lists each entity in which the Company or any
Subsidiary holds an equity interest, whether as a shareholder, partner, member,
joint venturer or otherwise. Except as set forth on Exhibit B, neither the
Company nor any Subsidiary has any equity interest in any person.
(e) 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 the jurisdiction of its incorporation, has full power (corporate and
other) and authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) and as
currently being conducted and proposed to be conducted by it and is duly
qualified as a foreign corporation and in good standing in all jurisdictions in
which the character of the property owned or leased or the nature of the
business transacted by it makes qualification necessary (except where the
failure to be so qualified would not have a material adverse effect on the
business, properties, condition (financial or otherwise), results of operations
or prospects of the Company or such Subsidiary). Each of the Company and its
Subsidiaries is in possession of and operating in compliance with all
authorizations, licenses, certificates, consents, orders and permits from
federal, state, local, foreign and other governmental or regulatory authorities
that are material to the conduct of its business, all of which are valid and in
full force and effect.
(f) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), there has not been any
material loss or interference with the business of the Company or any Subsidiary
from fire, explosion, flood,
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earthquake or other calamity, whether or not covered by insurance, or from any
court or governmental action, order or decree, or any changes in the capital
stock or long-term debt of the Company or any Subsidiary, or any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company or any Subsidiary, or any material change, or a development known to the
Company that might cause or result in a material change, in or affecting the
business, properties, condition (financial or otherwise), results of operation
or prospects of the Company or any Subsidiary, whether or not arising from
transactions in the ordinary course of business, in each case other than as is
set forth in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), and
since such dates, except in the ordinary course of business, neither the Company
nor any Subsidiary has entered into any material transaction not described in
the Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(g) There is no agreement, contract, license, lease or other document
required to be described in the Registration Statement or the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus) or
to be filed as an exhibit to the Registration Statement which is not described
or filed as required. All contracts described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), if any,
are in full force and effect on the date hereof, and none of the Company, its
Subsidiaries or any other party thereto is in material breach of or default
under any such contract.
(h) The authorized and outstanding capital stock of the Company is
set forth in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), and the description of the Common Stock and of
the Shares therein conforms with and accurately describes the rights set forth
in the instruments defining the same. The Shares have been duly and validly
authorized and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued, fully paid and nonassessable, and the
issuance of the Shares is not subject to any preemptive or similar rights.
(i) All of the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable,
have been issued in compliance with all applicable federal and state securities
laws and were not issued in violation of and are not subject to any preemptive
rights or other rights to subscribe for or purchase securities of the Company.
The description of the Company's stock option, stock bonus and other stock plans
or arrangements and the options or other rights granted or exercised thereunder
or otherwise set forth in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights. Other than pursuant to this Agreement and the
options,
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warrants and rights to purchase or acquire the Common Stock described in the
Prospectus, there are no options, warrants or other rights outstanding to
subscribe for or purchase or acquire any shares of the Company's capital stock.
There are no preemptive rights applicable to any shares of capital stock of the
Company.
(j) All of the stock in the Subsidiaries owned by the Company as set
forth on Exhibit A is owned by the Company free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest of any type, kind or
nature. All of the outstanding stock of each of the Subsidiaries has been duly
authorized and validly issued and is fully paid and nonassessable, has been
issued in compliance with all applicable laws, including securities laws, and
was not issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities of such Subsidiary. There are no
options, warrants or other rights outstanding to subscribe for or purchase any
shares of the capital stock or registered capital of any Subsidiary and no
Subsidiary is subject to any obligation, commitment, plan, arrangement or court
or administrative order with respect to same. There are no preemptive rights
applicable to any shares of capital stock or registered capital of the
Subsidiaries.
(k) This Agreement has been duly authorized, executed and delivered
by, and constitutes the valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable federal or state
securities laws. Other than the registration rights set forth in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) there are no rights for or relating to the registration of any
capital stock of the Company. The filing of the Registration Statement does not
give rise to any rights, other than those which have been waived in writing, for
or relating to the registration of any capital stock of the Company.
(l) Neither the Company nor any of its Subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under, nor will the execution or delivery of this Agreement or the
completion of the transactions contemplated by this Agreement result in a
violation of or constitute a breach of or a default (including without
limitation with the giving of notice, the passage of time or otherwise) under,
the articles of incorporation, bylaws or other governing documents of the
Company or such Subsidiary or any obligation, agreement, covenant or condition
contained in any bond, debenture, note or other evidence of indebtedness or in
any contract, indenture, mortgage, deed of trust, loan agreement, lease,
license, joint venture or other agreement or instrument to which the Company or
any Subsidiary is a party or by which any properties of the Company or any
Subsidiary may be bound or affected. The Company has not incurred any liability,
direct or indirect, for any finders' or similar fees payable on behalf of the
Company or the Underwriters in connection with the transactions contemplated by
this Agreement. The performance by the Company of its obligations
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under this Agreement will not violate any law, ordinance, rule or regulation, or
any order, writ, injunction, judgment or decree of any governmental agency or
body or of any court having jurisdiction over the Company or any Subsidiary or
any properties of the Company or any Subsidiary, or result in the creation or
imposition of any lien, charge, claim or encumbrance upon any property or asset
of the Company or any Subsidiary. Except for permits and similar authorizations
required under the Securities Act, the Exchange Act or under other securities or
Blue Sky laws of certain jurisdictions and for permits, authorizations, consents
and approvals that have been obtained, no consent, permit, approval,
authorization or order of any court, governmental agency or body, financial
institution or any other person is required in connection with the completion by
the Company of the transactions contemplated by this Agreement.
(m) Each of the Company and its Subsidiaries owns, or has valid
rights to use, all items of real and personal property which are material to the
business of the Company or such Subsidiary (including, without limitation, all
real property on which the Company's facilities are located) and, except as
described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), free
and clear of all liens, encumbrances and claims that might materially interfere
with the business, properties, condition (financial or otherwise), results of
operations or prospects of the Company or such Subsidiary .
(n) The Company or the appropriate Subsidiary, as the case may be,
owns or possesses adequate rights to use all material patents, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names and
copyrights (collectively, the "Intellectual Property") described or referred to
in the Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), as owned by or used by
the Company or such Subsidiary, or which are necessary for the conduct of the
business of the Company or such Subsidiary as described in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus); and neither the Company nor any Subsidiary
has received any notice of infringement of or conflict with asserted rights of
others with respect to any Intellectual Property which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a material effect on the business, properties, condition (financial or
otherwise), results of operations or prospects of the Company or any Subsidiary.
Except as described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), neither
the Company nor any Subsidiary is a party to any material options, licenses, or
agreements of any kind that grant rights to any other party to manufacture,
license, produce, assemble, market or sell the products of the Company, nor is
the Company or any Subsidiary bound by or a party to any options, licenses, or
agreements of any kind with respect to any Intellectual Property of any other
party material to the business of the Company. No employee of the Company or of
any Subsidiary is obligated under any
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contract (including licenses, covenants, or commitments of any nature) or other
agreement known to the Company, or subject to any judgment, decree, or order of
any court or administrative agency known to the Company, that would interfere
with the use of such employee's best efforts to promote the interests of the
Company or such Subsidiary or that would conflict with the business of the
Company or such Subsidiary as presently conducted or proposed to be conducted.
(o) There is no litigation or governmental proceeding to which the
Company or any Subsidiary is a party or to which any property of the Company or
any Subsidiary is subject which is pending or, to the best knowledge of the
Company, is threatened or contemplated against the Company that is required to
be disclosed in the Registration Statement or Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) or that might
prevent consummation of the transactions contemplated by this Agreement and is
not so disclosed.
(p) None of the Company or any Subsidiary is in violation of, or has
received any notice or claim from any governmental agency or third party that
any of them is in violation of, any law, ordinance, rule or regulation, or any
order, writ, injunction, judgment or decree of any agency or body or of any
court, to which it or its properties (whether owned or leased) may be subject,
which violation might have a material effect on the business, properties,
condition (financial or otherwise), results of operations or prospects of the
Company or any Subsidiary.
(q) The Company has not taken and shall not take, directly or
indirectly, any action designed to cause or result in, or which has constituted
or which might reasonably be expected to cause or result in, under the Exchange
Act, the Exchange Act Rules and Regulations or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares. No bid or purchase by the Company and, to the best
knowledge of the Company, no bid or purchase that could be attributed to the
Company (as a result of bids or purchases by an "affiliated purchaser" within
the meaning of Regulation M under the Exchange Act) for or of the Shares, the
Common Stock, any securities of the same class or series as the Common Stock or
any securities convertible into or exchangeable for or that represent any right
to acquire the Common Stock is now pending or in progress or will have commenced
at any time prior to the completion of the distribution of the Shares that is or
will be in violation of Regulation M under the Exchange Act.
(r) Coopers & Lybrand, L.L.P., whose reports appear in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), are, and during the periods
covered by their reports in the Registration Statement were, independent
accountants as required by the Securities Act and the Rules and Regulations. The
financial statements and schedules included in the Registration Statement, each
Preliminary Prospectus and the Prospectus present fairly (or,
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if the Prospectus has not been filed with the Commission, as to the Prospectus,
will present fairly) the financial condition, results of operations, cash flow
and changes in shareholders' equity and the financial statements and schedules
included in the Registration Statement present fairly the information required
to be stated therein. Such financial statements and schedules have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods presented. The selected and summary
financial and statistical data included in the Registration Statement and the
Prospectus present fairly (or, if the Prospectus has not been filed with the
Commission, as to the Prospectus, will present fairly) the information shown
therein and have been compiled on a basis consistent with the audited financial
statements presented therein. No other financial statements or schedules are
required to be included in the Registration Statement. Except as set forth in
such financial statements or as set forth in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), the
Company has no material debts, liabilities or obligations (whether absolute,
accrued, contingent or otherwise) of any nature whatsoever, including, without
limitation, any tax liabilities or deferred tax liabilities or any other debts,
liabilities or obligations.
(s) The books, records and accounts of the Company and each
Subsidiary accurately and fairly reflect, in reasonable detail, the transactions
in and dispositions of the assets of the Company and such Subsidiary. The
systems of internal accounting controls maintained by the Company and each
Subsidiary are sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary (x) to permit
preparation of financial statements in conformity with generally accepted
accounting principles and (y) to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(t) For a period of 180 days following the date of the Prospectus,
the Company shall not offer, sell, contract to sell or otherwise dispose of, or
announce the offer of, any Common Stock, warrants, options or other securities
exchangeable for or convertible into Common Stock without the prior written
consent of the Representative; except that the Company during this period (i)
may issue to employees, officers, directors and consultants of the Company,
options to purchase Common Stock; provided, that such options shall not be
exercisable during this 180 day period, (ii) may issue shares of Common Stock
upon the exercise of previously outstanding options, warrants or rights and
(iii) may issue shares of Common Stock on conversion of the preferred stock as
described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
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(u) No labor disturbance by the employees of the Company or any
Subsidiary exists, is imminent or, to the best knowledge of the Company, is
contemplated or threatened; and the Company is not aware of an existing,
imminent or threatened labor disturbance by the employees of any principal
suppliers or contractors that might be expected to result in any material change
in the business, properties, condition (financial or otherwise), results of
operations or prospects of the Company. Except as disclosed in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), no collective bargaining agreement exists
with any employees of the Company or any Subsidiary and, to the best knowledge
of the Company, no such agreement is imminent. Except as disclosed in the
Registration Statement, no officer, employee or consultant of the Company or any
Subsidiary whose continued services are material to the conduct of the business
of the Company or any Subsidiary has any plans to terminate employment with the
Company or any Subsidiary nor does the Company or any Subsidiary have a present
intention to terminate the employment or contract of any such person.
(v) Each of the Company and its Subsidiaries has filed all federal,
state, local and foreign tax returns that are required to be filed or has
requested extension thereof and has paid all taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges to the extent that
the same have become due and payable. No tax assessment or deficiency has been
made or proposed against the Company or any of its Subsidiaries nor has the
Company or any Subsidiary received any notice of any proposed tax assessment or
deficiency.
(w) Except as set forth in the Prospectus (or if the Prospectus is
not in existence, the most recent Preliminary Prospectus) there are no
outstanding loans, advances or guaranties of indebtedness by the Company to or
for the benefit of any of (i) its "affiliates", as such term is defined in the
Rules and Regulations, (ii) any of the officers or directors of any of its
Subsidiaries or (iii) any of the members of the families of any of them.
(x) Neither the Company nor any Subsidiary has, directly or
indirectly, at any time: (i) made any contributions to any candidate for
political office in violation of law; (ii) made any payment in violation of law
to any local, state, federal or foreign governmental officer or official, or
other person charged with similar public or quasi-public duties; or (iii)
violated any provision of the Foreign Corrupt Practices Act of 1977, as amended.
(y) Neither the Company nor any Subsidiary has any material
liability, absolute or contingent, relating to: (i) public health or safety;
(ii) worker health or safety; (iii) product defect or warranty; or (iv) except
as may be disclosed in the Registration Statement and Prospectus (or, if the
Prospectus is not in existence, the most recent
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Preliminary Prospectus) pollution, damage to or protection of the environment,
including, without limitation, relating to damage to natural resources,
emissions, discharges, releases or threatened releases of hazardous materials
into the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, use, treatment, storage, generation, disposal,
transport or handling of any hazardous materials, which could have a material
adverse effect on the general affairs, management and financial position of the
Company. As used herein, "hazardous material" includes chemical substances, or
wastes, pollutants, contaminants, hazardous, radioactive or toxic substances,
constituents, materials or wastes, whether solid, gaseous or liquid in nature.
(z) The Company has not distributed and will not distribute prior to
the Closing Date or prior to any date on which the Option Shares are to be
purchased, as the case may be, any prospectus or other offering material in
connection with the offering and sale of the Shares other than the Prospectus,
the Registration Statement and any other material which may be permitted by the
Securities Act and the Rules and Regulations.
(aa) The Company has filed and will file in a timely manner all
reports and other documents required to be filed with the Commission under the
Exchange Act and with the National Association of Securities Dealers, Inc. (the
"NASD"), and each such report or other document contained, at the time it was
filed, such information as was required to be included in such report or other
document and all such information was correct and complete in all material
respects; except as disclosed in the Registration Statement, no event has
occurred or is likely to occur that required or would require an amendment to
any report or document referred to in this section that has not been filed or
distributed as required.
(bb) The Shares have been designated for inclusion on the Nasdaq
National Market, subject only to official notice of issuance.
(cc) The Company is not now, and intends to conduct its affairs in the
future in such a manner so that it will not become, an investment company within
the meaning of the Investment Company Act of 1940, as amended.
(dd) Each of the Company and its Subsidiaries is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) for which the Company would have any liability has occurred;
the Company has not incurred and does not expect to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
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interpretations thereunder (the "Code"); and each "pension plan" for which the
Company or any Subsidiary would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, that
would cause the loss of such qualification.
(ee) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any
Subsidiary (or, to the best knowledge of the Company, any of their predecessors
in interest) at, upon or from any of the property now or previously owned or
leased by the Company or any Subsidiary in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or would not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a material
adverse effect on the general affairs, management, financial position,
shareholders' equity or results of operations of the Company or any Subsidiary;
there has been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes, solid wastes,
hazardous wastes, radioactive wastes, mixed wastes or hazardous substances due
to or caused by the Company or any Subsidiary or with respect to which the
Company has knowledge, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which would not have or would not be
reasonably likely to have, singularly or in the aggregate with all such spills,
discharges, leaks, emissions, injections, escapes, dumpings and releases, a
material effect on the general affairs, management, financial position,
shareholders' equity or results of operations of the Company or any Subsidiary.
The terms "radioactive wastes", "mixed wastes", "hazardous wastes", "toxic
wastes", "hazardous substances" and "medical wastes" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(ff) The Company satisfies the requirements for filing a registration
statement on Form S-1.
(gg) Each certificate signed by any officer of the Company or any
Subsidiary and delivered to the Representative's or Underwriter's counsel shall
be deemed to be a representation and warranty by the Company or such Subsidiary
to each Underwriter as to matters covered thereby.
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2. Purchase, Sale and Delivery of the Stock.
----------------------------------------
(a) On the basis of the representations, warranties, covenants and
agreements of the Company contained in this Agreement and subject to the terms
and conditions set forth in this Agreement, the Company agrees to sell to the
several Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $______ per Share
("Purchase Price"), the respective number of Firm Shares set forth opposite the
name of such Underwriter on Schedule I to this Agreement (subject to adjustment
as provided in Section 8 of this Agreement).
(b) On the basis of the several (and not joint) representations,
warranties, covenants and agreements of the Underwriters contained in this
Agreement and subject to the terms and conditions set forth in this Agreement,
the Company grants an option to the several Underwriters to purchase from the
Company all or any portion of the Option Shares at the Purchase Price. This
option may be exercised only to cover over-allotments in the sale of the Firm
Shares by the Underwriters and may be exercised in whole or in part at any time
(but not more than once) on or before the 45th day after the date of the
Prospectus upon written, telecopied or telegraphic notice by the Representative
to the Company setting forth the aggregate number of Option Shares as to which
the several Underwriters are exercising the option and the settlement date. If
the option to purchase the Option Shares is exercised, the Option Shares shall
be purchased severally, and not jointly, by each Underwriter, in the same
proportion that the number of Firm Shares set forth opposite the name of the
Underwriter in Schedule I to this Agreement bears to the total number of Firm
Shares to be purchased by the Underwriters under Section 2(a) above, subject to
such adjustments as the Representative in its absolute discretion shall make to
eliminate any fractional Shares. Delivery of Option Shares, and payment
therefor, shall be made as provided in Section 2(c), Section 2(d) and Section
2(e) below.
(c) Delivery of the Firm Shares and the Option Shares (if the option
granted by the Company in Section 2(b) above has been exercised not later than
7:00 a.m., San Francisco time, on the date two business days preceding the
Closing Date), and payment therefor, shall be made at the office of Van Kasper &
Company, 600 California Street, San Francisco, California at 7:00 a.m., San
Francisco time, on the third business day after the effective date of this
Agreement, or at such time on such other day, not later than seven full business
days after such third business day, as shall be agreed upon in writing by the
Company and the Representative, or as provided in Section 8 of this Agreement.
The date and hour of delivery and payment for the Firm Shares are referred to in
this Agreement as the "Closing Date". As used in this Agreement, "business day"
means a day on which the Nasdaq National Market is operating and on which banks
in
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New York and California are open for business and not permitted by law or
executive order to be closed.
(d) If the option granted by the Company in Section 2(b) above is
exercised after 7:00 a.m., San Francisco time, on the date two business days
preceding the Closing Date, delivery of the Option Shares and payment therefor
shall be made at the office of Van Kasper & Company, 600 California Street, San
Francisco, California at 7:00 a.m., San Francisco time, on the date specified by
the Representative (which shall be three or four or fewer business days after
the exercise of the option, but not in excess of the period specified in the
Rules and Regulations).
(e) Payment of the Purchase Price for the Shares by the several
Underwriters shall be made by certified or official bank check or checks drawn
in next-day funds, payable to the order of the Company. Such payment shall be
made upon delivery of Shares to the Representative for the respective accounts
of the several Underwriters. The Shares to be delivered to the Representative
shall be registered in such name or names and shall be in such denominations as
the Representative may request at least two business days before the Closing
Date, in the case of Firm Shares, and at least one business day prior to the
purchase of the Option Shares, in the case of the Option Shares. The
Representative, individually and not on behalf of the Underwriters, may (but
shall not be obligated to) make payment to the Company for Shares to be
purchased by any Underwriter whose check shall not have been received by the
Representative on the Closing Date or any later date on which Option Shares are
purchased for the account of such Underwriter. Any such payment shall not
relieve such Underwriter from any of its obligations hereunder.
(f) The several Underwriters propose to offer the Shares for sale
to the public as soon as the Representative deems it advisable to do so. The
Firm Shares are to be initially offered to the public at the public offering
price set forth (or to be set forth) in the Prospectus. The Representative may
from time to time thereafter change the public offering price and other selling
terms.
(g) The information set forth in the last paragraph on the front
cover page (insofar as such information relates to the Underwriters), the legend
respecting stabilization set forth on the inside front cover page and the
statements set forth under the caption "Underwriting" in the Registration
Statement, any Preliminary Prospectus and in the Prospectus constitute the only
information furnished by the Underwriters to the Company for inclusion in any
Preliminary Prospectus, the Prospectus or the Registration Statement.
(h) In addition to the other compensation payable to the Underwriters
pursuant to this Agreement, the Company shall issue on the Closing Date to the
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Representative a warrant to purchase up to 10% of the number of shares of Common
Stock sold to the Underwriters (excluding the Option Shares) at a price per
share equal to 120% of the Purchase Price, in the form included as an exhibit to
the Registration Statement.
3. Further Agreements of the Company. The Company covenants and agrees
---------------------------------
with the several Underwriters as follows :
(a) The Company will use its best efforts to cause the Registration
Statement, and any amendment thereof, if not effective at the time of execution
of this Agreement, to become effective as promptly as possible. If the
Registration Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Prospectus is otherwise required under Rule 424(b), the Company
will file the Prospectus, properly completed (and in form and substance
reasonably satisfactory to the Underwriters) pursuant to Rule 424(b) within the
time period prescribed and will provide evidence satisfactory to the
Representative of such timely filing. The Company will not file the Prospectus,
any amended Prospectus, any amendment (including post-effective amendments) of
the Registration Statement or any supplement to the Prospectus without (i)
advising the Representative of the proposed filing of such document, amendment
or supplement within a reasonable time prior to the proposed filing, and
furnishing the Representative with copies thereof and (ii) obtaining the prior
consent of the Representative to such filing. The Company will prepare and file
with the Commission, promptly upon the request of the Representative, any
amendment to the Registration Statement or supplement to the Prospectus that may
be necessary or advisable in the reasonable opinion of the Representative in
connection with the distribution of the Shares by the Underwriters and shall use
its best efforts to cause the same to become effective as promptly as possible.
(b) The Company will promptly advise the Representative (i) when the
Registration Statement becomes effective, (ii) when any post-effective amendment
thereof becomes effective, (iii) of any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus or
for any additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose, and (v) of the
receipt by the Company of any notification with respect to the suspension of the
registration, qualification or exemption from registration or qualification of
the Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best efforts to prevent
the issuance of any such stop order or suspension and, if issued, to obtain as
soon as possible the withdrawal thereof.
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(c) The Company will (i) on or before the Closing Date, deliver to the
Representative and its counsel a signed copy of the Registration Statement as
originally filed and of each amendment thereto filed prior to the time the
Registration Statement becomes effective and, promptly upon the filing thereof,
a signed copy of each post-effective amendment, if any, to the Registration
Statement (together with, in each case, all exhibits thereto unless previously
furnished to the Representative) and will also deliver to the Representative,
for distribution to the several Underwriters, a sufficient number of additional
conformed copies of each of the foregoing (excluding exhibits) so that one copy
of each may be distributed to each Underwriter, (ii) as promptly as possible
deliver to the Representative and send to the several Underwriters, at such
office or offices as the Representative may designate, as many copies of the
Prospectus as the Representative may reasonably request and (iii) thereafter
from time to time during the period in which a prospectus is required by law to
be delivered by an Underwriter or a dealer, likewise to send to the Underwriters
as many additional copies of the Prospectus and as many copies of any supplement
to the Prospectus and of any amended Prospectus, filed by the Company with the
Commission, as the Representative may reasonably request for the purposes
contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is
required by law to be delivered by an Underwriter or a dealer any event shall
occur as a result of which it is necessary to supplement or amend the Prospectus
in order to make the Prospectus not misleading or so that the Prospectus will
not omit to state a material fact necessary to be stated therein, in each case
at the time the Prospectus is delivered to a purchaser of the Shares, or if it
shall be necessary to amend or to supplement the Prospectus to comply with the
Securities Act or the Rules and Regulations, the Company will forthwith prepare
and file with the Commission a supplement to the Prospectus or an amended
Prospectus so that the Prospectus as so supplemented or amended will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein not misleading and so that it
then will otherwise comply with the Securities Act and the Rules and
Regulations. If, after the initial public offering of the Shares by the
Underwriters and during such period, the Underwriters propose to vary the terms
of offering thereof by reason of changes in general market conditions or
otherwise, the Representative will advise the Company in writing of the proposed
variation and if, in the opinion either of counsel for the Company or counsel
for the Underwriters, such proposed variation requires that the Prospectus be
supplemented or amended, the Company will forthwith prepare and file with the
Commission a supplement to the Prospectus setting forth such variation. The
Company authorizes the Underwriters and all dealers to whom any of the Shares
may be sold by the Underwriters to use the Prospectus, as from time to time so
amended or supplemented, in connection with the sale of the Shares in accordance
with the applicable provisions of the Securities Act and the Rules and
Regulations for such period.
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(e) The Company will cooperate with the Representative and its counsel
in the qualification or registration of the Shares for offer and sale under the
securities or blue sky laws of such jurisdictions as the Representative may
designate and, if applicable, in connection with exemptions from such
qualification or registration and, during the period in which a Prospectus is
required by law to be delivered by an Underwriter or a dealer, in keeping such
qualifications, registrations and exemptions in effect; provided, however, that
-------- -------
the Company shall not be obligated to file any general consent to service of
process or to qualify to do business as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will, from time to
time, prepare and file such statements, reports and other documents as are or
may be required to continue such qualifications, registrations and exemptions in
effect for so long a period as the Representative may reasonably request for the
distribution of the Shares.
(f) During a period of five years commencing with the date of this
Agreement, the Company will promptly furnish to the Representative and to each
Underwriter who may so request in writing copies of (i) all periodic and special
reports furnished by it to shareholders of the Company, (ii) all information,
documents and reports filed by it with the Commission, any securities exchange
on which any securities of the Company are then listed, the Nasdaq National
Market or the NASD, (iii) all press releases and material news items or articles
in respect of the Company or its affairs released or prepared by the Company
(other than promotional and marketing materials disseminated solely to customers
and potential customers of the Company in the ordinary course of business) and
(iv) any additional information concerning the Company or its business which the
Representative may reasonably request.
(g) Within 90 days of the Closing Date, the Company will furnish the
Representative with four bound volumes which shall be standard for an
underwriting transaction of the type contemplated by this Agreement.
(h) As soon as practicable, but not later than the 45th day following
the end of the fiscal quarter first ending after the first anniversary of the
Effective Date, the Company will make generally available to its securities
holders and furnish to the Representative an earnings statement or statements
(which need not be audited) in accordance with Section 11(a) of the Securities
Act and Rule 158 of the Rules and Regulations.
(i) The Company will apply the net proceeds from the offering of the
Shares in the manner set forth under the caption "Use of Proceeds" in the
Prospectus.
(j) The Company will comply with all provisions of all undertakings
contained in the Registration Statement.
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(k) The Company will, at all times for a period of at least five
years after the date of this Agreement, cause the Common Stock (including the
Shares) to be included on the Nasdaq National Market to the extent that the
Common Stock satisfies the then applicable criteria for inclusion, and the
Company will comply with all registration, filing, reporting, listing and other
requirements of the Exchange Act and the Nasdaq National Market, which may from
time to time be applicable to the Company.
(l) The Company will use its best efforts to maintain insurance of
the types and in the amounts which it deems adequate for its business consistent
with insurance coverage maintained by companies of similar size and engaged in
similar businesses in similar geographic locations, including, but not limited
to, product liability insurance and general liability insurance covering all
real and personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against.
(m) The Company will issue no press release prior to the Closing Date
with respect to the offering of the Shares without the Representative's prior
written consent.
(n) The Company will not effect a change in its accounting firm to
any other firm other than a "big six" accounting firm for a period of three
years from the date of this Agreement without the written consent of the
Representative.
(o) The Company has not and will not, without the prior written
consent of the Representative, seek any exemption from the requirements for
inclusion on the Nasdaq National Market.
(p) The Company will take all steps necessary to comply with the
requirements of the NASD in connection with the issuance and sale of the Shares.
4. Fees and Expenses.
--------------------
(a) The Company agrees with each Underwriter that:
(i) The Company will pay and bear all costs and expenses in
connection with: the preparation, printing and filing of the Registration
Statement (including financial statements, schedules and exhibits), Preliminary
Prospectuses and the Prospectus, any drafts of each of them and any amendments
or supplements to any of them; the duplication or, if applicable, printing
(including all drafts thereof) of this Agreement, the Agreement Among
Underwriters, any Selected Dealer Agreements, the Preliminary Blue Sky Survey
and any Supplemental Blue Sky Survey, the Underwriters' Questionnaire and the
Power of Attorney and the duplication and printing (including of drafts thereof)
of any other underwriting documents and underwriting material (including
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<PAGE>
but not limited to marketing memoranda and other marketing material) approved
by the Company and used in connection with the offering, purchase, sale and
delivery of the Shares; the issuance and delivery of the Shares under this
Agreement to the several Underwriters, including all expenses, taxes, duties,
fees and commissions on the purchase and sale of the Shares, stock exchange
brokerage and transaction levies with respect to the purchase and, if applicable
the sale of the Shares; the cost of printing the certificates for the Shares;
the Transfer Agents' and Registrars' fees; the fees and disbursements of counsel
for the Company; all fees and other charges of the Company's independent public
accountants and any other experts named in the Prospectus; the cost of
furnishing to the several Underwriters copies of the Registration Statement
(including appropriate exhibits), Preliminary Prospectus and the Prospectus, the
agreements and other documents and instruments referred to above and any
amendments or supplements to any of the foregoing; the NASD filing fees; the
cost of qualifying or registering the Shares (or obtaining exemptions from
qualification or registration) under the laws of such jurisdictions as the
Representative may designate (including filing fees and fees and
costs/disbursements of Underwriters' counsel in connection with such NASD
filings and state securities or Blue Sky qualifications, registrations and
exemptions and in preparing the preliminary and any final Blue Sky Memorandum);
all fees and expenses in connection with designating the Shares for inclusion on
the Nasdaq National Market; all Company advertising and road show expenses; and
all other expenses incurred by the Company in connection with the performance of
its obligations hereunder. In addition, the Company will pay the Representative
on the Closing Date and, if applicable, on the date on which Option Shares are
purchased, a non-accountable expense allowance of one and one-half percent (1
1/2%) of the gross proceeds (prior to deducting underwriting discounts and
commissions) of the offering of the Shares.
(ii) In addition to its obligations under Section 7(a) of this
Agreement, the Company 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 loss, claim, damage or liability described in Section 7(a) of
this Agreement, it will reimburse or advance to or for the benefit of the
Underwriters, and each of them, on a monthly basis (or more often, if requested)
for all legal and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse or advance for the
benefit of the Underwriters for such expenses or the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any portion, or all, of any such interim
reimbursement payments or advances are so held to have been improper, the
Underwriters receiving the same shall promptly return
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<PAGE>
such amounts to the Company together with interest, compounded daily, at 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"), but not in excess of the maximum rate permitted
by applicable law. Any such interim reimbursement payments or advances that are
not made to or for the Underwriters within 30 days of a request for
reimbursement or for an advance shall bear interest at the Prime Rate,
compounded daily, but not in excess of the maximum rate permitted by applicable
law, from the date of such request until the date paid.
(b) In addition to their obligations under Section 7(b) of this
Agreement, the Underwriters severally and in proportion to their obligation to
purchase Firm Shares as set forth on Schedule I hereto, 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 loss, claim, damage or
liability described in Section 7(b) of this Agreement, they will reimburse or
advance to or for the benefit of the Company on a monthly basis (or more often,
if requested) for all legal and other expenses incurred by the Company 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 or enforceability of the
Underwriters' obligation to reimburse or advance for the benefit of the Company
for such expenses and the possibility that such payments or advances might later
be held to have been improper by a court of competent jurisdiction. To the
extent that any portion, or all, of any such interim reimbursement payments or
advances are so held to have been improper, the Company shall promptly return
such amounts to the Underwriters together with interest, compounded daily, at
the Prime Rate, but not in excess of the maximum rate permitted by applicable
law. Any such interim reimbursement payments or advances that are not made to
the Company within 30 days of a request for reimbursement or for an advance
shall bear interest at the Prime Rate, compounded daily, but not in excess of
the maximum rate permitted by applicable law, from the date of such request
until the date paid.
(c) Any controversy arising out of the operation of the interim
reimbursement and advance arrangements set forth in Sections 4(a)(ii) and 4(b)
above, including the amounts of any requested reimbursement payments or
advances, the method of determining such amounts and the basis on which such
amounts shall be apportioned among the indemnifying parties, shall be settled by
arbitration conducted under the provisions of the Code of Arbitration Procedure
of the NASD. Any such arbitration must be commenced by service of a written
demand for arbitration or a written notice of intention to arbitrate, therein
electing the arbitration tribunal. If the party demanding arbitration does not
make such designation of an arbitration tribunal in such demand or notice, then
the party responding to the demand or notice is authorized to do so. Any such
arbitration will be limited to the interpretation and obligations of the parties
under the interim reimbursement and advance provisions contained in Sections
4(a)(ii) and 4(b)
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<PAGE>
above and will not resolve the ultimate propriety or enforceability of the
obligation to indemnify for or contribute to expenses that is created by the
provisions of Section 7 of this Agreement.
(d) If the sale of the Shares provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 5 of this Agreement is not satisfied, or because of any termination
pursuant to Section 9(b) of this Agreement, or because of any refusal, inability
or failure on the part of the Company to perform any covenant or agreement set
forth in this Agreement or to comply with any provision of this Agreement other
than by reason of a default by any of the Underwriters, the Company agrees to
reimburse the several Underwriters upon demand for all out-of-pocket accountable
expenses reasonably incurred (including fees and disbursements of counsel) that
shall have been incurred by any or all of them in connection with investigating,
preparing to market or marketing the Shares or otherwise in connection with this
Agreement.
5. Conditions of Underwriters' Obligations. The several obligations of
---------------------------------------
the Underwriters to purchase and pay for the Shares shall be subject, in the
reasonable determination of the Representative, to the accuracy as of the date
of execution of this Agreement, the Closing Date and the date and time at which
the Option Shares are to be purchased, as the case may be, of the
representations and warranties of the Company set forth in this Agreement, to
the accuracy of the statements of the Company and its officers made in any
certificate delivered pursuant to this Agreement, to the performance by the
Company of all of its obligations to be performed under this Agreement at or
prior to the Closing Date or any later date on which Option Shares are to be
purchased, as the case may be, and to the satisfaction of all conditions to be
satisfied or performed by the Company at or prior to that date and to the
following additional conditions:
(a) The Registration Statement shall have become effective (or, if a
post-effective amendment is required to be filed pursuant to Rule 430A under the
Act, such post-effective amendment shall become effective and the Company shall
have provided evidence satisfactory to the Representative of such filing and
effectiveness) not later than 5:00 p.m., New York time, on the date of this
Agreement or at such later date and time as the Representative may approve in
writing and, at the Closing Date or, with respect to the Option Shares, the date
on which such Option Shares are to be purchased, no stop order suspending the
effectiveness of the Registration Statement or any qualification, registration
or exemption from qualification or registration for the sale of the Shares in
any jurisdiction shall have been issued and no proceedings for that purpose
shall have been instituted or threatened; and any request for additional
information on the part of the Commission shall have been complied with to the
reasonable satisfaction of the Representative and its counsel.
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(b) The Representative shall have received from Heller Ehrman White &
McAuliffe, counsel for the Underwriters, an opinion, on and dated as of the
Closing Date or, if applicable, the date on which Option Shares are to be
purchased, with respect to the issuance and sale of the Shares and such other
related matters as the Representative may reasonably require, and the Company
shall have furnished such counsel with all documents which they may request for
the purpose of enabling them to pass upon such matters.
(c) The Representative shall have received on the Closing Date or, if
applicable, the later date on which Option Shares are purchased, the opinion of
Graham & James LLP, counsel for the Company, addressed to the Underwriters and
dated the Closing Date or such later date, with reproduced copies or signed
counterparts thereof for each of the Underwriters, covering the matters set
forth in Exhibit C to this Agreement and in form and substance satisfactory to
the Representative.
(d) The Representative shall be satisfied that there has not been any
material change in the market for securities in general or in political,
financial or economic conditions as to render it impracticable, in the
Representative's judgment, to make a public offering of the Shares, or a
material adverse change in market levels for securities in general (or those of
companies in particular) or financial or economic conditions which render it
inadvisable to proceed.
(e) The Representative shall have received on the Closing Date and on
any later date on which Option Shares are purchased a certificate, dated the
Closing Date or such later date, as the case may be, and signed by the President
and the Chief Financial Officer of the Company confirming certain of the
representations and warranties of the Company, as follows:
(i) the representations and warranties of the Company set
forth in Section 1 of this Agreement are true and correct with the same force
and effect as if expressly made at and as of the Closing Date or such later date
on which the Option Shares are purchased, and the Company has complied in all
material respects with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date or such
later date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that purpose have
been instituted or are pending or are threatened under the Securities Act;
(iii) the Common Stock has been designated for inclusion on the
Nasdaq National Market, subject only to notice of issuance; and
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(iv) (A) the respective signers of such certificate have
carefully examined the Registration Statement in the form in which it originally
became effective and the Prospectus and any supplements or amendments to any of
them and, as of the Effective Date, the statements made in the Registration
Statement and the Prospectus were true and correct in all material respects and
neither the Registration Statement nor the Prospectus omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, (B) since the Effective Date, no event has
occurred that should have been set forth in an amendment to the Registration
Statement or a supplement or amendment to the Prospectus that has not been set
forth in such an amendment or supplement, (C) since the respective dates as of
which information is given in the Registration Statement in the form in which it
originally became effective and the Prospectus, there has not been any material
change or any development involving a prospective material change in or
affecting the business, properties, condition (financial or otherwise), results
of operations or prospects of the Company and its Subsidiaries taken as a whole
and, since such dates, neither the Company nor any of its Subsidiaries has
entered into any material transaction not referred to in the Registration
Statement in the form in which it originally became effective and the
Prospectus, (D) there are not any pending or threatened legal proceedings to
which the Company or any Subsidiary is a party or of which property of the
Company or any Subsidiary is the subject which are material and which are not
disclosed in the Registration Statement and the Prospectus and (E) there are not
any license agreements, contracts, leases or other documents that are required
to be filed as exhibits to the Registration Statement that have not been filed
as required.
(f) The Representative shall have received from Coopers & Lybrand
L.L.P., accountants to the Company, a letter or letters, addressed to the
Underwriters and dated the Closing Date and any later date on which Option
Shares are purchased, confirming that they are independent accountants with
respect to the Company within the meaning of the Securities Act and the
applicable Rules and Regulations and, based upon the procedures described in
their letter delivered to the Representative concurrently with the execution of
this Agreement (the "Original Letter"), but carried out to a date not more than
five business days prior to the Closing Date or such later date on which Option
Shares are purchased, (i) confirming, to the extent true, that the statements
and conclusions set forth in the Original Letter are accurate as of the Closing
Date or such later date, as the case may be, and (ii) setting forth any
revisions and additions to the statements and conclusions set forth in the
Original Letter that are necessary to reflect any changes in the facts described
in the Original Letter since the date of the Original Letter or to reflect the
availability of more recent financial statements, data or information. Such
letters reflect that there is not any change, or any development involving a
prospective change, in or affecting the business, properties or condition
(financial or otherwise), results of operations or prospects of the Company
which, in the
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Representative's sole judgment, makes it impracticable or inadvisable to proceed
with the public offering of the Shares or the purchase of the Option Shares as
contemplated by the Prospectus. In addition, the Representative shall have
received from Coopers & Lybrand L.L.P., on or prior to the Closing Date, a
letter addressed to the Company and made available to the Representative for the
use of the Underwriters stating that their review of the Company's system of
internal controls, to the extent they deemed necessary in establishing the scope
of their examination of the Company's consolidated financial statements as of
December 31, 1997, or in delivering the Original Letter, did not disclose any
weaknesses in internal controls that they considered to be material weaknesses.
(g) Prior to the Closing Date, the Common Stock shall have been
designated for inclusion on the Nasdaq National Market, subject only to official
notice of issuance.
(h) The Representative shall have received executed agreements from
each of the Company's officers and directors, each person known to the Company
to own ________ shares or more of Common Stock and shareholders who in the
aggregate own ________ shares of Common Stock to the effect that each such
person or entity will not for a period of 180 days following the date of the
Prospectus, in each case without prior written consent of the Representative,
offer, sell or contract to sell, or otherwise dispose of, or announce the offer
of, any Common Stock or options or convertible securities exercisable or
exchangeable for, or convertible into, Common Stock. The Company acknowledges
that the Representative has provided the Company with the form of agreement
described above and that such form of agreement is acceptable for the purposes
of this section.
(i) The Company shall have furnished to the Representative such
further certificates and documents as the Representative shall reasonably
request (including certificates of officers of the Company) as to the accuracy
of the representations and warranties of the Company or any Subsidiary set forth
in this Agreement, the performance by the Company of its obligations under this
Agreement and such other matters as the Representative may have then reasonably
requested.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement will be in compliance with the provisions of this
Agreement only if they are reasonably satisfactory to the Representative and its
counsel. The Company will furnish the Representative with such number of
conformed copies of such opinions, certificates, letters and documents as the
Representative shall reasonably request.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, time
being of the essence, or if any of the opinions and certificates mentioned above
or elsewhere in this Agreement
24
<PAGE>
shall not be in all material respects reasonably satisfactory in form and
substance to the Representative and its counsel, this Agreement and all
obligations of the Underwriters hereunder may be canceled by the Representative
at or at any time prior to, the Closing Date or, with respect to the Option
Shares, prior to the date on which the Option Shares are to be purchased, as the
case may be. Notice of such cancellation shall be given to the Company in
writing or by telephone, telecopy or telegraph confirmed in writing. Any such
termination shall be without liability of the Company to the Underwriters
(except as provided in Section 4 or Section 7 of this Agreement) and without
liability of the Underwriters to the Company (except as provided in Section 7 of
this Agreement).
6. Conditions of the Obligation of the Company. The obligations of the
-------------------------------------------
Company to sell and deliver the Shares required to be delivered as and when
specified in this Agreement shall be subject to the condition that, at the
Closing Date or, with respect to the Option Shares, the date and time at which
the Option Shares are to be purchased, no stop order suspending the
effectiveness of the Registration Statement shall be in effect and no
proceedings therefor shall be pending or threatened by the Commission.
7. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person (including each partner or officer thereof) who
controls any Underwriter within the meaning of Section 15 of the Securities Act
from and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified parties or any of them may become subject
under the Securities Act, the Exchange Act or any other federal or state
statute, law or regulation, at common law or otherwise, specifically including
but not limited to losses, claims, damages or liabilities (or action in respect
thereof) related to negligence on the part of any Underwriter, and the Company
agrees to reimburse each such Underwriter and controlling person for any legal
or other expenses (including, except as otherwise provided below, settlement
expenses and fees and disbursements of counsel) incurred by the respective
indemnified parties in connection with defending against any such losses,
claims, damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding that may be brought against, the respective
indemnified parties, in each case insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon, in
whole or in part, (i) any breach of any representation, warranty, covenant or
agreement of the Company contained in this Agreement, (ii) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement in the form declared effective by the Commission (including the
Prospectus as part thereof) or any post-effective amendment thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(iii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any
25
<PAGE>
amendment thereof or supplement thereto) or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (iv) any untrue statement or alleged
untrue statement of a material fact contained in any application or other
document, or any amendment or supplement thereto, executed by the Company or
based upon written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify or register the Shares under the securities
or Blue Sky laws thereof or to obtain an exception from such qualification or
registration or filed with the Commission, any registered national securities
association or the Nasdaq National Market, or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that (1) the indemnity agreements
-------- -------
of the Company contained in this Section 7(a) shall not apply to such losses,
claims, damages, liabilities or expenses if such statement or omission was made
in reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representative
specifically for use in any Preliminary Prospectus or the Registration Statement
or the Prospectus or any such amendment thereof or supplement thereto and (2)
the indemnity agreement contained in this Section 7(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages, liabilities or
expenses purchased the Shares that is the subject thereof (or to the benefit of
any person controlling such Underwriter) if the Company can demonstrate that at
or prior to the written confirmation of the sale of such Shares a copy of the
Prospectus (or the Prospectus as amended or supplemented) or, for this purpose,
if applicable, a copy of the then most recent Preliminary Prospectus, was not
sent or delivered to such person and the untrue statement or omission of a
material fact contained in such Preliminary Prospectus or, if applicable, prior
Preliminary Prospectus, was corrected in the Prospectus (or the Prospectus as
amended or supplemented) or, if applicable, the then most recent Preliminary
Prospectus, unless the failure is the result of noncompliance by the Company
with Section 3 of this Agreement. The indemnity agreements of the Company
contained in this Section 7(a) and the representations and warranties of the
Company contained in Section 1 of this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or behalf of any
indemnified party and shall survive the delivery of and payment for the Shares.
This indemnity agreement shall be in addition to any liabilities which the
Company may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company, each of its officers who signs the Registration
Statement, each of its directors, each other Underwriter and each person
(including each partner or officer thereof) who controls the Company or any such
other Underwriter within the
26
<PAGE>
meaning of Section 15 of the Securities Act from and against any and all losses,
claims, damages or liabilities, joint or several, to which such indemnified
parties or any of them may become subject under the Securities Act, the Exchange
Act, or other federal or state statute, law or regulation or at common law or
otherwise and to reimburse each of them for any legal or other expenses
(including, except as otherwise hereinafter provided, settlement expenses and
fees and disbursements of counsel) incurred by the respective indemnified
parties in connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding that may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any breach of any covenant or
agreement of the indemnifying Underwriter contained in this Agreement, (ii) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement in the form declared effective by the Commission
(including the Prospectus included as part thereof) or any post-effective
amendment thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (iii) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, but in each case under clauses (ii) and (iii) above,
as the case may be, only if such statement or omission was made in reliance upon
and in connection with information furnished in writing to the Company by or on
behalf of such indemnifying Underwriter through the Representative specifically
for use in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto. The Company
acknowledges and agrees that the matters described in Section 2(g) of this
Agreement constitute the only information furnished in writing by or on behalf
of any of the several Underwriters for inclusion in the Registration Statement
or the Prospectus or in any Preliminary Prospectus. The several indemnity
agreement of each Underwriter contained in this Section 7(b) shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any indemnified party and shall survive the delivery of and
payment for the Shares. This indemnity agreement shall be in addition to any
liabilities which each Underwriter may otherwise have.
(c) Each person or entity indemnified under the provisions of
Sections 7(a) and 7(b) above agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity
27
<PAGE>
agreement contained in such Sections, it will, if a claim in respect thereunder
is to be made against the indemnifying party or parties under this Section 7,
promptly give written notice (the "Notice") of such service or notification to
the party or parties from whom indemnification may be sought hereunder. No
indemnification provided for in Sections 7(a) or 7(b) above shall be available
to any person who fails to so give the Notice if the party to whom such Notice
was not given was unaware of the action, suit, investigation, inquiry or
proceeding to which the Notice would have related, but only to the extent such
party was materially prejudiced by the failure to receive the Notice, and the
omission to so notify such indemnifying party or parties shall not relieve such
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of Sections
7(a) and 7(b). Any indemnifying party shall be entitled at its own expense to
participate in the defense of any action, suit or proceeding against, or
investigation or inquiry of, an indemnified party. Any indemnifying party shall
be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (the "Notice of Defense") to the indemnified
party, to assume (alone or in conjunction with any other indemnifying party or
parties) the entire defense of such action, suit, investigation, inquiry or
proceeding, in which event such defense shall be conducted, at the expense of
the indemnifying party or parties, by counsel chosen by such indemnifying, party
or parties and reasonably satisfactory to the indemnified party or parties;
provided, however, that (i) if the indemnified party or parties reasonably
-------- -------
determine that there may be a conflict between the positions of the indemnifying
party or parties and of the indemnified party or parties in conducting the
defense of such action, suit, investigation, inquiry or proceeding or that there
may be legal defenses or rights available to such indemnified party or parties
different from or in addition to those available to the indemnifying party or
parties, then separate counsel for and selected by the indemnified party or
parties shall be entitled, at the expense of the indemnifying parties, to
conduct the defense of the indemnified parties to the extent determined by
counsel to the indemnified parties to be necessary to protect the interests of
the indemnified party or parties and (ii) in any event, the indemnified party or
parties shall be entitled to have counsel selected by such indemnified party or
parties participate in, but not conduct, the defense. If, within a reasonable
time after receipt of the Notice, an indemnifying party gives a Notice of
Defense and, unless separate counsel is to be chosen by the indemnified party or
parties as provided above, the counsel chosen by the indemnifying party or
parties is reasonably satisfactory to the indemnified party or parties, the
indemnifying party or parties will not be liable under Sections 7(a) through
7(c) for any legal or other expenses subsequently incurred by the indemnified
party or parties in connection with the defense of the action, suit,
investigation, inquiry or proceeding, except that (A) the indemnifying party or
parties shall bear and pay the legal and other expenses incurred in connection
with the conduct of the defense as referred to in clause (i) of the "provided,
--------
however" clause in the preceding sentence and (B) the indemnifying party or
-------
parties shall bear and pay such other expenses as it or they have authorized to
be
28
<PAGE>
incurred by the indemnified party or parties. If, within a reasonable time after
receipt of the Notice, no Notice of Defense has been given, the indemnifying
party or parties shall be responsible for any legal or other expenses incurred
by the indemnified party or parties in connection with the defense of the
action, suit, investigation, inquiry or proceeding.
(d) In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this Section 7
but is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right to appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 7 provides for
indemnification in such case, each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in Section 7(a) or 7(b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by each indemnifying party from the offering of the Shares or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of each indemnifying
party in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, or actions in respect thereof, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Underwriters shall be deemed to be in the same respective
proportion as the total proceeds from the offering of the Shares, net of the
underwriting discounts, received by the Company and the total underwriting
discount retained by the Underwriters bear to the aggregate public offering
price of the Shares. Relative fault 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 relates to
information supplied by each indemnifying party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission.
The parties agree that it would not be just and equitable if contribution
pursuant to this Section 7(d) were to be determined by pro rata allocation which
does not take into account the equitable considerations referred to in the first
sentence of the first paragraph of this Section 7(d) and to the considerations
referred to in the third sentence of the first paragraph of this Section 7(d).
The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of the first paragraph of this Section 7(d) shall be deemed to include
any legal or other expenses incurred by such indemnified party in connection
with investigating, preparing to defend or defending against any action or claim
which is the subject of this Section 7(d). Notwithstanding the provisions of
this Section 7(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Shares purchased by that
Underwriter. For purposes of this Section 7(d), each person
29
<PAGE>
who controls an Underwriter within the meaning of Section 15 of the Securities
Act shall have the same rights to contribution as such Underwriter, and each
person who controls the Company within the meaning of Section 15 of the
Securities Act, each officer of the Company who signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company; provided, however, in each case that no person
-------- -------
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute in this Section 7(d) are several in proportion to their respective
underwriting obligations and not joint.
Each party or other entity entitled to contribution agrees that upon the
service of a summons or other initial legal process upon it in any action
instituted against it in respect of which contribution may be sought, it will
promptly give written notice of such service to the party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
of any such service shall not relieve the party from whom contribution may be
sought from any obligation it may have hereunder or otherwise (except to the
extent such party is materially prejudiced by the failure to receive written
notice).
(e) The Company shall not, without the prior written consent of each
Underwriter and any person who controls such Underwriter within the meaning of
Section 15 of the Securities Act, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or proceeding
in respect of which indemnification or contribution may be sought hereunder
(whether or not such Underwriter or any person who controls such Underwriter
within the meaning of Section 15 of the Securities Act is a party to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each such Underwriter and each such
controlling person from any and all liability arising out of such claim, action,
suit or proceeding.
(f) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of Sections 4(a)(ii), 4(b) and 4(c) and this Section
7 of this Agreement and that they are fully informed regarding all such
provisions. They further acknowledge that the provisions of Sections 4(a)(ii),
4(b) and 4(c) and this Section 7 of this Agreement fairly allocate the risks in
light of the ability of the parties to investigate the Company and its business
in order to assure that adequate disclosure is made in the Registration
Statement and Prospectus as required by the Securities Act, the Rules and
Regulations, the Exchange Act and the Exchange Act Rules and Regulations. The
parties are advised that federal or state policy, as interpreted by the courts
in certain jurisdictions, may be contrary
30
<PAGE>
to certain provisions of Sections 4(a)(ii), 4(b) and 4(c) and this Section 7 of
this Agreement and, to the extent permitted by law, the parties hereto hereby
expressly waive and relinquish any right or ability to assert such public policy
as a defense to a claim under Sections 4(a)(ii), 4(b) or 4(c) or this Section 7
of this Agreement and further agree not to assert any such defense.
8. Substitution of Underwriters. If for any reason one or more of the
----------------------------
Underwriters fails or refuses (otherwise than for a reason sufficient to justify
the termination of this Agreement under the provisions of Section 5 or Section 9
of this Agreement) to purchase and pay for the number of Firm Shares agreed to
be purchased by such Underwriter or Underwriters, the Representative shall
immediately give notice thereof to the Company and the non-defaulting
Underwriters, and the non-defaulting Underwriters shall have the right within 24
hours after their receipt of such notice to purchase, or procure one or more
other Underwriters to purchase, in such proportions as may be agreed upon among
the Representative and such purchasing Underwriter or Underwriters and upon the
terms set forth herein, all or any part of the Firm Shares that such defaulting
Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail to make such arrangements with respect to all such Shares, the
number of Firm Shares that each non-defaulting Underwriter is otherwise
obligated to purchase under this Agreement shall be automatically increased on a
pro rata basis to absorb the remaining Shares that the defaulting Underwriter or
Underwriters agreed to purchase; provided, however, that the non-defaulting
-------- -------
Underwriters shall not be obligated to purchase the Shares that the defaulting
Underwriter or Underwriters agreed to purchase if the aggregate amount of such
Shares exceeds 10% of the aggregate amount of Firm Shares that all Underwriters
agreed to purchase under this Agreement. If the total number of Firm Shares
that the defaulting Underwriter or Underwriters agreed to purchase shall not be
purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the first 24-hour
period above referred to, to make arrangements with other underwriters or
purchasers satisfactory to the Representative for purchase of such Shares on the
terms set forth in this Agreement. In any such case, either the Representative
or the Company shall have the right to postpone the Closing Date determined as
provided in Section 2(c) of this Agreement for not more than seven business days
after the date originally fixed as the Closing Date pursuant to Section 2(c) in
order that any necessary changes in the Registration Statement, the Prospectus
or any other documents or arrangements may be made.
If neither the non-defaulting Underwriters nor the Company shall make
arrangements within the time periods set forth above for the purchase of all the
Firm Shares that the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall be terminated without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter (except as provided in Section 4
31
<PAGE>
or Section 7 of this Agreement) and without any liability on the part of any
nondefaulting Underwriters to the Company (except to the extent provided in
Section 4 or Section 7 of this Agreement). Nothing in this Section 8, and no
action taken hereunder, shall relieve any defaulting Underwriter from liability,
if any, to the Company or any nondefaulting Underwriter for damages occasioned
by its default under this Agreement. If this Agreement is terminated pursuant to
the provisions of this Section 8, the Company shall not be obligated to
reimburse any defaulting Underwriter for expenses pursuant to the provisions of
Section 4 hereof or otherwise. The term "Underwriter" in this Agreement shall
include any persons substituted for an Underwriter under this Section 8.
9. Effective Date of Agreement and Termination.
-------------------------------------------
(a) If the Registration Statement has not been declared effective
prior to the date of this Agreement, this Agreement shall become effective at
such time, after notification of the effectiveness of the Registration Statement
has been released by the Commission, as the Representative and the Company shall
agree upon the public offering price and other terms and the purchase price of
the Shares. If the public offering price and other terms and the purchase price
of the Shares shall not have been determined prior to 5:00 p.m., New York time,
on the third full business day after the Registration Statement has become
effective, this Agreement shall thereupon terminate without liability on the
part of the Company to the Underwriters (except as provided in Section 4 or
Section 7 of this Agreement). By giving notice before the time this Agreement
becomes effective, the Representative, as representative of the several
Underwriters, may prevent this Agreement from becoming effective without
liability of any party to the other party, except that the Company shall remain
obligated to pay costs and expenses to the extent provided in Section 4 and
Section 7 of this Agreement. If the Registration Statement has been declared
effective prior to the date of this Agreement, this Agreement shall become
effective upon execution and delivery by the Representative and the Company.
(b) This Agreement may be terminated by the Representative in its
absolute discretion by giving written notice to the Company at any time on or
prior to the Closing Date or, with respect to the purchase of the Option Shares,
on or prior to any later date on which the Option Shares are to be purchased, as
the case may be, if prior to such time any of the following has occurred or, in
the Representative's opinion, is likely to occur: (i) after the respective dates
as of which information is given in the Registration Statement and the
Prospectus, any material change or development involving a prospective adverse
change in or affecting the business, properties, condition (financial or
otherwise), results of operations or prospects of the Company and its
subsidiaries taken as a whole, which would, in the Representative's sole
judgment, make the offering or the delivery of the Shares impracticable or
inadvisable; or (ii) trading in securities of the Company has been suspended by
the Commission or if trading generally on the New
32
<PAGE>
York Stock Exchange, American Stock Exchange, Nasdaq National Market or
over-the-counter market has been suspended or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of such exchanges, by the NASD or by the Commission; or
(iii) there shall have been the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of, or
commencement of any proceeding or investigation by, any court, legislative body,
agency or other governmental authority which in the Representative's sole
judgment materially affects or may materially affect the business, properties,
condition (financial or otherwise), results of operations or prospects of the
Company and its subsidiaries taken as a whole; (iv) there shall have been the
declaration of a banking moratorium by federal, New York or California
authorities; (v) existing international monetary conditions shall have undergone
a material change which, in the Representative's sole judgment, makes the
offering or delivery of the Shares impracticable or inadvisable; or (vi) there
has occurred any material change in the financial markets in the United States
or internationally or any outbreak of hostilities or escalation of existing
hostilities or other crisis, the effect of which in the Representative's
reasonable judgment makes the offering or delivery of the Shares impracticable
or inadvisable. If this Agreement shall be terminated pursuant to this Section
9, there shall be no liability of the Company to the Underwriters (except
pursuant to Section 4 and Section 7 of this Agreement) and no liability of the
Underwriters to the Company (except pursuant to Section 4 and Section 7 of this
Agreement).
10. Notices. Except as otherwise provided herein, all communications
-------
hereunder shall be in writing or by either telecopier or telegraph and, if to
the Underwriters, shall be mailed, telecopied or telegraphed or delivered to Van
Kasper & Company, 600 California Street, Suite 1700, San Francisco, California
94108, Attention: Bruce P. Emmeluth (telecopier: (415) 954-8309); and if to the
Company, shall be mailed, telecopied, telegraphed or delivered to it at its
office at 47375 Fremont Boulevard, Fremont, California 94538 (telecopier: (510)
651-3731) Attention: Doreen Chiu. All notices given by telecopy or telegraph
shall be promptly confirmed by letter.
11. Persons Entitled to the Benefit of This Agreement. This Agreement
-------------------------------------------------
shall inure to the benefit of the Company and the several Underwriters and, with
respect to the provisions of Section 4 and Section 7 of this Agreement, the
several parties (in addition to the Company and the several Underwriters)
indemnified under the provisions of Section 4 and Section 7 and their respective
personal representatives, successors and assigns (whether such succession or
assignment is by sale, assignment, merger, reverse merger, consolidation,
operation of law or, without limitation, otherwise). Nothing in this Agreement
is intended or shall be construed to give to any other person, firm or
corporation any legal or equitable remedy or claim under or in respect of this
Agreement or any provision contained herein. The term "successors and assigns"
as herein used shall not include any purchaser, as such, of any of the Shares
from the several Underwriters.
33
<PAGE>
12. General. Notwithstanding any provision of this Agreement to the
-------
contrary, the reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties, covenants and
agreements in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof or by or on behalf of
the Company, any controlling person thereof or their respective directors or
officers and (c) delivery and payment for the Shares under this Agreement;
provided, however, that if this Agreement is terminated prior to the Closing
-------- -------
Date, the provisions of Sections 3(f) through 3(p), inclusive, of this Agreement
shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which together shall constitute one and
the same instrument.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS, AND NOT THE LAWS PERTAINING TO CHOICE OR CONFLICT OF LAWS, OF THE
STATE OF CALIFORNIA.
13. Jurisdiction. The parties agree that any litigation arising out of or
------------
in any way related to this Agreement will be adjudicated in a state or district
court sitting in the City of San Francisco, California, and the parties hereby
consent to the jurisdiction of such court. The parties hereby waive any right to
object to such jurisdiction, including, without limitation, any objection based
on a claim of improper venue or forum non conveniens.
14. Authority of the Representative. In connection with this Agreement,
-------------------------------
the Representative will act for and on behalf of the several Underwriters, and
any action taken under this Agreement by the Representative, as representative
of the several Underwriters, will be binding on all of the Underwriters.
If the foregoing correctly sets forth your understanding, please so
indicate by signing in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement among the Company and the several
Underwriters.
Very truly yours,
ATG INC.
By:_________________________
34
<PAGE>
Doreen Chiu
President
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
VAN KASPER & COMPANY
By:____________________________________
Bruce P. Emmeluth, Managing Director
On its behalf and on behalf of each of the
several Underwriters named in Schedule I hereto
35
<PAGE>
SCHEDULE I
UNDERWRITERS
Number of Firm Shares
Underwriters to be Purchased
---------------------------- ----------------------------
Van Kasper & Company
36
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EXHIBIT A
SUBSIDIARIES OF THE COMPANY
ATG Richland Corporation, a Washington corporation
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EXHIBIT B
EQUITY INTERESTS OF THE COMPANY AND ITS SUBSIDIARIES
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EXHIBIT C
Matters to be Covered in the Opinion of
Graham & James LLP/1/
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation.
(ii) The Company has the corporate power to own, lease and operate its
properties and to conduct its business as described in the Prospectus.
(iii) The Company is duly qualified to do business as a foreign corporation
and is in good standing in all jurisdictions in which the ownership or leasing
of its properties or the conduct of its business requires such qualification,
except where the failure so to qualify would not have a material adverse effect
on the business, properties, condition (financial or otherwise), results of
operations or prospects of the Company.
(iv) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus under the caption "Capitalization" as of the
dates stated therein; the issued and outstanding shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid and
nonassessable and have not been issued in violation of any preemptive right or
other rights to subscribe for or purchase securities or, except to the extent
any such violations would not be material to the Company (whether because of the
magnitude of the violation, because any claims thereof would be barred by the
statute of limitations or otherwise), in violation of the registration
provisions of the Securities Act of 1933, as amended (the "Securities Act"), or
any registration or qualification requirements of all states in which such
registration or qualification was necessary; provided, that in rendering their
opinion as to non-violation of federal and state securities laws, such counsel
may assume, unless counsel has knowledge of facts that may render such
assumption unreasonable; that any purchasers had, to the extent relevant and
represented by such purchasers in writing, any required investment intent and
the Company directly or indirectly owns all of the issued and
______________________
/1/ In rendering this opinion, counsel may rely as to questions of law not
involving the laws of the United States or the State of California on opinions
of local counsel (provided that such counsel states that they believe they and
the Underwriters are justified in relying thereon) and, as to questions of fact,
upon representations or certificates of officers of the Company and government
officials, in which case their opinion is explicitly to state that they are so
relying thereon and that they have no knowledge of any material misstatement or
inaccuracy in such opinions, representations or certificate. Copies of any
opinion, representation or certificate so relied upon shall be delivered to the
Representative and counsel to the Underwriters.
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outstanding equity securities of each of its subsidiaries and there are no
outstanding options, warrants or other rights to acquire any equity securities
of any such subsidiary.
(v) The authorized capital stock of ATG Richland Corporation consists of
_________ shares of ATG Richland Common Stock, ___________ shares of Series A
Preferred Stock and ___________ shares of Series B Preferred Stock. All issued
and outstanding shares of ATG Richland Corporation's capital stock have been
duly and validly authorized and issued, are fully paid and nonassessable and
have not been issued in violation of any preemptive right or other rights to
subscribe for or purchase securities or, except to the extent any such
violation would not be material to the Company (whether because of the
magnitude of the violation, because any claims thereof would be barred by the
statute of limitations or otherwise), in violation of the registration
provisions of the Securities Act, or any registration or qualification
requirements of all states in which such registration or qualification was
necessary; provided, that in rendering their opinion as to non-violation of
federal and state securities laws, such counsel may assume, unless counsel has
knowledge of facts that may render such assumption unreasonable, that any
purchasers had, to the extent relevant and represented by such purchasers in
writing, any required investment intent; and there are no outstanding options,
warrants or other rights to acquire any equity securities of ATG Richland
Corporation. Immediately prior to the Closing Date, there were ________ shares
of ATG Richland Common Stock issued and outstanding.
(vi) The Company has the corporate power and authority to enter into the
Underwriting Agreement and to issue, sell and deliver the Shares to the
Underwriters.
(vii) The execution, delivery and performance of this Agreement and the
issuance and sale of the Shares do not (A) conflict with, violate, result in a
breach of or constitute a default (or an event that with notice or lapse of
time, or both, would constitute a default) under the Articles of Incorporation
or Bylaws of the Company or any agreement (including, without limitation, an
agreement with respect to registration rights) known to such counsel to which
the Company is a party or by which it or any of its properties or assets is
bound or (B) result in violation of any material federal, California law, rule
or regulation or any writ, judgment, order, injunction or decree of any
government, governmental body, agency or court or any arbitration tribunal
having jurisdiction over the Company or any of its properties, in each case,
known to such counsel.
(viii) The Shares are duly authorized and, when issued and delivered
against payment in full therefor pursuant to the terms of the Underwriting
Agreement, will be validly issued, fully paid, nonassessable, and free of
preemptive rights.
(ix) The Underwriting Agreement has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed and
delivered by
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the Company and, assuming the due authorization, execution and delivery of the
Underwriting Agreement by the Representative on behalf of the Underwriters, is
the valid and binding agreement of the Company, except insofar as the
enforceability of the indemnification and contribution provisions of the
Underwriting Agreement may be limited as a matter of public policy and except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or by general
equitable principles.
(x) Except for the order of the Commission making the Registration
Statement effective and similar authorizations required under the securities or
"Blue Sky" laws of certain jurisdictions (as to which such counsel need express
no opinion), no consent, approval, authorization or other order of any federal
or California governmental body or, to the knowledge of such counsel, other
person is required which has not been obtained in connection with the
authorization, issuance, sale and delivery of the Shares and the execution,
delivery and performance by the Company of the Underwriting Agreement.
(xi) The Registration Statement has become effective under the Securities
Act and, to the actual knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or threatened under the
Securities Act.
(xii) The Registration Statement and the Prospectus, and each amendment or
supplement thereto (other than the financial statements, financial data and
supporting schedules included therein, as to which such counsel need express no
opinion), as of the effective date of the Registration Statement, complied as to
form in all material respects with the requirements of the Securities Act and
the applicable Rules and Regulations.
(xiii) To the best knowledge of such counsel, the Company satisfies the
requirements for filing a registration statement on Form S-1.
(xiv) The terms and provisions of the capital stock of the Company conform
in all material respects to the description thereof contained in the
Registration Statement and Prospectus, and the information in the Prospectus
under the caption "Description of Capital Stock", to the extent it constitutes
matters of law or legal conclusions, has been reviewed by such counsel and is
correct and the form of certificate for the Shares complies with California law.
(xv) The description in the Registration Statement and the Prospectus of
the Articles of Incorporation and Bylaws of the Company and of statutes and
contracts are accurate in all material respects and fairly present in all
material respects the information required to be presented by the Securities Act
and the Rules and Regulations.
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(xvi) To the actual knowledge of such counsel, there are no agreements,
contracts, licenses, leases or documents of a character required to be described
or referred to in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement that are not described or referred to
therein and filed as required.
(xvii) To the actual knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened against the Company of a
character which are required to be disclosed in the Registration Statement or
the Prospectus by the Securities Act or the applicable Rules and Regulations,
other than those described therein.
(xviii) To the actual knowledge of such counsel, the Company is not
presently in breach of, or in default under, any bond, debenture, note or other
evidence of indebtedness or any contract, indenture, mortgage, deed of trust,
loan agreement, lease, license or, without limitation, other agreement or
instrument to which the Company is a party or by which any of its properties is
bound that, individually or in the aggregate, is material to the business,
properties, condition (financial or otherwise), prospects or results of
operations of the Company.
(xix) To the actual knowledge of such counsel, except as set forth in the
Registration Statement and Prospectus, no holders of Common Stock or other
securities of the Company have registration rights with respect to any
securities of the Company.
In addition, such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company, the
independent public accountants of the Company, the Representative and counsel to
the Underwriters, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed and, although
they have not independently verified the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the Prospectus,
nothing has come to the attention of such counsel that caused them to believe
that, at the time the Registration Statement became effective, the Registration
Statement (except as to financial statements, financial data and supporting
schedules contained therein, as to which such counsel need express no opinion)
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or at the Closing Date or any later date on which the Option
Shares are to be purchased, as the case may be, the Prospectus contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.