1
2,250,000 SHARES(1)
INTEVAC, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
, 1996
ROBERTSON, STEPHENS & COMPANY LLC
HAMBRECHT & QUIST LLC
As Representatives of the several Underwriters
c/o Robertson, Stephens & Company LLC
555 California Street
Suite 2600
San Francisco, California 94104
Ladies/Gentlemen:
Intevac, Inc., a California corporation (the "Company"), and certain
shareholders of the Company named in Schedule B hereto (hereafter called the
"Selling Shareholders") address you as the Representatives of each of the
persons, firms and corporations listed in Schedule A hereto (herein
collectively called the "Underwriters") and hereby confirm their respective
agreements with the several Underwriters as follows:
1. Description of Shares. The Company proposes to issue and sell
1,500,000 shares of its authorized and unissued Common Stock, no par value, to
the several Underwriters. The Selling Shareholders, acting severally and not
jointly, propose to sell an aggregate of 750,000 shares of the Company's
authorized and outstanding Common Stock, no par value, to the several
Underwriters. The 1,500,000 shares of Common Stock, no par value, of the
Company to be sold by the Company are hereinafter called the "Company Shares"
and the 750,000 shares of Common Stock, no par value, to be sold by the Selling
Shareholders are hereinafter called the "Selling Shareholder Shares." The
Company Shares and the Selling Shareholder Shares are hereinafter collectively
referred to as the "Firm Shares." The Company also proposes to grant to the
Underwriters an option to purchase up to 337,500 additional shares of the
Company's Common Stock, no par value (the "Option Shares"), as provided in
Section 7 hereof. As used in this Agreement, the term "Shares" shall include
the Firm Shares and the Option Shares. All shares of Common Stock, no par
value, of the Company to be outstanding after giving effect to the sales
contemplated hereby, including the Shares, are hereinafter referred to as
"Common Stock." Unless the context otherwise requires, all representations and
warranties of the Company herein shall also be deemed to be representations and
warranties with respect to all predecessor entities, including without
limitation Intevac Industries, Inc., and its subsidiary Intevac, Inc. and DKP
Holding Co. and its subsidiary DKP Electronics.
2. Representations, Warranties and Agreements of the Company and
the Selling Shareholders.
I. The Company represents and warrants to and agrees
with each Underwriter and each Selling Shareholder that:
(a) A registration statement on Form S-1 (File
No. 333-_____) with respect to the Shares, including a prospectus subject to
completion, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
applicable rules and regulations (the "Rules
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1 Plus an option to purchase up to 337,500 additional shares from the
Company to cover over-allotments.
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and Regulations") of the Securities and Exchange Commission (the "Commission")
under the Act and has been filed with the Commission; such amendments to such
registration statement, such amended prospectuses subject to completion and
such abbreviated registration statements pursuant to Rule 462(b) of the Rules
and Regulations as may have been required prior to the date hereof have been
similarly prepared and filed with the Commission; and the Company will file
such additional amendments to such registration statement, such amended
prospectuses subject to completion and such abbreviated registration statements
as may hereafter be required. Copies of such registration statement and
amendments, of each related prospectus subject to completion (the "Preliminary
Prospectuses") and of any abbreviated registration statement pursuant to Rule
462(b) of the Rules and Regulations have been delivered to you.
If the registration statement relating to the Shares
has been declared effective under the Act by the Commission, the Company will
prepare and promptly file with the Commission the information omitted from the
registration statement pursuant to Rule 430A(a) or, if Robertson, Stephens &
Company LLC, on behalf of the several Underwriters, shall agree to the
utilization of Rule 434 of the Rules and Regulations, the information required
to be included in any term sheet filed pursuant to Rule 434(b) or (c), as
applicable, of the Rules and Regulations pursuant to subparagraph (1), (4) or
(7) of Rule 424(b) of the Rules and Regulations or as part of a post-effective
amendment to the registration statement (including a final form of prospectus).
If the registration statement relating to the Shares has not been declared
effective under the Act by the Commission, the Company will prepare and
promptly file an amendment to the registration statement, including a final
form of prospectus, or, if Robertson, Stephens & Company LLC, on behalf of the
several Underwriters, shall agree to the utilization of Rule 434 of the Rules
and Regulations, the information required to be included in any term sheet
filed pursuant to Rule 434(b) or (c), as applicable, of the Rules and
Regulations. The term "Registration Statement" as used in this Agreement shall
mean such registration statement, including financial statements, schedules and
exhibits, in the form in which it became or becomes, as the case may be,
effective (including, if the Company omitted information from the registration
statement pursuant to Rule 430A(a) or files a term sheet pursuant to Rule 434
of the Rules and Regulations, the information deemed to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
or Rule 434(d) of the Rules and Regulations) and, in the event of any amendment
thereto or the filing of any abbreviated registration statement pursuant to
Rule 462(b) of the Rules and Regulations relating thereto after the effective
date of such registration statement, shall also mean (from and after the
effectiveness of such amendment or the filing of such abbreviated registration
statement) such registration statement as so amended, together with any such
abbreviated registration statement. The term "Prospectus" as used in this
Agreement shall mean the prospectus relating to the Shares as included in such
Registration Statement at the time it becomes effective (including, if the
Company omitted information from the Registration Statement pursuant to Rule
430A(a) of the Rules and Regulations, the information deemed to be a part of
the Registration Statement at the time it became effective pursuant to Rule
430A(b) of the Rules and Regulations); provided, however, that if in reliance
on Rule 434 of the Rules and Regulations and with the consent of Robertson,
Stephens & Company LLC, on behalf of the several Underwriters, the Company
shall have provided to the Underwriters a term sheet pursuant to Rule 434(b) or
(c), as applicable, prior to the time that a confirmation is sent or given for
purposes of Section 2(10)(a) of the Act, the term "Prospectus" shall mean the
"prospectus subject to completion" (as defined in Rule 434(g) of the Rules and
Regulations) last provided to the Underwriters by the Company and circulated by
the Underwriters to all prospective purchasers of the Shares (including the
information deemed to be a part of the Registration Statement at the time it
became effective pursuant to Rule 434(d) of the Rules and Regulations).
Notwithstanding the foregoing, if any revised prospectus shall be provided to
the Underwriters by the Company for use in connection with the offering of the
Shares that differs from the prospectus referred to in the immediately
preceding sentence (whether or not such revised prospectus is required to be
filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations), the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to the Underwriters for such use. If
in reliance on Rule 434 of the Rules and Regulations and with the consent of
Robertson, Stephens & Company LLC, on behalf of the several Underwriters, the
Company shall have provided to the Underwriters a term sheet pursuant to Rule
434(b) or (c), as applicable, prior to the time that a confirmation is sent or
given for purposes of Section 2(10)(a) of the Act, the Prospectus and the term
sheet, together, will not be materially different from the prospectus in the
Registration Statement.
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(b) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus or instituted
proceedings for that purpose, and each such Preliminary Prospectus has
conformed in all material respects to the requirements of the Act and the Rules
and Regulations and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and at the time the Registration Statement became or
becomes, as the case may be, effective and at all times subsequent thereto up
to and on the Closing Date (hereinafter defined) and on any later date on which
Option Shares are to be purchased, (i) the Registration Statement and the
Prospectus, and any amendments or supplements thereto, contained and will
contain all material information required to be included therein by the Act and
the Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, (ii) the Registration
Statement, and any amendments or supplements thereto, did not and will not
include any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and (iii) the Prospectus, and any amendments or supplements
thereto, did not and will not include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that none of the representations and warranties contained in
this subparagraph (b) shall apply to information contained in or omitted from
the Registration Statement or Prospectus, or any amendment or supplement
thereto, in reliance upon, and in conformity with, written information relating
to any Underwriter furnished to the Company by such Underwriter specifically
for use in the preparation thereof.
(c) 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 with full
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Prospectus; the
transfer of certain assets by Varian Associates, Inc. to DKP Electronics and
the acquisition of DKP Electronics from Varian Associates, Inc. by DKP Holding
Co. pursuant to the Capitalization Agreement between both parties dated
February 15, 1991 (the "Acquisition") was duly and properly effectuated in
accordance with applicable corporate and other laws, and DKP Electronics
received good and marketable title to all properties and assets transferred to
it by Varian Associates, Inc. in connection with the Acquisition; the Company
owns all of the outstanding capital stock of its subsidiaries free and clear of
any pledge, lien, security interest, encumbrance, claim or equitable interest;
each of the Company and its subsidiaries is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified or be in good
standing would not have a material adverse effect on the condition (financial
or otherwise), earnings, operations, business or business prospects of the
Company and its subsidiaries considered as one enterprise; no proceeding has
been instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification;
each of the Company and its subsidiaries is in possession of and operating in
compliance with all authorizations, licenses, certificates, consents, orders
and permits from state, federal and other regulatory authorities which are
material to the conduct of its business, all of which are valid and in full
force and effect; neither the Company nor any of its subsidiaries is in
violation of its respective charter or bylaws or in default in the performance
or observance of any obligation, agreement, covenant or condition contained in
any bond, debenture, note or other evidence of indebtedness, or in any lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of its subsidiaries or their respective
properties may be bound, except where such violation or default would not have
a material adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its subsidiaries
considered as one enterprise; and neither the Company nor any of its
subsidiaries is in violation of any material law, order, rule, regulation,
writ, injunction, judgment or decree of any court, government or governmental
agency or body, domestic or foreign, having jurisdiction over the Company or
any of its subsidiaries or over their respective properties of which it has
knowledge. The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than Intevac Foreign Sales
Corporation, Intevac GmbH, Intevac Asia Pte Ltd., San Jose Technology Corp.,
and Lotus Technologies, Inc. ("Lotus"); and, other than Lotus, none of the
subsidiaries of the Company is a "significant subsidiary," as such term is
defined in Rule 405 of the Rules and Regulations and none of such
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subsidiaries have operations, assets or liabilities that are material to the
condition (financial or otherwise) earnings, operations, business or business
prospects of the Company and its subsidiaries considered as one enterprise.
(d) The Company has full legal right, power and
authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the part of
the Company, enforceable in accordance with its terms, except as rights to
indemnification and contribution hereunder may be limited by applicable law and
except as the enforcement hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles; the
performance of this Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any bond, debenture, note or
other evidence of indebtedness, or under any lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of its subsidiaries or their respective properties may be
bound, (ii) the charter or bylaws of the Company or any of its subsidiaries, or
(iii) any law, order, rule, regulation, writ, injunction, judgment or decree of
any court, government or governmental agency or body, domestic or foreign,
having jurisdiction over the Company or any of its subsidiaries or over their
respective properties except with respect to (i) and (ii) where such breach,
violation or default would not have a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company and its subsidiaries considered as one enterprise. No consent,
approval, authorization or order of or qualification with any court, government
or governmental agency or body, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or over their respective properties is
required for the execution and delivery of this Agreement and the consummation
by the Company or any of its subsidiaries of the transactions herein
contemplated, except such as may be required under the Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which shall be obtained
on or prior to the Closing Date, or except such as may be required under state
or other securities or Blue Sky laws.
(e) There is not any pending or, to the best of
the Company's knowledge, threatened action, suit, claim or proceeding against
the Company, any of its subsidiaries or any of their respective officers or any
of their respective properties, assets or rights before any court, government
or governmental agency or body, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or over their respective officers or
properties or otherwise which (i) might result in any material adverse change
in the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries considered as one
enterprise or might materially and adversely affect their properties, assets or
rights, (ii) might prevent consummation of the transactions contemplated hereby
or (iii) is required to be disclosed in the Registration Statement or
Prospectus and is not so disclosed; and there are no agreements, contracts,
leases or documents of the Company or any of its subsidiaries of a character
required to be described or referred to in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement by the
Act or the Rules and Regulations which have not been accurately described in
all material respects in the Registration Statement or Prospectus or filed as
exhibits to the Registration Statement.
(f) All outstanding shares of capital stock of
the Company (including the Selling Shareholder Shares) have been duly
authorized and validly issued and are fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and the authorized and outstanding
capital stock of the Company is as set forth in the Prospectus under the
caption "Capitalization" and conforms in all material respects to the
statements relating thereto contained in the Registration Statement and the
Prospectus (and such statements correctly state the substance of the
instruments defining the capitalization of the Company); the Company Shares and
the Option Shares have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by the
Company against payment therefor in accordance with the terms of this
Agreement, will be duly and validly issued and fully paid and nonassessable,
and will be sold free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest; and no preemptive right, co-sale
right, registration right, right of first refusal or other similar right of
shareholders exists with respect to any of the Company Shares or Option Shares
or the issuance and sale thereof other than those that have been
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expressly waived prior to the date hereof and those that will automatically
expire upon and will not apply to the consummation of the transactions
contemplated on the Closing Date. No further approval or authorization of any
shareholder, the Board of Directors of the Company or others is required for
the issuance and sale or transfer of the Shares, except as may be required
under the Act or the Exchange Act which shall be obtained on or prior to the
Closing Date, or except as may be required under state or other securities or
Blue Sky laws. All issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued and are
fully paid and nonassessable, and were not issued in violation of or subject to
any preemptive right, or other rights to subscribe for or purchase shares and
are owned by the Company free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest. Except as disclosed in the
Prospectus and the financial statements of the Company, and the related notes
thereto, included in the Prospectus, neither the Company nor any subsidiary has
outstanding any options to purchase, or any preemptive rights or other rights
to subscribe for or to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its capital
stock or any such options, rights, convertible securities or obligations. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
(g) Ernst & Young LLP, which has examined (i) the
consolidated financial statements of the Company, together with the related
schedules and notes, as of December 31, 1995 and March 30, 1996 and for each of
the years in the three (3) years ended December 31, 1995 and for the three (3)
months ended March 30, 1996 and (ii) the financial statements of Lotus,
together with the related notes, as of January 31, 1996 and April 30, 1996 and
for the twelve (12) months ended January 31, 1996 and for the three (3) months
ended April 30, 1996, each filed with the Commission as a part of the
Registration Statement, which are included in the Prospectus, are independent
accountants within the meaning of the Act and the Rules and Regulations; the
audited consolidated financial statements of the Company, together with the
related schedules and notes, the unaudited consolidated financial information
and the audited financial statements of Lotus, together with the related notes,
forming part of the Registration Statement and Prospectus, fairly present the
financial position and the results of operations of the Company and its
subsidiaries and Lotus, as the case may be, at the respective dates and for the
respective periods to which they apply; and all audited consolidated financial
statements of the Company, together with the related schedules and notes, the
unaudited consolidated financial information and the audited financial
statements of Lotus, together with the related notes, filed with the Commission
as part of the Registration Statement, have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved except as may be otherwise stated therein. The selected and
summary financial and statistical data included in the Registration Statement
present fairly the information shown therein and have been compiled on a basis
consistent with the audited financial statements presented therein. The pro
forma financial information included in the Registration Statement and
Prospectus comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X and present fairly the
information shown therein. No other financial statements or schedules are
required to be included in the Registration Statement.
(h) Subsequent to the respective dates as of
which information is given in the Registration Statement and Prospectus, there
has not been (i) any material adverse change in the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries considered as one enterprise, (ii) any transaction that is
material to the Company and its subsidiaries considered as one enterprise,
except transactions entered into in the ordinary course of business, (iii) any
obligation, direct or contingent, that is material to the Company and its
subsidiaries considered as one enterprise, incurred by the Company or its
subsidiaries, except obligations incurred in the ordinary course of business,
(iv) any change in the capital stock or outstanding indebtedness of the Company
or any of its subsidiaries that is material to the Company and its subsidiaries
considered as one enterprise, (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any of its
subsidiaries, or (vi) any loss or damage (whether or not insured) to the
property of the Company or any of its subsidiaries which has been sustained or
will have been sustained which has a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company and its subsidiaries considered as one enterprise.
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(i) Except as set forth in the Registration
Statement and Prospectus (i) each of the Company and its subsidiaries has good
and marketable title to all properties and assets described in the Registration
Statement and Prospectus as owned by it, free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest, other than such as
would not have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries considered as one enterprise, (ii) the agreements to which
the Company or any of its subsidiaries is a party described in the Registration
Statement and Prospectus are valid agreements, enforceable by the Company and
its subsidiaries (as applicable), except as the enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles and, to the Company's knowledge, the other
contracting party or parties thereto are not in material breach or material
default under any of such agreements, and (iii) each of the Company and its
subsidiaries has valid and enforceable leases for all properties described in
the Registration Statement and Prospectus as leased by it, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles. Except as set
forth in the Registration Statement and Prospectus, the Company owns or leases
all such properties as are necessary to its operations as now conducted or as
proposed to be conducted.
(j) The Company and its subsidiaries have timely
filed all necessary federal, state and foreign income and franchise tax returns
and have paid all taxes shown thereon as due, and there is no tax deficiency
that has been or, to the Company's knowledge, might be asserted against the
Company or any of its subsidiaries that might have a material adverse effect on
the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries considered as one
enterprise; and all tax liabilities are adequately provided for on the books of
the Company and its subsidiaries.
(k) The Company and its subsidiaries maintain
insurance with insurers of recognized financial responsibility of the types and
in the amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and personal
property owned or leased by the Company or its subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect; neither the
Company nor any such subsidiary has been refused any insurance coverage sought
or applied for; and neither the Company nor any such subsidiary has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not
materially and adversely affect the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise.
(l) To the Company's knowledge, no labor
disturbance by the employees of the Company or any of its subsidiaries exists
or is imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers or customers,
that might be expected to result in a material adverse change in the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company and its subsidiaries considered as one enterprise. No
collective bargaining agreement exists with any of the Company's employees and,
to the Company's knowledge, no such agreement is imminent.
(m) Each of the Company and its subsidiaries owns
or possesses adequate rights to use all patents, patent rights, inventions,
trade secrets, know-how, trademarks, service marks, trade names and copyrights
which are necessary to conduct its businesses as described in the Registration
Statement and Prospectus; the expiration of any patents, patent rights, trade
secrets, trademarks, service marks, trade names or copyrights would not have a
material adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its subsidiaries
considered as one enterprise; the Company has not received any notice of, and
has no knowledge of, any infringement of or conflict with asserted rights of
the Company by others with respect to any patent, patent rights, inventions,
trade secrets, know-how, trademarks, service marks, trade names or copyrights;
and the Company has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of others with respect to any
patent, patent rights, inventions, trade
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secrets, know-how, trademarks, service marks, trade names or copyrights which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries considered as one enterprise.
(n) The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is listed on The Nasdaq National Market,
and the Company has taken no action designed to, or likely to have the effect
of, terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from The Nasdaq National Market, nor has the Company
received any notification that the Commission or the National Association of
Securities Dealers, Inc. ("NASD") is contemplating terminating such
registration or listing.
(o) The Company has been advised concerning the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder, and has in the past conducted, and intends in the
future to conduct, its affairs in such a manner as to ensure that it will not
become an "investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act and such rules and regulations.
(p) The Company has not distributed and will not
distribute prior to the later of (i) the Closing Date, or any date on which
Option Shares are to be purchased, as the case may be, and (ii) completion of
the distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than any Preliminary Prospectuses, the
Prospectus, the Registration Statement and other materials, if any, permitted
by the Act.
(q) Neither the Company nor any of its
subsidiaries has at any time during the last five (5) years (i) made any
unlawful contribution to any candidate for foreign office or failed to disclose
fully any contribution in violation of law, or (ii) made any payment to any
federal or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
(r) The Company has not taken and will not take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
(s) Each officer and director of the Company,
each Selling Shareholder, and certain other beneficial owners of an aggregate
of __________ shares of Common Stock have agreed in writing that such person
will not, until 90 days from the date of the Prospectus (the "Lock-up Period"),
offer to sell, contract to sell, or otherwise sell, dispose of, loan, pledge or
grant any rights with respect to (collectively, a "Disposition") any shares of
Common Stock, any options or warrants to purchase any shares of Common Stock or
any securities convertible into or exchangeable for shares of Common Stock
(collectively, "Securities") now owned or hereafter acquired directly by such
person or with respect to which such person has or hereafter acquires the power
of disposition, otherwise than (i) as a bona fide gift or gifts, provided the
donee or donees thereof agree in writing to be bound by this restriction, (ii)
as a distribution to partners or shareholders of such person, provided that the
distributees thereof agree in writing to be bound by the terms of this
restriction, or (iii) with the prior written consent of Robertson, Stephens &
Company LLC. The foregoing restriction has been expressly agreed to preclude
the holder of the Securities from engaging in any hedging or other transaction
which is designed to or reasonably expected to lead to or result in a
Disposition of Securities during the Lock-up Period, even if such Securities
would be disposed of by someone other than such holder. Such prohibited
hedging or other transactions would include, without limitation, any short sale
(whether or not against the box) or any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to any
Securities or with respect to any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from Securities. Furthermore, such person has also agreed and
consented to the entry of stop transfer instructions with the Company's
transfer agent against the transfer of the Securities held by such person
except in compliance with this restriction. The Company has provided to
counsel for the Underwriters a complete and accurate list of all
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securityholders of the Company and the number and type of securities held by
each securityholder. The Company has provided to counsel for the Underwriters
true, accurate and complete copies of all of the agreements pursuant to which
its officers, directors and shareholders have agreed to such or similar
restrictions (the "Lock-up Agreements") presently in effect or effected hereby.
The Company hereby represents and warrants that it will not release any of its
officers, directors or other shareholders from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of Robertson,
Stephens & Company LLC. The Company further represents and warrants that with
respect to the Company's 1995 Stock Option/Issuance Plan it will not grant any
options that will vest until after the Lock-up Period and that the Company will
not waive any rights it may have to repurchase any shares proposed to be sold
that were issued upon exercise of unvested options granted under the Company's
1995 Stock Option/Issuance Plan.
(t) Except as set forth in the Registration
Statement and Prospectus, (i) the Company is in compliance with all rules, laws
and regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental Laws")
which are applicable to its business, (ii) the Company has received no notice
from any governmental authority or third party of an asserted claim under
Environmental Laws, which claim is required to be disclosed in the Registration
Statement and the Prospectus, (iii) except as disclosed in the Registration
Statement and Prospectus, the Company is unaware of the performance of any act
which would require it to make future material capital expenditures to comply
with Environmental Laws and (iv) except as disclosed in the Registration
Statement and Prospectus, no property which is owned, leased or occupied by the
Company now or in the past has been designated as a Superfund site pursuant to
the Comprehensive Response, Compensation, and Liability Act of 1980, as amended
(42 U.S.C. Section 9601, et seq.), or otherwise designated as a contaminated
site under applicable state or local law.
(u) The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets, (iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(v) There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for the benefit of
any of the officers or directors of the Company or any of the members of the
families of any of them, except as disclosed in the Registration Statement and
the Prospectus.
(w) The Company has complied with all provisions
of Section 517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
(x) The sales by the Company of: (i) its
molecular beam epitaxy systems to Chorus Corporation on October 21, 1993; (ii)
its night vision business to Litton Systems, Inc. on March 5, 1995; and (iii)
its leasehold interest in 601 California Avenue, Palo Alto, California (the
"Site") to 601 California Avenue LLC (the "LLC") on July 28, 1995, a limited
liability Company formed and owned by the Company and certain shareholders of
the Company, were effectuated in accordance with applicable corporate and other
laws, and resulted in no liability of any kind to the Company, except as
disclosed in the Registration Statement and Prospectus. The formation of the
LLC was in accordance with the Beverly-Killea Limited Liability Company Act, as
amended.
(y) The acquisition by the Company of: (i) San
Jose Technology Corp. on May __, 1996; (ii) Cathode Technology Corporation on
January __, 1996; and (iii) Lotus on June __, 1996 were effectuated in
accordance with applicable corporate and other laws, and resulted in no
liability to the Company, except as disclosed in the Registration Statement and
Prospectus.
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II. Each Selling Shareholder, severally and not jointly,
represents and warrants to and agrees with each Underwriter and the Company
that:
(a) Such Selling Shareholder now has and on the
Closing Date will have valid marketable title to the Shares to be sold by such
Selling Shareholder, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest other than pursuant to this Agreement;
and upon delivery of such Shares hereunder and payment of the purchase price as
herein contemplated, each of the Underwriters will obtain valid marketable
title to the Shares purchased by it from such Selling Shareholder, free and
clear of any pledge, lien, security interest pertaining to such Selling
Shareholder or such Selling Shareholder's property, encumbrance, claim or
equitable interest, including any liability for estate or inheritance taxes, or
any liability to or claims of any creditor, devisee, legatee or beneficiary of
such Selling Shareholder.
(b) Such Selling Shareholder has duly authorized
(if applicable), executed and delivered, in the form heretofore furnished to
the Representatives, an irrevocable Power of Attorney (the "Power of Attorney")
appointing ___________ and ___________ as attorneys-in-fact (collectively, the
"Attorneys" and individually, an "Attorney") and a Letter of Transmittal and
Custody Agreement (the "Custody Agreement") with
______________________________, as custodian (the "Custodian"); each of the
Power of Attorney and the Custody Agreement constitutes a valid and binding
agreement on the part of such Selling Shareholder, enforceable in accordance
with its terms, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles; and each of such Selling Shareholder's Attorneys, acting alone, is
authorized to execute and deliver this Agreement and the certificate referred
to in Section 6(h) hereof on behalf of such Selling Shareholder, to determine
the purchase price to be paid by the several Underwriters to such Selling
Shareholder as provided in Section 3 hereof, to authorize the delivery of the
Selling Shareholder Shares under this Agreement and to duly endorse (in blank
or otherwise) the certificate or certificates representing such Shares or a
stock power or powers with respect thereto, to accept payment therefor, and
otherwise to act on behalf of such Selling Shareholder in connection with this
Agreement.
(c) All consents, approvals, authorizations and
orders required for the execution and delivery by such Selling Shareholder of
the Power of Attorney and the Custody Agreement, the execution and delivery by
or on behalf of such Selling Shareholder of this Agreement and the sale and
delivery of the Selling Shareholder Shares under this Agreement (other than, at
the time of the execution hereof (if the Registration Statement has not yet
been declared effective by the Commission), the issuance of the order of the
Commission declaring the Registration Statement effective and such consents,
approvals, authorizations or orders as may be necessary under state or other
securities or Blue Sky laws) have been obtained and are in full force and
effect; such Selling Shareholder, if other than a natural person, has been duly
organized and is validly existing in good standing under the laws of the
jurisdiction of its organization as the type of entity that it purports to be;
and such Selling Shareholder has full legal right, power and authority to enter
into and perform its obligations under this Agreement and such Power of
Attorney and Custody Agreement, and to sell, assign, transfer and deliver the
Shares to be sold by such Selling Shareholder under this Agreement.
(d) Such Selling Shareholder will not, during the
Lock-up Period, effect the Disposition of any Securities now owned or hereafter
acquired directly by such Selling Shareholder or with respect to which such
Selling Shareholder has or hereafter acquires the power of disposition,
otherwise than (i) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction, (ii) as a
distribution to partners or shareholders of such Selling Shareholder, provided
that the distributees thereof agree in writing to be bound by the terms of this
restriction, or (iii) with the prior written consent of Robertson, Stephens &
Company LLC. The foregoing restriction is expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction
which is designed to or reasonably expected to lead to or result in a
Disposition of Securities during the Lock-up Period, even if such Securities
would be disposed of by someone other than the Selling Shareholder. Such
prohibited hedging or other transactions would include, without limitation, any
short sale (whether or not against the box) or any purchase, sale or grant of
any right (including, without limitation, any put or call option) with respect
to any Securities or with respect to any security (other than a broad-based
market basket or
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index) that includes, relates to or derives any significant part of its value
from the Securities. Such Selling Shareholder also agrees and consents to the
entry of stop transfer instructions with the Company's transfer agent against
the transfer of the securities held by such Selling Shareholder except in
compliance with this restriction.
(e) Certificates in negotiable form for all
Shares to be sold by such Selling Shareholder under this Agreement, together
with a stock power or powers duly endorsed in blank by such Selling
Shareholder, have been placed in custody with the Custodian for the purpose of
effecting delivery hereunder.
(f) This Agreement has been duly authorized by
each Selling Shareholder that is not a natural person and has been duly
executed and delivered by or on behalf of such Selling Shareholder and is a
valid and binding agreement of such Selling Shareholder, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles; and the performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a material breach or
violation of any of the terms and provisions of, or constitute a default under,
(i) any bond, debenture, note or other evidence of indebtedness, or under any
lease, contract, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder, or any Selling Shareholder Shares
hereunder or any properties of such Selling Stockholder may be bound, (ii) to
the best of such Selling Shareholders' knowledge, result in any violation of
any law, order, rule, regulation, writ, injunction, judgment or decree of any
court, government or governmental agency or body, domestic or foreign, having
jurisdiction over such Selling Shareholder or over the properties of such
Selling Shareholder, or (iii) if such Selling Shareholder is other than a
natural person, result in any violation of any provisions of the charter,
bylaws or other organizational documents of such Selling Shareholder.
(g) Such Selling Shareholder has not taken and
will not take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Shares.
(h) Such Selling Shareholder has not distributed
and will not distribute any prospectus or other offering material in connection
with the offering and sale of the Shares.
(i) All information furnished by or on behalf of
such Selling Shareholder relating to such Selling Shareholder and the Selling
Shareholder Shares that is contained in the representations and warranties of
such Selling Shareholder in such Selling Shareholder's Power of Attorney or set
forth in the Registration Statement or the Prospectus is, and at the time the
Registration Statement became or becomes, as the case may be, effective and at
all times subsequent thereto up to and on the Closing Date, was or will be,
true, correct and complete, and does not, and at the time the Registration
Statement became or becomes, as the case may be, effective and at all times
subsequent thereto up to and on the Closing Date (hereinafter defined), will
not, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make such
information not misleading.
(j) Such Selling Shareholder will review the
Prospectus and will comply with all agreements and satisfy all conditions on
its part to be complied with or satisfied pursuant to this Agreement on or
prior to the Closing Date and will advise one of its Attorneys and Robertson,
Stephens & Company LLC prior to the Closing Date if any statement to be made on
behalf of such Selling Shareholder in the certificate contemplated by Section
6(h) would be inaccurate if made as of the Closing Date.
(k) Such Selling Shareholder does not have, or
has waived prior to the date hereof, any preemptive right, co-sale right or
right of first refusal or other similar right to purchase any of the Shares
that are to be sold by the Company or any of the other Selling Shareholders to
the Underwriters pursuant to this Agreement; such Selling Shareholder does not
have, or has waived prior to the date hereof, any registration right or other
similar right to participate in the offering made by the Prospectus, other than
such rights of participation as have been
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satisfied by the participation of such Selling Shareholder in the transactions
to which this Agreement relates in accordance with the terms of this Agreement;
and such Selling Shareholder does not own any warrants, options or similar
rights to acquire, and does not have any right or arrangement to acquire, any
capital stock, rights, warrants, options or other securities from the Company,
other than those described in the Registration Statement and the Prospectus.
(l) Such Selling Shareholder is not aware that
any of the representations and warranties of the Company set forth in Section
2.I. above is untrue or inaccurate in any material respect.
3. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and the Selling Shareholders
agree, severally and not jointly, to sell to the Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Shareholders, respectively, at a purchase price of $_____ per
share, the respective number of Company Shares as hereinafter set forth and
Selling Shareholder Shares set forth opposite the names of the Company and the
Selling Shareholders in Schedule B hereto. The obligation of each Underwriter
to the Company and to each Selling Shareholder shall be to purchase from the
Company or such Selling Shareholder that number of Company Shares or Selling
Shareholder Shares, as the case may be, which (as nearly as practicable, as
determined by you) is in the same proportion to the number of Company Shares or
Selling Shareholder Shares, as the case may be, set forth opposite the name of
the Company or such Selling Shareholder in Schedule B hereto as the number of
Firm Shares which is set forth opposite the name of such Underwriter in
Schedule A hereto (subject to adjustment as provided in Section 10) is to the
total number of Firm Shares to be purchased by all the Underwriters under this
Agreement.
The certificates in negotiable form for the Selling
Shareholder Shares have been placed in custody (for delivery under this
Agreement) under the Custody Agreement. Each Selling Shareholder agrees that
the certificates for the Selling Shareholder Shares of such Selling Shareholder
so held in custody are subject to the interests of the Underwriters hereunder,
that the arrangements made by such Selling Shareholder for such custody,
including the Power of Attorney is to that extent irrevocable and that the
obligations of such Selling Shareholder hereunder shall not be terminated by
any act of such Selling Shareholder or by operation of law, whether by the
death or incapacity of such Selling Shareholder or the occurrence of any other
event, except as specifically provided herein or in the Custody Agreement. If
any Selling Shareholder should die or be incapacitated, or if any other such
event should occur, before the delivery of the certificates for the Selling
Shareholder Shares hereunder, the Selling Shareholder Shares to be sold by such
Selling Shareholder shall, except as specifically provided herein or in the
Custody Agreement, be delivered by the Custodian in accordance with the terms
and conditions of this Agreement as if such death, incapacity or other event
had not occurred, regardless of whether the Custodian shall have received
notice of such death or other event.
Delivery of definitive certificates for the Firm Shares to be
purchased by the Underwriters pursuant to this Section 3 shall be made against
receipt of a wire transfer reference number issued by the Federal Reserve
System evidencing payment of the purchase price therefor by the several
Underwriters by wire transfer of immediately available funds, to an account
specified in writing by the Company with regard to the Shares being purchased
from the Company, and to an account specified in writing by the Custodian for
the respective accounts of the Selling Shareholders with regard to the Shares
being purchased from such Selling Shareholders, at the offices of Brobeck,
Phleger & Harrison, Two Embarcadero Place, 2200 Geng Road, Palo Alto,
California 94303 (or at such other place as may be agreed upon among the
Representatives and the Company), at 7:00 A.M., San Francisco time (a) on the
third (3rd) full business day following the first day that Shares are traded,
(b) if this Agreement is executed and delivered after 1:30 P.M., San Francisco
time, the fourth (4th) full business day following the day that this Agreement
is executed and delivered or (c) at such other time and date not later than
seven (7) full business days following the first day that Shares are traded as
the Representatives and the Company may determine (or at such time and date to
which payment and delivery shall have been postponed pursuant to Section 10
hereof), such time and date of payment and delivery being herein called the
"Closing Date;" provided, however, that if the Company has not made available
to the Representatives copies of the Prospectus within the time provided in
Section 4(d) hereof, the Representatives may, in their sole discretion,
postpone the Closing Date until no later than
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two (2) full business days following delivery of copies of the Prospectus to
the Representatives. The certificates for the Firm Shares to be so delivered
will be made available to you at such office or such other location including,
without limitation, in New York City, as you may reasonably request for
checking at least one (1) full business day prior to the Closing Date and will
be in such names and denominations as you may request, such request to be made
at least two (2) full business days prior to the Closing Date. If the
Representatives so elect, delivery of the Firm Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated
to) make payment of the purchase price on behalf of any Underwriter or
Underwriters whose check or checks shall not have been received by you prior to
the Closing Date for the Firm Shares to be purchased by such Underwriter or
Underwriters. Any such payment by you shall not relieve any such Underwriter
or Underwriters of any of its or their obligations hereunder.
After the Registration Statement becomes effective, the
several Underwriters intend to make an initial public offering (as such term is
described in Section 11 hereof) of the Firm Shares at an initial public
offering price of $_____ per share. After the initial public offering, the
several Underwriters may, in their discretion, vary the public offering price.
The information set forth in the last paragraph on the front
cover page (insofar as such information relates to the Underwriters), on the
inside front cover page concerning stabilization, over-allotment and passive
market making by the Underwriters and in the second and sixth paragraphs under
the caption "Underwriting" in any Preliminary Prospectus and in the Prospectus
constitutes the only information furnished by the Underwriters to the Company
for inclusion in any Preliminary Prospectus, the Prospectus or the Registration
Statement, and you, on behalf of the respective Underwriters, represent and
warrant to the Company and the Selling Shareholders that the statements made
therein do not include any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
4. Further Agreements of the Company. The Company agrees with
the several Underwriters that:
(a) The Company will use its best efforts to
cause the Registration Statement and any amendment thereof, if not effective at
the time and date that this Agreement is executed and delivered by the parties
hereto, to become effective as promptly as possible; the Company will use its
best efforts to cause any abbreviated registration statement pursuant to Rule
462(b) of the Rules and Regulations as may be required subsequent to the date
the Registration Statement is declared effective to become effective as
promptly as possible; the Company will notify you, promptly after it shall
receive notice thereof, of the time when the Registration Statement, any
subsequent amendment to the Registration Statement or any abbreviated
registration statement has become effective or any supplement to the Prospectus
has been filed; if the Company omitted information from the Registration
Statement at the time it was originally declared effective in reliance upon
Rule 430A(a) of the Rules and Regulations, the Company will provide evidence
satisfactory to you that the Prospectus contains such information and has been
filed, within the time period prescribed, with the Commission pursuant to
subparagraph (1) or (4) of Rule 424(b) of the Rules and Regulations or as part
of a post-effective amendment to such Registration Statement as originally
declared effective which is declared effective by the Commission; if the
Company files a term sheet pursuant to Rule 434 of the Rules and Regulations,
the Company will provide evidence satisfactory to you that the Prospectus and
term sheet meeting the requirements of Rule 434(b) or (c), as applicable, of
the Rules and Regulations, have been filed, within the time period prescribed,
with the Commission pursuant to subparagraph (7) of Rule 424(b) of the Rules
and Regulations; if for any reason the filing of the final form of Prospectus
is required under Rule 424(b)(3) of the Rules and Regulations, it will provide
evidence satisfactory to you that the Prospectus contains such information and
has been filed with the Commission within the time period prescribed; it will
notify you promptly of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; promptly upon your request, it will prepare and file with the
Commission any amendments or supplements to the Registration Statement or
Prospectus which, in the opinion of
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counsel for the several Underwriters ("Underwriters' Counsel"), may be
necessary or advisable in connection with the distribution of the Shares by the
Underwriters; it will promptly prepare and file with the Commission, and
promptly notify you of the filing of, any amendments or supplements to the
Registration Statement or Prospectus which may be necessary to correct any
statements or omissions, if, at any time when a prospectus relating to the
Shares is required to be delivered under the Act, any event shall have occurred
as a result of which the Prospectus or any other prospectus relating to the
Shares as then in effect would include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; in
case any Underwriter is required to deliver a prospectus nine (9) months or
more after the effective date of the Registration Statement in connection with
the sale of the Shares, it will prepare promptly upon request, but at the
expense of such Underwriter, such amendment or amendments to the Registration
Statement and such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act; and it will
file no amendment or supplement to the Registration Statement or Prospectus
which shall not previously have been submitted to you a reasonable time prior
to the proposed filing thereof or to which you shall reasonably object in
writing, subject, however, to compliance with the Act and the Rules and
Regulations and the provisions of this Agreement.
(b) The Company will advise you, promptly after
it shall receive notice or obtain knowledge, of the issuance of any stop order
by the Commission suspending the effectiveness of the Registration Statement or
of the initiation or threat of any proceeding for that purpose; and it will
promptly use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued.
(c) The Company will use its best efforts to
qualify the Shares for offering and sale under the securities laws of such
jurisdictions as you may designate and to continue such qualifications in
effect for so long as may be required for purposes of the distribution of the
Shares, except that the Company shall not be required in connection therewith
or as a condition thereof to qualify as a foreign corporation or to execute a
general consent to service of process in any jurisdiction in which it is not
otherwise required to be so qualified or to so execute a general consent to
service of process. In each jurisdiction in which the Shares shall have been
qualified as above provided, the Company will make and file such statements and
reports in each year as are or may be required by the laws of such
jurisdiction.
(d) The Company will furnish to you, as soon as
available, and, in the case of the Prospectus and any term sheet or abbreviated
term sheet under Rule 434, in no event later than the first (1st) full business
day following the first day that Shares are traded, copies of the Registration
Statement (three of which will be signed and which will include all exhibits),
each Preliminary Prospectus, the Prospectus and any amendments or supplements
to such documents, including any prospectus prepared to permit compliance with
Section 10(a)(3) of the Act, all in such quantities as you may from time to
time reasonably request. Notwithstanding the foregoing, if Robertson, Stephens
& Company LLC, on behalf of the several Underwriters, shall agree to the
utilization of Rule 434 of the Rules and Regulations, the Company shall provide
to you copies of a Preliminary Prospectus updated in all respects through the
date specified by you in such quantities as you may from time to time
reasonably request.
(e) The Company will make generally available to
its securityholders as soon as practicable, but in any event not later than the
forty-fifth (45th) day following the end of the fiscal quarter first occurring
after the first anniversary of the effective date of the Registration
Statement, an earnings statement (which will be in reasonable detail but need
not be audited) complying with the provisions of Section 11(a) of the Act and
covering a twelve (12) month period beginning after the effective date of the
Registration Statement.
(f) During a period of five (5) years after the
date hereof, the Company will furnish to its shareholders as soon as
practicable after the end of each respective period, annual reports (including
financial statements audited by independent certified public accountants) and
unaudited quarterly reports of operations for each of the first three quarters
of the fiscal year, and will furnish to you and the other several Underwriters
hereunder, upon request (i) concurrently with furnishing such reports to its
shareholders, statements of operations of the Company for each of the first
three (3) quarters in the form furnished to the Company's shareholders, (ii)
concur-
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rently with furnishing to its shareholders, a balance sheet of the Company as of
the end of such fiscal year, together with statements of operations, of
shareholders' equity, and of cash flows of the Company for such fiscal year,
accompanied by a copy of the certificate or report thereon of independent
certified public accountants, (iii) as soon as they are available, copies of all
reports (financial or other) mailed to shareholders, (iv) as soon as they are
available, copies of all reports and financial statements furnished to or filed
with the Commission, any securities exchange or the NASD, (v) every material
press release and every material news item or article in respect of the Company,
its subsidiaries or its or their affairs which was generally released to
shareholders or prepared by the Company or any of its subsidiaries, and (vi) any
additional information of a public nature concerning the Company or its
subsidiaries, or its business which you may reasonably request. During such
five (5) year period, if the Company shall have active subsidiaries, the
foregoing financial statements shall be on a consolidated basis to the extent
that the accounts of the Company and its subsidiaries are consolidated, and
shall be accompanied by similar financial statements for any significant
subsidiary which is not so consolidated.
(g) The Company will apply the net proceeds from
the sale of the Shares being sold by it in the manner set forth under the
caption "Use of Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent
and, if necessary under the jurisdiction of incorporation of the Company, a
registrar (which may be the same entity as the transfer agent) for its Common
Stock.
(i) If the transactions contemplated hereby are
not consummated by reason of any failure, refusal or inability on the part of
the Company or any Selling Shareholder to perform any agreement on their
respective parts to be performed hereunder or to fulfill any condition of the
Underwriters' obligations hereunder, or if the Company shall terminate this
Agreement pursuant to Section 11(a) hereof, or if the Underwriters shall
terminate this Agreement pursuant to Section 11(b)(i), the Company will
reimburse the several Underwriters for all out-of-pocket expenses (including
fees and disbursements of Underwriters' Counsel) incurred by the Underwriters
in investigating or preparing to market or marketing the Shares.
(j) If at any time during the ninety (90) day
period after the Registration Statement becomes effective, any rumor,
publication or event relating to or affecting the Company shall occur as a
result of which in your opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after written notice from you advising the
Company to the effect set forth above, forthwith prepare, consult with you
concerning the substance of and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(k) During the Lock-up Period, the Company will
not, without the prior written consent of Robertson, Stephens & Company LLC,
effect the Disposition of, directly or indirectly, any Securities other than
the sale of the Company Shares and the Option Shares hereunder and the
Company's issuance of options or Common Stock under the Company's presently
authorized 1991 Stock Option/Stock Issuance Plan, 1995 Stock Option/Stock
Issuance Plan and Employee Stock Purchase Plan (the "Plans").
(l) During a period of ninety (90) days from the
effective date of the Registration Statement, the Company will not file a
registration statement registering shares under the Plans or other employee
benefit plan.
5. Expenses.
(a) The Company and the Selling Shareholders
agree 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 and any amendments or
supplements thereto; the printing of
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this Agreement, the Agreement Among Underwriters, the Selected Dealer
Agreement, the Preliminary Blue Sky Survey and any Supplemental Blue Sky
Survey, the Underwriters' Questionnaire and Power of Attorney, and any
instruments related to any of the foregoing; the issuance and delivery of the
Shares hereunder to the several Underwriters, including transfer taxes, if any,
the cost of all certificates representing the Shares and transfer agents' and
registrars' fees; the fees and disbursements of counsel for the Company; all
fees and other charges of the Company's independent certified public
accountants; the cost of furnishing to the several Underwriters copies of the
Registration Statement (including appropriate exhibits), Preliminary Prospectus
and the Prospectus, and any amendments or supplements to any of the foregoing;
NASD filing fees and the cost of qualifying the Shares under the laws of such
jurisdictions as you may designate (including filing fees and fees and
disbursements of Underwriters' Counsel in connection with such NASD filings and
Blue Sky qualifications); and all other expenses directly incurred by the
Company and the Selling Shareholders in connection with the performance of
their obligations hereunder. Any additional expenses incurred as a result of
the sale of the Shares by the Selling Shareholders will be borne collectively
by the Company and the Selling Shareholders. The provisions of this Section
5(a)(i) are intended to relieve the Underwriters from the payment of the
expenses and costs which the Selling Shareholders and the Company hereby agree
to pay, but shall not affect any agreement which the Selling Shareholders and
the Company may make, or may have made, for the sharing of any of such expenses
and costs. Such agreements shall not impair the obligations of the Company and
the Selling Shareholders hereunder to the several Underwriters.
(ii) In addition to its other
obligations under Section 8(a) hereof, the Company agrees that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding described in Section 8(a) hereof, it will reimburse the
Underwriters on a monthly basis for all reasonable legal or other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
obligation to reimburse the Underwriters for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Underwriters shall promptly
return such payment to the Company together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) listed from time to time in The Wall
Street Journal which represents the base rate on corporate loans posted by a
substantial majority of the nation's thirty (30) largest banks (the "Prime
Rate"). Any such interim reimbursement payments which are not made to the
Underwriters within thirty (30) days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request.
(iii) In addition to their other
obligations under Section 8(b) hereof, each Selling Shareholder agrees that, as
an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding described in Section 8(b) hereof relating to such
Selling Shareholder, it will reimburse the Underwriters on a monthly basis for
all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of such Selling Shareholder's obligation to
reimburse the Underwriters for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, the Underwriters shall promptly return such payment
to the Selling Shareholders, together with interest, compounded daily,
determined on the basis of the Prime Rate. Any such interim reimbursement
payments which are not made to the Underwriters within thirty (30) days of a
request for reimbursement shall bear interest at the Prime Rate from the date
of such request.
(b) In addition to their other obligations under
Section 8(b) hereof, the Underwriters severally and not jointly agree that, as
an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding described in Section 8(b) hereof, they will
reimburse the Company and each Selling Shareholder on a monthly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the
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Company and each such Selling Shareholder for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Company and each such Selling
Shareholder shall promptly return such payment to the Underwriters together
with interest, compounded daily, determined on the basis of the Prime Rate.
Any such interim reimbursement payments which are not made to the Company and
each such Selling Shareholder within thirty (30) days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request.
(c) It is agreed that any controversy arising out
of the operation of the interim reimbursement arrangements set forth in
Sections 5(a)(ii), 5(a)(iii) and 5(b) hereof, including the amounts of any
requested reimbursement payments, the method of determining such amounts and
the basis on which such amounts shall be apportioned among the reimbursing
parties, shall be settled by arbitration conducted under the provisions of the
Constitution and Rules of the Board of Governors of the New York Stock
Exchange, Inc. or pursuant to the Code of Arbitration Procedure of the NASD.
Any such arbitration must be commenced by service of a written demand for
arbitration or a written notice of intention to arbitrate, therein electing the
arbitration tribunal. In the event the party demanding arbitration does not
make such designation of an arbitration tribunal in such demand or notice, then
the party responding to said demand or notice is authorized to do so. Any such
arbitration will be limited to the operation of the interim reimbursement
provisions contained in Sections 5(a)(ii), 5(a)(iii) and 5(b) hereof and will
not resolve the ultimate propriety or enforceability of the obligation to
indemnify for expenses which is created by the provisions of Sections 8(a),
8(b) and 8(c) hereof or the obligation to contribute to expenses which is
created by the provisions of Section 8(e) hereof.
6. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters to purchase and pay for the Shares as provided herein
shall be subject to the accuracy, as of the date hereof and the Closing Date
and any later date on which Option Shares are to be purchased, as the case may
be, of the representations and warranties of the Company and the Selling
Shareholders herein, to the performance by the Company and the Selling
Shareholders of their respective obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become
effective not later than 2:00 P.M., San Francisco time, on the date following
the date of this Agreement, or such later date and time as shall be consented
to in writing by you; and no stop order suspending the effectiveness thereof
shall have been issued and no proceedings for that purpose shall have been
initiated or, to the knowledge of the Company, any Selling Shareholder or any
Underwriter, threatened by the Commission, and any request of the Commission
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
Underwriters' Counsel.
(b) All corporate proceedings and other legal
matters in connection with this Agreement, the form of Registration Statement
and the Prospectus, and the registration, authorization, issue, sale and
delivery of the Shares, shall have been reasonably satisfactory to
Underwriters' Counsel, and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable them to
pass upon the matters referred to in this Section.
(c) Subsequent to the execution and delivery of
this Agreement and prior to the Closing Date, or any later date on which Option
Shares are to be purchased, as the case may be, there shall not have been any
change in the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries considered
as one enterprise from that set forth in the Registration Statement or
Prospectus, which, in your sole judgment, is material and adverse and that
makes it, in your sole judgment, impracticable or inadvisable to proceed with
the public offering of the Shares as contemplated by the Prospectus.
(d) You shall have received on the Closing Date
and on any later date on which Option Shares are to be purchased, as the case
may be, the following opinion of Brobeck, Phleger and Harrison, counsel for the
Company and the Selling Shareholders, dated the Closing Date or such later date
on which Option Shares are to
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be purchased, as the case may be, addressed to the Underwriters and with
reproduced copies or signed counterparts thereof for each of the Underwriters,
to the effect that:
(i) The Company and each
Significant Subsidiary (as that term is defined in Regulation
S-X) has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation;
(ii) The Company and each
Significant Subsidiary has the corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Prospectus;
(iii) The Company and each
Significant Subsidiary is duly qualified to do business as a
foreign corporation and is in good standing in each
jurisdiction, if any, in which the ownership or leasing of its
properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or
be in good standing would not have a material adverse effect
on the condition (financial or otherwise), earnings,
operations or business of the Company and its subsidiaries
considered as one enterprise;
(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 (including the Selling
Shareholder Shares) have been duly and validly issued and are
fully paid and nonassessable, and will not have been issued in
violation of or subject to any preemptive right, or to such
counsel's knowledge, co-sale right, registration right, right
of first refusal or other similar right;
(v) All issued and outstanding
shares of capital stock of each subsidiary of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable, and have not been issued in violation of or
subject to any preemptive right, or to such counsel's
knowledge, co-sale right, registration right, right of first
refusal or other similar right and are owned by the Company
free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest;
(vi) The Firm Shares or the Option
Shares, as the case may be, to be issued by the Company
pursuant to the terms of this Agreement have been duly
authorized and, upon issuance and delivery against payment
therefor in accordance with the terms hereof, will be duly and
validly issued and fully paid and nonassessable, and will not
have been issued in violation of or subject to any preemptive
right, co-sale right, registration right, right of first
refusal or other similar right;
(vii) The Company has the corporate
power and authority to enter into this Agreement and to issue,
sell and deliver to the Underwriters the Shares to be issued
and sold by it hereunder;
(viii) This Agreement has been duly
authorized by all necessary corporate action on the part of
the Company and has been duly executed and delivered by the
Company and, assuming due authorization, execution and
delivery by you, is a valid and binding agreement of the
Company, enforceable in accordance with its terms, except
insofar as indemnification provisions may be limited by
applicable law and except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or affecting creditors' rights generally or
by general equitable principles;
(ix) The Registration Statement has
become effective under the Act and, to such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has
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been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Act;
(x) The Registration Statement and
the Prospectus, and each amendment or supplement thereto
(other than the financial statements (including supporting
schedules) and financial data derived therefrom as to which
such counsel need express no opinion), as of the effective
date of the Registration Statement, complied as to form in all
material respects with the requirements of the Act and the
applicable Rules and Regulations;
(xi) The information in the
Prospectus under the caption "Description of Capital Stock,"
to the extent that it constitutes matters of law or legal
conclusions, has been reviewed by such counsel and is a fair
summary of such matters and conclusions; and the forms of
certificates evidencing the Common Stock and filed as exhibits
to the Registration Statement comply with California law;
(xii) The description in the
Registration Statement and the Prospectus of the charter and
bylaws of the Company and of statutes are accurate and fairly
present the information required to be presented by the Act
and the applicable Rules and Regulations;
(xiii) To such counsel's knowledge,
there are no agreements, contracts, leases or documents to
which the Company is a party of a character required to be
described or referred to in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration
Statement which are not described or referred to therein or
filed as required;
(xiv) The performance of this
Agreement and the consummation of the transactions herein
contemplated (other than performance of the Company's
indemnification obligations hereunder, concerning which no
opinion need be expressed) will not (a) result in any
violation of the Company's charter or bylaws or (b) to such
counsel's knowledge, result in a breach or violation of any
of the terms and provisions of, or constitute a default under,
any material bond, debenture, note or other evidence of
indebtedness, or any material lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument known to such counsel to which
the Company is a party or by which its properties are bound,
or any applicable material statute, rule or regulation known
to such counsel or, to such counsel's knowledge, any order,
writ or decree of any court, government or governmental agency
or body having jurisdiction over the Company or any of its
subsidiaries, or over any of their properties or operations;
provided however, that no opinion need be rendered concerning
state securities or Blue Sky laws;
(xv) No consent, approval,
authorization or order of or qualification with any court,
government or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries, or over any of
their properties or operations is necessary in connection with
the consummation by the Company of the transactions herein
contemplated, except such as have been obtained under the Act
and the Exchange Act or such as may be required under state or
other securities or Blue Sky laws in connection with the
purchase and the distribution of the Shares by the
Underwriters and the rules and regulations of the NASD as they
pertain to the fairness of the Underwriters' compensation;
(xvi) To such counsel's knowledge,
there are no legal or governmental proceedings pending or
threatened against the Company or any of its subsidiaries of a
character required to be disclosed in the Registration
Statement or the Prospectus by the Act or the Rules and
Regulations, other than those described therein;
(xvii) To such counsel's knowledge,
neither the Company nor any of its subsidiaries is presently
(a) in violation of its respective charter or bylaws, or (b)
in breach of any applicable
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material statute, rule or regulation known to such counsel or,
to such counsel's knowledge, any order, writ or decree of any
court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries, or over any of their
properties or operations;
(xviii) To such counsel's knowledge,
except as set forth in the Registration Statement and
Prospectus, no holders of Common Stock or other securities of
the Company have registration rights with respect to
securities of the Company and, except as set forth in the
Registration Statement and Prospectus, all holders of
securities of the Company having rights known to such counsel
to registration of such shares of Common Stock or other
securities, because of the filing of the Registration
Statement by the Company have, with respect to the offering
contemplated thereby, waived such rights or such rights have
expired by reason of lapse of time following notification of
the Company's intent to file the Registration Statement or
have included securities in the Registration Statement
pursuant to the exercise of and in full satisfaction of such
rights;
(xix) Each Selling Shareholder which
is not a natural person has full right, power and authority to
enter into and to perform its obligations under the Power of
Attorney and Custody Agreement to be executed and delivered by
it in connection with the transactions contemplated herein;
the Power of Attorney and Custody Agreement of each Selling
Shareholder that is not a natural person has been duly
authorized by such Selling Shareholder; the Power of Attorney
and Custody Agreement of each Selling Shareholder has been
duly executed and delivered by or on behalf of such Selling
Shareholder; and the Power of Attorney and Custody Agreement
of each Selling Shareholder constitutes the valid and binding
agreement of such Selling Shareholder, enforceable in
accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable
principles;
(xx) Each of the Selling
Shareholders has full right, power and authority to enter into
and to perform its obligations under this Agreement and to
sell, transfer, assign and deliver the Shares to be sold by
such Selling Shareholder hereunder;
(xxi) This Agreement has been duly
authorized by each Selling Shareholder that is not a natural
person and has been duly executed and delivered by or on
behalf of each Selling Shareholder; and
(xxii) Upon the delivery of and
payment for the Shares as contemplated in this Agreement, each
of the Underwriters will receive valid marketable title to the
Shares purchased by it from such Selling Shareholder, free and
clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest. In rendering such opinion, such
counsel may assume that the Underwriters are without notice of
any defect in the title of the Shares being purchased from the
Selling Shareholders.
In addition, such counsel shall state that such
counsel has participated in conferences with officials and other
representatives of the Company, the Company's patent counsel, the
Representatives, Underwriters' Counsel and the independent certified public
accountants of the Company, at which such conferences the contents of the
Registration Statement and Prospectus and related matters were discussed, and
although they have not verified the accuracy or completeness of the statements
contained in the Registration Statement or the Prospectus, nothing has come to
the attention of such counsel which leads them to believe that, at the time the
Registration Statement became effective and at all times subsequent thereto up
to and on the Closing Date and on any later date on which Option Shares are to
be purchased, the Registration Statement and any amendment or supplement
thereto (other than the financial statements including supporting schedules and
other financial and statistical information derived therefrom, as to which such
counsel need express no comment) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or at the Closing Date
or any later date on which the Option Shares are to be
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purchased, as the case may be, the Prospectus and any amendment or supplement
thereto (except as aforesaid) contained any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as
to questions of law not involving the laws of the United States or the State of
California upon opinions of local counsel, and as to questions of fact upon
representations or certificates of officers of the Company, the Selling
Shareholders or officers of the Selling Shareholders (when the Selling
Shareholder is not a natural person), and of government officials, in which
case their opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or inaccuracy in any such opinion,
representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of the
Underwriters, and to Underwriters' Counsel.
(e) You shall have received on the Closing Date
and on any later date on which Option Shares are purchased, as the case may be,
the following opinion of Stanley Z. Cole, outside patent counsel for the
Company, dated the Closing Date or such later date on which Option Shares are
to be purchased, as the case may be, addressed to the Underwriters and with
reproduced copies or signed counterparts thereof for each of the Underwriters,
stating that such counsel is familiar with the technology used by the Company,
its business and the manner of its technology's use thereof and has read the
Prospectus, including particularly the portions of the Prospectus referring to
patents, patent rights, inventions, trade secrets, know-how, trademarks,
service marks, trade names, copyrights or other proprietary information or
materials (herein called Intellectual Property Rights) and to the effect that:
(i) Such counsel has no reason to
believe that the Prospectus (a) contains any untrue statement
of a material fact with respect to Intellectual Property
Rights owned or used by the Company, or the manner of its use
thereof, or any claim or possible claim on the part of any
person that the Company is infringing any Intellectual
Property Rights of any such person or (b) omits to state any
material fact relating to Intellectual Property Rights owned
or used by the Company, or the manner of its use thereof, or
any claim or possible claim of which such counsel has
knowledge, that is required to be stated in the Prospectus or
is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(ii) To the best of such counsel's
knowledge, and other than as set forth in the Prospectus, the
Company has not received notice of any other claims of
infringement of any Intellectual Property Rights which are
currently pending;
(iii) Other than as set forth in the
Prospectus and to the best of such counsel's knowledge, there
are no other legal or governmental proceedings relating to any
Intellectual Property Rights owned or used by the Company
pending against the Company, or any third party, there are no
legal or governmental proceedings relating to a third party's
Intellectual Property Rights pending against the Company, and
no such proceedings are threatened or contemplated by
governmental authorities or others;
(iv) Other than as set forth in the
Prospectus, such counsel does not know of any contracts or
other documents relating to the Intellectual Property Rights
of the Company of a character required to be filed as an
exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus that
are not filed or described as required;
(v) Other than as set forth in the
Prospectus, to the best of such counsel's knowledge, the
Company is not infringing or otherwise violating any
Intellectual Property Rights of others and there are no
infringements by others of any Intellectual Property Rights
owned or used by the Company which, in the judgment of such
counsel, could affect materially the use thereof by the
Company;
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(vi) To the best of such counsel's
knowledge, the Company owns or possesses sufficient licenses
or other rights to use all necessary Intellectual Property
Rights to conduct the business being conducted by the Company
as described in the Prospectus;
(vii) Such statements in the
Prospectus under the captions "Risk Factors--Patents and Other
Intellectual Property Rights" and "Business--Patents and
Other Intellectual Property Rights", insofar as such
statements constitute summaries of matters of law, are
accurate and complete statements or summaries of such matters
of law set forth therein;
(viii) As to each patent and patent
application listed in Exhibit 1 to this opinion and except as
set forth in such Exhibit 1, there is an assignment to the
Company. The assignments have been submitted to the United
States Patent and Trademark Office ("USPTO") and those
assignments have been recorded in the USPTO's title records or
have been submitted to the USPTO for recording;
(ix) The Company's U.S. patent
applications listed on Exhibit 1 to this opinion have been
prepared and filed in the USPTO in a form and with
accompanying papers that are acceptable to the USPTO for the
purposes of according each such application a filing date and
serial number, and of placing each such application in
condition for eventual examination on the merits as to
patentability. For each such U.S. application an Official
Filing Receipt has been received from the USPTO. As to each
of such applications, such counsel is not aware of any
material defect of form in preparation or filing; and
(x) As to each of the Company's
foreign patents and patent applications based on the United
States patents or applications listed on Exhibit 1 to this
opinion, the applications have either (a) been submitted to
patent firms in the respective foreign countries with
instructions to file the applications in the patent offices of
those countries naming the Company as the owner of record, or
(b) as to certain Patent Cooperation Treaty applications, been
submitted directly to the relevant patent office of those
countries naming the Company as the owner of record. In each
such application, written confirmation has been received that
the application has, in fact, been accepted for filing by such
patent offices. There is no assurance that the patent offices
of the respective countries will not reject the claims of the
foreign patent applications as being unpatentable, or that any
claims will be allowed without amendment, nor is there any
assurance that those patent offices will ultimately conclude
that the foreign patent applications meet all requirements for
patentability.
(f) You shall have received on the Closing Date
and on any later date on which Option Shares are to be purchased, as the case
may be, an opinion of Wilson, Sonsini, Goodrich & Rosati, in form and substance
satisfactory to you, with respect to the sufficiency of all such corporate
proceedings and other legal matters relating to this Agreement and the
transactions contemplated hereby as you may reasonably require, and the Company
shall have furnished to such counsel such documents as they may have requested
for the purpose of enabling them to pass upon such matters.
(g) You shall have received on the Closing Date
and on any later date on which Option Shares are to be purchased, as the case
may be, a letter from Ernst & Young LLP addressed to the Underwriters, dated
the Closing Date or such later date on which Option Shares are to be purchased,
as the case may be, confirming that they are independent certified public
accountants with respect to the Company within the meaning of the Act and the
applicable published Rules and Regulations and based upon the procedures
described in such letter delivered to you concurrently with the execution of
this Agreement (herein called the "Original Letter"), but carried out to a date
not more than five (5) business days prior to the Closing Date or such later
date on which Option Shares are to be purchased, as the case may be, (i)
confirming, to the extent true, that the statements and conclusions set forth
in the Original Letter are accurate as of the Closing Date or such later date
on which Option Shares are to be purchased, as the case may be, and (ii)
setting forth any revisions and additions to the statements and conclusions set
forth in the Original Letter which are necessary to reflect any changes in the
facts described in
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the Original Letter since the date of such letter, or to reflect the
availability of more recent financial statements, data or information. The
letter shall not disclose any change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise from that set forth in the
Registration Statement or Prospectus, which, in your sole judgment, is material
and adverse and that makes it, in your sole judgment, impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated by
the Prospectus. The Original Letter from Ernst & Young LLP shall be addressed to
or for the use of the Underwriters in form and substance satisfactory to the
Underwriters and shall (i) represent, to the extent true, that they are
independent certified public accountants with respect to the Company within the
meaning of the Act and the applicable published Rules and Regulations, (ii) set
forth their opinion with respect to their examination of (A) the consolidated
balance sheet of the Company as of December 31, 1995 and as of March 30, 1996
and related consolidated statements of operations, shareholders' equity, and
cash flows for each of the years in the three (3) years ended December 31, 1995
and the three (3) months ended March 30, 1996, respectively, and (B) the balance
sheet of Lotus as of January 31, 1996 and as of April 30, 1996, and related
consolidated statements of operations, shareholders' equity, and cash flows for
the twelve (12) months ended January 31, 1996 and for the three (3) months ended
April 30, 1996, (iii) state that Ernst & Young LLP has performed the procedure
set out in Statement on Auditing Standards No. 71 ("SAS 71") for a review of
interim financial information and providing the report of Ernst & Young LLP as
described in SAS 71 on the financial statements for each of the quarters in the
nine (9) quarter period ended March 30, 1996 (the "Quarterly Financial
Statements"), (iv) state that in the course of such review, nothing came to
their attention that leads them to believe that any material modifications need
to be made to any of the Quarterly Financial Statements in order for them to be
in compliance with generally accepted accounting principles consistently applied
across the periods presented, (v) state that nothing came to their attention
that caused them to believe that the pro forma financial statements included in
the Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X and that the pro forma adjustments thereto have not been properly
applied to the historical amounts in the compilation of such statements, and
(vi) address other matters agreed upon by Ernst & Young LLP and you. In
addition, you shall have received from Ernst & Young LLP a letter addressed to
the Company and made available to you for the use of the Underwriters stating
that their review of the Company's system of internal accounting controls, to
the extent they deemed necessary in establishing the scope of their examination
of the Company's consolidated financial statements as of December 31, 1995 did
not disclose any weaknesses in internal controls that they considered to be
material weaknesses.
(h) You shall have received on the Closing Date
and on any later date on which Option Shares are to be purchased, as the case
may be, a certificate of the Company, dated the Closing Date or such later date
on which Option Shares are to be purchased, as the case may be, signed by the
Chief Executive Officer and Chief Financial Officer of the Company, to the
effect that, and you shall be satisfied that:
(i) The representations and
warranties of the Company in this Agreement are true and
correct, as if made on and as of the Closing Date or any later
date on which Option Shares are to be purchased, as the case
may be, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date or any later date
on which Option Shares are to be purchased, as the case may
be;
(ii) No stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
are pending or threatened under the Act;
(iii) When the Registration Statement
became effective and at all times subsequent thereto up to the
delivery of such certificate, the Registration Statement and
the Prospectus, and any amendments or supplements thereto,
contained all material information required to be included
therein by the Act and the Rules and Regulations and in all
material respects conformed to the requirements of the Act and
the Rules and Regulations, the Registration Statement, and any
amendment or supplement thereto, did not and does not include
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements
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therein not misleading, the Prospectus, and any amendment or
supplement thereto, did not and does not include any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and,
since the effective date of the Registration Statement, there
has occurred no event required to be set forth in an amended
or supplemented Prospectus which has not been so set forth;
and
(iv) Subsequent to the respective
dates as of which information is given in the Registration
Statement and Prospectus, there has not been (a) any material
adverse change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the
Company and its subsidiaries considered as one enterprise, (b)
any transaction that is material to the Company and its
subsidiaries considered as one enterprise, except transactions
entered into in the ordinary course of business, (c) any
obligation, direct or contingent, that is material to the
Company and its subsidiaries considered as one enterprise,
incurred by the Company or its subsidiaries, except
obligations incurred in the ordinary course of business, (d)
any change in the capital stock or outstanding indebtedness of
the Company or any of its subsidiaries that is material to the
Company and its subsidiaries considered as one enterprise, (e)
any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company or any of its
subsidiaries, or (f) any loss or damage (whether or not
insured) to the property of the Company or any of its
subsidiaries which has been sustained or will have been
sustained which has a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries
considered as one enterprise.
(i) You shall be satisfied that, and you shall
have received a certificate, dated the Closing Date from the Attorneys for each
Selling Shareholder to the effect that, as of the Closing Date, they have not
been informed that:
(i) The representations and
warranties made by such Selling Shareholder herein are not
true or correct in any material respect on the Closing Date;
or
(ii) Such Selling Shareholder has
not complied with any obligation or satisfied any condition
which is required to be performed or satisfied on the part of
such Selling Shareholder at or prior to the Closing Date.
(j) The Company shall have obtained and delivered
to you an agreement from each officer and director of the Company, each Selling
Shareholder, and certain other beneficial owners of an aggregate of __________
shares of Common Stock in writing prior to the date hereof that such person
will not, during the Lock-up Period, effect the Disposition of any Securities
now owned or hereafter acquired directly by such person or with respect to
which such person has or hereafter acquires the power of disposition, otherwise
than (i) as a bona fide gift or gifts, provided the donee or donees thereof
agree in writing to be bound by this restriction, (ii) as a distribution to
partners or shareholders of such person, provided that the distributees thereof
agree in writing to be bound by the terms of this restriction, or (iii) with
the prior written consent of Robertson, Stephens & Company LLC. The foregoing
restriction shall have been expressly agreed to preclude the holder of the
Securities from engaging in any hedging or other transaction which is designed
to or reasonably expected to lead to or result in a Disposition of Securities
during the Lock-up Period, even if such Securities would be disposed of by
someone other than the such holder. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including,
without limitation, any put or call option) with respect to any Securities or
with respect to any security (other than a broad-based market basket or index)
that includes, relates to or derives any significant part of its value from the
Securities. Furthermore, such person will have also agreed and consented to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of the Securities held by such person except in compliance
with this restriction.
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(k) The Company and the Selling
Shareholders shall have furnished to you such further certificates and
documents as you shall reasonably request (including certificates of
officers of the Company, the Selling Shareholders or officers of the
Selling Shareholders (when the Selling Shareholder is not a natural
person)) as to the accuracy of the representations and warranties of
the Company and the Selling Shareholders herein, as to the performance
by the Company and the Selling Shareholders of their respective
obligations hereunder and as to the other conditions concurrent and
precedent to the obligations of the Underwriters hereunder.
All such opinions, certificates, letters and
documents will be in compliance with the provisions hereof only if they are
reasonably satisfactory to Underwriters' Counsel. The Company and the Selling
Shareholders will furnish you with such number of conformed copies of such
opinions, certificates, letters and documents as you shall reasonably request.
7. Option Shares.
(a) On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company hereby grants to the several
Underwriters, for the purpose of covering over-allotments in connection with
the distribution and sale of the Firm Shares only, a nontransferable option to
purchase up to an aggregate of 337,500 Option Shares at the purchase price per
share for the Firm Shares set forth in Section 3 hereof. Such option may be
exercised by the Representatives on behalf of the several Underwriters on one
(1) or more occasions in whole or in part during the period of thirty (30) days
after the date on which the Firm Shares are initially offered to the public, by
giving written notice to the Company. The number of Option Shares to be
purchased by each Underwriter upon the exercise of such option shall be the
same proportion of the total number of Option Shares to be purchased by the
several Underwriters pursuant to the exercise of such option as the number of
Firm Shares purchased by such Underwriter (set forth in Schedule A hereto)
bears to the total number of Firm Shares purchased by the several Underwriters
(set forth in Schedule A hereto), adjusted by the Representatives in such
manner as to avoid fractional shares.
Delivery of definitive certificates for the Option
Shares to be purchased by the several Underwriters pursuant to the exercise of
the option granted by this Section 7 shall be made against receipt of a wire
transfer reference number issued by the Federal Reserve System evidencing
payment of the purchase price therefor by the several Underwriters by wire
transfer of immediately available funds to an account specified in writing by
the Company. Such delivery and payment shall take place at the offices of
Brobeck, Phleger & Harrison, Two Embarcadero Place, 2200 Geng Road, Palo Alto,
California 94303 or at such other place as may be agreed upon among the
Representatives and the Company (i) on the Closing Date, if written notice of
the exercise of such option is received by the Company at least two (2) full
business days prior to the Closing Date, or (ii) on a date which shall not be
later than the third (3rd) full business day following the date the Company
receives written notice of the exercise of such option, if such notice is
received by the Company less than two (2) full business days prior to the
Closing Date.
The certificates for the Option Shares to be so
delivered will be made available to you at such office or such other location
including, without limitation, in New York City, as you may reasonably request
for checking at least one (1) full business day prior to the date of payment
and delivery and will be in such names and denominations as you may request,
such request to be made at least two (2) full business days prior to such date
of payment and delivery. If the Representatives so elect, delivery of the
Option Shares may be made by credit through full fast transfer to the accounts
at the Depository Trust Company designated by the Representatives.
It is understood that you, individually, and not as
the Representatives of the several Underwriters, may (but shall not be
obligated to) make payment of the purchase price on behalf of any Underwriter
or Underwriters whose check or checks shall not have been received by you prior
to the date of payment and delivery for the Option Shares to be purchased by
such Underwriter or Underwriters. Any such payment by you shall not relieve
any such Underwriter or Underwriters of any of its or their obligations
hereunder.
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(b) Upon exercise of any option provided for in
Section 7(a) hereof, the obligations of the several Underwriters to purchase
such Option Shares will be subject (as of the date hereof and as of the date of
payment and delivery for such Option Shares) to the accuracy of and compliance
with the representations, warranties and agreements of the Company herein, to
the accuracy of the statements of the Company and officers of the Company made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, to the conditions set forth in Section 6 hereof and to
the condition that all proceedings taken at or prior to the payment date in
connection with the sale and transfer of such Option Shares shall be
satisfactory in form and substance to you and to Underwriters' Counsel, and you
shall have been furnished with all such documents, certificates and opinions as
you may request in order to evidence the accuracy and completeness of any of
the representations, warranties or statements, the performance of any of the
covenants or agreements of the Company or the satisfaction of any of the
conditions herein contained.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject (including,
without limitation, in its capacity as an Underwriter or as a "qualified
independent underwriter" within the meaning of Schedule E of the Bylaws of the
NASD), under the Act, the Exchange Act or otherwise, specifically including,
but not limited to, losses, claims, damages or liabilities (or actions in
respect thereof) arising out of or based upon (i) any breach of any
representation, warranty, agreement or covenant of the Company herein
contained, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any untrue statement or alleged untrue
statement of any material fact contained in any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
such Preliminary Prospectus or the Prospectus, or any such amendment or
supplement thereto, in reliance upon, and in conformity with, written
information relating to any Underwriter furnished to the Company by such
Underwriter, directly or through you, specifically for use in the preparation
thereof and, provided further, that the indemnity agreement provided in this
Section 8(a) with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any losses, claims,
damages, liabilities or actions based upon any untrue statement or alleged
untrue statement of material fact or omission or alleged omission to state
therein a material fact purchased Shares, if a copy of the Prospectus in which
such untrue statement or alleged untrue statement or omission or alleged
omission was corrected had not been sent or given to such person within the
time required by the Act and the Rules and Regulations, unless such failure is
the result of noncompliance by the Company with Section 4(d) hereof.
The indemnity agreement in this Section 8(a) shall
extend upon the same terms and conditions to, and shall inure to the benefit
of, each person, if any, who controls any Underwriter within the meaning of the
Act or the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which the Company may otherwise have.
(b) Each Selling Shareholder, severally and not
jointly, agrees to indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject (including, without limitation, in its capacity
as an Underwriter or as a "qualified independent underwriter" within the
meaning of Schedule E or the Bylaws of the NASD) under the Act, the Exchange
Act or otherwise, specifically including, but not limited to, losses, claims,
damages or liabilities (or actions in respect thereof) arising out of or based
upon (i) any breach of any representation, warranty, agreement or covenant of
such Selling Shareholder herein contained, (ii) any untrue statement or alleged
untrue statement of any
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material fact contained in the Registration Statement or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any untrue statement or alleged untrue
statement of any material fact contained in any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in the case of subparagraphs (ii) and (iii) of this Section 8(b) to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company or such
Underwriter by such Selling Shareholder, directly or through such Selling
Shareholder's representatives, specifically for use in the preparation thereof,
and agrees to reimburse each Underwriter for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement provided in this Section 8(b) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any losses, claims, damages, liabilities or actions
based upon any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission to state therein a material fact purchased
Shares, if a copy of the Prospectus in which such untrue statement or alleged
untrue statement or omission or alleged omission was corrected had not been
sent or given to such person within the time required by the Act and the Rules
and Regulations, unless such failure is the result of noncompliance by the
Company with Section 4(d) hereof.
The indemnity agreement in this Section 8(b) shall
extend upon the same terms and conditions to, and shall inure to the benefit
of, each person, if any, who controls any Underwriter within the meaning of the
Act or the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which such Selling Shareholder may otherwise have.
(c) Each Underwriter, severally and not jointly,
agrees to indemnify and hold harmless the Company and each Selling Shareholder
against any losses, claims, damages or liabilities, joint or several, to which
the Company or such Selling Shareholder may become subject under the Act, the
Exchange Act or otherwise, specifically including, but not limited to, losses,
claims, damages or liabilities (or actions in respect thereof) arising out of
or based upon (i) any breach of any representation, warranty, agreement or
covenant of such Underwriter herein contained, (ii) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in the case of subparagraphs (ii)
and (iii) of this Section 8(c) to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by such Underwriter, directly or through you, specifically for
use in the preparation thereof, and agrees to reimburse the Company and each
such Selling Shareholder for any legal or other expenses reasonably incurred by
the Company and each such Selling Shareholder in connection with investigating
or defending any such loss, claim, damage, liability or action.
The indemnity agreement in this Section 8(c) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
officer of the Company who signed the Registration Statement and each director
of the Company, each Selling Shareholder and each person, if any, who controls
the Company or any Selling Shareholder within the meaning of the Act or the
Exchange Act. This indemnity agreement shall be in addition to any liabilities
which each Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified
party under this Section 8 of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
any indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 8. In case any such
action is brought against any indemnified
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party, and it notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it shall elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of the indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with appropriate local
counsel) approved by the indemnifying party representing all the indemnified
parties under Section 8(a), 8(b) or 8(c) hereof who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. In no event shall any
indemnifying party be liable in respect of any amounts paid in settlement of
any action unless the indemnifying party shall have approved the terms of such
settlement; provided that such consent shall not be unreasonably withheld. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and
indemnification could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(e) In order to provide for just and equitable
contribution in any action in which a claim for indemnification is made
pursuant to this Section 8 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 8 provides for indemnification in such case, all the parties
hereto shall contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (after contribution from others) in such
proportion so that, except as set forth in Section 8(f) hereof, the
Underwriters severally and not jointly are responsible pro rata for the portion
represented by the percentage that the underwriting discount bears to the
initial public offering price, and the Company and the Selling Shareholders are
responsible for the remaining portion, provided, however, that (i) no
Underwriter shall be required to contribute any amount in excess of the amount
by which the underwriting discount applicable to the Shares purchased by such
Underwriter exceeds the amount of damages which such Underwriter has been
otherwise required to pay and (ii) no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. The contribution agreement in this Section 8(e) shall
extend upon the same terms and conditions to, and shall inure to the benefit
of, each person, if any, who controls any Underwriter, the Company or any
Selling Shareholder within the meaning of the Act or the Exchange Act and each
officer of the Company who signed the Registration Statement and each director
of the Company.
(f) The liability of each Selling Shareholder
under the representations, warranties and agreements contained herein and under
the indemnity agreements contained in the provisions of this Section 8 shall be
limited to an amount equal to the initial public offering price of the Selling
Shareholder Shares sold by such Selling Shareholder to the Underwriters minus
the amount of the underwriting discount paid thereon to the Underwriters by
such Selling Shareholder. The Company and such Selling Shareholders may agree,
as among themselves and without limiting the rights of the Underwriters under
this Agreement, as to the respective amounts of such liability for which they
each shall be responsible.
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(g) The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented
by counsel during the negotiations regarding the provisions hereof including,
without limitation, the provisions of this Section 8, and are fully informed
regarding said provisions. They further acknowledge that the provisions of
this Section 8 fairly allocate the risks in light of the ability of the parties
to investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and Prospectus as required by
the Act and the Exchange Act.
9. Representations, Warranties, Covenants and Agreements to
Survive Delivery. All representations, warranties, covenants and agreements of
the Company, the Selling Shareholders and the Underwriters herein or in
certificates delivered pursuant hereto, and the indemnity and contribution
agreements contained in Section 8 hereof shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter within the meaning of the
Act or the Exchange Act, or by or on behalf of the Company or any Selling
Shareholder or any of their officers, directors or controlling persons within
the meaning of the Act or the Exchange Act, and shall survive the delivery of
the Shares to the several Underwriters hereunder or termination of this
Agreement.
10. Substitution of Underwriters. If any Underwriter or
Underwriters shall fail to take up and pay for the number of Firm Shares agreed
by such Underwriter or Underwriters to be purchased hereunder upon tender of
such Firm Shares in accordance with the terms hereof, and if the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters so
agreed but failed to purchase does not exceed 10% of the Firm Shares, the
remaining Underwriters shall be obligated, severally in proportion to their
respective commitments hereunder, to take up and pay for the Firm Shares of
such defaulting Underwriter or Underwriters.
If any Underwriter or Underwriters so defaults and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed to take up and pay for exceeds 10% of the Firm
Shares, the remaining Underwriters shall have the right, but shall not be
obligated, to take up and pay for (in such proportions as may be agreed upon
among them) the Firm Shares which the defaulting Underwriter or Underwriters so
agreed but failed to purchase. If such remaining Underwriters do not, at the
Closing Date, take up and pay for the Firm Shares which the defaulting
Underwriter or Underwriters so agreed but failed to purchase, the Closing Date
shall be postponed for twenty-four (24) hours to allow the several Underwriters
the privilege of substituting within twenty-four (24) hours (including
non-business hours) another underwriter or underwriters (which may include any
nondefaulting Underwriter) satisfactory to the Company. If no such underwriter
or underwriters shall have been substituted as aforesaid by such postponed
Closing Date, the Closing Date may, at the option of the Company, be postponed
for a further twenty-four (24) hours, if necessary, to allow the Company the
privilege of finding another underwriter or underwriters, satisfactory to you,
to purchase the Firm Shares which the defaulting Underwriter or Underwriters so
agreed but failed to purchase. If it shall be arranged for the remaining
Underwriters or substituted underwriter or underwriters to take up the Firm
Shares of the defaulting Underwriter or Underwriters as provided in this
Section 10, (i) the Company shall have the right to postpone the time of
delivery for a period of not more than seven (7) full business days, in order
to effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees promptly to file any amendments to the Registration Statement,
supplements to the Prospectus or other such documents which may thereby be made
necessary, and (ii) the respective number of Firm Shares to be purchased by the
remaining Underwriters and substituted underwriter or underwriters shall be
taken as the basis of their underwriting obligation. If the remaining
Underwriters shall not take up and pay for all such Firm Shares so agreed to be
purchased by the defaulting Underwriter or Underwriters or substitute another
underwriter or underwriters as aforesaid and the Company shall not find or
shall not elect to seek another underwriter or underwriters for such Firm
Shares as aforesaid, then this Agreement shall terminate.
In the event of any termination of this Agreement pursuant to
the preceding paragraph of this Section 10, neither the Company nor any Selling
Shareholder shall be liable to any Underwriter (except as provided in Sections
5 and 8 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this Agreement, to
purchase the number of Firm Shares agreed by such Underwriter to be purchased
hereunder, which Underwriter shall remain liable to the Company, the Selling
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Shareholders and the other Underwriters for damages, if any, resulting from
such default) be liable to the Company or any Selling Shareholder (except to
the extent provided in Sections 5 and 8 hereof).
The term "Underwriter" in this Agreement shall include any
person substituted for an Underwriter under this Section 10.
11. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at the
earlier of (i) 6:30 A.M., San Francisco time, on the first full business day
following the effective date of the Registration Statement, or (ii) the time of
the initial public offering of any of the Shares by the Underwriters after the
Registration Statement becomes effective. The time of the initial public
offering shall mean the time of the release by you, for publication, of the
first newspaper advertisement relating to the Shares, or the time at which the
Shares are first generally offered by the Underwriters to the public by letter,
telephone, telegram or telecopy, whichever shall first occur. By giving notice
as set forth in Section 12 before the time this Agreement becomes effective,
you, as Representatives of the several Underwriters, or the Company, may
prevent this Agreement from becoming effective without liability of any party
to any other party, except as provided in Sections 4(i), 5 and 8 hereof.
(b) You, as Representatives of the several
Underwriters, shall have the right to terminate this Agreement by giving notice
as hereinafter specified at any time on or prior to the Closing Date or on or
prior to any later date on which Option Shares are to be purchased, as the case
may be, (i) if the Company or any Selling Shareholder shall have failed,
refused or been unable to perform any agreement on its part to be performed, or
because any other condition of the Underwriters' obligations hereunder required
to be fulfilled is not fulfilled, including, without limitation, any change in
the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries considered as one
enterprise from that set forth in the Registration Statement or Prospectus,
which, in your sole judgment, is material and adverse, or (ii) if additional
material governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally or minimum or
maximum prices shall have been generally established on the New York Stock
Exchange or on the American Stock Exchange or in the over the counter market by
the NASD, or trading in securities generally shall have been suspended on
either such exchange or in the over the counter market by the NASD, or if a
banking moratorium shall have been declared by federal, New York or California
authorities, or (iii) if the Company or any Significant Subsidiary shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as to interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss shall have
been insured, or (iv) if there shall have been a material adverse change in the
general political or economic conditions or financial markets as in your
reasonable judgment makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Shares, or (v) if there shall have been an
outbreak or escalation of hostilities or of any other insurrection or armed
conflict or the declaration by the United States of a national emergency which,
in the reasonable opinion of the Representatives, makes it impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated
by the Prospectus. In the event of termination pursuant to subparagraph (i)
above, the Company and the Selling Shareholders shall remain obligated to pay
costs and expenses pursuant to Sections 4(i), 5 and 8 hereof. Any termination
pursuant to any of subparagraphs (ii) through (v) above shall be without
liability of any party to any other party except as provided in Sections 5 and
8 hereof.
If you elect to prevent this Agreement from becoming effective
or to terminate this Agreement as provided in this Section 11, you shall
promptly notify the Company by telephone, telecopy or telegram, in each case
confirmed by letter. If the Company shall elect to prevent this Agreement from
becoming effective, the Company shall promptly notify you by telephone,
telecopy or telegram, in each case, confirmed by letter.
12. Notices. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to you
shall be mailed, delivered, telegraphed (and confirmed by letter) or telecopied
(and confirmed by letter) to you c/o Robertson, Stephens & Company, LLC, 555
California Street, Suite 2600, San Francisco, California 94104, telecopier
number (415) 781-0278, Attention: General Counsel, with a copy to
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Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, 650 Page Mill
Road, Palo Alto, CA 94304, telecopier number (415) 493-6811, Attention: Alan K.
Austin; if sent to the Company, such notice shall be mailed, delivered,
telegraphed (and confirmed by letter) or telecopied (and confirmed by letter)
to 3550 Bassett Street, Santa Clara, California 95054, telecopier number (408)
727-5739, Attention: Norman H. Pond, Chief Executive Officer, with a copy to
Brobeck, Phleger & Harrison, Two Embarcadero Place, 2200 Geng Road, Palo Alto,
California 94303, telecopier number (415) 496-2885, Attention: Gari L. Cheever;
if sent to one or more of the Selling Shareholders, such notice shall be sent
mailed, delivered, telegraphed (and confirmed by letter) or telecopied (and
confirmed by letter) to [NAME OF ATTORNEY-IN-FACT FOR SELLING SHAREHOLDERS], as
Attorney-in-Fact for the Selling Shareholders, at [ADDRESS OF
ATTORNEY-IN-FACT], telecopier number (___) ________.
13. Parties. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters and the Company and the Selling
Shareholders and their respective executors, administrators, successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any person or entity, other than the parties hereto and
their respective executors, administrators, successors and assigns, and the
controlling persons within the meaning of the Act or the Exchange Act, officers
and directors referred to in Section 8 hereof, any legal or equitable right,
remedy or claim in respect of this Agreement or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective executors, administrators, successors and assigns
and said controlling persons and said officers and directors, and for the
benefit of no other person or entity. No purchaser of any of the Shares from
any Underwriter shall be construed a successor or assign by reason merely of
such purchase.
In all dealings with the Company and the Selling Shareholders
under this Agreement, you shall act on behalf of each of the several
Underwriters, and the Company and the Selling Shareholders shall be entitled to
act and rely upon any statement, request, notice or agreement made or given by
you jointly or by Robertson, Stephens & Company LLC on behalf of you.
14. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.
15. Counterparts. This Agreement may be signed in several
counterparts, each of which will constitute an original.
30
31
If the foregoing correctly sets forth the understanding among
the Company and the several Underwriters, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among the Company and the several Underwriters.
Very truly yours,
INTEVAC, INC.
By
---------------------------------------------------
Name:
Title:
SELLING SHAREHOLDERS
By
---------------------------------------------------
Attorney-in-Fact for the Selling Shareholders
named in Schedule B hereto
Accepted as of the date first above written:
ROBERTSON, STEPHENS & COMPANY LLC
HAMBRECHT & QUIST LLC
On their behalf and on behalf of each of the
several Underwriters named in Schedule A hereto.
ROBERTSON, STEPHENS & COMPANY LLC
By ROBERTSON, STEPHENS & COMPANY GROUP, L.L.C.
By
-------------------------------------------------------
Authorized Signatory
32
SCHEDULE A
Number of
Firm Shares
To Be
Underwriters Purchased
------------------------------ -----------
Robertson, Stephens & Company LLC. . . . . . . . . . . .
Hambrecht & Quist LLC . . . . . . . . . . . . . . . . . .
---------
Total . . . . . . . . . . . . . . . . . . . . . . . 2,250,000
---------
33
SCHEDULE B
Number of
Company
Shares To
Be Sold
---------
Intevac, Inc. . . . . . . . . . . . . . . . . . . . . . 1,500,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . 1,500,000
=========
Number of
Selling
Shareholder
Shares
Name of Selling Shareholder To Be Sold
--------------------------- ----------
Kaiser Aerospace and Electronics Corporation . . . . . . . 600,000
Norman H. Pond . . . . . . . . . . . . . . . . . . . . . . 129,378
John Lester Hughes . . . . . . . . . . . . . . . . . . . . 10,000
Charles B. Eddy, III . . . . . . . . . . . . . . . . . . . 9,269
Verle W. Aebi . . . . . . . . . . . . . . . . . . . . . . . 1,353
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . 750,000
=========