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EXHIBIT 1.1
Primary
Common Stock Offering
2,500,000 Shares
TRITEAL CORPORATION
Common Stock
UNDERWRITING AGREEMENT
August 6, 1996
PAINEWEBBER INCORPORATED
PIPER JAFFRAY INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
TriTeal Corporation, a Delaware corporation (the "Company"), proposes
to sell an aggregate of 2,500,000 shares (the "Firm Shares") of the Company's
Common Stock, $.001 par value per share (the "Common Stock"), all of which are
to be issued and sold by the Company to you and to the other underwriters named
in Schedule I (collectively, the "Underwriters"), for whom you are acting as
representatives (the "Representatives"). The Company has also agreed to grant to
you and the other Underwriters an option (the "Option") to purchase up to an
additional 375,000 shares of Common Stock (the "Option Shares") on the terms and
for the purposes set forth in Section 1(b). The Firm Shares and the Option
Shares are hereinafter collectively referred to as the "Shares."
The initial public offering price per share for the Shares and the
purchase price per share for the Shares to be paid by the several Underwriters
shall be agreed upon by the Company and the Representatives, acting on behalf of
the several Underwriters, and such agreement shall be set forth in a separate
written instrument substantially in the form of
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Exhibit A hereto (the "Price Determination Agreement"). The Price Determination
Agreement may take the form of an exchange of any standard form of
telecommunication among the Company and the Representatives and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering of
the Shares will be governed by this Agreement, as supplemented by the Price
Determination Agreement. From and after the date of the execution and delivery
of the Price Determination Agreement, this Agreement shall be deemed to
incorporate, and, unless the context otherwise indicates, all references
contained herein to "this Agreement" and to the phrase "herein" shall be deemed
to include the Price Determination Agreement.
The Company confirms as follows its agreements with the Representatives
and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the respective representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, (i) the Company agrees to sell to the several
Underwriters and (ii) each of the Underwriters, severally and not jointly,
agrees to purchase from the Company at the purchase price per share for the Firm
Shares to be agreed upon by the Representatives and the Company in accordance
with Section 1(c) and set forth in the Price Determination Agreement, the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I,
plus such additional number of Firm Shares which such Underwriter may become
obligated to purchase pursuant to Section 8 hereof. Schedule I may be attached
to the Price Determination Agreement.
(b) Subject to all the terms and conditions of this Agreement, the
Company grants the Option to the several Underwriters to purchase, severally and
not jointly, up to 375,000 Option Shares from the Company at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement (or, if
the Company has elected to rely on Rule 430A, on or before the 30th day after
the date of the Price Determination Agreement), upon written or telegraphic
notice (the "Option Shares Notice") by the Representatives to the Company no
later than 12:00 noon, New York City time, at least two and no more than five
business days before the date specified for closing in the Option Shares Notice
(the "Option Closing Date") setting forth the aggregate number of Option Shares
to be purchased and the time and date for such purchase. On the Option Closing
Date, the Company will issue and sell to the Underwriters the number of Option
Shares set forth in the Option Shares Notice, and each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of Firm
Shares that such Underwriter is purchasing, as adjusted by the Representatives
in such manner as they deem advisable to avoid fractional shares.
(c) The initial public offering price per share for the Firm Shares and
the purchase price per share for the Firm Shares to be paid by the several
Underwriters shall be agreed
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upon and set forth in the Price Determination Agreement. In the event such price
has not been agreed upon and the Price Determination Agreement has not been
executed by the close of business on the fourteenth business day following the
date on which the Registration Statement becomes effective, this Agreement shall
terminate forthwith, without liability of any party to any other party except
that Section 6 shall remain in effect.
2. Delivery and Payment. Delivery of the Firm Shares shall be made to
the Representatives for the accounts of the Underwriters against payment of the
purchase price by wire transfer or certified or official bank checks payable in
same-day funds to the order of the Company at the office of PaineWebber
Incorporated, 1285 Avenue of the Americas, New York, New York 10019. Such
payment shall be made at 10:00 a.m., New York City time, on the fourth business
day after the date on which the first bona fide offering of the Shares to the
public is made by the Underwriters or at such time on such other date, not later
than ten business days after such date, as may be agreed upon by the Company and
the Representatives (such date is hereinafter referred to as the "Closing
Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above at the time and date (which may be the
Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to the
respective Underwriters shall be borne by the Company. The Company will pay and
save each Underwriter and any subsequent holder of the Shares harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No. 333-5052-LA) on Form
SB-2 relating to the Shares, including a preliminary prospectus and such
amendments to such registration statement as may have been required to the date
of this Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Com-
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mission. The term "preliminary prospectus" as used herein means a preliminary
prospectus as contemplated by Rule 430 or Rule 430A ("Rule 430A") of the Rules
and Regulations included at any time as part of the registration statement.
Copies of such registration statement and amendments and of each related
preliminary prospectus have been delivered to the Representatives. The term
"Registration Statement" means the registration statement as amended at the time
it becomes or became effective (the "Effective Date"), including financial
statements and all exhibits and any information deemed to be included by Rule
430A or Rule 434 of the Rules and Regulations. If the Company files a
registration statement to register a portion of the Shares and relies on Rule
462(b) of the Rules and Regulations for such registration statement to become
effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to the "Registration Statement" shall be deemed
to include the Rule 462 Registration Statement, as amended from time to time.
The term "Prospectus" means the prospectus as first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations or, if no such filing is
required, the form of final prospectus included in the Registration Statement at
the Effective Date.
(b) On the Effective Date, the date the Prospectus is first filed with
the Commission pursuant to Rule 424(b) (if required), at all times subsequent to
and including the Closing Date and, if later, the Option Closing Date and when
any post-effective amendment to the Registration Statement becomes effective or
any amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment or supplement
thereto), including the financial statements included in the Prospectus, did or
will comply with all applicable provisions of the Act and the Rules and
Regulations and will contain all statements required to be stated therein in
accordance with the Act and the Rules and Regulations. On the Effective Date and
when any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement or any such amendment did or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading. At the Effective Date, the date the Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission and at
the Closing Date and, if later, the Option Closing Date, the Prospectus did not
or will not contain 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. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. For all purposes of this
Agreement, the amounts of the selling concession and reallowance set forth in
the Prospectus constitute the only information relating to any Underwriter
furnished in writing to the Company by the Representatives specifically for
inclusion in the preliminary prospectus, the Registration Statement or the
Prospectus. The Company has not distributed any offering material in connection
with the offering or sale of the Shares other than the Registration Statement,
the preliminary prospectus, the Prospectus or any other materials, if any,
permitted by the Act.
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(c) The only subsidiaries (as defined in the Rules and Regulations) of
the Company is the subsidiary listed on Exhibit 21 to the Registration Statement
(the "Subsidiary"). The Company and the Subsidiary is, and at the Closing Date
will be, a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. Each of the Company and the
Subsidiary has, and at the Closing Date will have, full power and authority to
conduct all the activities conducted by it, to own or lease all the assets owned
or leased by it and to conduct its business as described in the Registration
Statement and the Prospectus. The Company and each of its Subsidiaries is, and
at the Closing Date will be, duly licensed or qualified to do business and in
good standing as a foreign corporation in all jurisdictions in which the nature
of the activities conducted by it or the character of the assets owned or leased
by it makes such licensing or qualification necessary, except where failure to
be so qualified would not have a material adverse effect on the Company and the
Subsidiary, considered as a whole. All of the outstanding shares of capital
stock of the Subsidiary have been duly authorized and validly issued, and are
fully paid and non-assessable and are owned by the Company free and clear of all
liens, encumbrances and claims whatsoever. Except for the stock of the
Subsidiary and as disclosed in the Registration Statement, the Company does not
own, and at the Closing Date will not own, directly or indirectly, any shares of
stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any firm, partnership, joint venture, association or
other entity. Complete and correct copies of the certificate of incorporation
and of the bylaws of each of the Company and the Subsidiary and all amendments
thereto have been delivered to the Representatives, and no changes therein will
be made subsequent to the date hereof and prior to the Closing Date or, if
later, the Option Closing Date, except as contemplated by the Registration
Statement.
(d) The outstanding shares of Common Stock have been, and the Shares to
be issued and sold by the Company upon such issuance will be, duly authorized,
validly issued, fully paid and nonassessable and will not be subject to any
preemptive or similar right. The description of the Common Stock in the
Registration Statement and the Prospectus is, and at the Closing Date will be,
complete and accurate in all respects. Except as set forth in the Prospectus,
the Company does not have outstanding, and at the Closing Date will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock, any shares of capital
stock of the Subsidiary or any such warrants, convertible securities or
obligations.
(e) The financial statements and schedules included in the Registration
Statement or the Prospectus present fairly the consolidated financial condition
of the Company as of the respective dates thereof and the consolidated results
of operations and cash flows of the Company for the respective periods covered
thereby, all in conformity with generally accepted accounting principles applied
on a consistent basis throughout the entire period involved, except as otherwise
disclosed in the Prospectus. No other financial statements or schedules of the
Company are required by the Act or the Rules and Regulations to be included in
the Registration Statement or the Prospectus. Ernst & Young LLP (the
"Accountants") who have reported on such financial statements and schedules, are
independent accountants with respect to the Company as required by the Act and
the Rules and Regulations.
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(f) The Company maintains a system of internal accounting control
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (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.
(g) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing Date,
except as set forth in or contemplated by the Registration Statement and the
Prospectus, (i) there has not been and will not have been any change in the
capitalization of the Company and the Subsidiary, (ii) neither the Company nor
the Subsidiary has incurred nor will it incur any material liabilities or
obligations, direct or contingent, nor has it entered into nor will it enter
into any material transactions other than pursuant to this Agreement and the
transactions referred to herein and (iii) the Company has not and will not have
paid or declared any dividends or other distributions of any kind on any class
of its capital stock.
(h) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
(i) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the best
knowledge of each of the Company and the Subsidiary, threatened against or
affecting the Company or the Subsidiary or any of their respective officers in
their capacity as such, before or by any Federal or state court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding might materially and
adversely affect the Company and the Subsidiary or their businesses, properties,
business prospects, condition (financial or otherwise) or results of operations,
considered as a whole.
(j) Each of the Company and the Subsidiary has, and at the Closing Date
will have, (i) all governmental licenses, permits, consents, orders, approvals
and other authorizations necessary to carry on its business as contemplated in
the Prospectus, except for those which would not materially and adversely affect
the Company or the Subsidiary or the business or results of operations of the
Company or the Subsidiary, (ii) complied in all respects with all laws,
regulations and orders applicable to it or its business and (iii) performed all
its obligations required to be performed by it, and is not, and at the Closing
Date will not be, in default, under any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement, lease,
contract or other agreement or instrument (collectively, a "contract or other
agreement") to which it is a party or by which its property is bound or affected
in each case where any such failure to perform might adversely affect the
Company and the Subsidiary or their businesses, properties, business prospects
condition (financial or otherwise) or results of operations. To the best
knowledge of the Company and the Subsidiary, no other party under any contract
or other agreement to which it is a party is
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in default in any respect thereunder. Neither the Company nor the Subsidiary is,
nor at the Closing Date will either of them be, in violation of any provision of
its certificate of incorporation or bylaws.
(k) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of this Agreement by the Company or in connection with the taking by
the Company of any action contemplated hereby, except such as have been obtained
under the Act or the Rules and Regulations and such as may be required under
state securities or Blue Sky laws or the bylaws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the Underwriters of the Shares to be sold by the
Company.
(l) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding agreement of the Company and
is enforceable against the Company in accordance with the terms hereof, except
as may be limited by the effect of any applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally. The
performance of this Agreement and the consummation of the transactions
contemplated hereby and the application of the net proceeds from the offering
and sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds" will not result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the Company or the
Subsidiary pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or give any other party a right to terminate any of its obligations under, or
result in the acceleration of any obligation under, the certificate of
incorporation or bylaws of the Company or the Subsidiary, any contract or other
agreement to which the Company or the Subsidiary is a party or by which the
Company or the Subsidiary or any of its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to the
business or properties of the Company or the Subsidiary.
(m) The Company and the Subsidiary has good and marketable title to all
properties and assets described in the Prospectus as owned by it, free and clear
of all liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material to the business of the Company
or the Subsidiary, constituted as a whole. Each of the Company and the
Subsidiary has valid, subsisting and enforceable leases for the properties
described in the Prospectus as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such properties by the Company and such Subsidiary.
(n) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company or the Subsidiary is a party
have been duly authorized, executed and delivered by
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the Company or the Subsidiary, constitute valid and binding agreements of the
Company or the Subsidiary and are enforceable against the Company or the
Subsidiary in accordance with the terms thereof, except as may be limited by the
effect of any applicable bankruptcy, insolvency, moratorium or similar laws
affecting creditors' rights generally.
(o) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect in any material respect.
(p) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action intended, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(q) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(r) Prior to the Closing Date, the Shares will be duly authorized for
quotation on the Nasdaq National Market upon official notice of issuance.
(s) Neither the Company nor the Subsidiary is involved in any material
labor dispute nor, to the knowledge of the Company and the Subsidiary, is any
such dispute threatened.
(t) Each of the Company and the Subsidiary own, or have licensed or
otherwise possess adequate rights to use, all material trademarks and trade
names which are used in or necessary for the conduct its business as described
in the Prospectus. No claims have been asserted by any person to the use of any
such trademarks or trade names or challenging or questioning the validity or
effectiveness of any such trademark or trade name. The use, in connection with
the business and operations of the Company and the Subsidiary of such trademarks
and trade names does not, to the Company's knowledge, infringe on the rights of
any person.
(u) Neither the Company nor the Subsidiary nor, to the Company's
knowledge, any employee or agent of the Company or any Subsidiary has made any
payment of funds of the Company or any Subsidiary or received or retained any
funds in violation of any law, rule or regulation or of a character required to
be disclosed in the Prospectus.
(v) The Company has complied, and until the completion of the
distribution of the Shares will comply in all material respects with the
provisions of (including, without limitation, filing all forms required by)
Section 517.075 of the Florida Securities and Investor Protection Act and
regulation 3E-900.001 issued thereunder with respect to the offering and sale of
the Shares.
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4. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representatives promptly, and
will confirm such advice in writing, (i) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (ii) of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose or the threat thereof, (iv) of the happening of any event
during the period mentioned in the second sentence of Section 4(e) that in the
judgment of the Company makes any statement made in the Registration Statement
or the Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (v) of receipt by the Company or any representative of the Company of any
other communication from the Commission relating to the Company, the
Registration Statement, any preliminary prospectus or the Prospectus. If at any
time the Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. The Company will
use its best efforts to comply with the provisions of and make all requisite
filings with the Commission pursuant to Rule 430A and to notify the
Representatives promptly of all such filings.
(c) The Company will furnish to the Representatives, without charge,
two signed copies of the Registration Statement and of any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto and will furnish to the Representatives, without charge, for
transmittal to each of the other Underwriters, a copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the
Company will deliver to each of the Underwriters, without charge, as many copies
of the Prospectus or any amendment or supplement thereto as the Representatives
may reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the several Underwriters and by all dealers
to whom the Shares may be sold, both in
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connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. If during such period of time any event shall occur which
in the judgment of the Company or counsel to the Underwriters should be set
forth in the Prospectus in order to make any statement therein, in the light of
the circumstances under which it was made, not misleading, or if it is necessary
to supplement or amend the Prospectus to comply with law, the Company will
forthwith prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and will deliver to each of the Underwriters, without charge,
such number of copies thereof as the Representatives may reasonably request.
(f) Prior to any public offering of the Shares by the Underwriters, the
Company will cooperate with the Representatives and counsel to the Underwriters
in connection with the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may request; provided, that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the Effective Date,
the Company will furnish to the Representatives and each other Underwriter who
may so request copies of such financial statements and other periodic and
special reports as the Company may from time to time distribute generally to the
holders of any class of its capital stock, and will furnish to the
Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or reimburse
if paid by the Representatives, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including
but not limited to costs and expenses of or relating to (i) the preparation,
printing and filing of the Registration Statement and exhibits to it, each
preliminary prospectus, the Prospectus and any amendment or supplement to the
Registration Statement or the Prospectus, (ii) the preparation and delivery of
certificates representing the Shares, (iii) the printing of this Agreement, the
Agreement Among Underwriters, any Dealer Agreements, any Underwriters'
Questionnaire and the Agreement and Power of Attorney, (iv) furnishing
(including costs of shipping, mailing and courier) such copies of the
Registration Statement, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold, (v) the listing of the Shares on the Nasdaq National
Market, (vi) any filings required to be made by the
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Underwriters with the NASD, and the fees, disbursements and other charges of
counsel for the Underwriters in connection therewith, (vii) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions designated pursuant to Section 4(f), including the
reasonable fees, disbursements and other charges of counsel to the Underwriters
in connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (viii) counsel to the Company, (ix)
the transfer agent for the Shares and (x) the Accountants.
(j) If this Agreement shall be terminated by the Company pursuant to
any of the provisions hereof (otherwise than pursuant to Section 8) or if for
any reason the Company shall be unable to perform its obligations hereunder, the
Company will reimburse the several Underwriters for all out-of-pocket expenses
(including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith.
(k) The Company will not at any time, directly or indirectly, take any
action intended, or which might reasonably be expected, to cause or result in,
or which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares in violation of the
Exchange Act or any applicable NASD National Market rules.
(l) The Company will apply the net proceeds from the offering and sale
of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds" and shall file such reports with the
Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the Act.
(m) During the period of one hundred eighty (180) days commencing at
the Closing Date, the Company will not, without the prior written consent of
PaineWebber Incorporated, grant options to purchase shares of Common Stock at a
price less than the initial public offering price, other than grants made
pursuant to the Company's 1995 Stock Option Plan.
(n) The Company will not, and will cause each of its executive
officers, directors and each beneficial owner of more than five percent (5%) of
the outstanding shares of Common Stock to enter into agreements with the
Representatives in the form set forth in Exhibit B to the effect that they will
not, for a period of one hundred eighty (180) days after the commencement of the
public offering of the Shares, without the prior written consent of PaineWebber
Incorporated, sell, contract to sell or otherwise dispose of any shares of
Common Stock or rights to acquire such shares (other than pursuant to (i)
agreements with corporate partners, research institutions or leasing entities or
(ii) employee, director or consultant stock option plans or in connection with
other employee, director or consultant incentive compensation arrangements).
5. Conditions of the Obligations of the Underwriters. In addition to
the execution and delivery of the Price Determination Agreement, the obligations
of each Underwriter hereunder are subject to the following conditions:
-11-
12
(a) Notification that the Registration Statement has become effective
shall be received by the Representatives not later than 5:00 p.m., New York City
time, on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Representatives and all filings required by Rule
424 of the Rules and Regulations and Rule 430A shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Shares under the securities or Blue Sky laws of any jurisdiction shall be
in effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities, and (iv)
after the date hereof no amendment or supplement to the Registration Statement
or the Prospectus shall have been filed unless a copy thereof was first
submitted to the Representatives and the Representatives did not object thereto
in good faith, and the Representatives shall have received certificates, dated
the Closing Date and the Option Closing Date and signed by the Chief Executive
Officer or the Chairman of the Board of Directors of the Company and the Chief
Financial Officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of clauses (i),
(ii) and (iii).
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company and the Subsidiary, taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus and (ii) neither the Company nor the Subsidiary shall have sustained
any material loss or interference with its business or properties from fire,
explosion, flood or other casualty, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement and the
Prospectus, if in the judgment of the Representatives any such development makes
it impracticable or inadvisable to consummate the sale and delivery of the
Shares by the Underwriters at the initial public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or the Subsidiary or any of
their respective officers or directors in their capacities as such, before or by
any federal, state or local court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would materially and
adversely affect the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiary taken as a whole.
-12-
13
(e) Each of the representations and warranties of the Company contained
herein shall be true and correct in all material respects at the Closing Date
and, with respect to the Option Shares, at the Option Closing Date, as if made
at the Closing Date and, with respect to the Option Shares, at the Option
Closing Date, and all covenants and agreements herein contained to be performed
on the part of the Company and all conditions herein contained to be fulfilled
or complied with by the Company at or prior to the Closing Date and, with
respect to the Option Shares, at or prior to the Option Closing Date, shall have
been duly performed, fulfilled or complied with.
(f) The Representatives shall have received opinions, each dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
and satisfactory in form and substance to counsel for the Underwriters, from
Cooley Godward Castro Huddleson & Tatum, counsel to the Company, to the effect
set forth in Exhibit C.
(g) The Representatives shall have received an opinion, dated the
Closing Date and the Option Closing Date, from Pillsbury Madison & Sutro LLP,
counsel to the Underwriters, with respect to the Registration Statement, the
Prospectus and this Agreement, which opinion shall be reasonably satisfactory to
the Representatives.
(h) On the date of the Prospectus, the Accountants shall have furnished
to the Representatives a letter, dated the date of its delivery, addressed to
the Representatives and in form and substance satisfactory to the
Representatives, confirming that they are independent accountants with respect
to the Company as required by the Act and the Rules and Regulations and with
respect to the financial and other statistical and numerical information
contained in the Registration Statement. At the Closing Date and, as to the
Option Shares, the Option Closing Date, the Accountants shall have furnished to
the Representatives a letter, dated the date of its delivery, which shall
confirm, on the basis of a review in accordance with the procedures set forth in
the letter from the Accountants, that nothing has come to their attention during
the period from the date of the letter referred to in the prior sentence to a
date (specified in the letter) not more than five days prior to the Closing Date
and the Option Closing Date which would require any change in their letter dated
the date of the Prospectus, if it were required to be dated and delivered at the
Closing Date and the Option Closing Date.
(i) At the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to the Representatives an accurate
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the Company, in form and
substance satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of
such certificate, such documents are true and correct in all material
respects and do not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not untrue
or misleading and (B) since the Effective Date, no event has occurred
as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue or
misleading in any material respect.
-13-
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(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects.
(iii) Each of the covenants required herein to be performed by
the Company on or prior to the date of such certificate has been duly,
timely and fully performed and each condition herein required to be
complied with by the Company on or prior to the delivery of such
certificate has been duly, timely and fully complied with.
(j) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 4(n).
(k) The Shares shall be qualified for sale in such states as the
Representatives may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(l) Prior to the Closing Date, the Shares shall have been duly
authorized for quotation on the Nasdaq National Market upon official notice of
issuance.
(m) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus as to the accuracy at the Closing
Date and the Option Closing Date of the representations and warranties of the
Company herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and precedent
to the obligations hereunder of the Representatives.
6. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls each Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), from and against any and all losses, claims, liabilities,
expenses and damages (including any and all investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding between any of the indemnified
parties and any indemnifying parties or between any indemnified party and any
third party, or otherwise, or any claim asserted), to which they, or any of
them, may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based on
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus or the
omission or alleged omission to state in such document a material fact required
to be stated in it or necessary to make the statements in it not misleading,
provided that the Company will not be liable to the extent that such loss,
-14-
15
claim, liability, expense or damage arises from the sale of the Shares in the
public offering to any person by an Underwriter and is based on an untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives on behalf of any Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus; provided, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of an Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
to have been so delivered, at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.
(b) Each Underwriter will indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, each director of the Company and each
officer of the Company who signs the Registration Statement to the same extent
as the foregoing indemnity from the Company to each Underwriter, but only
insofar as losses, claims, liabilities, expenses or damages arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of such Underwriter expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus. This indemnity will be in addition to
any liability that each Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section 6 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 6 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will
-15-
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be at the expense of such indemnified party unless (i) the employment of counsel
by the indemnified party has been authorized in writing by the indemnifying
party, (ii) the indemnified party has reasonably concluded (based on advice of
counsel) that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the
indemnifying party, (iii) a conflict or potential conflict exists (based on
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (iv) the indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld). No indemnifying party shall,
without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by
this Section 6 (whether or not any indemnified party is a party thereto),
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising or that may arise out of
such claim, action or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons other than the
Underwriters, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who also may be liable for contribution) to which the Company
and any one or more of the Underwriters may be subject in such proportion as
shall be appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but
-16-
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also the relative fault of the Company, on the one hand, and the Underwriters,
on the other, with respect to the statements or omissions which resulted in such
loss, claim, liability, expense or damage, or action in respect thereof, as well
as any other relevant equitable considerations with respect to such offering.
Such relative fault shall be determined by reference to whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Representatives on behalf of the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
6(d) were to be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, liability, expense or damage, or action in respect thereof,
referred to above in this Section 6(d) shall be deemed to include, for purpose
of this Section 6(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6(d), no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts received by it, and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 6(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 6(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section
6 and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii) acceptance of
any of the Shares and payment therefor or (iii) any termination of this
Agreement.
7. Termination. The obligations of the several Underwriters under this
Agreement may be terminated at any time prior to the Closing Date (or, with
respect to the Option Shares, on or prior to the Option Closing Date), by notice
to the Company from the Representatives, without liability on the part of any
Underwriter to the Company, if, prior to delivery and payment for the Shares (or
the Option Shares, as the case may be), in the sole judgment of the
Representatives, (i) trading in any of the equity securities of the Company
-17-
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shall have been suspended by the Commission, by an exchange that lists the
Shares or by the Nasdaq National Market, (ii) trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general banking moratorium shall have been declared by either
federal or New York State authorities or (iv) any material adverse change in the
financial or securities markets in the United States or in political, financial
or economic conditions in the United States or any outbreak or material
escalation of hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred, the effect of
any of which is such as to make it, in the sole judgment of the Representatives,
impracticable or inadvisable to market the Shares on the terms and in the manner
contemplated by the Prospectus.
8. Substitution of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Firm Shares which it or they have
agreed to purchase hereunder, and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Firm Shares, the other
Underwriters shall be obligated, severally, to purchase the Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase, in the proportions which the number of Firm Shares which they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares which all such non-defaulting Underwriters have so agreed
to purchase, or in such other proportions as the Representatives may specify;
provided that in no event shall the maximum number of Firm Shares which any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 8 by more than one-ninth of the number of Firm Shares
agreed to be purchased by such Underwriter without the prior written consent of
such Underwriter. If any Underwriter or Underwriters shall fail or refuse to
purchase any Firm Shares and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
exceeds one-tenth of the aggregate number of the Firm Shares and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Firm Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter, or
the Company for the purchase or sale of any Shares under this Agreement. In any
such case either the Representatives or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken pursuant to this Section 8 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
9. Miscellaneous. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, 2011
Palomar Airport Road, Carlsbad, California 92009, Attention: Jeffrey D. Witous,
or (b) if to the Underwriters, to PaineWebber
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Incorporated at the offices of PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019, Attention: Corporate Finance Department. Any
such notice shall be effective only upon receipt. Any notice under Section 7 or
8 may be made by telex or telephone, but if so made shall be subsequently
confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and of the controlling persons, directors and
officers referred to in Section 6, and their respective successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Shares from any of the several
Underwriters.
With respect to any obligation of the Company hereunder to make any
payment, to indemnify for any liability or to reimburse for any expense, the
Underwriters (or any other person to whom such payment, indemnification or
reimbursement is owed) may pursue the Company with respect thereto.
All representations, warranties and agreements of the Company contained
herein or in certificates or other instruments delivered pursuant hereto, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any of their controlling persons and
shall survive delivery of and payment for the Shares hereunder.
Any action required or permitted to be taken by the Representatives
under this Agreement may be taken by them jointly or by PaineWebber
Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby irrevocably waive any
right they may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the
Representatives and the Company.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
TRITEAL CORPORATION
By
----------------------------------------
Jeffrey D. Witous, President,
Chairman and Chief Executive Officer
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED
PIPER JAFFRAY INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By
------------------------------
Title
------------------------------
PIPER JAFFRAY INC.
By
------------------------------
Title
------------------------------
21
SCHEDULE I
UNDERWRITERS
Number of
Firm Shares
Name of Underwriters to be Purchased
-------------------- ---------------
PaineWebber Incorporated 785,500
Piper Jaffray Inc. 785,500
Alex. Brown & Sons Incorporated 55,000
Cowen & Company 55,000
Deutsche Morgan Grenfell/C.J. Lawrence Inc. 55,000
Donaldson, Lufkin & Jenrette Securities 55,000
Corporation
Hambrecht & Quist LLC 55,000
Lehman Brothers Inc. 55,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 55,000
Morgan Stanley & Co. Incorporated 55,000
Prudential Securities Incorporated 55,000
Robertson, Stephens & Company LLC 55,000
Smith Barney Inc. 55,000
Cruttenden Roth Incorporated 27,000
Fahnestock & Co. Inc. 27,000
Ladenburg, Thalmann & Co. Inc. 27,000
Needham & Company, Inc. 27,000
Pacific Growth Equities, Inc. 27,000
Pennsylvania Merchant Group Ltd. 27,000
Punk, Ziegel & Knoell 27,000
Seidler Amdec Securities Inc. 27,000
Torrey Pines Securities, Inc. 27,000
Unterberg Harris 27,000
Van Kasper & Company 27,000
Wessels, Arnold & Henderson, L.P. 27,000
----------
2,500,000
Total
22
EXHIBIT A
TRITEAL CORPORATION
---------------------
PRICE DETERMINATION AGREEMENT
[Date]
PAINEWEBBER INCORPORATED
PIPER JAFFRAY INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Reference is made to the Underwriting Agreement, dated __________, 1996
(the Underwriting Agreement"), among TriTeal Corporation, a Delaware corporation
(the "Company") and the several Underwriters named in Schedule I thereto or
hereto (the "Underwriters"), for whom PaineWebber Incorporated and Piper Jaffray
Inc. are acting as representatives (the "Representatives"). The Underwriting
Agreement provides for the purchase by the Underwriters from the Company,
subject to the terms and conditions set forth therein, of an aggregate of
2,500,000 shares (the "Firm Shares") of the Company's common stock, par value
$.001 per share. This Agreement is the Price Determination Agreement referred to
in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agree with the Representatives as follows:
The initial public offering price per share for the 2,500,000 Shares
shall be $_______.
The purchase price per share for the Firm Shares to be paid by the
several Underwriters shall be $_______ representing an amount equal to the
initial public offering price set forth above, less $______ per share.
The Company represents and warrants to each of the Underwriters that
the representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
A-1
23
As contemplated by the Underwriting Agreement, attached as Schedule I
is a completed list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
If the foregoing is in accordance with your understanding of the
agreement among the Underwriters and the Company, please sign and return to the
Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement among the Underwriters and the Company in accordance with its terms
and the terms of the Underwriting Agreement.
Very truly yours,
TRITEAL CORPORATION
By
----------------------------------------
Jeffrey D. Witous, President,
Chairman and Chief Executive Officer
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED
PIPER JAFFRAY INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By
----------------------------------
Title
----------------------------------
PIPER JAFFRAY INC.
By
----------------------------------
Title
----------------------------------
A-2
24
EXHIBIT B
[DATE]
PAINEWEBBER INCORPORATED
PIPER JAFFRAY INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
In consideration of the agreement of the several Underwriters, for
which PaineWebber Incorporated and Piper Jaffray Inc. (the "Representatives")
intend to act as Representatives, to underwrite a proposed public offering (the
"Offering") of the Common Stock, par value $.001 per share (the "Common Stock")
of TriTeal Corporation, a Delaware corporation (the "Company"), the undersigned
hereby agrees that the undersigned will not, for a period of one hundred eighty
(180) days after the commencement of the public offering of such shares, without
the prior written consent of PaineWebber Incorporated, offer to sell, sell,
contract to sell, grant any option to sell, or otherwise dispose of, or require
the Company to file with the Securities and Exchange Commission a registration
statement under the Securities Act of 1933 to register, any shares of Common
Stock or securities convertible into or exchangeable for Common Stock or
warrants or other rights to acquire shares of Common Stock of which the
undersigned is now, or may in the future become, the beneficial owner (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) (other than
pursuant to employee stock option plans or in connection with other employee
incentive compensation arrangements) provided, however, that the foregoing shall
not prohibit (i) a bona fide gift or gifts so long as such donee or donees
thereof agree to be bound by the terms of this Lock-Up Agreement, or (ii) any
distribution by a partnership to its partners so long as such partners agree in
writing to be bound by the terms of this Lock-Up Agreement.
Very truly yours,
By
--------------------------
Name
--------------------------
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EXHIBIT C
FORM OF OPINION OF
COUNSEL TO THE COMPANY
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
full corporate power and authority to conduct all the activities conducted by
it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus.
All of the outstanding shares of Common Stock have been, and the
Shares, when paid for by the Underwriters in accordance with the terms of the
Agreement, will be, duly authorized, validly issued, fully paid and
nonassessable are not subject to any preemptive or similar right under (i) the
general corporation law of the State of Delaware, (ii) the Company's certificate
of incorporation or bylaws, or (iii) any instrument, document, contract or other
agreement filed as an exhibit to the Registration Statement. Except as described
in the Registration Statement or the Prospectus, to the best of our knowledge,
there is no commitment or arrangement to issue, and there are no outstanding
options, warrants or other rights calling for the issuance of, any share of
capital stock of the Company or any Subsidiary to any person or any security or
other instrument that by its terms is convertible into, exercisable for or
exchangeable for capital stock of the Company.
No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of the Agreement by the Company or in connection with the taking by
the Company of any action contemplated thereby, except such as have been
obtained under the Act and the Rules and Regulations and such as may be required
under state securities or "Blue Sky" laws or by the bylaws and rules of the NASD
in connection with the purchase and distribution by the Underwriters of the
Shares to be sold by the Company.
The authorized, issued and outstanding capital stock of the Company was
as set forth in the Registration Statement and the Prospectus under the caption
"Capitalization" as of the date stated therein. The description of the Common
Stock contained under the caption "Description of Capital Stock" in the
Prospectus is accurate in all material respects and is a fair summary to the
extent required by the Act and the Rules and Regulations.. The form of
certificate filed as an exhibit to the Registration Statement is in due and
proper form and complies with all applicable statutory requirements.
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The Registration Statement and the Prospectus comply in all material
respects as to form with the requirements of the Act and the Rules and
Regulations (except that we express no opinion as to financial statements,
schedules and other financial and statistical data contained in the Registration
Statement or the Prospectus).
To the best of our knowledge, any instrument, document, lease, license,
contract or other agreement (collectively, "Documents") required to be described
or referred to in the Registration Statement or the Prospectus has been properly
described or referred to therein to the extent required by the Act and the Rules
and Regulations and any Document required to be filed as an exhibit to the
Registration Statement has been filed as an exhibit thereto.
To the best of our knowledge, except as disclosed in the Registration
Statement or the Prospectus, no person or entity has the right to require the
registration under the Act of shares of Common Stock or other securities of the
Company by reason of the filing or effectiveness of the Registration Statement.
There are no legal or governmental proceedings required to be shown in
the Prospectus under the Act and the Rules and Regulations.
The Company has full corporate power and authority to enter into the
Agreement, and the Agreement has been duly authorized, executed and delivered by
the Company, is a valid and binding agreement of the Company and, except for the
indemnification and contribution provisions thereof, as to which we express no
opinion, is enforceable against the Company in accordance with the terms
thereof.
The execution and delivery by the Company of, and the performance by
the Company of its agreements in, the Agreement do not and will not (i) violate
the certificate of incorporation or bylaws of the Company, (ii) breach or result
in a default under, cause the time for performance of any obligation to be
accelerated under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the assets of the Company or the Subsidiary pursuant
to the terms of any Document filed as an exhibit to the Registration Statement
(iii) breach or otherwise violate any existing obligation of the Company under
any court or administrative order, judgment or decree of which we have knowledge
or (iv) violate applicable provisions of any statute or regulation in the State
of California, of the United States or the Delaware General Corporation Law.
The Shares have been duly authorized for quotation on the Nasdaq
National Market upon official notice of issuance.
We have been advised by the staff of the Commission that the
Registration Statement has become effective under the Act and that no order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or is threatened or pending.
To our knowledge, there are no actions, suits, proceedings or
investigations pending or, to our knowledge, overtly threatened in writing
against the Company, before or by any
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court, governmental agency or arbitrator which (i) seek to challenge the
legality or enforceability of the Agreement, (ii) seek to challenge the legality
or enforceability of any of the Documents filed, or required to be filed, as
exhibits to the Registration Statement, (iii) seek damages or other remedies
with respect to any of the Documents filed, or required to be filed, as exhibits
to the Registration Statement, (iv) except as set forth in or contemplated by
the Registration Statement and the Prospectus, seek money damages in excess of
$1,000,000 or seek to impose criminal penalties upon the Company or the
Subsidiary of which we have knowledge or (v) seek to enjoin any of the business
activities of the Company or the Subsidiary or the transactions described in the
Prospectus and of which we have knowledge.
In connection with the preparation of the Registration Statement and
the Prospectus, we have participated in conferences with officers and
representatives of the Company and with its certified public accountants (as you
and your counsel have done). As such conferences we have made inquires of such
officers, representatives and accountants, and discussed the contents of the
Registration Statement and the Prospectus. We have not ourselves independently
verified, and accordingly, do not render any opinion upon, the accuracy,
completeness or fairness of the Registration Statement or the Prospectus. Based
on the foregoing, nothing has come to our attention that causes us to believe
that, as of the Effective Date, the Registration Statement contained any untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus at the time such Prospectus was issued, or at
the Closing Date [and the Option Closing Date,] contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading (except that we express no
opinion as to financial statements, schedules and other financial or statistical
data contained in the Registration Statement or the Prospectus).
The foregoing opinion is subject to the qualification that the
enforceability of the Agreement may be: (i) subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally; and (ii) subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity),
including principles of commercial reasonableness or conscionability and an
implied covenant of good faith and fair dealing.
This letter is furnished by us solely for your benefit in connection
with the transactions referred to in the Agreement and may not be circulated to,
or relied upon by, any other person, except that this letter may be relied upon
by your counsel in connection with the opinion letter to be delivered to you
pursuant to Section 5(f) of the Agreement.
In rendering the foregoing opinion, counsel may rely, to the extent
they deem such reliance proper, on the opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to Underwriters' counsel as to matters governed by the laws of
jurisdictions other than the United States and the State of
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Delaware, and as to matters of fact, upon certificates of officers of the
Company and of government officials; provided that such counsel shall state that
the opinion of any other counsel is in form satisfactory to such counsel. Copies
of all such opinions and certificates shall be furnished to counsel to the
Underwriters on the Closing Date.
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