<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1996
REGISTRATION NO. 333-05107
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 5
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AWARD SOFTWARE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
CALIFORNIA 5098 94-2893462
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification Number)
incorporation or organization)
</TABLE>
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777 EAST MIDDLEFIELD ROAD
MOUNTAIN VIEW, CALIFORNIA 94043
(415) 968-4433
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
GEORGE C. HUANG
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
AWARD SOFTWARE INTERNATIONAL, INC.
777 EAST MIDDLEFIELD ROAD
MOUNTAIN VIEW, CALIFORNIA 94043
(415) 968-4433
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies to:
<TABLE>
<S> <C>
JAMES C. KITCH, ESQ. ROBERT T. CLARKSON, ESQ.
MATTHEW P. FISHER, ESQ. ADELE C. FREEDMAN, ESQ.
COOLEY GODWARD LLP WILSON SONSINI GOODRICH & ROSATI, P.C.
FIVE PALO ALTO SQUARE 650 PAGE MILL ROAD
3000 EL CAMINO REAL PALO ALTO, CALIFORNIA 94304-1050
PALO ALTO, CALIFORNIA 94306-2155 (415) 493-9300
(415) 843-5000
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of earlier effective registration
statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the Common Stock being registered. All the amounts shown are estimates except
for the registration fee and the NASD filing fee.
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<S> <C>
Registration fee.................................................................. $ 11,897
NASD filing fee................................................................... 3,950
Nasdaq application fee............................................................ 32,018
Blue sky qualification fee and expenses........................................... 10,000
Printing and engraving expenses................................................... 200,000
Legal fees and expenses........................................................... 350,000
Accounting fees and expenses...................................................... 225,000
Transfer agent and registrar fees................................................. 5,000
Custodian......................................................................... 2,500
Miscellaneous..................................................................... 134,635
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Total................................................................... $ 975,000
========
</TABLE>
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 317 of the California Corporations Code ("CCC") provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any proceeding or may procure a judgment in its favor by
reason of the fact that the person is or was an agent of the corporation,
against expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with the proceeding if that person acted in
good faith and in a manner the person reasonably believed to be in the best
interests of the corporation and, in the case of a criminal proceeding, had no
reasonable cause to believe the conduct of the person was unlawful.
Section 204 of the CCC provides that a corporation's articles of incorporation
may set forth a provision authorizing, whether by bylaw, agreement, or
otherwise, the indemnification of agents in excess of that expressly permitted
by Section 317 for those agents of the corporation for breach of duty to the
corporation and its stockholders, provided, however, that the provision may not
provide for indemnification of any agent for any acts or omissions or
transactions from which a director may not be relieved of liability, including
(i) for acts or omissions that involve intentional misconduct or a knowing and
culpable violation of law, (ii) for acts or omissions that a director believes
to be contrary to the best interests of the corporation or its shareholders or
that involve the absence of good faith on the part of the director, (iii) for
any transaction from which a director derived an improper personal benefit, (iv)
for acts or omissions that show a reckless disregard for the director's duty to
the corporation or its shareholders in circumstances in which the director was
aware, or should have been aware, in the ordinary course of performing a
director's duties, of a risk of serious injury to the corporation or its
shareholders, (v) for acts or omissions that constitute an executed pattern of
inattention that amounts to an abdication of the director's duty to the
corporation or its shareholders, (vi) under Section 310 of the CCC requiring
that a director who has a contract or other transaction with the corporation or
has a material financial interest in a contract or other transaction between the
corporation and another corporation, obtain approval of such contract or
transaction by the shareholders or the board of directors, or (vii) under
Section 316 of the CCC subjecting a director to joint and several liability for
making any improper distribution, loan or guarantee. Section 204 further
provides that no such indemnification provision may eliminate or limit the
liability of (i) a director for any act or omission occurring prior to the date
when the provision becomes effective, or (ii) an officer for any act or omission
as an officer, notwithstanding that the officer is also a director or that his
or her action, if negligent or improper, has been ratified by the directors.
Article 7 of the Registrant's Amended and Restated Articles of Incorporation
provides that the directors' liability to the Registrant for monetary damages
will be eliminated to the fullest extent permitted under California law. Article
8 of the Registrant's Amended and Restated Articles of Incorporation provides
that the corporation is authorized to provide indemnification of agents through
a bylaw provision and agreements with agents in excess of the indemnification
otherwise permitted by Section 317 of the CCC, subject only to the applicable
limits on such excess indemnification set
II-1
<PAGE> 3
forth in Section 204 of the CCC. Article 8 of the Registrant's Amended and
Restated Articles of Incorporation further provides that any repeal or
modification of Article 8 shall only be prospective and shall not affect the
rights under Articles 7 or 8 in effect at the time of the alleged occurrence of
any act or omission to act giving rise to indemnification.
Section 63 of the Registrant's Bylaws provides that the corporation shall
indemnify its directors to the fullest extent not prohibited by the California
General Corporation Law; provided, however, that the corporation may limit the
extent of such indemnification by individual contracts with its directors; and,
provided, further, that the corporation shall not be required to indemnify any
director in connection with any proceeding (or part thereof) initiated by such
person or any proceeding by such person against the corporation or its
directors, officers, employees or other agents unless (i) such indemnification
is expressly required to be made by law, (ii) the proceeding was authorized by
the board of directors of the corporation or (iii) such indemnification is
provided by the corporation, in its sole discretion, pursuant to the powers
vested in the corporation under the California General Corporation Law. Section
63 of the Registrant's Bylaws further provide that the corporation shall have
power to indemnify its officers, employees and other agents as set forth in the
California General Corporation Law.
Under the form of Underwriting Agreement filed as Exhibit 1.1 hereto, the
Underwriters are obligated, under certain circumstances, to indemnify directors
and officers of the Registrant against certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
The Company intends to purchase a general liability insurance policy which
covers certain liabilities of directors and officers of the Registrant arising
out of claims based on acts or omissions in their capacity as directors or
officers.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
In July 1993, GCH Systems, Inc. ("GCH") acquired all of the capital stock of the
Registrant. Since July 1993, the Registrant has sold and issued the following
unregistered securities (share and dollar amounts reflect a 1-for-2 reverse
stock split):
(1) In October 1994, the Registrant issued a warrant exercisable for up to
200,000 shares of Common Stock to an accredited investor at an exercise
price of $1.00 per share.
(2) In December 1994, GCH distributed all of the Registrant's outstanding
3,841,801 shares of Common Stock, all of the Registrant's capital stock, to
GCH's existing shareholders on a pro rata basis for no consideration.
(3) In June 1995, the Registrant issued warrants exercisable for an
aggregate of 100,000 shares of Common Stock to a group of accredited
investors at an exercise price of $1.00 per share.
(4) In July 1995, the Registrant sold an aggregate of 750,000 shares of
Common Stock to a group of accredited investors for cash in the aggregate
amount of $4,500,000 at a purchase price of $6.00 per share.
(5) In September 1995, the Registrant sold to a group of accredited
investors an aggregate of 416,666 shares of Common Stock at a purchase
price of $6.00 per share for an aggregate purchase price of $2,500,000 and
warrants for a purchase price of $2,467 exercisable for 123,333 shares of
Common Stock with an exercise price of $1.00 per share.
(6) In January 1996, the Registrant sold 570,033 shares of Common Stock at
a purchase price of $12.28 per share for an aggregate purchase price of
$7,000,005 and issued a warrant for $5,448 exercisable for 272,394 shares
of Common Stock at an exercise price of $12.28 per share to an accredited
investor.
(7) In July 1996, the Registrant sold 160,000 shares of Common Stock at a
purchase price of $12.50 per share for an aggregate purchase price of
$1,999,998 to an accredited investor.
(8) In July 1996, the Registrant sold 77,500 shares of common stock to an
accredited investor pursuant to the exercise of a warrant at an exercise
price of $1.00 per share for an aggregate exercise price of $77,500.
(9) In July 1996, the Registrant sold 41,169 shares of Common Stock to an
accredited investor at a purchase price of $10.00 per share for an
aggregate purchase price of $411,695.
(10) From December 1994 through August 1996, the Registrant granted
incentive stock options and nonstatutory stock options to employees,
directors and consultants under its 1995 Stock Option Plan covering an
aggregate of 1,067,655 shares of the Registrant's Common Stock, at an
average exercise price of $3.86 per share. Options to purchase 61,709
shares of Common Stock have been canceled or have lapsed without being
exercised. The Registrant has sold 50,291 shares of its Common Stock to
employees, directors and consultants of the Registrant pursuant to exercise
of stock options granted under the 1995 Stock Option Plan.
II-2
<PAGE> 4
The sales and issuances of securities in the transactions described in paragraph
(10) above were deemed to be exempt from registration under the Securities Act
by virtue of Rule 701 promulgated thereunder in that they were offered and sold
either pursuant to written compensatory benefit plans or pursuant to a written
contract relating to compensation, as provided by Rule 701.
The sales and issuances of securities in the transactions described in
paragraphs (1) through (9) above were deemed to be exempt from registration
under the Securities Act by virtue of Section 4(2) and/or Regulation D
promulgated under the Securities Act. The purchasers in each case represented
their intention to acquire the securities for investment only and not with a
view to the distribution thereof. Appropriate legends are affixed to the stock
certificates issued in such transactions. Similar legends were imposed in
connection with any subsequent sales of any such securities. All recipients
either received adequate information about the Registrant or had access, through
employment or other relationships, to such information.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<C> <C> <S>
1.1 -- Form of Underwriting Agreement.
3.1* -- Amended and Restated Articles of Incorporation of the Registrant.
3.1.1* -- Form of Amended and Restated Articles of Incorporation of the Registrant
effecting the 1-for-2 reverse stock split.
3.1.2* -- Form of Amended and Restated Articles of Incorporation of the Registrant, to be
effective upon the completion of the Offering.
3.2* -- Amended and Restated Bylaws of the Registrant.
3.2.1* -- Form of Amended and Restated Bylaws of the Registrant, to be effective upon the
completion of the Offering.
4.1* -- Reference is made to Exhibits 3.1 through 3.2.
4.5* -- Specimen stock certificate.
5.1 -- Opinion of Cooley Godward LLP.
10.1* -- Form of Indemnity Agreement to be entered into between the Registrant and its
directors and officers, with related schedule.
10.2* -- Registrant's 1995 Stock Option Plan, as amended (the "Option Plan").
10.3* -- Form of Incentive Stock Option under the Option Plan.
10.4* -- Form of Nonstatutory Stock Option under the Option Plan.
10.5* -- Registrant's 1996 Employee Stock Purchase Plan.
10.6* -- Registrant's Amended and Restated Executive Compensation Plan.
10.7* -- Lease, dated January 1, 1996, between GCH Systems, Inc. and the Registrant.
10.8* -- Summary of Leases, dated March 1, 1996, between Sun Corporation, GSS Corporation
and the Registrant.
10.9* -- Voting Agreement, dated January 12, 1996, between the Registrant and certain
persons named therein.
10.10* -- Investors' Rights Agreement among the Registrant and certain other persons named
therein, dated as of January 12, 1996.
10.11* -- Warrant issued to Synnex Information Technologies, Inc.
10.12* -- Warrant issued to Vobis Microcomputer AG.
10.13* -- Warrant issued to Venrock Associates.
10.14* -- Warrant issued to Venrock Associates II, L.P.
10.15* -- Warrant issued to Walden Capital Partners II, L.P.
10.16* -- Warrant issued to Walden Technology Ventures II, L.P.
10.17+ -- Technology Development and Support Agreement, dated June 28, 1996, between
Registrant and Advanced Micro Devices, Inc.
11.1* -- Statement regarding calculation of net income (loss) per share.
23.1* -- Consent of Price Waterhouse LLP.
23.2 -- Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
</TABLE>
II-3
<PAGE> 5
<TABLE>
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EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<C> <C> <S>
24.1* -- Power of Attorney.
27* -- Financial Data Schedule
</TABLE>
* Previously filed.
+ Confidential treatment requested.
(B) FINANCIAL STATEMENT SCHEDULES.
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NUMBER DESCRIPTION
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<S> <C>
Schedule II...................................... Valuation and Qualifying Accounts
</TABLE>
All other schedules are omitted because they are not required, are not
applicable, or the information is included in the consolidated financial
statements or notes thereto.
ITEM 17. UNDERTAKINGS.
The Registrant hereby undertakes to provide the Underwriters at the closing
specified in the Underwriting Agreement certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 14 or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant undertakes that: (1) for purposes of determining any
liability under the Securities Act of 1933, the information omitted from the
form of prospectus as filed as part of the registration statement in reliance
upon Rule 430A and contained in the form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of the registration statement as of the time it was declared
effective, and (2) for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
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<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Mountain View, County of
Santa Clara, State of California, on the twenty-fourth day of October 1996.
AWARD SOFTWARE INTERNATIONAL, INC.
By: /s/ GEORGE C. HUANG
------------------------------------
George C. Huang
Chairman of the Board, President and
Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
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<C> <S> <C>
/s/ GEORGE C. HUANG Chairman of the Board, President, October 24, 1996
- ------------------------------------------ Chief Executive Officer and
George C. Huang Director (Principal Executive
Officer)
/s/ KEVIN J. BERRY Vice President, Finance, Chief October 24, 1996
- ------------------------------------------ Financial Officer and Secretary
Kevin J. Berry (Principal Financial and
Accounting Officer)
* Director October 24, 1996
- ------------------------------------------
Cheng Ming Lee
* Director October 24, 1996
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David S. Lee
* Director October 24, 1996
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Theodor L. Lieven
* Director October 24, 1996
- ------------------------------------------
Masami Maeda
* Director October 24, 1996
- ------------------------------------------
Anthony Sun
* Director October 24, 1996
- ------------------------------------------
William P. Tai
*By: /s/ GEORGE C. HUANG
- ------------------------------------------
George C. Huang
Attorney-in-Fact
</TABLE>
II-5
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<S> <C> <C>
1.1 -- Form of Underwriting Agreement.
3.1* -- Amended and Restated Articles of Incorporation of the Registrant.
3.1.1* -- Form of Amended and Restated Articles of Incorporation of the Registrant
effecting the 1-for-2 reverse stock split.
3.1.2* -- Form of Amended and Restated Articles of Incorporation of the Registrant, to be
effective upon the completion of the Offering.
3.2* -- Amended and Restated Bylaws of the Registrant.
3.2.1* -- Form of Amended and Restated Bylaws of the Registrant, to be effective upon the
completion of the Offering.
4.1* -- Reference is made to Exhibits 3.1 through 3.2.
4.5* -- Specimen stock certificate.
5.1 -- Opinion of Cooley Godward LLP.
10.1* -- Form of Indemnity Agreement to be entered into between the Registrant and its
directors and officers, with related schedule.
10.2* -- Registrant's 1995 Stock Option Plan, as amended (the "Option Plan").
10.3* -- Form of Incentive Stock Option under the Option Plan.
10.4* -- Form of Nonstatutory Stock Option under the Option Plan.
10.5* -- Registrant's 1996 Employee Stock Purchase Plan.
10.6* -- Registrant's Amended and Restated Executive Compensation Plan.
10.7* -- Lease, dated January 1, 1996, between GCH Systems, Inc. and the Registrant.
10.8* -- Summary of Leases, dated March 1, 1996, between Sun Corporation, GSS Corporation
and the Registrant.
10.9* -- Voting Agreement, dated January 12, 1996, between the Registrant and certain
persons named therein.
10.10* -- Investors' Rights Agreement among the Registrant and certain other persons named
therein, dated as of January 12, 1996.
10.11* -- Warrant issued to Synnex Information Technologies, Inc.
10.12* -- Warrant issued to Vobis Microcomputer AG.
10.13* -- Warrant issued to Venrock Associates.
10.14* -- Warrant issued to Venrock Associates II, L.P.
10.15* -- Warrant issued to Walden Capital Partners II, L.P.
10.16* -- Warrant issued to Walden Technology Ventures II, L.P.
10.17+ -- Technology Development and Support Agreement, dated June 28, 1996, between
Registrant and Advanced Micro Devices, Inc.
11.1* -- Statement regarding calculation of net income (loss) per share.
23.1* -- Consent of Price Waterhouse LLP.
23.2 -- Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1* -- Power of Attorney.
27* -- Financial Data Schedule
</TABLE>
* Previously filed.
+ Confidential treatment requested.
<PAGE> 1
AWARD SOFTWARE INTERNATIONAL, INC.
1,850,000 Shares of Common Stock
UNDERWRITING AGREEMENT
October , 1996
J.P. Morgan Securities Inc.
Prudential Securities Incorporated
Needham & Company, Inc.
As Representatives of the Underwriters
Listed in Schedule I hereto
c/o J.P. Morgan Securities Inc.
23 Wall Street
New York, New York 10015
Dear Sirs:
Award Software International, Inc., a California corporation (the
"Company"), proposes to issue and sell to the several Underwriters listed in
Schedule I hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives") an aggregate of 1,250,000 shares of
common stock, no par value per share, of the Company (the "Company Shares"), and
certain shareholders of the Company named in Schedule II hereto (hereafter
called the "Selling Shareholders"), acting severally and not jointly, propose to
sell to the several Underwriters an aggregate of 600,000 shares of Common Stock,
no par value per share, of the Company (the "Selling Shareholder Shares"). The
Company Shares and the Selling Shareholder Shares are herein referred to as the
"Underwritten Shares"). The Company also proposes to issue and sell to the
Underwriters, for the sole purpose of covering over-allotments in connection
with the sale of the Underwritten Shares, at the option of the Underwriters, up
to an additional 277,500 shares of common stock, no par value per share, of the
Company (the "Option Shares"). The Underwritten Shares and the Option Shares are
herein referred to as the "Shares." The shares of common stock of the Company to
be outstanding after giving effect to the sale of the Shares are herein referred
to as the "Common Stock."
<PAGE> 2
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Shares. The registration
statement as amended at the time when it shall become effective, or, if a
post-effective amendment is filed with respect thereto, as amended by such
post-effective amendment at the time of its effectiveness, including in each
case information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act, and any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission, is referred to in this Agreement as the
"Registration Statement," and the prospectus in the form first used to confirm
sales of Shares is referred to in this Agreement as the "Prospectus."
The Company and the Selling Shareholders hereby agree with the
Underwriters as follows:
1. The Company and the Selling Shareholders agree, severally and not
jointly, to sell the Underwritten Shares to the several Underwriters as
hereinafter provided, with the number of Shares to be sold by each Selling
Shareholder being the number of Shares set forth opposite his, her or its name
or Schedule II hereto, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase, severally and not jointly, from the
Company and the Selling Shareholders the respective number of Underwritten
Shares set forth opposite such Underwriter's name in Schedule I hereto at a
purchase price per share (the "Purchase Price") of $ . The obligation of
each Underwriter to each Selling Shareholder hereunder shall be to purchase
from the Selling Shareholder that number of Selling Shareholder Shares which is
in the same proportion to the number of Selling Shareholder Shares set forth
opposite the name of such Selling Shareholder on Schedule II hereto as the
number of Underwritten Shares which is set forth opposite the name of such
Underwriter in Schedule I hereto is to the total number of Underwritten Shares
to be purchased by all of the Underwriters under this Agreement, subject, to
such adjustments to eliminate any fractional shares as the Representatives in
their sole discretion shall make.
In addition, the Company agrees to issue and sell the Option Shares to
the several Underwriters as hereinafter provided, and the Underwriters on the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, shall have the option to purchase, severally and
not jointly, from the Company up to an aggregate of 277,500 Option Shares at the
Purchase Price, for the sole purpose of covering over-allotments (if any) in the
sale of Underwritten Shares by the several Underwriters.
If any Option Shares are to be purchased, the number of Option Shares
to be purchased by each Underwriter shall be the number of Option Shares which
bears the same ratio to the aggregate number of Option Shares being purchased as
the number of Underwritten Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to the aggregate number of Underwritten Shares being
purchased from the Company by the several Underwriters, subject, however, to
such adjustments to eliminate any fractional Shares as the Representatives in
their sole discretion shall make.
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<PAGE> 3
The Underwriters may exercise the option to purchase the Option shares
at any time (but no more than once) on or before the thirtieth day following the
date of this Agreement, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option Shares as to
which the option is being exercised and the date and time when the Option Shares
are to be delivered and paid for, which may be the same date and time as the
Closing Date (as hereinafter defined) but shall not be earlier than the Closing
Date nor later than the tenth full Business Day (as hereinafter defined) after
the date of such notice (unless such time and date are postponed in accordance
with the provisions of Section 9 hereof). Any such notice shall be given at
least two Business Days prior to the date and time of delivery specified
therein.
2. The Company and the Selling Shareholders understand that the
Underwriters intend (i) to make a public offering of the Shares as soon after
the Registration Statement and this Agreement have become effective as in the
judgment of the Representatives is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
3. Payment for the Shares shall be made to the Company or to its order
with regard to the Company Shares, and payable to the order of the Custodian (as
hereinafter defined) for the respective accounts of the Selling Shareholders
with respect to the Selling Shareholder Shares, by certified or official bank
check or checks payable in federal (same day) funds at the office of J.P. Morgan
Securities Inc., 23 Wall Street, New York, New York 10015 at 10:00 a.m., New
York City time, in the case of the Underwritten Shares, on _________, 1996 , or
at such other time on the same or such other date, not later than the fifth
Business Day thereafter, as the Representatives, the Company and the Selling
Shareholders may agree upon in writing or, in the case of the Option Shares, on
the date and time specified by the Representatives in the written notice of the
Underwriters' election to purchase such Option Shares. The time and date of such
payment for the Underwritten Shares are referred to herein as the Closing Date
and the time and date for such payment for the Option Shares, if other than the
Closing Date, are herein referred to as the Additional Closing Date. As used
herein, the term "Business Day" means any day other than a day on which banks
are permitted or required to be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company. The certificates for
the Shares will be made available for inspection and packaging by the
Representatives at the office of J.P. Morgan Securities Inc. set forth above not
later than 1:00 p.m., New York City time, on the Business Day prior to the
Closing Date or the Additional Closing Date, as the case may be.
4. The Company represents and warrants to each Underwriter that:
(a) no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and each
preliminary prospectus filed as part of the Registration
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<PAGE> 4
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act, and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use therein;
(b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Company,
threatened by the Commission; and the Registration Statement and
Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the
Securities Act and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as
of the date of the Prospectus and any amendment or supplement thereto,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented at the Closing Date, if applicable, 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; except that
the foregoing representations and warranties shall not apply to
statements or omissions in the Registration Statement or the Prospectus
made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use therein;
(c) there are no contracts or other documents required by the
Securities Act to be filed as exhibits to the Registration Statement or
required to be described in the Registration Statement or Prospectus
which have not been so filed or described as required; each contract to
which the Company is a party and to which reference is made in the
prospectus or filed as an exhibit to the Registration Statement has
been duly and validly executed by the Company and is in full force and
effect in all material respects in accordance with its respective terms
and no such contracts have been assigned by the Company; the Company
knows of no present situation or condition or fact which would prevent
compliance by the Company in all material respects with the terms of
any such contracts, as amended to date;
(d) other than the subsidiaries listed on Exhibit A hereto
(the "Subsidiaries"), the Company does not own, beneficially or of
record, any interest in, or control, any material partnership, joint
venture, limited liability company, unincorporated association,
corporation or other entity;
(e) the consolidated financial statements, and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Company and
its consolidated subsidiaries as of the dates indicated and the results
of their
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<PAGE> 5
operations and changes in their consolidated cash flows for the periods
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis, and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein;
(f) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, business, management, financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, taken as
a whole, otherwise than as set forth or contemplated in the Prospectus;
except as set forth or contemplated in the Prospectus neither the
Company nor any of its subsidiaries has entered into any transaction or
agreement (whether or not in the ordinary course of business) material
to the Company and its subsidiaries taken as a whole;
(g) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state
of its incorporation, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as
a whole;
(h) each of the Company's Subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of
its jurisdiction of incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole; and all the outstanding shares of capital stock of each
Subsidiary of the Company have been duly authorized and validly issued,
are fully-paid and non-assessable, and (except, in the case of foreign
subsidiaries, for directors' qualifying shares) are owned by the
Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests and claims;
(i) this Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding
agreement of the Company, except as rights to indemnity and
contribution hereunder may be limited by applicable law;
(j) the authorized capital stock of the Company conforms as to
legal matters to the description thereof set forth in the Registration
Statement and the Prospectus, and all of the outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, are fully-paid and non-assessable and are not subject to any
pre-emptive or similar rights; and,
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<PAGE> 6
except as described in or expressly contemplated by the Prospectus,
there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or
other equity interests in the Company or any of its subsidiaries, or
any contract, commitment, agreement, understanding or arrangement of
any kind relating to the issuance of any capital stock of the Company
or any such subsidiary, any such convertible or exchangeable securities
or any such rights, warrants or options;
(k) the Shares to be issued and sold by the Company and the
Shares to be sold by the Selling Shareholders hereunder have been duly
authorized, and, when delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will have been duly issued
and will be fully paid and non-assessable and will conform to the
descriptions thereof in the Prospectus; and the issuance of the Shares
is not subject to any preemptive or similar right;
(l) neither the Company nor any of its subsidiaries is, or
with the giving of notice or lapse of time or both would be, in
violation of or in default under, its Articles of Incorporation or
By-Laws or any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the Company
and its subsidiaries taken as a whole; the issue and sale of the Shares
and the performance by the Company of its obligations under this
Agreement and the consummation of the transactions contemplated herein
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument
to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will any such action result in any violation of the
provisions of the Articles of Incorporation or the By-Laws of the
Company or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company, its subsidiaries or any of their
respective properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this
Agreement, except such consents, approvals, authorizations,
registrations or qualifications as have been obtained under the
Securities Act and as may be required under state securities or Blue
Sky Laws in connection with the purchase and distribution of the Shares
by the Underwriters;
(m) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its
subsidiaries is or may be a party or to which any property of the
Company or any of its subsidiaries is or may be the subject which, if
determined adversely to the Company, could individually or in the
aggregate reasonably be expected to have a material adverse effect on
the general affairs, business, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, and, to the
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<PAGE> 7
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(n) the Company and its subsidiaries have good and marketable
title in fee simple to all items of real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described or referred to in the Prospectus or such as do not
materially affect the value of such property and do not interfere with
the use made or proposed to be made of such property by the Company and
its subsidiaries; and any real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
existing and enforceable leases with such exceptions as are not
material and do not interfere with the use made or proposed to be made
of such property and buildings by the Company or its subsidiaries;
(o) no relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries on the one hand, and the
directors, officers, shareholders, customers or suppliers of the
Company or any of its subsidiaries on the other hand, which is required
by the Securities Act to be described in the Registration Statement and
the Prospectus which is not so described;
(p) except as described in the Registration Statement and the
Prospectus, other than registration rights which have either been
fulfilled hereby or properly waived, no person has the right to require
the Company to register any securities for offering and sale under the
Securities Act by reason of the filing of the Registration Statement
with the Commission or the issue and sale of the Shares;
(q) the Company has filed all federal, state, local and foreign
income, withholding and franchise tax returns and taxes which have
been required to be filed and has paid all taxes indicated by said
returns and all assessments received by it to the extent that such
taxes and assessments have become due and payable; the Company (i) has
established adequate reserves for such taxes which are not due and
payable, and (ii) to its knowledge does not have any tax deficiency
or claim outstanding, proposed or assessed against it which would
materially and adversely affect the general affairs, business
management, financial position or results of operations of the
Company; the Company has not granted any extension of any statute of
limitations to any federal, state, local or foreign tax authority for
any period, nor has the Company requested any extension of the time
for filing any federal, state, local or foreign tax return or forms;
(r) except as disclosed in the Prospectus, the business and
operations conducted by the Company, as described in the Prospectus,
comply in all material respects with all applicable laws, foreign or
domestic, having jurisdiction over the Company and all applicable rules
and
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<PAGE> 8
regulations of all public authorities except where the failure to do so
would not have a material adverse effect on the general affairs,
business, management, financial position, shareholders' equity or
results of operation of the Company; except as disclosed in the
Prospectus, the Company owns, licenses or possesses adequate rights to
use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses, inventions, trade secrets and
other proprietary and similar rights necessary for the conduct of its
business as currently conducted;
(s) any document hereafter filed by the Company pursuant to
Section 12, 13, 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), prior to the termination of the offering
of the Shares, at the time they are filed with the Commission, will
comply in all material respects with the requirements of the Securities
Act and the Exchange Act, and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances in which
they were made, not misleading;
(t) the Company maintains insurance of the types and in the
amounts that the Company deems adequate for its business and consistent
with insurance maintained by similar companies in similar businesses,
including, but not limited to, general liability insurance and
insurance covering all real and personal property owned or leased by
the Company against death, damage, destruction, acts of vandalism and
all other risks customarily insured against, all of which insurance is
in full force and effect;
(u) Price Waterhouse LLP, which has certified the financial
statements filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the
Securities Act;
(v) other than the over allotment option granted to the
Underwriters herein, the Company will not take, directly or indirectly,
any action (and the Company does not know of any action by its
directors, officers or shareholders or by others) designed to or which
has constituted or would reasonably be expected to cause or result in,
under the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the Shares in violation of the Exchange Act;
(w) the Company has not distributed and will not distribute
any prospectus or other offering material in connection with the
offering and sale of the Shares other than any preliminary prospectus
or the Prospectus or other materials permitted by the Securities Act to
be distributed by the Company;
(x) the Company has not incurred any liability for any
finder's or broker's fee or agent's commission in connection with the
execution and delivery of this Agreement or the offering of the Shares
contemplated hereby other than is as described in this Agreement;
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<PAGE> 9
(y) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled by an investment company," as such terms are
defined in the Investment Company Act of 1940, as amended;
(z) the Company intends to use the net proceeds of the sales
received by it substantially in the manner specified in the Prospectus
under the caption "Use of Proceeds;"
(aa) the Company is in full compliance with the terms and
provisions of the Settlement and Release Agreement dated as of February
1, 1996 between International Business Machines Corporation ("IBM") and
the Company (the "IBM Agreement"), and has ceased manufacturing,
copying, selling, exhibiting, displaying, performing, offering for
sale, licensing, distributing or otherwise transferring any AWARD CGA
BIOS and/or OLD AWARD VGA BIOS (as defined in the IBM Agreement ) other
than as permitted pursuant to Agreement PCC960521, dated October 1,
1996 between the Company and IBM.
5. Each Selling Shareholder, severally and not jointly, represents and
warrants to each Underwriter and the Company that:
(a) this Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder and constitutes a
valid and binding obligation upon such Selling Shareholder except as
rights to indemnity and contribution hereunder may be limited by
applicable laws;
(b) the execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligation
under this Agreement, the Custody Agreement signed by such Selling
Shareholder and the First National Bank as Custodian (the
"Custodian"), relating to the deposit of the shares to be sold by
such Selling Shareholder and the Power of Attorney appointing certain
individuals as such Selling Shareholder's attorneys in fact (the
"Attorneys-inFact") to the extent set forth therein, relating to the
transactions contemplated hereby and by the registration statement
(the "Custody Agreement and Power of Attorney"), and the Lock-Up
Agreement signed by such Selling Shareholder relating to the resale
restrictions on the Company's stock owned or held by such Selling
Shareholder (the "Lock-up Agreement") will not contravene any
provision of applicable law, or the certificate or articles of
incorporation or bylaws of such Selling Shareholder (if such Selling
Shareholder is a corporation), or any material agreement or other
material instrument binding upon such Selling Shareholder or any
judgement, order or decree of any governmental body, agency or court
having jurisdiction over such Selling Shareholder, and no consent,
approval, authorization or order or qualification with any
governmental body or agency is required for the performance by such
Selling Shareholder of its obligations under this Agreement or the
Custody Agreement and Power of Attorney or Lock-Up Agreement of such
Selling Shareholder, except such as may be required by the securities
or Blue Sky laws of the various states in connection with the offer
and sale of the Shares or has been duly and validly obtained on or
prior to the Closing;
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<PAGE> 10
(c) such Selling Shareholder has, and on the Closing Date will
have, good and marketable title to the Shares to be sold by such
Selling Shareholder and the legal right and power, and all
authorization and approval required by law or contract to enter into
this Agreement, the Custody Agreement and Power of Attorney and the
Lock-Up Agreement and to sell, transfer and deliver the Shares to be
sold by such Selling Shareholder and such sale, transfer and delivery
is not subject to any right of first refusal or other contractual
restriction;
(d) the Shares to be sold by such Selling Shareholder pursuant
to this Agreement have been, or will be prior to the Closing Date,
fully paid;
(e) the Custody Agreement and Power of Attorney and the
Lock-Up Agreement have been duly authorized, executed and delivered by
such Selling Shareholder and are valid and binding agreements of such
Selling Shareholder except as rights to indemnity and contribution
hereunder may be limited by applicable law;
(f) assuming the Underwriters purchase the Shares to be sold
by each Selling Shareholder for value, in good faith and without notice
of an adverse claim within the meaning of the Uniform Commercial Code,
delivery of the certificate for the Shares to be sold by such Selling
Shareholder pursuant to this Agreement will pass good and marketable
title to such Shares free and clear of any security interest, claims,
liens, equities and other encumbrances;
(g) all information furnished by or on behalf of such Selling
Shareholder for use in the Registration Statement and Prospectus is,
and on the Closing Date will be, true, correct and complete, and does
not, and on the Closing Date will not, contain any untrue statement of
a material fact or omit to state any material fact necessary to make
such information not misleading;
(h) such Selling Shareholder, if other than a natural person,
has been duly organized and is validly existing and 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
right, power and authority to enter into and perform its obligations
under this Agreement and the Custody Agreement and Power of Attorney,
and to sell, assign, transfer and deliver the Shares to be sold by such
Selling Shareholder under this Agreement;
(i) 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; and
(j) other than the overallotment option granted to the
Underwriters herein, such Selling Shareholder will not take, directly
or indirectly, any action (and such Selling Shareholder does not know
of any action by the Company, its directors or officers or any other
Shareholders) designed to or which has constituted or would cause or
result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares in violation of the Exchange Act.
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<PAGE> 11
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions contemplated herein, each of the Selling
Shareholders agrees to deliver to you prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-8 or W-9 (or
other applicable form of statement specified by Treasury Department regulations
in lieu thereof).
6. The Company covenants and agrees with the several Underwriters as
follows:
(a) to use its best efforts to cause the Registration
Statement to become effective at the earliest possible time and, if
required, to file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the
Securities Act;
(b) to deliver, at the expense of the Company, to the
Representatives three signed copies of the Registration Statement (as
originally filed) and each amendment thereto, in each case including
exhibits, and to each other Underwriter a conformed copy of the
Registration Statement (as originally filed) and each amendment
thereto, in each case without exhibits, and, during the period
mentioned in paragraph (e) below, to each of the Underwriters as many
copies of the Prospectus (including all amendments and supplements
thereto) as the Representatives may reasonably request;
(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the
time the Registration Statement becomes effective, to furnish to the
Representatives a copy of the proposed amendment or supplement for
review and not to file any such proposed amendment or supplement to
which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm
such advice in writing (i) of when the Registration Statement shall
become effective, (ii) of when any amendment to the Registration
Statement shall have become effective, (iii) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation or threatening of any proceeding for that purpose and (v) of
the receipt by the Company of any notification with respect to any
suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to prevent the issuance of
any such stop order or notification and, if issued, to obtain as soon
as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriters a prospectus relating to the Shares is required by law to
be delivered in connection with sales by the Underwriters or any
dealer, any event shall occur as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply
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<PAGE> 12
with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriters and to the dealers (whose names and
addresses the Representatives will furnish to the Company) to which
Shares may have been sold by the Representatives on behalf of the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will comply with
law;
(f) to endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and to continue such
qualification in effect so long as reasonably required for distribution
of the Shares and to pay all fees and expenses (including fees and
disbursements of counsel to the Underwriters) reasonably incurred in
connection with such qualification; provided that the Company shall not
be required to file a general consent to service of process in any
jurisdiction;
(g) to make generally available to its security holders and to
the Representatives as soon as practicable an earnings statement
covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the effective date of the
Registration Statement, satisfying the provisions of Section 11(a) of
the Securities Act and Rule 158 of the Commission promulgated
thereunder;
(h) to use its best efforts to list the Shares, subject to
official notice of issuance, on the National Association of Securities
Dealers Automated Quotations National Market ("Nasdaq");
(i) For a period of five years from the date hereof, to furnish
to the Representatives copies of all reports or other communications
(financial or other) furnished to holders of the Shares, and copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange or Nasdaq;
(j) for a period of 180 days after the date of the initial
public offering of the Shares not to offer, sell, contract to sell or
otherwise dispose of any shares of common stock of the Company or any
securities convertible into or exercisable or exchangeable for shares
of common stock of the Company without the prior written consent of
the Representatives, other than (i) the Shares to be sold hereunder;
(ii) options granted under existing employee stock option plans; (iii)
any shares of common stock of the Company issued upon the exercise of
options granted under existing employee stock option plans; and (iv)
the sale to Vobis Microcomputer AG of up to 238,719 shares of common
stock of the Company at the initial offering price per share;
(k) If the Company elects to rely on Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington D.C. time, as of
the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee
pursuant to Rule 11(b) under this Act; and
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<PAGE> 13
(l) If at any time during the 90 day period after the
Registration Statement becomes effective, any rumor, publication or
event relating to or affecting the Company shall occur as a 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.
7. Each of the Selling Shareholders covenants and agrees with the
several Underwriters that each Selling Shareholder will not for a period of 180
days after the date of the Prospectus, sell, offer to sell, contract to sell,
grant any options to purchase, grant a security interest in, pledge, hypothecate
or otherwise sell or dispose of any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock, any securities convertible into
or exercisable or exchangeable for shares of Common Stock or any rights to
purchase or acquire shares of Common Stock, without the prior written consent of
J.P. Morgan Securities Inc., other than the Shares to be sold hereunder and any
shares of Common Stock issued upon the exercise of options granted under
existing employee stock option plans of the Company.
8. The Company and each of the Selling Shareholders covenant and agree
with one another and the several Underwriters that the Company will pay all
costs and expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all costs and
expenses (i) incident to the preparation, issuance, execution and delivery of
the Shares, (ii) incident to the preparation, printing and filing under the
Securities Act of the Registration Statement, the Prospectus and any preliminary
prospectus (including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or qualification of
the Shares under the laws of such jurisdictions as the Representatives may
designate (including fees of counsel for the Underwriters and its
disbursements), (iv) in connection with the listing of the Shares on any stock
exchange, (v) related to the filing with, and clearance of the offering by, the
National Association of Securities Dealers, Inc.; (vi) in connection with the
printing (including word processing and duplication costs) and delivery of this
Agreement, the Preliminary and Supplemental Blue Sky Memoranda and the
furnishing to the Underwriters and dealers of copies of the Registration
Statement and the Prospectus, including mailing and shipping, as herein
provided; and (vii) all costs and expenses of one counsel for the Selling
Shareholders.
9. The several obligations of the Underwriters hereunder to purchase
the Underwritten Shares are subject to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) the Registration Statement shall have become effective (or
if a post-effective amendment is required to be filed under the
Securities Act, such post-effective amendment shall have become
effective) not later than 5:00 p.m., New York City time, on the date
hereof; and no stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for such
purpose shall be pending before or threatened by the Commission; and
all
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<PAGE> 14
requests for additional information shall have been complied with to
the satisfaction of the Representatives;
(b) the representations and warranties of the Company
contained herein shall be true and correct on and as of the Closing
Date as if made on and as of the Closing Date, and the Company shall
have complied with all agreements and all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date;
(c) the representations and warranties of the Selling
Shareholders contained herein are true and correct on and as of the
Closing Date as if made on and as of the Closing Date, and the Selling
Shareholders shall have complied with all agreements and all conditions
on their part to be performed or satisfied hereunder at or prior to the
Closing Date;
(d) since the respective dates as of which information is
given in the Prospectus there shall not have been any material adverse
change or any development involving a prospective material adverse
change, in or affecting the general affairs, business, financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, the effect of which in the judgment of
the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares on the terms and
in the manner contemplated in the Prospectus;
(e) the Representatives shall have received on and as of the
Closing Date a certificate of an executive officer of the Company
satisfactory to the Representatives to the effect set forth in
subsections (a) and (b) of this Section and to the further effect that
there has not occurred any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, business, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries taken as a
whole from that set forth or contemplated in the Registration
Statement;
(f) the Representatives shall have received on and as of the
Closing Date a certificate from the Attorneys-in-Fact of each of the
Selling Shareholders satisfactory to the Representatives to the effect
set forth in sub-Section (c) of this Section;
(g) Cooley Godward LLP, counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the
Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;
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<PAGE> 15
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be
so qualified or in good standing would not have a material
adverse effect on the Company and its subsidiaries taken as a
whole;
(iii) Award Software Hong Kong ("ASHK") has been duly
incorporated and is validly existing as a corporation under
the laws of its jurisdiction of incorporation with corporate
power and authority to own its properties and conduct its
business as described in the Prospectus and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification,
other than where the failure to be so qualified and in good
standing would not have a material adverse effect on the
Company and its Subsidiaries taken as a whole; and all of the
outstanding shares of capital stock of ASHK have been duly and
validly authorized and issued, are fully paid and
non-assessable, and (except, in the case of foreign
subsidiaries, for directors' qualifying shares) are owned of
record by the Company, free and clear of all liens,
encumbrances, equities or claims; and except as described in
the Prospectus, no options, warrants or other rights to
purchase securities or other obligations to issue or other
rights to convert any obligation into any shares of capital
stock or of ownership interests in the Company or ASHK are
outstanding from the Company or ASHK;
(iv) ASHK is not in violation of it Memorandum or
Articles of Association, and no written notice of currently
existing dispute or litigation has been received by the
Company or ASHK indicating that ASHK is in default in the
performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence
of indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the
Company and ASHK taken as a whole to which the Company or ASHK
is a party or by which the Company or ASHK or their respective
properties are bound.
(v) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental proceedings
pending or, to the best of such counsel's knowledge,
threatened to which the Company or its Subsidiaries is or may
be a party or to which any property of the Company or its
Subsidiaries is or may be the subject which, if determined
adversely to the Company or such Subsidiaries, could
individually or in the aggregate reasonably be expected to
have a material adverse effect on the general affairs,
business, management, financial position, shareholders' equity
or results of operations of the Company and its Subsidiaries
taken as a whole; to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and such
counsel does not know of any contracts or other documents of a
character required to be filed as an exhibit to the
Registration Statement
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<PAGE> 16
or required to be described in the Registration Statement or
the Prospectus which are not filed or described as required;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company and is a valid and
binding agreement to the Company, except as enforceability may
be limited by general equitable principles and limitations on
the availability of equitable remedies, bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and except as to those provisions
relating to indemnity and contribution for liabilities arising
under the Securities Act of 1933, as amended;
(vii) the Shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be sold by
the Company have been duly authorized and are validly issued,
fully paid and non-assessable;
(viii) the Shares to be issued and sold by the
Company hereunder have been duly authorized, and when
delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement will be validly issued, fully
paid and non-assessable and the issuance of the Shares is not
subject to any preemptive or similar rights; to such counsel's
knowledge, except for registration rights which have either
been fulfilled hereby or properly waived, no rights to
register outstanding shares of the Company's capital stock or
shares issuable upon the exercise of outstanding warrants,
options, convertible securities or other rights to acquire
shares of such capital stock exist which have not been validly
exercised or waived with respect to the Registration
Statement;
(ix) the Company is not, nor with the giving of
notice or lapse of time or both would be, in violation of or
in default under, its Articles of Incorporation or By-Laws or
any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which
the Company is a party or by which it or any of its properties
is bound, except for violations and defaults which
individually and in the aggregate are not material to the
Company and its Subsidiaries taken as a whole; the issue and
sale of the Shares and the performance by the Company of its
obligations under this Agreement and the consummation of the
transactions contemplated herein will not conflict with or
result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other material agreement or
instrument known to such counsel to which the Company or any
of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound or to which any of the property
or assets of the Company or any of its Subsidiaries is
subject, nor will any such action result in any violation of
the provisions of the Articles of Incorporation or the By-Laws
of the Company or any applicable law or statute or any order,
rule or regulation of any court or governmental agency or body
having jurisdiction over the Company, its Subsidiaries or any
of their respective properties;
(x) to the best of counsel's knowledge, there are no
franchises, leases, contracts, agreements or documents of a
character required by the Securities Act, and the
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<PAGE> 17
rules and regulations promulgated thereunder ("Rules and
Regulations") to be disclosed in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration
Statement which are not disclosed or filed as required.
(xi) no consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for the issue and sale
of the Shares or the consummation of the other transactions
contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as
have been obtained under the Securities Act and as may be
required under state securities or Blue Sky laws or by the
bylaws and rules of the National Association of Securities
Dealers, Inc. in connection with the purchase and distribution
of the Shares by the Underwriters;
(xii) the statements in the Prospectus under
"Description of Capital Stock," "Underwriting"
"Indemnification of Directors" and "Recent Sales of
Unregistered Securities" in the Registration Statement and
Prospectus, insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to
therein, fairly present the information called for with
respect to such legal matters, documents or proceedings; and
(xiii) such counsel is of the opinion that the
Registration Statement and the Prospectus and any amendments
and supplements thereto (except for the financial statements
included therein as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Securities Act and believes that (except
for the financial statements included therein as to which such
counsel need express no belief) the Registration Statement and
the prospectus included therein at the time the Registration
Statement became effective did 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 the
statements therein not misleading, and that the Prospectus, as
amended or supplemented, if applicable, does not contain any
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the State of California, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to Underwriters' counsel) of other
counsel reasonably acceptable to the Underwriters' counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Company and certificates
or other written statements of officials of jurisdictions having custody of
documents respecting the corporate existence or good standing of the Company.
The opinion of such counsel for the Company shall state that the opinion of any
such other counsel is in form satisfactory to such counsel and, in such
counsel's opinion, the Underwriters and they are justified in relying thereon.
With respect to the matters to be covered in subparagraph (xi) above counsel may
state that their opinion and belief is based upon their
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<PAGE> 18
participation in the preparation of the Registration Statement and the
Prospectus and any amendment or supplement thereto and review and discussion of
the contents thereof but is without independent check or verification except as
specified.
(h) Counsel for each of the Selling Shareholders shall have
furnished to the Representatives their written opinions, dated the
Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by or on behalf of such Selling Shareholder;
(ii) the execution and delivery by such Selling
Shareholder of, and the performance by such Selling
Shareholder of its obligations under, this Agreement and the
Custody Agreement and Power of Attorney and the Lock-up
Agreement of such Selling Shareholder will not contravene any
provision of applicable law, or the certificates or articles
of incorporation or bylaws of such Selling Shareholder (if
such Selling Shareholder is a corporation), or, to the best of
such counsel's knowledge, any agreement or other instrument
binding upon such Selling Shareholder or, to the best of such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
such Selling Shareholder, and no consent, approval,
authorization, filing or order of or qualification with any
governmental body or court or agency is required for the
performance by such Selling Shareholder of its obligations
under this Agreement, the Custody Agreement and Power of
Attorney and or the Lockup Agreement of such Selling
Shareholder, except such as may be required by the securities
or Blue Sky laws of the various states in connection with
offer and sale of the Shares;
(iii) such Selling Shareholder has the power to
submit and has taken all necessary action to submit to the
jurisdiction of any United States or New York State Court in
the Borough of Manhattan, the City of New York, New York and
to appoint Corporation Service Company as the authorized agent
of such Selling Shareholder for the purposes and to the extent
described in Section 16 of this Agreement;
(iv) such Selling Shareholder has the legal right and
power, and all authorization and approval required by law or
contract, to enter into this Agreement, the Custody Agreement
and Power of Attorney and the Lock-up Agreement and to sell,
transfer and deliver the Shares to be sold by such Selling
Shareholder;
(v) each of the Custody Agreement and Power of
Attorney and the Lock-up Agreement of such Selling Shareholder
has been duly authorized, executed and delivered by such
Selling Shareholder and is a valid and binding agreement of
such Selling Shareholder;
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<PAGE> 19
(vi) assuming the Underwriters purchase the Shares to
be sold by such Selling Shareholder for value, in good faith
and without notice of adverse claim within the meaning of the
Uniform Commercial Code, delivery of the certificates for the
Shares to be sold by each Selling Shareholder pursuant to this
Agreement will pass good and marketable title to such Shares
free and clear of any security interests, claims, liens,
equities and other encumbrances;
(vii) such Selling Shareholder, if other than a
natural person, has been duly organized and is validly
existing and 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 right,
power and authority to enter into and perform its obligations
under this Agreement and the Custody Agreement and Power of
Attorney, and to sell, assign, transfer and deliver the Shares
to be sold by such Selling Shareholder under this Agreement;
and
(vii) any other opinions regarding such Selling
Shareholder as Underwriters may reasonably require.
In rendering the foregoing opinions, each of such counsel may rely (A)
as to matters involving the application of laws other than the laws of the
United States, the jurisdiction of organization or residence of such Selling
Shareholders and the State of California, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions of other counsel familiar with the applicable laws; (B) as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company, on certificates of the Selling Shareholders
and on certificates or other written statements of officials of jurisdictions
having custody of documents respecting the corporate existence or good standing
of the Company.
(i) on the Effective Date of the Registration Statement and
the effective date of the most recently filed post-effective amendment
to the Registration Statement and also on the Closing Date, Price
Waterhouse LLP shall have furnished to you letters, dated the
respective dates of delivery thereof, in form and substance
satisfactory to you, containing statements and information of the type
customarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
(j) the Representatives shall have received on and as of the
Closing Date an opinion of Wilson Sonsini Goodrich & Rosati, counsel to
the Underwriters, with respect to the due authorization and valid
issuance of the Shares, the Registration Statement, the Prospectus and
other related matters as the Representatives may reasonably request,
and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters;
(k) the Shares shall have been approved for listing on the
Nasdaq National Market, subject to official notice of issuance; and
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<PAGE> 20
(l) on or prior to the Closing Date the Company shall have
furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to satisfaction of the conditions set forth in paragraphs
(a) through (l) above on and as of the Additional Closing Date, except that the
certificate called for by paragraphs (e) and (f) above, the opinions called for
by paragraphs (g), (h) and (j) above and the third letter called for by
paragraph (i) above shall be dated the Additional Closing Date.
10. The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages and liabilities as such expenses
are incurred (including, without limitation, the reasonable legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use
therein; provided that the foregoing indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of any person controlling such Underwriter) from whom the person asserting any
such losses, claims, damages or liabilities purchased Shares if such untrue
statement or omission or alleged untrue statement or omission made in such
preliminary prospectus is eliminated or remedied in the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) and a copy of the Prospectus (as so amended or
supplemented) shall not have been furnished to such person at or prior to the
written confirmation of the sale of such Shares to such person.
Each Selling Shareholder designated as a Primary Selling Shareholder on
Schedule II hereof (a "Primary Selling Shareholder"), severally and not jointly,
agrees to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities as such expenses are incurred
(including, without limitation, the reasonable legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if such
Primary Selling Shareholder shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company
in writing by such
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<PAGE> 21
Underwriter through the Representatives expressly for use therein; provided that
the foregoing indemnity with respect to any preliminary prospectus shall not
inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such losses,
claims, damages or liabilities purchased Shares if such untrue statement or
omission or alleged untrue statement or omission made in such preliminary
prospectus is eliminated or remedied in the Prospectus (as amended or
supplemented if such Primary Selling Shareholder shall have furnished any
amendments or supplements thereto) and a copy of the Prospectus (as so amended
or supplemented) shall not have been furnished to such person at or prior to the
written confirmation of the sale of such Shares to such person.
Subject to the last two paragraphs of this Section 10, each Selling
Shareholder, severally and not jointly, agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, the legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact made in writing by or on behalf of such Selling Shareholder
expressly for use in the Registration Statement, the Prospectus, any amendment
or supplement thereto, or any preliminary prospectus.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement, each person who controls the Company within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act and each Selling
Shareholder to the same extent as the foregoing indemnity from the Company to
each Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of
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<PAGE> 22
more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
they are incurred. Any such separate firm for the Underwriters and such control
persons of Underwriters shall be designated in writing by J.P. Morgan Securities
Inc., and any such separate firm for the Company, its directors, its officers
who sign the Registration Statement and such control persons of the Company
shall be designated in writing by the Company. The Indemnifying Person shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the third sentence of
this paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 10 is unavailable to an Indemnified Person in respect of any
losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and each Selling Shareholder on
the one hand and the Underwriters on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and each Selling Shareholder on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Company and each Selling Shareholder and the total underwriting
discounts and the commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate public
offering price of the Shares. The relative fault of the Company and each Selling
Shareholder on the one hand and the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Selling
Shareholder on the one hand or by the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
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<PAGE> 23
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 10
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purposes) or by any other method of allocation that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 10, in no event shall
an Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section ll(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 10 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I hereto,
and not joint.
The indemnity and contribution agreements contained in this Section 10
are in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 10
and the representations and warranties of the Company and the Selling
Shareholders set forth in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Company, its officers or directors or
any other person controlling the Company and (iii) acceptance of and payment for
any of the Shares.
Notwithstanding anything herein contained, the liability of each (i)
Primary Selling Shareholder under the representations and warranties contained
in Sections 4 and 5 hereof and under the indemnity provisions contained in the
provisions of this Section 10 and (ii) Selling Shareholder under the
representations and warranties contained in Section 5 hereof and under the
indemnity agreements contained in the provisions of this Section 10 shall not
exceed an amount equal to the net proceeds from the offering received by each
such Primary Selling Shareholder and Selling Shareholder from the Underwriters.
11. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Shares, prior to the
Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of or
guaranteed by the Company shall have been suspended
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<PAGE> 24
on any exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities, or (iv) there shall have occurred any
outbreak or escalation of hostilities or any adverse change in financial markets
or any calamity or crisis that, in the reasonable judgment of the
Representatives, is material and adverse and which, in the reasonable judgment
of the Representatives, makes it impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus.
12. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of 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 Shares to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Representatives may specify,
to purchase the Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
the number of Shares that any Underwriter has agreed to purchase pursuant to
Section 1 be increased pursuant to this Section 12 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If on the Closing Date or the Additional Closing Date, as the case
may be, any Underwriter or Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Shares to be purchased on such date,
and arrangements satisfactory to the Representatives and the Company for the
purchase of such Shares are not made within 36 hours after such default, this
Agreement (or the obligations of the several Underwriters to purchase the Option
Shares, as the case may be) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date (or, in the case of
the Option Shares, the Additional 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 under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
13. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of its counsel)
reasonably incurred by the Underwriter in connection with this Agreement or the
offering contemplated hereunder.
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<PAGE> 25
14. This Agreement shall inure to the benefit of and be binding upon
the Company, the Underwriters, any controlling persons referred to herein and
their respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Shares from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
15. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
J.P. Morgan Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o J.P. Morgan Securities Inc., 23 Wall Street, New York, New
York 10015 (telex:______); Attention: Syndicate Department. Notices to the
Company shall be given to it at ____________, _____________, ____________,
(telex:________); Attention:____________.
16. Each of the parties hereto irrevocably (i) agrees that any legal
suit, action or proceeding against the Company or the Selling Shareholders
other than Selling Shareholders who are citizens or legal residents of the
United States brought by any Underwriter or by any person who controls any
Underwriter arising out of or based upon this Agreement or the transactions
contemplated hereby may be instituted in any United States or New York State
Court in the borough of Manhattan, the City of New York, New York (each, a "New
York Court"), (ii) waives, to the fullest extent it may effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such
proceeding and (iii) submits to the exclusive jurisdiction of such courts in
any such suit, action or proceeding. The Company and each of the Selling
Shareholders irrevocably waives any immunity to jurisdiction to which it or
they may otherwise be entitled or become entitled (including sovereign
immunity, immunity to pre-judgment attachment, post-judgment attachment and
execution) in any legal suit, action or proceeding against it or them by the
Underwriters arising out of or based on this Agreement or the transactions
contemplated hereby which is instituted in any New York Court. The Company and
each of the Selling Shareholders have appointed Corporation Service Company as
their authorized agent (the "Authorized Agent") upon whom process may be served
in any such action by the Underwriters arising out of or based on this
Agreement or the transactions contemplated hereby which may be instituted in
any New York Court by any Underwriter or by any person who controls any
Underwriter, expressly consents to the jurisdiction of any such court in
respect of any such action, and waives any other requirements of or objections
to personal jurisdiction with respect thereto. Such appointment shall be
irrevocable. The Company and each of the Selling Shareholders other than
Selling Shareholders who are citizens or legal residents of the United States
represents and warrants that the Authorized Agent has agreed to act as such
agent for service of process and agrees to take any and all action, including
the filing of any and all documents and instruments, that may be necessary to
continue such appointment in full force and effect as aforesaid. Service of
process upon the Authorized Agent and written notice of such service to the
Company shall be deemed, in every respect, effective service of process upon
the Company and the respective Selling Shareholder(s), as the case may be.
17. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument. This Agreement shall be governed by and
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<PAGE> 26
construed in accordance with the laws of the State of New York, without giving
effect to the conflicts of laws provisions thereof.
-26-
<PAGE> 27
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
AWARD SOFTWARE INTERNATIONAL, INC.
By:_______________________________
Name:
Title:
SELLING SHAREHOLDERS
Accepted: October ____, 1996 By:_______________________________
Name:
Title: Attorney-in-Fact acting on
behalf of each such Selling
Shareholder
J.P. Morgan Securities Inc.
Prudential Securities Incorporated
Needham & Company, Inc.
Acting severally on behalf
of themselves and the
several Underwriters listed
in Schedule I hereto.
By: J.P. Morgan Securities Inc.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto.
By:_______________________________
Name: Michael J. Tiedemann
Title: Vice President
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<PAGE> 28
SCHEDULE I
<TABLE>
<CAPTION>
Number of Shares
Underwriter To Be Purchased
- ----------- ---------------
<S> <C>
J.P. Morgan Securities Inc.
Prudential Securities Incorporated
Needham & Company, Inc.
=========
Total 1,850,000
</TABLE>
<PAGE> 29
SCHEDULE II
SELLING SHAREHOLDERS
<TABLE>
<CAPTION>
NUMBER OF SELLING
SHAREHOLDER
PRIMARY SELLING SHAREHOLDERS SHARES TO BE SOLD
---------------------------- -----------------
<S> <C>
OTHER SELLING SHAREHOLDERS
--------------------------
-------
Total
</TABLE>
<PAGE> 1
EXHIBIT 5.1
(COOLEY GODWARD LLP LETTERHEAD)
October 24, 1996
Award Software International, Inc.
777 East Middlefield Road
Mountain View, CA 94043
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Award Software International, Inc., a California corporation
(the "Company"), of a Registration Statement on Form S-1, as amended, (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") covering the underwritten public offering of up to 2,127,500
shares of the Company's common stock (the "Common Stock") (including 277,500
shares of Common Stock for which the underwriters will be granted an
over-allotment option).
In connection with this opinion, we have (i) examined and relied upon the
Registration Statement and related Prospectus, the Company's Amended and
Restated Articles of Incorporation and Bylaws, and the originals or copies
certified to our satisfaction of such records, documents, certificates,
memoranda and other instruments as in our judgment are necessary or appropriate
to enable us to render the opinion expressed below; and (ii) assumed that the
share of the Common stock will be sold by the underwriters at a price
established by the Pricing Committee of the Board of Directors of the Company.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Common Stock, when sold, issued and paid for in accordance with the
Registration Statement and related Prospectus, will be validly issued, fully
paid and nonassessable.
We consent to the reference to our firm under the caption "Legal Matters" in the
prospectus included in the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
Cooley Godward LLP
By:
- ------------------------------------------------
James C. Kitch
