1
EXHIBIT 1.1
Maxtor Corporation
25,754,409 Shares*
Common Stock
($0.01 par value)
Underwriting Agreement
New York, New York
September 13, 2001
Xxxxxxx Xxxxx Xxxxxx Inc.
Bear, Xxxxxxx & Co. Inc
Xxxxxxx & Company, Inc.
as Representatives of the several Underwriters
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Hynix Semiconductor America Inc., a corporation organized under the laws
of California ("Hynix"), formerly Hyundai Electronics America, proposes to sell
to the several underwriters named in Schedule I hereto (the "Underwriters"), for
whom you are acting as representatives (the "Representatives"), 25,754,409
shares of common stock, $0.01 par value ("Common Stock"), of Maxtor Corporation,
a corporation organized under the laws of Delaware (the "Company"), (such shares
of Common Stock being sold by Hynix pursuant to this Agreement are hereinafter
called the "Underwritten Securities"). Hynix also proposes to grant to the
Underwriters an option to purchase up to 2,575,441 additional shares of Common
Stock to cover over-allotments (the "Option Securities"; the Option Securities,
together with the Underwritten Securities are hereinafter called the
"Securities"). To the extent there are no Underwriters listed on Schedule I
other than you, the term Representatives as used herein shall mean you, as
Underwriters, and the terms Representatives and Underwriters shall mean either
the singular or plural as the context requires. The use of the neuter in this
Agreement shall include the feminine and masculine wherever appropriate. Any
reference herein to the Registration Statement, a Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date of the Registration Statement or
the issue date of such Preliminary Prospectus or the Prospectus, as the case may
be; and any reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration Statement,
or the issue date of any Preliminary Prospectus or the Prospectus,
----------
* Plus an additional option to purchase from Hynix up to 2,575,441 additional
Securities to cover over-allotments.
2
as the case may be, deemed to be incorporated therein by reference. Certain
terms used herein are defined in Section 17 hereof.
1. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration
statement (file number 333-61770) on Form S-3, including a related
preliminary prospectus, for registration under the Act of the offering and
sale of the Securities. The Company may have filed one or more amendments
thereto, including a related preliminary prospectus, each of which has
previously been furnished to you. The Company will next file with the
Commission one of the following: either (1) prior to the Effective Date of
such registration statement, a further amendment to such registration
statement, (including the form of final prospectus) or (2) after the
Effective Date of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b). In the case of clause (2), the
Company has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in such
registration statement and prospectus. As filed, such amendment and form
of final prospectus, or such final prospectus ("Prospectus"), shall
contain all Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest preliminary prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined herein) and on any date on
which Option Securities are purchased, if such date is not the Closing
Date (a "settlement date"), the Prospectus (and any supplements thereto)
will, comply in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement did
not or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the Effective
Date, the Prospectus, if not filed pursuant to Rule 424(b), will not, and
on the date of any filing pursuant to Rule 424(b) and on the Closing Date
and any settlement date, the Prospectus (together with any supplement
thereto) will not, include 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; provided, however, that the Company makes no representations
or warranties as to the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with
3
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto).
(c) Each of the Company and Maxtor Asia Pacific Limited, Maxtor
Disc Drives Pty. Limited, Maxtor Europe GmbH, Maxtor Europe Limited,
Maxtor Europe SARL, Maxtor Japan Limited, Maxtor Korea Limited, Maxtor
Ireland Limited, Maxtor Peripherals (S) Pte. Limited, Maxtor Receivables
Corporation, Maxtor Sales Private Limited, Maxtor Thailand Limited, Maxtor
International SARL, Maxtor (ROK) Corporation, Maxtor Malaysia Sdn Bhd,
Maxtor Global Ltd., Maxtor (Gibraltar) Limited, Quantum Hong Kong Limited,
Quantum GmbH, Quantum Peripherals Products Ltd., Quantum France SARL,
Quantum Storage Japan KK and Quantum Asia-Pacific Pte. Limited (each a
"Subsidiary" and collectively the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification except to the extent that the failure to
be so qualified or be in good standing could not reasonably be expected to
have a Material Adverse Effect (as defined herein).
(d) All the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through wholly
owned Subsidiaries free and clear of any perfected security interest or
any other security interests, claims, liens or encumbrances.
(e) The Company's authorized equity capitalization is as set forth
in the Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus;
the outstanding shares of Common Stock (including the Securities being
sold hereunder by Hynix) have been duly and validly authorized and issued
and are fully paid and nonassessable; the Securities being sold by Hynix
are duly listed, and admitted and authorized for trading, on the New York
Stock Exchange; the certificates for the Securities are in valid and
sufficient form; the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for
the Securities except for the ownership maintenance rights granted to
Hynix under the stockholder agreement, dated June 25, 1998, among the
Company, Hyundai Electronics America, Inc. (the predecessor to Hynix) and
Hyundai Electronics Industries Co., Ltd. (the "Stockholder Agreement"),
which do not apply to the Securities being sold hereunder by the Company;
and, except as set forth in the Prospectus, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are outstanding,
except options granted to employees in the ordinary course of business
since the end of the Company's fiscal year ended December 30, 2000.
4
(f) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or
to be filed as an exhibit thereto, which is not described or filed as
required; and the statements in the Prospectus under the headings "Selling
Stockholder--Material Federal Income Tax Consequences of the Sale of
Shares by the Selling Stockholder" and "Recent Developments--Addition to
the Coverage under our Tax Opinion Insurance Policy" "Risk Factors
--Protection of our intellectual property is limited and it is exposed to
third party claims of infringement", "--We are subject to existing
infringement claims which are costly to defend and may harm our business",
"If Quantum incurs non-insured tax as a result of its split-off of Quantum
HDD, our financial condition and operating results could be negatively
affected" and "--Because we have to abide by potentially significant
restrictions with respect to our equity securities for two years after the
merger in order to avoid the risk of triggering a tax obligation of
Quantum as a result of the split-off, our ability to attract and retain
key personnel or be acquired could be harmed" insofar as such statements
summarize legal matters, agreements, documents, or proceedings discussed
therein, are accurate and fair summaries of such legal matters,
agreements, documents or proceedings.
(g) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, except (i) as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles and
(ii) to the extent that rights to indemnity or contribution under this
Agreement may be limited by Federal and state securities laws or the
public policy underlying such laws.
(h) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required for the consummation by
the Company of the transactions contemplated herein, except such as have
been obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and distribution
of Securities by the Underwriters in the manner contemplated herein and in
the Prospectus.
(j) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, or result in a breach
or violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiaries pursuant to, (i) the
charter or by-laws of the Company or any Subsidiaries, (ii) the terms of
any material indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other material agreement, obligation,
condition, covenant or instrument to which the Company or any Subsidiary
is a party or bound or to which its or their property is subject, or (iii)
any statute, law, rule, regulation, judgment, order or decree applicable
5
to the Company or any Subsidiary of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any Subsidiary or any of its or
their properties.
(k) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement which
have not been waived in writing prior to the Execution Time.
(l) The consolidated historical financial statements and schedules
of the Company and its consolidated subsidiaries included and incorporated
by reference in the Prospectus and the Registration Statement present
fairly in all material respects the financial condition, results of
operations and cash flows of the Company as of the dates and for the
periods indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein). The
pro forma financial statements included and incorporated by reference in
the Prospectus and the Registration Statement include assumptions that
provide a reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the related
pro forma adjustments give appropriate effect to those assumptions, and
the pro forma adjustments reflect the proper application of those
adjustments to the historical financial statement amounts in the pro forma
financial statements included and incorporated by reference in the
Prospectus and the Registration Statement; the pro forma financial
statements included and incorporated by reference in the Prospectus and
the Registration Statement comply as to form in all material respects with
the applicable accounting requirements of Regulation S-X under the Act;
and the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements.
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiaries or its or their property is pending or, to the
knowledge of the Company, threatened that (i) could reasonably be expected
to have a material adverse effect on the performance of this Agreement or
the consummation of any of the transactions contemplated hereby or (ii)
could reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and the Subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business (a
"Material Adverse Effect"), except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(n) Each of the Company and the Subsidiaries owns, leases or has
sufficient rights to use all such properties as are necessary to the
conduct of its operations as presently conducted.
(o) Neither the Company nor any Subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms of
any material indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other material agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which
6
its property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its properties,
as applicable, the violation of which could reasonably be expected to have
a Material Adverse Effect.
(p) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and financial statement schedules incorporated by reference in the
Prospectus, and Ernst & Young LLP, who have certified certain financial
statements of Quantum HDD and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
included and incorporated by reference in the Prospectus, are each
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(q) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid by the Company or any Subsidiary in
connection with the execution and delivery of this Agreement.
(r) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
Material Adverse Effect) and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good
faith or as could not reasonably be expected to have a Material Adverse
Effect.
(s) No labor problem or dispute with the employees of the Company or
any Subsidiary exists or, to the knowledge of the Company, is threatened
or imminent, that could, in any such case, reasonably be expected to have
a Material Adverse Effect.
(t) The Company and each Subsidiary carry, or are entitled to the
benefits of, insurance (including self-insurance) in such amounts and
covering such risks as are prudent and customary in the businesses in
which they are engaged and all such insurance is, and after consummation
of the transactions contemplated herein will be, in full force and effect;
and neither the Company nor any Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that could not
reasonably be expected to have a Material Adverse Effect.
(u) No Subsidiary is currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other
distribution on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to the
7
Company or any other Subsidiary, except for any requirements under the
laws of the jurisdictions in which any Subsidiary is organized that
corporations organized in such jurisdictions maintain specified levels of
capital or statutory reserves.
(v) The Company and the Subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses as presently conducted except where the
failure to possess such licenses, certificates, permits or authorizations
would not have a Material Adverse Effect, and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authorization
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could reasonably be expected to
have a Material Adverse Effect.
(w) The Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(x) The Company has not directly or indirectly taken any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(y) The Company and the Subsidiaries (i) are in material compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses
as presently conducted and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal
or release of hazardous or toxic substances or wastes, pollutants or
contaminants, except where such non-compliance with Environmental Laws,
failure to receive required permits, licenses or other approvals, or
liability would not, individually or in the aggregate, have a Material
Adverse Effect. Neither the Company nor any Subsidiary has been named as a
"potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(z) Each of the Company and the Subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published
8
interpretations thereunder with respect to each "plan" (as defined in
Section 3(3) of ERISA and such regulations and published interpretations)
in which employees of the Company or any of the Subsidiaries are eligible
to participate. Each such plan is in compliance in all material respects
with the presently applicable provisions of ERISA and such regulations and
published interpretations, except where the failure to so comply could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. Neither the Company nor any of the Subsidiaries
has incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary
course) or to any such plan under Title IV of ERISA.
(aa) Maxtor Peripherals (S) Pte. Limited ("Maxtor Singapore") and
Maxtor International SARL ("Maxtor International") are the only two
Subsidiaries that reasonably could be deemed to each be a "significant
subsidiary" of the Company within the meaning of Rule 1-02(w) of
Regulation S-X under the Act.
(bb) The Company and the Subsidiaries own, possess, license or have
other rights to use all patents, patent applications, trade and service
marks, trade and service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the "Intellectual Property")
necessary for the conduct of their respective businesses as now conducted
(as described in the Prospectus), except where the failure to own or
possess any such Intellectual Property could not reasonably be expected,
singly or in the aggregate, to have a Material Adverse Effect and (i) to
the knowledge of the Company, there are no rights of third parties to any
such Intellectual Property, other than licenses granted in the ordinary
course of business; (ii) to the knowledge of the Company, there is no
material infringement by third parties of any such Intellectual Property;
(iii) except as specifically set forth in the Prospectus, there is no
pending or, to the knowledge of the Company, threatened action, suit,
proceeding or claim by others challenging the Company's rights in or to
any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (iv) except as
specifically set forth in the Prospectus, there is no pending or to the
knowledge of the Company, threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual
Property, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (v) except as specifically set forth
in the Prospectus under the caption "Risk Factors --Protection of our
intellectual property is limited and it is exposed to third party claims
of infringement", there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others that the Company
infringes or otherwise violates any patent, trademark, copyright, trade
secret or other proprietary rights of others, and the Company is unaware
of any other fact which would form a reasonable basis for any such claim
and (vi) to the Company's knowledge, all U.S. patents owned by the Company
are valid and enforceable.
(cc) Except as disclosed in the Prospectus, the Company does not
have any material lending or other relationship with any bank or lending
affiliate of any of the Underwriters.
9
(dd) Neither the Company nor any of the Subsidiaries has distributed
nor will it distribute prior to the latest of (i) the Closing Date, (ii)
any settlement date and (iii) completion of the distribution of the
Securities, any offering material in connection with the offering and sale
of the Securities other than any Preliminary Prospectus, the Prospectus,
the Registration Statement and other materials, if any, permitted by the
Act.
(ee) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company or any of the Subsidiaries to or
for the benefit of any of the officers or directors of the Company or any
Subsidiary or any of the members of the families of any of them, which
loans, advances or guarantees are required to be, and are not, disclosed
in the Registration Statement and Prospectus.
(ff) There have not been, and there are not proposed, any
transactions or agreements between the Company or any of the Subsidiaries
on the one hand and the officers, directors or stockholders of the Company
or any of the Subsidiaries on the other, which transactions or agreements
are required to be, and are not, disclosed in the Registration Statement
and Prospectus.
(gg) To the Company's knowledge, no officer or director of the
Company is in breach or violation of any employment agreement,
non-competition agreement, confidentiality agreement, or other agreement
restricting the nature or scope of employment to which such officer or
director is a party, other than such breaches or violations which could
not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; the conduct of the Company's business, as
described in the Registration Statement and Prospectus, will not result in
a breach or violation of any such agreement.
(hh) There are no outstanding options to acquire shares of capital
stock of the Company except as disclosed in the Registration Statement and
the Prospectus and options granted to employees in the ordinary course of
business since the end of the Company's fiscal quarter ended June 30,
2001.
(ii) The Company has not received any notice or communication (in
writing or otherwise), or any other information, indicating that there is
a material possibility that any customer of the Company identified in the
"Business--Customers and Sales Channels" section of the Annual Report on
Form 10-K (as amended by Form 10-K/A Amendment No. 1 to Form 10-K filed on
April 30, 2001) that is incorporated by reference in the Registration
Statement will cease dealing with the Company or otherwise materially
reduce the volume of business transacted by such customer with the Company
below historical levels.
Any certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Underwriters in connection with
the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each
Underwriter.
10
(ii) Hynix represents and warrants to, and agrees with, each
Underwriter that:
(a) Hynix has full legal right, capacity, power and authority to
enter into and perform this Agreement and to sell, transfer, assign and
deliver in the manner provided in this Agreement the Securities to be sold
by it hereunder.
(b) Hynix is the lawful owner of the Securities to be sold by it
hereunder and upon sale and delivery of, and payment for, such Securities,
as provided herein, will convey to the Underwriters good and marketable
title to such Securities, free and clear of all liens, encumbrances,
equities and claims whatsoever.
(c) Hynix has not taken, directly or indirectly any action designed
to or which has constituted or which might reasonably be expected to cause
or result, under the Exchange Act or otherwise in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(d) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by Hynix of
the transactions contemplated herein, except such as may have been
obtained under the Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of
the Securities by the Underwriters and such other approvals as have been
obtained.
(e) Neither the sale of the Securities being sold by Hynix nor the
consummation of any other of the transactions herein contemplated by Hynix
nor the fulfillment of the terms hereof will conflict with, or result in a
breach or violation or imposition of any lien, charge or encumbrance upon
any property or assets of Hynix pursuant to, (i) the charter or by-laws of
Hynix, (ii) the terms of any material indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other material
agreement, obligation, condition, covenant or instrument to which Hynix is
a party or bound or to which its property is subject, or (iii) any
statute, law, rule, regulation, judgment, order or decree applicable to
Hynix of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over Hynix or any
of its properties.
(f) Hynix is not and, after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(g) To the best of Hynix's knowledge, the representations and
warranties of the Company contained in this Section 1 are true and
correct; Hynix is familiar with the Registration Statement and has no
knowledge of any material fact, condition or information not disclosed in
the Prospectus or any supplement thereto which has adversely affected or
may adversely affect the business of the Company or any Subsidiary; and
the sale of Securities by Hynix pursuant hereto is not prompted by any
information concerning the Company or any Subsidiary which is not set
forth in the Prospectus or any supplement thereto. For purposes of this
paragraph 1(ii)(g), to the
11
"knowledge" of Hynix refers only to information and things known by Xx.
X.X. Xxxx in his capacity as a Maxtor director as of the date hereof.
(h) This Agreement has been duly authorized, executed and delivered
by Hynix and constitutes a valid and binding obligation of Hynix
enforceable in accordance with its terms, except (i) as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles and (ii) to the
extent that rights to indemnity or contribution under this Agreement may
be limited by Federal and state securities laws or the public policy
underlying such laws.
(i) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the sale by Hynix of the Securities.
(j) Except as disclosed in the Prospectus, Hynix (i) does not have
any material lending or other relationship with any bank or lending
affiliate of any of the Underwriters and (ii) does not intend to use any
of the proceeds from the sale of the Securities hereunder to repay any
outstanding debt owed to any affiliate of any of the Underwriters.
(k) There have not been, and there are not proposed, any
transactions or agreements between Hynix or any of its subsidiaries on the
one hand and the officers, directors or stockholders of the Company or any
of the Subsidiaries on the other, which transactions or agreements are
required to be, and are not, disclosed in the Registration Statement and
Prospectus.
Any certificate signed by any officer of Hynix and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by Hynix, as to
matters covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, Hynix agrees
to sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from Hynix, at a purchase price of $[_______] per share,
the amount of the Underwritten Securities set forth opposite such Underwriter's
name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, Hynix hereby grants an option
to the several Underwriters to purchase, severally and not jointly, up to
2,575,441 Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date of
the Prospectus upon written or telegraphic notice by the Representatives to
Hynix setting forth the number of shares of the Option Securities as to which
the several Underwriters are exercising the option and the settlement date. The
number of
12
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of Option Securities to be purchased by the
several Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as you in your absolute discretion shall
make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on September
[19], 2001, or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, which date and
time may be postponed by agreement among the Representatives, the Company and
Hynix or as provided in Section 9 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing Date"). Delivery of
the Securities shall be made to the Representatives for the respective accounts
of the several Underwriters against payment by the several Underwriters through
the Representatives of the respective purchase price of the Securities to or
upon the order of Hynix by wire transfer payable in same-day funds to the
accounts specified by Hynix. Delivery of the Underwritten Securities and the
Option Securities shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct.
Hynix will pay all applicable state transfer taxes, if any, involved
in the transfer to the several Underwriters of the Securities to be purchased by
them from Hynix and the respective Underwriters will pay any additional stock
transfer taxes involved in further transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, Hynix will deliver the Option
Securities (at the expense of the Company) to the Representatives, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of Hynix by wire transfer payable in same-day
funds to the accounts specified by Hynix. If settlement for the Option
Securities occurs after the Closing Date, Hynix will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any
13
amendment of the Registration Statement or supplement to the Prospectus or
any Rule 462(b) Registration Statement unless the Company has furnished you
a copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is otherwise
required under Rule 424(b), the Company will cause the Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives of
such timely filing. The Company will promptly advise the Representatives
(1) when the Registration Statement, if not effective at the Execution
Time, shall have become effective, (2) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement
shall have been filed with the Commission, (3) when, prior to termination
of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (4) of any request by
the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any supplement
to the Prospectus or for any additional information, (5) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose and (6) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the Exchange Act or the respective rules thereunder, the Company
promptly will (1) notify the Representatives of such event, (2) prepare and
file with the Commission, subject to the second sentence of paragraph
(i)(a) of this Section 5, an amendment or supplement which will correct
such statement or omission or effect such compliance and (3) supply any
supplemented Prospectus to you in such quantities as you may reasonably
request.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement or
statements of the Company and the Subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters signed copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by
14
the Act, as many copies of the Preliminary Prospectus and the Prospectus
and any supplement thereto as the Representatives may reasonably request.
(e) The Company will use its best efforts, to arrange, if necessary,
for the qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate and will maintain such
qualifications in effect so long as required for the distribution of the
Securities; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities, in
any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of Xxxxxxx
Xxxxx Barney Inc., offer, sell, or contract to sell, or otherwise dispose
of, (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act,
any other shares of Common Stock or any securities convertible into, or
exercisable, or exchangeable for, shares of Common Stock; or publicly
announce an intention to effect any such transaction, for a period of 90
days after the date of this Agreement, provided, however, that the Company
may issue and sell Common Stock pursuant to any employee stock option plan,
restricted stock plan, employee stock purchase plan or dividend
reinvestment plan of the Company in effect at the Execution Time and the
Company may issue Common Stock issuable upon the conversion of securities
or the exercise of warrants outstanding at the Execution Time.
(g) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Preliminary Prospectus, the
Prospectus, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, the Preliminary Prospectus, the Prospectus, and all
amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky
15
memorandum and all other agreements or documents printed (or reproduced)
and delivered in connection with the offering of the Securities; (v) the
registration of the Securities under the Exchange Act and the listing of
the Securities on the New York Stock Exchange; (vi) any registration or
qualification of the Securities for offer and sale under the securities or
blue sky laws of the several states (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters relating to
such registration and qualification); (vii) any filings required to be made
with the National Association of Securities Dealers, Inc. (including filing
fees and the reasonable fees and expenses of counsel for the Underwriters
relating to such filings); (viii) the transportation and other expenses
incurred by or on behalf of Company representatives (excluding the
Underwriters) in connection with presentations to prospective purchasers of
the Securities; (ix) the fees and expenses of the Company's accountants and
the fees and expenses of counsel (including local and special counsel) for
the Company and Hynix; and (x) all other costs and expenses incident to the
performance by the Company and Hynix of their obligations hereunder.
(ii) Hynix agrees with the several Underwriters that:
(a) Hynix will not, without the prior written consent of Xxxxxxx Xxxxx
Xxxxxx Inc., offer, sell, contract to sell, pledge or otherwise dispose of,
(or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person in privity with the
Company or any affiliate of the Company) directly or indirectly, or file
(or participate in the filing of) a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act with respect to, any shares of
capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the
date of this Agreement, other than shares of Common Stock disposed of as
bona fide gifts approved by Xxxxxxx Xxxxx Barney Inc.
(b) Hynix will not take any action designed to or which has
constituted or which might reasonably be expected to cause or result, under
the Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Securities.
(c) Hynix will advise you promptly, and if requested by you, will
confirm such advice in writing, so long as delivery of a prospectus
relating to the Securities by an underwriter or dealer may be required
under the Act, of any change in information in the Registration Statement
or the Prospectus relating to Hynix.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and Hynix contained
herein as of the Execution Time, the Closing Date and any settlement date
pursuant to Section 3 hereof, to the accuracy of the statements of the Company
16
and Hynix made in any certificates pursuant to the provisions hereof, to the
performance by the Company and Hynix of their respective obligations hereunder
and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) The Company shall have caused Xxxx Xxxx Xxxx & Freidenrich LLP,
counsel for the Company, to have furnished to the Representatives their
opinion, dated the Closing Date and addressed 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 the
State of Delaware, with corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its businesses as described in the Prospectus, and is
duly qualified to do business as foreign corporation and is in
good standing under the laws of the State of California and, to
the knowledge of such counsel, each other jurisdiction which
requires such qualification, except where the failure to be so
qualified or be in good standing could not reasonably be expected
to have a Material Adverse Effect;
(ii) except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of each Subsidiary are owned
of record by the Company or by another Subsidiary;
(iii) the Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company
conforms in all material respects to the description thereof
contained in the Prospectus; the outstanding shares of Common
Stock (including Securities being sold hereunder by Hynix) have
been duly and validly authorized and issued and are fully paid
and nonassessable; the Securities being sold by Hynix are duly
listed, and admitted and authorized for trading, on the New York
Stock Exchange; the certificates for the Securities are in valid
and sufficient form; the holders of outstanding shares of capital
stock of the Company are not entitled to preemptive rights under
the Company's charter documents, Delaware corporate law or any
agreements of which
17
such counsel is aware, or to such counsel's knowledge, similar
rights to subscribe for the Securities except for the ownership
maintenance rights granted to Hynix under the Stockholder
Agreement, which do not apply to the Securities being sold by the
Company hereunder; and, except as set forth in the Prospectus, to
the knowledge of such counsel, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the
Company are outstanding[, except options granted to employees in
the ordinary course of business since the end of the Company's
fiscal year ended December 30, 2000].
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator
involving the Company or any Subsidiaries or its or their
property of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus, and, to the knowledge of such counsel, there is no
franchise, contract or other document of a character required to
be described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, which is not described or filed
as required under the Act or the applicable rules and regulations
of the Commission thereunder; and the statements in the
Prospectus under the headings "Selling Stockholder --Material
Federal Income Tax Consequences of the Sale of Shares by the
Selling Stockholder" and "Recent Developments --Addition to the
Coverage under our Tax Opinion Insurance Policy" "Risk Factors
--Protection of our intellectual property is limited and it is
exposed to third party claims of infringement", "--We are subject
to existing infringement claims which are costly to defend and
may harm our business", "If Quantum incurs non-insured tax as a
result of its split-off of Quantum HDD, our financial condition
and operating results could be negatively affected", "--Because
we have to abide by potentially significant restrictions with
respect to our equity securities for two years after the merger
in order to avoid the risk of triggering a tax obligation of
Quantum as a result of the split-off, our ability to attract and
retain key personnel or be acquired could be harmed", and the
statements under "Legal Proceedings", "Executive Compensation,"
and "Certain Relationships and Related Transactions" in (or
incorporated by reference in) the Company's Annual Report on Form
10-K for the year ended December 30, 2000 (as amended by Form
10-K/A Amendment No. 1 to Form 10-K filed on April 30, 2001) that
is incorporated by reference in the Registration Statement and
Prospectus, accurately summarize in all material respects the
matters therein described to the extent they are matters of law
and descriptions of contractual arrangements;
(v) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to
18
Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose have
been instituted or threatened and the Registration Statement and
the Prospectus (other than the financial statements, schedules
and other financial information contained therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and
the rules thereunder;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company (assuming due authorization and
execution by each party thereto other than the Company);
(vii) the Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be, an
"investment company" as defined in the Investment Company Act of
1940, as amended;
(viii) no consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such
as have been obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this Agreement and in
the Prospectus and such other approvals (specified in such
opinion) as have been obtained;
(ix) neither the issuance and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated
nor the fulfillment of the terms hereof will conflict with,
result in a breach or violation of or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
pursuant to, (i) the charter or by-laws of the Company, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company is a party
or bound or to which its property is subject and that is filed as
an exhibit to the Registration Statement, or (iii) any statute,
law, rule or regulation which, in the experience of such counsel,
typically is applicable to the types of transactions contemplated
herein or, to the knowledge of such counsel, any judgment, order
or decree applicable to the Company of any court, regulatory
body, administrative agency, governmental body, arbitrator or
other authority asserting jurisdiction over the Company or any of
its properties; and
(x) to the knowledge of such counsel, no holders of securities of
the Company have rights to the registration of such securities
under the
19
Registration Statement except for rights granted to Hynix under
the Stockholder Agreement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of California, the General Corporation Law of the State of Delaware or the
Federal laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are reasonably
satisfactory to counsel for the Underwriters and (B) as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of
the Company and public officials. References to the Prospectus in this
paragraph (b) include any supplements thereto at the Closing Date.
In addition, such counsel shall state that such counsel has participated in
conferences and in telephone conversations with officers and other
representatives of the Company, representatives of Hynix, representatives
of the Representatives and representatives of the independent public
accountants of the Company, during which conferences and conversations the
contents of the Registration Statement and the Prospectus were discussed,
and such counsel has reviewed certain corporate records and documents
furnished to such counsel by the Company and that, although such counsel
has not undertaken to independently verify and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except as
specified in the foregoing opinion), on the basis of the foregoing, and
such counsel's understanding of the U.S. federal securities laws, no
information has come to the attention of such counsel that causes such
counsel to believe that the Registration Statement on the Effective Date or
at the Execution Time contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus as of its date and on the Closing Date included or includes any
untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than
financial statements and schedules and other financial information
contained therein, as to which such counsel need express no opinion).
(c) The Company shall have caused counsel for Maxtor Singapore and
Maxtor International (such counsel to be reasonably satisfactory to the
Representatives) to have furnished to the Representatives an opinion, dated
the Closing Date and addressed to the Representatives, to the effect that:
(i) Maxtor Singapore and Maxtor International have been duly
incorporated and are validly existing as corporations in good standing
under the laws of the jurisdiction in which they are each chartered or
organized, with corporate power and authority to own or lease, as the
case may be, and to operate their properties and conduct their
businesses as described in the Prospectus, and, to the knowledge of
such counsel, are duly qualified to do business as foreign
corporations and are in good standing under the laws of each
jurisdiction which requires such qualification, except where the
failure to be so qualified or be in
20
good standing could not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of Maxtor Singapore and/or Maxtor
International, whether or not arising from transactions in the
ordinary course of business;
(ii) all the outstanding shares of capital stock of Maxtor
Singapore and Maxtor International have been duly and validly
authorized and issued and are fully paid and nonassessable, and except
as otherwise set forth in the Prospectus, are owned of record by the
Company;
(iii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
Maxtor Singapore or Maxtor International or their property which, if
determined adversely to Maxtor Singapore or Maxtor International,
could reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of Maxtor
Singapore or Maxtor International, whether or not arising from
transactions in the ordinary course of business; and
(iv) neither the sale of the Securities, nor the consummation of
any other of the transactions herein contemplated nor the fulfillment
of the terms hereof will conflict with, result in a breach or
violation of or imposition of any lien, charge or encumbrance upon any
property or assets of Maxtor Singapore or Maxtor International
pursuant to, (i) the charter or by-laws of Maxtor Singapore or Maxtor
International, (ii) to the knowledge of such counsel, the terms of any
material indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other material agreement, obligation,
condition, covenant or instrument to which Maxtor Singapore or Maxtor
International is a party or bound or to which its property is subject,
or (iii) any statute, law, rule or regulation which, in the experience
of such counsel, typically is applicable to the types of transactions
contemplated herein or, to the knowledge of such counsel, any
judgment, order or decree applicable to Maxtor Singapore or Maxtor
International of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority asserting
jurisdiction over Maxtor Singapore or Maxtor International or any of
their property.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent they deem proper and specified in such opinion, upon
certificates of responsible officers of the Company, Maxtor Singapore,
Maxtor International and public officials. References to the Prospectus in
this paragraph (c) include any supplements thereto at the Closing Date.
(d) Hynix shall have caused Xxx Xxxxxxx, counsel for Hynix, to have
furnished to the Representatives his opinion dated the Closing Date and
addressed to the Representatives, to the effect that:
21
(i) Hynix is duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
California, with corporate power and authority to own or lease, as the
case may be, and to operate its properties and conduct its business as
described in the Prospectus, to the knowledge of such counsel, is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each other jurisdiction which requires such
qualification, except where the failure to be so qualified or be in
good standing could not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of Hynix and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary
course of business;
(ii) this Agreement has been duly authorized, executed and
delivered by Hynix, and Hynix has full legal right and authority to
sell, transfer and deliver in the manner provided in this Agreement
and the Securities being sold by it hereunder;
(iii) the delivery by Hynix to the several Underwriters of
certificates with all necessary endorsements for the Securities being
sold hereunder by Hynix against payment therefor as provided herein,
assuming the several Underwriters are acquiring the Securities in good
faith without notice of any adverse claim, will pass title to such
Securities to the several Underwriters, free and clear of any adverse
claim;
(iv) Hynix is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" as
defined in the Investment Company Act of 1940, as amended;
(v) no consent, approval, authorization, filing with or order of
any court or governmental agency or body on the part of Hynix is
required in connection with the consummation by Hynix of the
transactions contemplated herein, except such as may have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Prospectus and such other
approvals (specified in such opinion) as have been obtained; and
(vi) neither the sale of the Securities being sold by Hynix nor
the consummation of any other of the transactions herein contemplated
nor the fulfillment of the terms hereof will conflict with, result in
a breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of Hynix pursuant to, (i) the
charter or by-laws of the Hynix, (ii) to the knowledge of such
counsel, the terms of any material indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
material agreement, obligation, condition, covenant or instrument to
which Hynix is a party or bound or to which its property is subject,
or (iii) any statute, law, rule or regulation
22
which, in the experience of such counsel, typically is applicable to
the types of transactions contemplated herein or, to the knowledge of
such counsel, any judgment, order or decree applicable to Hynix of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority asserting jurisdiction over Hynix or any
of its properties.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of California, the General Corporation Law of the State of Delaware or the
Federal laws of the United States, to the extent he deem proper and
specified in such opinion, upon the opinion of other counsel of good
standing whom he believes to be reliable and who are reasonably
satisfactory to counsel for the Underwriters, and (B) as to matters of
fact, to the extent he deems proper, on certificates of responsible
officers of Hynix and public officials.
(e) The Representatives shall have received from Cleary, Gottlieb,
Xxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect
to the sale of the Securities, the Registration Statement, the Prospectus
(together with any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company and Hynix shall
have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chief Executive Officer and the
Chief Financial Officer of the Company, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any supplements to the Prospectus
and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date and the Company has
complied in all material respect with all the agreements and satisfied
in all material respect all the conditions on its part to be performed
or satisfied at or prior to the Closing Date (such certificate to set
forth all known failures to comply with such agreements or satisfy
such conditions whether such known failures are material or
immaterial);
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the Company's knowledge,
after due inquiry with the Commission, no proceedings for that purpose
have been instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Prospectus (exclusive of
any supplement thereto), there has been no material adverse effect on
the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and the Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course
23
of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(g) Hynix shall have furnished to the Representatives a certificate,
signed by its Chief Executive Officer, dated the Closing Date, to the
effect that the signer of such certificate has carefully examined the
Registration Statement, the Prospectus, any supplement to the Prospectus
and this Agreement and that the representations and warranties of Hynix in
this Agreement are true and correct in all material respects on and as of
the Closing Date to the same effect as if made on the Closing Date.
(h) The Company shall have caused PricewaterhouseCoopers LLP to have
furnished to the Representatives [and to Hynix] letters, at the Execution
Time and at the Closing Date, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance reasonably satisfactory
to the Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable published rules and regulations adopted by the Commission
thereunder, and that they have performed a review of the unaudited interim
financial information of the Company for the three-month period ended March
31, 2001 and April 1, 2000 and the three and six month periods ended June
30, 2001 and July 1, 2000 in accordance with Statement on Auditing
Standards No. 71, and stating in effect that:
(i) in their opinion the audited consolidated financial
statements and financial statement schedule incorporated by reference
in the Registration Statement and the Prospectus and reported on by
them comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the
related published rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries, their
limited review, in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited interim
financial information for three-month period ended March 31, 2001 and
April 1, 2000 and the three and six month periods ended June 30, 2001
and July 1, 2000 incorporated by reference in the Registration
Statement and the Prospectus; carrying out certain specified
procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the stockholders,
directors and the audit, executive and compensation committees of the
Company and its subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions and
events subsequent to December 30, 2000, nothing came to their
attention which caused them to believe that:
(a) any material modifications should be made to the
unaudited condensed consolidated financial statements described
in 6(h)(ii)
24
incorporated by reference in the Registration Statement and the
Prospectus for them to be in conformity with applicable
accounting requirements of the Act and with the related rules and
regulations adopted by the Commission with respect to financial
statements included in quarterly reports on Form 10-Q under the
Exchange Act; and said unaudited condensed consolidated financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements incorporated by
reference in the Registration Statement and the Prospectus;
(b) with respect to the period subsequent to June 30, 2001,
there were any changes, at a specified date not more than five
business days prior to the date of the letter, in the long-term
debt and capital lease obligations due after one year of the
Company or capital stock of the Company or any decrease in the
stockholders' equity of the Company or decreases in net current
assets or total assets of the Company as compared with the
amounts shown on the June 30, 2001, unaudited consolidated
balance sheet incorporated by reference in the Registration
Statement and the Prospectus, or for the period from July 1, 2001
to such specified date there were any decreases, as compared with
the corresponding period in the preceding year (July 2, 2000 to
the specified date), in revenues or income from operations or
income before income taxes or in total or per share amounts of
net income of the Company, except in all instances for changes or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives; or
(c) the information and pro forma statement of operations
included or incorporated in the Registration Statement and
Prospectus in response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial Information),
Item 301 Management's Discussion and Analysis of Financial
Condition and Results of Operations), Item 305 (Quantitative and
Qualitative Disclosure About Market Risk) and Item 402 (Executive
Compensation) is not in conformity with the applicable disclosure
requirements of Regulation S-K and Regulation S-X;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is expressed in
dollars (or percentages derived from such dollar amounts) and has been
obtained from accounting records of the Company) which are subject to
controls over financial reporting or which has been derived from such
accounting records by analysis or computation, is in agreement with
such records or computations therefrom) set forth in the Registration
Statement and the Prospectus, including the information set forth
under the captions "Summary," "Summary Pro Forma Financial Data,"
"Risk Factors," "Recent
25
Developments," "Capitalization," in the Prospectus; and the
information included or incorporated by reference in Items 1, 2, 6, 7,
and 11 of the Company's Annual Report on Form 10-K, in [Part I-Items
1, 2, 3 and Part II-Item 6] of the Company's Quarterly Report on Form
00-X, [xxx under the captions [________________] in the Company's
Current Report on Form 8-K,] incorporated by reference in the
Registration Statement and the Prospectus, agrees with the accounting
records of the Company and the Subsidiaries, excluding any questions
of legal interpretation.
(iv) on the basis of a reading of the unaudited combined pro
forma statements of operations included or incorporated by reference
in the Registration Statement and the Prospectus (the "pro forma
financial statements"); carrying out certain specified procedures;
inquiries of certain officials of the Company and Quantum HDD who have
responsibility for financial and accounting matters; and proving the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the pro forma statements of operations,
nothing came to their attention which caused them to believe that the
pro forma statements of operations do not comply as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of
such statements.
References to the Prospectus in this paragraph (h) include any
supplement thereto at the date of the letter.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (h) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and the Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto) the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto).
(j) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
26
(k) The Securities shall have been listed and admitted and authorized
for trading on the New York Stock Exchange , and satisfactory evidence of
such actions shall have been provided to the Representatives.
(l) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from
each officer and director of the Company, which persons are listed on
Schedule II hereto, addressed to the Representatives.
(m) Prior to the Closing Date, the Company and Hynix shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company and Hynix in writing or by telephone
or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxx Xxxx Xxxx & Freidenrich LLP, counsel for the
Company, at 000 Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or Hynix to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through Xxxxxxx Xxxxx Xxxxxx Inc. on demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
8. Indemnification and Contribution. (a) The Company and Hynix jointly
and severally agree to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person
who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission
27
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company and
Hynix will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein; provided, further, that with respect to any
untrue statement or omission of material fact made in any Preliminary
Prospectus, the indemnity agreement contained in this Section 8(a) shall not
inure to the benefit of any Underwriter from whom the person asserting any such
loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of such Underwriter occurs
under the circumstance where it shall have been determined by final
nonappealable judgment that (w) the Company had previously furnished copies of
the Prospectus to the Representatives, (x) delivery of the Prospectus was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such securities to such
person, a copy of the Prospectus.
This indemnity agreement will be in addition to any liability which
the Company or Hynix may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, and Hynix, to the same extent as
the foregoing indemnity to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company by or on
behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company and Hynix acknowledge that the statements set
forth in the last paragraph of the cover page regarding delivery of the
Securities, and, under the heading "Underwriting" (i) the list of Underwriters
and their respective participation in the sale of the Securities, (ii) the
sentences related to concessions and reallowances and (iii) the paragraph
related to stabilization, syndicate covering transactions and penalty bids in
any Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided
28
in paragraph (a) or (b) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and Hynix, jointly and severally,
and the Underwriters severally agree to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which the Company, Hynix and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company and Hynix on the one hand and by the Underwriters on the
other from the offering of the Securities; provided, however, that in no case
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the Company
and Hynix, jointly and severally, and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company or Hynix on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company or Hynix shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by Hynix, and benefits received by the Underwriters shall be deemed to
be equal to the total underwriting discounts and commissions, in each case as
set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the
29
omission or alleged omission to state a material fact relates to information
provided by the Company or Hynix on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company, Hynix and the Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
(e) The liability of Hynix under the indemnity and contribution
provisions contained in this Section 8 shall be limited to an amount equal to
the net proceeds from the public offering of the Securities sold by Hynix to the
Underwriters after deducting underwriting discounts. The Company and Hynix may
agree, as among themselves and without limiting the rights of the Underwriters
under this Agreement, as to the respective amounts of such liability for which
they each shall be responsible.
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, then
the Company shall have 36 hours within which it may, but is not obligated, to
find one or more substitute underwriters satisfactory to the Representatives to
purchase such Securities upon the terms set forth in this Agreement and if the
Company is unable to find one or more such underwriters that are satisfactory to
the Representatives, this Agreement will terminate without liability to any
nondefaulting Underwriter, Hynix or the Company. In the event of a default by
any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its
30
liability, if any, to the Company, Hynix and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in any of the Company's securities shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on either of
such Exchanges, (ii) a banking moratorium shall have been declared either by
Federal or New York State authorities or (iii) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war, or other calamity or crisis the effect of which on
financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus (exclusive of any
supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of Hynix and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, Hynix or the Company
or any of the officers, directors, employees, agents or controlling persons
referred to in Section 8 hereof, and will survive delivery of and payment for
the Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to Xxxxxxx Xxxxx Xxxxxx Inc. General Counsel (fax no.:
(000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Barney Inc.,
at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General Counsel;
or, if sent to the Company, will be mailed, delivered or telefaxed to Chief
Financial Officer c/o of Maxtor Corporation, 000 XxXxxxxx Xxxxxxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000 (fax no. (000) 000-0000) and confirmed to the General Counsel
c/o Maxtor Corporation, 0000 Xxxxxx Xxxxx Xxxxx, Xxxxxxxx. Xxxxxxxx 00000 (fax
no. (000) 000-0000), attention of the Legal Department, with a copy to Xxxxx
Xxxx Xxxxxxx (fax no. (000) 000-0000) at Xxxx Xxxx Xxxx & Freidenrich LLP, 000
Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000; or if sent to Hynix, will be
mailed, delivered or telefaxed to the Chief Executive Officer, c/o Hynix
Semiconductor America, Inc., 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000
(fax no. (000) 000-0000), and confirmed to the General Counsel c/o Hynix
Semiconductor America, Inc., 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000
(fax no. (000) 000-0000), attention of the Legal Department and Xxxx X. Xxxxx
(fax no. (000) 000-0000) at McCutchen, Doyle, Xxxxx & Xxxxxxx LLP, 0000 Xxxxxx
Xxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
31
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York. Hynix and the
Underwriters intend this Underwriting Agreement to be a "securities contract" as
defined in 11 U.S.C. Section 741.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(i)(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall
32
also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, Hynix and the several Underwriters.
Very truly yours,
Maxtor Corporation
By:
-------------------------------------
Name:
Title:
Hynix Semiconductor America, Inc.
By:
-------------------------------------
Name:
Title:
33
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
Bear, Xxxxxxx & Co. Inc
Xxxxxxx & Company
By: Xxxxxxx Xxxxx Barney Inc.
By:
------------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
34
Schedule I
--------------------------------------------------------------------------------
UNDERWRITERS NUMBER OF UNDERWRITTEN
SECURITIES TO BE PURCHASED
--------------------------------------------------------------------------------
Xxxxxxx Xxxxx Xxxxxx Inc...............
--------------------------------------------------------------------------------
Bear, Xxxxxxx & Co. Inc................
--------------------------------------------------------------------------------
Xxxxxxx & Company, Inc.................
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total..................................
--------------------------------------------------------------------------------
35
Schedule II
LIST OF OFFICERS, DIRECTORS AND SHAREHOLDERS
[Persons subject to lock-up to be confirmed]
--------------------------------------------------------------------------------
Name Position
--------------------------------------------------------------------------------
Xx. Xxxxx Sup Park Chairman of the Board
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx President, Chief Executive Officer and
Director
--------------------------------------------------------------------------------
Xxxxxxx Xxxx Director
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx Director
--------------------------------------------------------------------------------
Xxxxxx Xxxxx Chun Director
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx Director
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx Director
--------------------------------------------------------------------------------
Xxxx X. Xxxxx President, Network Systems Group
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxx Executive Vice President, Worldwide
Sales and Marketing
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxx Executive Vice President, Human
Resources
--------------------------------------------------------------------------------
Xx. Xxxxxx X. Xxxxxx Executive Vice President, Engineering
--------------------------------------------------------------------------------
Xxxx X. Xxxxxx Executive Vice President, Chief
Operating Officer and Chief Financial
Officer
--------------------------------------------------------------------------------
Xx. Xxxxxxxx X. Xxxxxxxxxxx Senior Vice President and Chief
Technology Officer
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxx Senior Vice President, Materials
--------------------------------------------------------------------------------
Xxxxx Xxxxxxxxx Senior Vice President, Worldwide Quality
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxx Senior Vice President, Consumer
Electronics and Business Development
--------------------------------------------------------------------------------
Xxxx Xxxxxx Senior Vice President, Engineering
--------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx Senior Vice President, General Counsel
and Secretary
--------------------------------------------------------------------------------
K. H. Teh Senior Vice President, Manufacturing
--------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxx Senior Vice President, Engineering
--------------------------------------------------------------------------------
36
EXHIBIT A
Maxtor Corporation
Public Offering of Common Stock
_________ __, 2001
Xxxxxxx Xxxxx Xxxxxx Inc.
Bear, Xxxxxxx & Co. Inc
Xxxxxxx & Company, Inc.
as Representatives of the several Underwriters
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), among Maxtor Corporation,
a Delaware corporation (the "Company"), Hynix Semiconductor America, Inc.
("Hynix"), a stockholder of the Company and each of you as representatives of a
group of Underwriters named therein, relating to an underwritten public offering
of Common Stock, $0.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge or
otherwise dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) directly or indirectly, including the filing (or participation in the
filing of) a registration statement with the Securities and Exchange Commission
in respect of, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Securities and Exchange Commission promulgated thereunder with respect to,
any shares of capital stock of the Company or any securities convertible into,
or exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of this Agreement, other than [(i)] shares of Common Stock disposed of as bona
fide gifts approved by Xxxxxxx Xxxxx Barney Inc.[, or (ii) a number of shares of
Common Stock (not to exceed 10,000 shares) authorized by the Company to be sold
(it being understood that the Company will not authorize all executive officers
and directors to sell more than 100,000 shares of Common Stock in the aggregate
during such 90 day period)]. [In case of (ii) above, the undersigned agrees to
sell such shares of Common Stock only to or through Xxxxxxx Xxxxx Xxxxxx Inc.]
37
If for any reason the Underwriting Agreement shall be terminated prior to
the Closing Date (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated.
Yours very truly,
By:
------------------------------------
Name:
Title:
2
