4,000,000 SHARES
POWER-ONE, INC.
COMMON STOCK, PAR VALUE $.001 PER SHARE
UNDERWRITING AGREEMENT
November 2, 2000
November 2, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Power-One, Inc., a Delaware corporation (the "COMPANY"), proposes to
issue and sell to Xxxxxx Xxxxxxx & Co. Incorporated (the "UNDERWRITER") an
aggregate of 4,000,000 shares of the Common Stock, par value $.001 per share,
of the Company (the "FIRM SHARES").
The Company also proposes to sell to the Underwriter not more than an
additional 500,000 shares of the Common Stock, par value $.001 per share, of
the Company (the "ADDITIONAL SHARES"), if and to the extent that the
Underwriter shall have determined to exercise the right to purchase such
shares of common stock granted to the Underwriter in Section 2 hereof. The
Firm Shares and the Additional Shares are hereinafter collectively referred
to as the "SHARES." The shares of Common Stock, par value $.001 per share, of
the Company to be outstanding after giving effect to the sales contemplated
hereby are hereinafter referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to
the Common Stock and other securities of the Company and has filed with, or
transmitted for filing to, or shall promptly hereafter file with or transmit
for filing to, the Commission a prospectus supplement (the "PROSPECTUS
SUPPLEMENT") specifically relating to the Shares pursuant to Rule 424 under
the Securities Act of 1933, as amended (the "SECURITIES ACT"). The
registration statement as amended at the time it becomes effective, including
the information (if any) deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A under the Securities Act, is
hereinafter referred to as the "REGISTRATION STATEMENT;" the prospectus
included in the Registration Statement is hereinafter referred to as the
"BASIC PROSPECTUS;" the Basic Prospectus together with the Prospectus
Supplement is hereinafter referred to as the "PROSPECTUS" (including, in the
case of all references to the Registration Statement and the Prospectus,
documents incorporated by reference). If the Company has filed an abbreviated
registration statement to register additional shares of Common Stock pursuant
to Rule 462(b) under the Securities Act (the "RULE 462 REGISTRATION
STATEMENT"), then any reference herein to the term "REGISTRATION STATEMENT"
shall be deemed to include such Rule 462 Registration Statement.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to and agrees with the Underwriter that:
(a) The Registration Statement has become effective, no stop
order suspending the effectiveness of the Registration Statement is in
effect and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and
the applicable rules and regulations of the Commission thereunder, (ii)
the Registration Statement, when it became effective, did not contain
and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (iii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iv)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to the Underwriter furnished to the Company in writing by the
Underwriter expressly for use therein.
(c) The Company (i) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, (ii) has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
(iii) is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(d) Each of the Company's Subsidiaries (as defined below) that
is a partnership is a duly formed general or limited partnership, as
the case may be, and is validly existing as a general or limited
partnership, as the case may be, under the laws of the state of its
organization, with full partnership power and authority to own its
property and to conduct its business as described in the Prospectus,
and each is duly qualified to transact business and is in good standing
as a foreign partnership in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a
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material adverse effect on the Company and its subsidiaries, taken as
a whole. Each corporate Subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken
as a whole. For the purposes of this Agreement, "Subsidiaries" means
International Power Devices, Inc., HC Power, Inc., Xxxxxxx Holding
AG, Powec AS, Power Electronics, Inc. and Poder Uno de Mexico, S.A.
de C.V. All of the issued shares of capital stock of each corporate
Subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (except for (i) shares owned and
held in trust for the Company in accordance with the laws of the
country of incorporation and (ii) a pledge of all of the issued and
outstanding stock of International Power Devices, Inc. and HC Power,
Inc. and 65% of the issued and outstanding capital stock of each of
Power Electronics, Inc., Poder Uno de Mexico, S.A., de C.V. and
Xxxxxxx Holding AG made by the Company in favor of Union Bank of
California, N. A., pursuant to that certain Credit Agreement among
the Company, certain subsidiaries of the Company and Union Bank of
California, N.A. as Administrative Agent and Lead Arranger, as
amended).
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the
issuance of the Shares (i) have been duly authorized, (ii) are validly
issued, fully paid and non-assessable, (iii) were issued in compliance
with all applicable laws (including, without limitation, federal and
state securities laws) and (iv) were not issued in violation of any
preemptive rights.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, free and clear of any
pledge, lien, encumbrance, security interest, preemptive or similar
claim or right.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of (i) applicable law, except where
such contravention would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, (ii) the certificate of
incorporation
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or by-laws of the Company, (iii) any agreement or other instrument
binding upon the Company or any of its Subsidiaries, except
where such contravention would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole or (iv) any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any Subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the Securities Act or securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change in the
condition, financial or otherwise, or in the earnings, business,
stockholders' equity or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this
Agreement).
(k) There are no (i) legal or governmental proceedings pending
or, to the Company's knowledge, threatened to which the Company or any
of its Subsidiaries is a party or to which any of the properties of the
Company or any of its Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not
so described or (ii) statutes, regulations, contracts or other
documents applicable to or binding upon the Company that are required
to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not
described or filed as required.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied as to form when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the
Commission thereunder.
(m) The Company is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus will not be, required to
register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(n) The Company and its Subsidiaries (i) are in 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 all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals
4
or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(o) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(p) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares
registered pursuant to the Registration Statement.
(q) The consolidated financial statements of the Company and
its Subsidiaries, together with related notes and schedules, as set
forth or incorporated by reference in the Registration Statement,
present fairly the consolidated financial condition and the results of
operations of the Company and its Subsidiaries, at the indicated dates
and for the indicated periods. Such financial statements have been
prepared in accordance with generally accepted accounting principles
("GAAP"), consistently applied throughout the periods involved, and all
adjustments necessary for a fair presentation of results for such
periods have been made. The summary financial information and the
selected financial data included in the Prospectus present fairly in
accordance with GAAP (other than the "EBITDA," "EBITDA margin" and
"backlog" information) the information shown therein and have been
compiled on a basis consistent with that of the audited and unaudited
financial statements from which they were derived.
(r) The Company and its Subsidiaries have filed all federal,
foreign, state and other tax returns and reports which have been
required to be filed and have paid all taxes indicated by said returns
and all assessments received by them to the extent that such taxes have
become due and there is no tax deficiency that has been or, to the
Company's knowledge, might be asserted against the Company or any of
its Subsidiaries that would have a material adverse effect on the
Company and its subsidiaries, taken as a whole. All material tax
liabilities are adequately provided for on the books of the Company and
its Subsidiaries.
(s) There are no agreements, contracts or other documents of a
character required to be described in the Registration Statement or the
Prospectus or required to be filed as exhibits to the Registration
Statement or incorporated by reference in the Registration Statement
which are not described, filed or incorporated as required.
5
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to sell
to the Underwriter, and the Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase from the Company at $70.00
a share (the "PURCHASE PRICE") the Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to the terms and conditions hereof, the Company agrees
to sell to the Underwriter the Additional Shares, and the Underwriter shall
have a one-time right to purchase, up to 500,000 Additional Shares at the
Purchase Price. If the Underwriter elects to exercise such option, it shall
so notify the Company in writing not later than 30 days after the date of
this Agreement, which notice shall specify the number of Additional Shares to
be purchased by the Underwriter and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below)
but not earlier than the Closing Date nor later than ten business days after
the date of such notice. Additional Shares may be purchased as provided in
Section 4 hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares.
The Company hereby agrees that, without the prior written consent of the
Underwriter, it will not, during the period ending 90 days after the date of
the Prospectus, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii)
enter into any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is
to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (A) the sale of any
Shares to the Underwriter pursuant to this Agreement, (B) transactions
relating to shares of Common Stock or other securities acquired in open
market transactions after the completion of the offering of the Shares, (C)
bona fide gifts aggregating not more than 100,000 shares of Common Stock, (D)
the pledge of shares of Common Stock as collateral against loans of the
Company or (E) the sale of shares of Common Stock pledged as collateral, if
loans secured by such shares are called, to the extent necessary to satisfy
such loans; PROVIDED, that, in the case of clauses (C), (D) and (E), each
donee, pledgee or transferee agrees in writing to be bound by all terms of
this Section 2.
3. TERMS OF PUBLIC OFFERING. The Company is advised that the
Underwriter proposes to make a public offering of the Shares as soon after
the Registration Statement and this Agreement have become effective as in its
judgment is advisable.
4. PAYMENT AND DELIVERY. Payment for the Firm Shares shall be made to
the Company in federal or other funds immediately available in New York City
against delivery of such Firm Shares for the account of the Underwriter at
10:00 a.m., New York City time, on
6
November 7, 2000, or at such other time on the same or such other date, not
later than November 14, 2000, as shall be designated in writing by the
Underwriter. The time and date of such payment are hereinafter referred to as
the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company in
federal or other funds immediately available in New York City against
delivery of such Additional Shares for the account of the Underwriter at
10:00 a.m., New York City time, on the date specified in the notice described
in Section 2 or at such other time on the same or on such other date, in any
event not later than December 15, 2000, as shall be designated in writing by
the Underwriter. The time and date of such payment are hereinafter referred
to as the "OPTION CLOSING DATE."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
account of the Underwriter, with any transfer taxes payable in connection
with the transfer of the Shares to the Underwriter duly paid, against payment
of the Purchase Price therefor.
5. CONDITIONS TO THE UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriter are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business,
stockholders' equity or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
(b) The Underwriter shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, (i) to the effect set
7
forth in Section 5(a)(i) above and (ii) to the effect that (A) the
representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and (B) the
Company has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied hereunder on
or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriter shall have received on the Closing Date an
opinion of O'Melveny & Xxxxx LLP, outside counsel for the Company,
dated the Closing Date, with respect to the Company as to the matters
set forth below in clauses (i) through (xiv), and opinions of counsel
to the Company in Massachusetts and Switzerland (and the Company will
use commercially reasonable efforts to obtain opinions of counsel to
the Company in Puerto Rico and Mexico) with respect to the subsidiaries
of the Company as to the matters set forth below in clauses (ii), (v)
and (viii), to the effect that:
(i) the Company (A) has been duly incorporated and is
validly existing as a corporation under the laws of the State
of Delaware, (B) has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and (C) is duly qualified to transact business and
is in good standing in the State of California;
(ii) each of the Company's Subsidiaries that is a
partnership is a duly formed general or limited partnership,
as the case may be, and is validly existing as a general or
limited partnership, as the case may be, under the laws of the
state of its organization, with full partnership power and
authority to own its property and to conduct its business as
described in the Prospectus; each corporate Subsidiary of the
Company has been duly incorporated, is validly existing as a
corporation under the laws of the jurisdiction of its
incorporation and has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus;
(iii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(iv) the shares of Common Stock outstanding prior to
the issuance of the Shares have been duly authorized, are
validly issued, fully paid and non-assessable and were issued
in compliance with all applicable laws (including, without
limitation, federal and state securities laws);
(v) all of the issued shares of capital stock of each
corporate Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and
8
non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or
claims (except for (i) shares owned and held in trust for the
Company in accordance with the laws of the country of
incorporation and (ii) a pledge of all of the issued and
outstanding stock International Power Devices, Inc. and HC
Power, Inc. and 65% of the issued and outstanding capital stock
of each of Power Electronics, Inc., Poder Uno de Mexico, S.A.,
de C.V. and Xxxxxxx Holding AG made by the Company in favor of
Union Bank of California, N. A., pursuant to that certain
Credit Agreement among the Company, certain subsidiaries of the
Company and Union Bank of California, N.A. as Administrative
Agent and Lead Arranger, as amended);
(vi) the Shares have been duly authorized and, when
issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights;
(vii) this Agreement has been duly authorized, executed
and delivered by the Company;
(viii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not violate (A) the current Delaware
General Corporation Law or any current California or federal
statute, rule or regulation that such counsel has, in the
exercise of customary professional diligence, recognized as
applicable to the Company or to transactions of the type
contemplated by this Agreement or (B) the certificate of
incorporation or by-laws of the Company or any agreement or
other instrument binding upon the Company or any of its
Subsidiaries that is listed as an Exhibit to the Company's
most recent Annual Report on Form 10-K or any
subsequently-filed Current Report on Form 8-K or (C) to the
best of such counsel's knowledge, any judgment, order or
decree of any Delaware, California or federal court or
governmental authority binding on the Company identified in a
Company Certificate to be furnished by the Company to such
counsel, and no order, consent, permit or approval of any
Delaware, California or federal governmental authority that
such counsel has, in the exercise of customary professional
diligence, recognized as applicable to the Company or to
transactions of the type contemplated by this Agreement is
required on the part of the Company for the execution,
delivery and performance of its obligations under, the
Agreement, except such as may be required by the Securities
Act or the state securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares;
(ix) the statements (A) in the Prospectus under the
captions "Description of Stock" and "Plan of Distribution" and
(B) in the Registration Statement in Item
9
15, in each case insofar as such statements constitute summaries
of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect
to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(x) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any
of the properties of the Company or any of its Subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(xi) the Company is not an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended;
(xii) such counsel (A) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Registration Statement and
the Prospectus (except for financial statements and schedules
as to which such counsel need not express any opinion)
appeared on its face to comply when so filed as to form in all
material respects with the Exchange Act, and the applicable
rules and regulations of the Commission thereunder and (B) is
of the opinion that the Registration Statement and Prospectus
(except for financial statements and schedules and other
financial and statistical data included therein as to which
such counsel need not express any opinion) appeared on its
face to comply as to form in all material respects with the
Securities Act and the applicable rules and regulations of the
Commission thereunder;
(xiii) The Registration Statement has been declared
effective under the Act and, to such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued or threatened by the Commission; and
(xiv) Except as set forth in the Registration
Statement and Prospectus, to such counsel's knowledge, there
are no contracts, agreements or understandings between the
Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company
or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
In addition, such counsel will state that such counsel (A) has
no reason to believe that (except for financial statements and
schedules and other financial and statistical data
10
as to which such counsel need not express any belief) the
Registration Statement and the prospectus included therein at the
time the Registration Statement became effective contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and (B) has no reason to believe that (except
for financial statements and schedules and other financial and
statistical data as to which such counsel need not express any
belief) the Prospectus contains any untrue statement of a material
fact or omits 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.
(d) The Underwriter shall have received on the Closing Date an
opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for the Underwriter,
dated the Closing Date, covering the matters referred to in Sections
5(c)(vi), 5(c)(vii), 5(c)(ix) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "The Underwriter")
and clause (B) of Section 5(c)(xii) and the final paragraph of Section
5(c) above.
With respect to Section 5(c)(xii) above, O'Melveny & Xxxxx LLP
may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and documents
incorporated by reference and review and discussion of the contents
thereof, but are without independent check or verification, except as
specified. With respect to clause (B) of Section 5(c)(xii) and the
final paragraph of Section 5(c) above, Xxxxxx, Xxxx & Xxxxxxxx LLP
may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto (other than the
documents incorporated by reference) and upon review and discussion
of the contents thereof (including documents incorporated by
reference), but are without independent check or verification except
as specified.
The opinion of O'Melveny & Xxxxx described in Sections 5(c) above
shall be rendered to the Underwriter at the request of the Company and
shall so state therein.
(e) The Underwriter shall have received, on November 3, 2000
by 4:00 PM New York City time and on the Closing Date, a letter dated
the date hereof or the Closing Date, as the case may be, in form and
substance satisfactory to the Underwriter, from Deloitte & Touche LLP,
independent public accountants, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in, or incorporated by reference into,
the Registration Statement and the Prospectus; PROVIDED that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier
than the date hereof.
11
(f) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and certain stockholders, officers and
directors of the Company relating to sales and certain other
dispositions of shares of Common Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force
and effect on the Closing Date.
The obligations of the Underwriter to purchase Additional Shares
hereunder are subject to the delivery to the Underwriter on the Option
Closing Date of such documents as the Underwriter may reasonably request with
respect to the good standing of the Company, the due authorization and
issuance of the Additional Shares and other matters related to the issuance
of the Additional Shares.
6. COVENANTS OF THE COMPANY. In further consideration of the agreements
of the Underwriter herein contained, the Company covenants with the
Underwriter as follows:
(a) To furnish to you, without charge, three signed copies of
the Registration Statement (including exhibits thereto and documents
incorporated by reference) and to furnish to you in New York City,
without charge, prior to 10:00 a.m. New York City time on the business
day next succeeding the date of this Agreement and during the period
mentioned in Section 6(c) below, as many copies of the Prospectus, any
documents incorporated by reference, and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request.
The terms "supplement" and "amendment" or "amend" as used in this
Agreement shall include all documents subsequently filed by the company
with the Commission pursuant to the Exchange Act that are deemed to be
incorporated by reference in the Prospectus.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriter
the Prospectus is required by law to be delivered in connection with
sales by the Underwriter or a dealer, any event shall occur or
condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriter, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriter and to
the dealers (whose names and addresses you will furnish to the Company)
to which Shares may have been sold by you and to any other dealers upon
request, either amendments or supplements to the Prospectus so that the
12
statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending December 31, 2001 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
7. EXPENSES. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees
to pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration and delivery of the Shares under the Securities Act and
all other fees or expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and the mailing and delivering of copies thereof
to the Underwriter and dealers, in the quantities hereinabove specified, (ii)
all costs and expenses related to the transfer and delivery of the Shares to
the Underwriter, including any transfer or other taxes payable thereon, (iii)
the cost of printing or producing any Blue Sky memorandum in connection with
the offer and sale of the Shares under state securities laws and all expenses
in connection with the qualification of the Shares for offer and sale under
state securities laws as provided in Section 6(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Underwriter
in connection with such qualification and in connection with the Blue Sky or
Legal Investment memorandum, (iv) all costs and expenses incident to listing
the Shares on the Nasdaq National Market and other national securities
exchanges and foreign stock exchanges, (v) the cost of printing certificates
representing the Shares, (vi) the costs and charges of any transfer agent,
registrar or depositary and (vii) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood, however,
that except as provided in this Section, Section 8 entitled "Indemnity and
Contribution," and the last paragraph of Section 10 below, the Underwriter
will pay all of its costs and expenses, including fees and disbursements of
its counsel, stock transfer taxes payable on resale of any of the Shares by
it and any advertising expenses connected with any offers it may make.
The provisions of this Section shall not supersede or otherwise affect
any agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
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8. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to indemnify and
hold harmless the Underwriter and each person, if any, who controls the
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to the
Underwriter furnished to the Company in writing by the Underwriter expressly
for use therein; PROVIDED, HOWEVER, that the foregoing indemnity agreement
with respect to any prospectus shall not inure to the benefit of the
Underwriter, or any person controlling the Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or
on behalf of the Underwriter to such person, if required by law to have been
so delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as amended or supplemented)
would have cured the defect giving rise to such losses, claims, damages or
liabilities, unless such failure is the result of noncompliance by the
Company with the provisions hereof.
(b) The Underwriter agrees to indemnify and hold harmless the
Company, the directors of the Company, the officers of the Company
who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against
any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, but only with reference to information relating to the
Underwriter furnished to the Company in writing by the Underwriter
expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b),
such person (the "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING
PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably
14
satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the reasonable fees and
disbursements of such counsel related to such proceeding. In any
such proceeding, any indemnified party shall have the right to
retain its own counsel, but the reasonable fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for (A) the fees and expenses of more than one separate firm
(in addition to any local counsel) for the Underwriter and all
persons, if any, who control the Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the
Exchange Act and (B) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Company, its
directors, its officers who sign the Registration Statement and each
person, if any, who controls the Company within the meaning of
either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate
firm for the Company, and such directors, officers and control
persons of the Company, such firm shall be designated in writing by
the Company. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent,
but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected
without its written consent if (1) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the
aforesaid request and (2) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the
subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section
8(a) or 8(b) is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu
of indemnifying such indemnified party thereunder, shall contribute
to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits
received by the indemnifying party or parties on the one hand and
the indemnified party or parties on the other hand from the offering
15
of the Shares or (ii) if the allocation provided by Section 8(d)(i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
Section 8(d)(i) above but also the relative fault of the
indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and
the Underwriter on the other hand in connection with the offering of
the Shares shall be deemed to be in the same respective proportions
as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriter,
in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Company on the one hand and the
Underwriter on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by
the Underwriter and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement
or omission.
(e) The Company and the Underwriter agree that it would not be
just or equitable if contribution pursuant to this Section 8 were
determined by PRO RATA allocation or by any other method of
allocation that does not take account of the equitable
considerations referred to in Section 8(d). The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section
8, the Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that the Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 8 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements
of the Company contained in this Agreement shall remain operative
and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of the
Underwriter or any person controlling the Underwriter, or the
Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Shares.
16
9. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall
have been suspended or materially limited on or by, as the case may be, any
of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or
any calamity or crisis that, in your judgment, is material and adverse and
(b) in the case of any of the events specified in clauses (i) through (iv) of
this Section 9, such event, singly or together with any other such event,
makes it, in your judgment, impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus.
10. EFFECTIVENESS. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If this Agreement shall be terminated by the Underwriter because of any
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company will reimburse the Underwriter for all out-of-pocket expenses
(including the fees and disbursements of its counsel) reasonably incurred by
the Underwriter in connection with this Agreement or the offering
contemplated hereunder.
11. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
13. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
17
Very truly yours,
POWER-ONE, INC.
By: /s/ Xx Xxxxxxx
Name: Xx Xxxxxxx
Title: CFO
Accepted as of the date hereof
By: Xxxxxx Xxxxxxx & Co. Incorporated
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Managing Director
EXHIBIT A
November __, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated (the
"UNDERWRITER") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Power-One, Inc., a Delaware corporation (the
"COMPANY"), providing for the public offering (the "PUBLIC OFFERING") by the
Underwriter of 4,000,000 shares (the "SHARES") of the common stock, par value
$.001 per share, of the Company (the "COMMON STOCK").
To induce the Underwriter to continue its efforts in connection with the
Public Offering, the undersigned hereby agrees that, without the prior
written consent of the Underwriter, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic
consequences of ownership of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (a) the sale of any Shares to the Underwriter pursuant to
the Underwriting Agreement, (b) transactions relating to shares of Common
Stock or other securities acquired in open market transactions after the
completion of the Public Offering, (c) bona fide gifts aggregating not more
than 100,000 shares of Common Stock, (d) the pledge of shares of Common Stock
as collateral against loans of the undersigned or (e) the sale of shares of
Common Stock pledged as collateral, if loans secured by such shares are
called, to the extent necessary to satisfy such loans; PROVIDED, that, in the
case of clauses (c), (d) and (e), (i) each donee, pledgee or transferee
agrees in writing to be bound by all terms of this letter and (ii) no gift,
transfer or sale shall require the filing of a Form 4 pursuant to Section 16
of the Securities Exchange Act of 1934, as amended. The undersigned also
agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of the
undersigned's shares of Common Stock except in compliance with the foregoing
restrictions.
The undersigned understands that the Company and the Underwriter are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned
further understands that this Lock-Up Agreement is irrevocable and shall be
binding upon the undersigned's heirs, legal representatives, successors and
assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be
made pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriter.
Very truly yours,
-----------------------
(Name)
-----------------------
(Address)
2
