EXHIBIT 1.1
11,000,000 Shares
MANUFACTURERS' SERVICES LIMITED
Common Stock
UNDERWRITING AGREEMENT
__________, 2000
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
XXXXXX XXXXXX PARTNERS LLC
DLJDIRECT INC.
As representatives of the several Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Manufacturers' Services Limited, a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several underwriters named in
Schedule I hereto (the "UNDERWRITERS") an aggregate of 11,000,000 shares of the
common stock, par value $.001 per share, of the Company (the "FIRM SHARES").
Certain stockholders of the Company named in Schedule II hereto (the "SELLING
STOCKHOLDERS") severally propose to sell to the several Underwriters not more
than an additional 1,650,000 shares of common stock, par value $.001 per share,
(the "ADDITIONAL Shares") if requested by the Underwriters as provided in
Section 2 hereof, each Selling Stockholder selling the amount set forth opposite
such Selling Stockholder's name in Schedule II hereto. The Firm Shares and the
Additional Shares are hereinafter referred to collectively as the "SHARES". The
shares of common stock of the Company to be outstanding after giving effect to
the sales contemplated hereby are hereinafter referred to as the "COMMON STOCK".
The Company and the Selling Stockholders are hereinafter sometimes referred to
collectively as the "SELLERS."
SECTION 1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-1, including a
prospectus, relating to the Shares. The registration statement, as amended at
the time it became 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 Act, is hereinafter referred to as the "REGISTRATION STATEMENT";
and the prospectus in the form first used to confirm sales of Shares is
hereinafter referred to as the " PROSPECTUS". If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering additional shares of Common Stock (a
"RULE 462(b) REGISTRATION STATEMENT"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462(b) Registration Statement.
SECTION 2. AGREEMENTS TO SELL AND PURCHASE AND LOCK-UP AGREEMENTS . On
the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell, and
each Underwriter agrees, severally and not jointly, to purchase from the Company
at a price per Share of $______ (the "PURCHASE PRICE") the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) each Selling Stockholder
agrees, severally and not jointly, to sell the number of Additional Shares set
forth opposite such Selling Stockholder's name in Schedule II hereto, and (ii)
the Underwriters shall have the right to purchase, severally and not jointly, up
to 1,650,000 Additional Shares from the Selling Stockholders at the Purchase
Price. Additional Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. The
Underwriters may exercise their right to purchase Additional Shares in whole or
in part from time to time by giving written notice thereof to the Company and
the Selling Stockholders within 30 days after the date of this Agreement. You
shall give any such notice on behalf of the Underwriters and such notice shall
specify the aggregate number of Additional Shares to be purchased pursuant to
such exercise and the date for payment and delivery thereof, which date shall be
a business day (i) no earlier than two business days after such notice has been
given (and, in any event, no earlier than the Closing Date (as hereinafter
defined)) and (ii) no later than ten business days after such notice has been
given. If any Additional Shares are to be purchased, each Underwriter, severally
and not jointly, agrees to purchase from the Selling Stockholders the number of
Additional Shares (subject
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to such adjustments to eliminate fractional shares as you may determine) which
bears the same proportion to the total number of Additional Shares to be
purchased from the Selling Stockholders as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I bears to the total number of
Firm Shares.
Each Seller hereby agrees not to (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, 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 all or a portion of
the economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 180 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. Notwithstanding
the foregoing, during such period (i) the Company may grant stock options
pursuant to the Company's existing stock option plan and (ii) the Company may
issue shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof. The Company also agrees
not to file any registration statement with respect to any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock for a period of 180 days after the date of the Prospectus without
the prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
other than registration statements on Form S-8 to register shares of Common
Stock issuable upon exercise of stock options that have been granted and are
exercisable under the Company's stock option plans existing on the date hereof.
In addition, each Selling Stockholder agrees that, for a period of 180 days
after the date of the Prospectus without the prior written consent of Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation, it will not make any demand for, or
exercise any right with respect to, the registration of any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock. The Company shall, prior to or concurrently with the execution of
this Agreement, deliver an agreement executed by (i) each Selling Stockholder
who is listed on Annex I hereto, (ii) each of the directors and officers of the
Company who is not a Selling Stockholder, who beneficially owns (within the
meaning of Section 13(d) of the Act) shares of Common Stock and who is listed on
Annex I hereto, and (iii) each other stockholder of the Company listed on Annex
I hereto to the effect that such person will not, during the period commencing
on the date hereof and ending 180 days after the date of the Prospectus, without
the prior written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation, (A) engage in any of the transactions described in the first
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sentence of this paragraph or (B) make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
The Sellers hereby confirm their engagement of Banc of America
Securities LLC ("BANC OF AMERICA") as, and Banc of America hereby confirms its
agreement with the Sellers to render services as, a "qualified independent
underwriter", within the meaning of Section (b)(15) of Rule 2720 of the National
Association of Securities Dealers, Inc. with respect to the offering and sale of
the Shares. Banc of America, solely in its capacity as the qualified independent
underwriter and not otherwise, is referred to herein as the "QIU". As
compensation for the services of the QIU hereunder, the Sellers agree to pay the
QIU $5,000 on the Closing Date. The price at which the Shares will be sold to
the public shall not be higher than the maximum price recommended by the QIU.
As part of the offering contemplated by this Agreement, Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation ("DLJSC") has agreed to reserve up to
[550,000] shares, for sale to the Company's employees, officers, and directors
and other individuals associated with the Company (collectively,
"PARTICIPANTS"), as set forth in the Prospectus under the heading "Underwriting"
(the "DIRECTED SHARE PROGRAM"). The Shares to be sold by DLJSC pursuant to the
Directed Share Program (the "DIRECTED SHARES") will be sold by DLJSC pursuant to
this Agreement at the public offering price. Any Directed Shares not orally
confirmed for purchase by any Participants by 9:00 a.m., New York City time, on
the next business day after which this Agreement is executed will be offered to
the public by DLJSC as set forth in the Prospectus.
SECTION 3. TERMS OF PUBLIC OFFERING. The Sellers are advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. DELIVERY AND PAYMENT. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
shall request no later than two business days prior to the Closing Date or the
applicable Option Closing Date (as defined below), as the case may be. The
Shares shall be delivered by or on behalf of the Company or the Selling
Stockholders, as the case may be, with any transfer taxes thereon duly paid by
the Company or the Selling Stockholders, as the case may be, to Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation through the facilities of The
Depository Trust Company ("DTC"), for the respective accounts of the several
Underwriters,
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against payment to the Sellers of the Purchase Price therefore by wire transfer
of Federal or other funds immediately available in New York City. The
certificates representing the Shares shall be made available for inspection not
later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be, at the
office of DTC or its designated custodian (the "DESIGNATED OFFICE"). The time
and date of delivery and payment for the Firm Shares shall be 9:00 A.M., New
York City time, on ________, 2000 or such other time on the same or such other
date as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and the Sellers
shall agree in writing. The time and date of delivery and payment for the Firm
Shares are hereinafter referred to as the "CLOSING DATE". The time and date of
delivery and payment for any Additional Shares to be purchased by the
Underwriters shall be 9:00 A.M., New York City time, on the date specified in
the applicable exercise notice given by you pursuant to Section 2 or such other
time on the same or such other date as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation, the Company and the Selling Stockholders shall agree in writing.
The time and date of delivery and payment for any Additional Shares are
hereinafter referred to as the "OPTION CLOSING DATE".
The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 10 of this Agreement
shall be delivered at the offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and the Shares shall be delivered at the
Designated Office, all on the Closing Date or such Option Closing Date, as the
case may be.
SECTION 5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding, to the extent known by the Company, for such
purposes, (iii) when any amendment to the Registration Statement becomes
effective, (iv) if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, when the Rule 462(b)
Registration Statement has become effective and (v) of the happening of any
event during the period referred to in Section 5(d) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements therein
not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the
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Company will use its reasonable best efforts to obtain the withdrawal or lifting
of such order at the earliest possible time.
(b) To furnish to you six conformed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and to furnish to you and each Underwriter designated by
you such number of conformed copies of the Registration Statement as so filed
and of each amendment to it, without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall
be reasonably satisfactory to you, and to file the Prospectus in such form with
the Commission within the applicable period specified in Rule 424(b) under the
Act; during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
or to which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or amendment or supplement
to the Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its reasonable best efforts to
cause any such amendment to the Registration Statement to become promptly
effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of counsel
for the Underwriters, it becomes 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 Underwriters, it is necessary to amend or supplement
the Prospectus to comply with applicable law, forthwith to prepare and file with
the Commission an appropriate amendment or supplement to the Prospectus so that
the statements in the Prospectus, as so amended or supplemented, will not in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with applicable law, and to furnish to each
Underwriter
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and to any dealer as many copies thereof as such Underwriter or dealer may
reasonably request.
(f) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; PROVIDED, HOWEVER, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation in any
jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its stockholders as soon
as practicable an earnings statement (which need not be audited) covering the
twelve-month period ending June 30, 2001 that shall satisfy the provisions of
Section 11(a) of the Act.
(h) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Sellers' obligations under this
Agreement, including: (i) (A) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants, and (B) up to $10,000 of the
fees, disbursements and expenses of any Selling Stockholder's outside counsel
(in addition to the Company's counsel), each of (A) and (B) in connection with
the registration and delivery of the Shares under the Act and all other fees and
expenses in connection with the preparation, printing, filing and distribution
of the Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and supplements to any
of the foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) all expenses in
connection with the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of the several states and all costs
of printing or producing any Preliminary and Supplemental Blue Sky Memoranda in
connection therewith (including the filing fees and reasonable fees and
disbursements of counsel for the Underwriters in connection with such
registration or qualification and memoranda relating thereto not to exceed
$5,000), (iv) the filing fees and reasonable disbursements of counsel for the
Underwriters in connection with the review and clearance of the offering of the
Shares by the
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National Association of Securities Dealers, Inc., (v) all fees and expenses in
connection with the preparation and filing of the registration statement on Form
8-A relating to the Common Stock and all costs and expenses incident to the
listing of the Shares on the New York Stock Exchange, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
transfer agent, registrar and/or depositary, (viii) the fees and reasonable
expenses of the QIU (including the fees and disbursements of counsel to the QIU
not to exceed $5,000), and (ix) 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. The provisions of this Section shall not
supersede or otherwise affect any agreement that the Company and the Selling
Stockholders may otherwise have for allocation of such expenses among
themselves.
(i) To use its best efforts to list the Shares on the New York Stock
Exchange and to maintain the listing of the Shares on the New York Stock
Exchange for a period of three years after the date of this Agreement.
(j) To use its reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date or any Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the Shares.
(k) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so covered
in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the date of
this Agreement and to pay to the Commission the filing fee for such Rule 462(b)
Registration Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
(l) That in connection with the Directed Share Program, the Company
will notify the transfer agent as to the Directed Shares that will be restricted
to the extent required by the National Association of Securities Dealers, Inc.
(the "NASD") or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. The Underwriters will notify the
Company as to which Participants will need to be so restricted. The Company will
direct the removal of such transfer restrictions upon the expiration of such
period of time.
(m) To pay all fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program.
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SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and to
the knowledge of the Company, no proceedings for such purpose are pending before
or threatened by the Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, 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, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement and any amendments thereto, when they become effective (A) 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 and (B) will comply in all material respects with the Act 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 any Underwriter or Selling Stockholder furnished to
the Company in writing by such Underwriter or Selling Stockholder through you or
such Selling Stockholder expressly for use therein.
(c) 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 Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this
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paragraph do not apply to statements or omissions in any preliminary prospectus
based upon information relating to any Underwriter or Selling Stockholder
furnished to the Company in writing by such Underwriter or Selling Stockholder
through you or such Selling Stockholder expressly for use therein.
(d) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing (or similar
concept with respect to foreign subsidiaries, if applicable) under the laws of
its jurisdiction of incorporation and has the corporate power and authority to
carry on its business as described in the Prospectus and to own, lease and
operate its properties, and each is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole.
(e) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or issued by
the Company or any of its subsidiaries relating to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of the Company
or any of its subsidiaries, except as otherwise disclosed in the Registration
Statement.
(f) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, non-assessable and
were not issued in violation of any preemptive or similar rights; and the Shares
to be issued and sold by the Company have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor as provided by this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be issued in violation of any preemptive or
similar rights.
(g) All of the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Company, directly or
indirectly through one or more subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature except as
described in the Prospectus.
(h) The authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in violation of
its respective charter or by-laws or in default in the performance of any
obligation,
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agreement, covenant or condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to the Company
and its subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound, except for such violations or defaults as
would not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole.
(j) The execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not (i) require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be required under the
Act or the securities or Blue Sky laws of the various states or from the
National Association of Securities Dealers, Inc.), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its Significant Subsidiaries (as such term is defined in Rule
1-02(w) of Regulation S-X under the Act) is a party or by which the Company or
any of its subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property or (iv) result
in the suspension, termination or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or any other impairment of the
rights of the holder of any such Authorization, in each case except for such as
would not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries taken as
a whole.
(k) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its
subsidiaries is or has been threatened to be made a party or to which any of
their respective property is or has been threatened to be made subject that are
required to be described in the Registration Statement or the Prospectus and are
not so described; nor are there 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
so described or filed as required.
(l) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human
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health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS"), any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or any provisions
of the Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a material adverse effect on the business, prospects, financial
condition or results of operation of the Company and its subsidiaries, taken as
a whole.
(m) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole. Each such Authorization is valid and in full
force and effect and each of the Company and its subsidiaries is in compliance,
in all material respects, with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except in each case where such failure to be valid and in full force and effect
or to be in compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole.
(n) There are no costs or liabilities associated with compliance with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or other compliance
with Environmental Laws or any Authorization, any related constraints on
operating activities and any potential liabilities to third parties) which have
been incurred and which would, singly or in the aggregate, have a material
adverse effect on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
12
(o) 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, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(p) Except as described in the Prospectus, 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 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 Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property reflected as owned in the line item "Property and equipment, net" in
the financial statements described in paragraph (y) below, which is material to
the business of the Company and its subsidiaries taken as a whole, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value of
such property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made as
described in the Prospectus of such property and buildings by the Company and
its subsidiaries, in each case except as described in the Prospectus.
(r) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names ("INTELLECTUAL PROPERTY") currently employed by
them in connection with the business now operated by them except where the
failure to own or possess or otherwise be able to acquire such intellectual
property would not, singly or in the aggregate, have a material adverse effect
on the business, prospects, financial condition or results of operation of the
Company and its subsidiaries, taken as a whole; and neither the Company nor any
of its subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of such intellectual property
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
13
(s) The Company and each of its Significant Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; and neither the Company nor any of its subsidiaries (i) has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other material expenditures will have to be made in
order to continue such insurance or (ii) 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 at a cost increase,
if any, that would not have a material adverse effect on the business,
prospects, financial conditions or results of operations of the Company and its
subsidiaries, taken as a whole.
(t) There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceedings pending or, to the knowledge of the
Company, threatened against the Company or any of its Significant Subsidiaries
before the National Labor Relations Board or any state or local labor relations
board, (ii) strike, labor dispute, slowdown or stoppage pending or threatened
against the Company or any of its subsidiaries or (iii) union representation
question existing with respect to the employees of the Company and its
subsidiaries, except for such actions specified in clause (i), (ii) or (iii)
above, which, singly or in the aggregate, would not reasonably be expected to
have a material adverse effect on the business, prospects, financial condition
or results of operations of the Company and its subsidiaries, taken as a whole.
To the best of the Company's knowledge, no collective bargaining organizing
activities are taking place with respect to the Company or any of its
subsidiaries.
(u) The Company and each of its subsidiaries maintains 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 accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(v) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
14
(w) This Agreement has been duly authorized, executed and delivered by
the Company.
(x) PricewaterhouseCoopers, LLP are independent public accountants
with respect to the Company and its subsidiaries as required by the Act.
(y) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), together
with related schedules and notes, present fairly in all material respects the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries on the basis stated therein at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; the supporting schedules, if any,
included in the Registration Statement present fairly in all material respects
in accordance with generally accepted accounting principles the information
required to be stated therein; and the other financial and statistical
information and data set forth in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) are, in all material respects,
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
(z) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the condition, financial or otherwise,
or the earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries has incurred, outside
of the ordinary course of business, any material liability or obligation, direct
or contingent.
(aa) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters in connection with
the consummation of the transactions contemplated hereby and dated the date
hereof, the Closing Date or any Option Closing Date, shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
15
Furthermore, the Company represents and warrants to DLJSC that (i) the
Registration Statement, the Prospectus and any preliminary prospectus comply in
all material respects, and any further amendments or supplements thereto will
comply in all material respects, with any applicable laws or regulations of
foreign jurisdictions in which the Prospectus or any preliminary prospectus, as
amended or supplemented, if applicable, are distributed in connection with the
Directed Share Program, and that (ii) no authorization, approval, consent,
license, order, registration or qualification of or with any government,
governmental instrumentality or court, other than such as have been obtained, is
necessary under the securities laws and regulations of foreign jurisdictions in
which the Directed Shares are offered outside the United States, except where
the failure to obtain any such authorization, approval, consent, license, order
or to make any such registration, qualification, filing or notice would not,
singly or in the aggregate, result in a material liability to or obligation of
DLJSC.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS .
Each Selling Stockholder, severally and not jointly, represents and warrants to
each Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Additional
Shares (or security entitlements with respect thereof) to be sold by such
Selling Stockholder pursuant to this Agreement and has, and on the Option
Closing Date will have, good and clear title to such Additional Shares (or
security entitlements with respect thereof), free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever;
(b) To the knowledge of the Selling Shareholder, the Additional Shares
to be sold by such Selling Stockholder have been duly authorized and are validly
issued, fully paid and non-assessable.
(c) Such Selling Stockholder has, and on the Option Closing Date will
have, full legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement and to sell, assign, transfer and
deliver the Additional Shares to be sold by such Selling Stockholder in the
manner provided herein.
(d) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Stockholder.
(e) upon payment for the Additional Shares to be sold by each selling
Stockholder pursuant to this Agreement, and the deposit of such Additional
Shares registered in the name of Cede & Co. or such other nominee designated by
the Depository Trust Company ("DTC"), both as provided for in this Agreement,
and
16
the crediting of the Underwriters accounts with DTC, Cede & Co. or such
other nominee designated by DTC, (A) DTC will be a "protected purchaser" of the
Additional Shares (as defined in Section 8-303 of the Uniform Commercial Code as
adopted in the State of New York (the "CODE")), (B) the Underwriters will
acquire a valid "security entitlement" (within the meaning of Section 8-501 of
the Code) to the Additional Shares, and (C) no action based on an "adverse
claim" (as defined in Section 8-102 of the Code) may be asserted against the
Underwriters with respect to such security entitlement (assuming that the
Underwriters are without notice of any such adverse claim).
(f) The execution, delivery and performance of this Agreement by or on
behalf of such Selling Stockholder, the compliance by such Selling Stockholder
with all the provisions hereof and the consummation of the transactions
contemplated hereby will not (i) require any consent, approval, authorization or
other order of, or qualification with, any court or governmental body or agency
(except such as may be required under the Act or the securities or Blue Sky laws
of the various states or from the National Association of Securities Dealers,
Inc.), (ii) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the organizational documents of such Selling
Stockholder, if such Selling Stockholder is not an individual, or any indenture,
loan agreement, mortgage, lease or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder or any
property of such Selling Stockholder is bound or (iii) violate or conflict with
any applicable law or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency having jurisdiction over such Selling
Stockholder or any property of such Selling Stockholder.
(g) The information in the Registration Statement under the caption
"Principal and Selling Stockholders" that specifically relates to such Selling
Stockholder does not, and will not on the Option Closing Date, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(h) At any time during the period described in Section 5(d), if there
is any change in the information referred to in Section 7(G), such Selling
Stockholder will immediately notify you of such change.
(i) Each certificate signed by or on behalf of such Selling
Stockholder and delivered to the Underwriters or counsel for the Underwriters in
connection with the consummation of the transactions contemplated hereby and
dated the date hereof, the Closing Date, or any Option Closing Date shall be
deemed to be a
17
representation and warranty by such Selling Stockholder to the Underwriters as
to the matters covered thereby.
SECTION 8. INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each Underwriter, its directors, its officers and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages, liabilities and
judgments (including, without limitation, any legal or other expenses incurred
in connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter or Selling Stockholder furnished in writing to the Company by
such Underwriter or Selling Stockholder through you or such Selling Stockholder
expressly for use therein PROVIDED, HOWEVER, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter who failed to deliver a Prospectus, as then amended
or supplemented, (so long as the Prospectus and any amendment or supplement
thereto was provided by the Company to the several Underwriters in the requisite
quantity and on a timely basis to permit proper delivery on or prior to the
Closing Date) to the person asserting any losses, claims, damages, liabilities
or judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in such preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured in the Prospectus, as so amended or supplemented, and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person.
(b) The Selling Stockholders agree to indemnify and hold harmless each
Underwriter, its directors, its officers and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any legal or other expenses
incurred in connection with investigating or defending any matter, including any
action, that could give rise to any such losses, claims, damages, liabilities or
judgments) caused
18
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished in writing
to the Company by such Underwriter through you expressly for use therein
PROVIDED, HOWEVER, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter who
failed to deliver a Prospectus, as then amended or supplemented, (so long as the
Prospectus and any amendment or supplement thereto was provided by the Company
to the several Underwriters in the requisite quantity and on a timely basis to
permit proper delivery on or prior to the Closing Date) to the person asserting
any losses, claims, damages, liabilities or judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in such
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured in the Prospectus, as so
amended or supplemented, and such Prospectus was required by law to be delivered
at or prior to the written confirmation of sale to such person. Notwithstanding
the foregoing, the aggregate liability of any Selling Stockholder pursuant to
this Section 8(b) shall be limited to information relating to such Selling
Stockholder furnished in writing to the Company by such Selling Stockholder and
then further limited to an amount equal to the total proceeds (before deducting
underwriting discounts and commissions and expenses) received by such Selling
Stockholder from the Underwriters for the sale of the Shares sold by such
Selling Stockholder hereunder.
(c) The Company agrees to indemnify and hold harmless DLJSC and each
person, if any, who controls DLJSC within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act (the "DLJ ENTITIES") 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) related to,
arising out of or in connection with a violation of any applicable securities
laws or regulations of foreign jurisdictions where Directed Shares have been
offered, or caused by (i) any untrue statement or alleged untrue statement of a
material fact contained in the prospectus wrapper material prepared by or with
the consent of the Sellers for distribution in foreign jurisdictions in
connection with the Directed Share Program attached to the Prospectus or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated
19
therein or necessary to make the statement therein, when considered in
conjunction with the Prospectus or any applicable preliminary prospectus, not
misleading or (ii) the failure of any Participant to pay for and accept delivery
of the shares which immediately following the effectiveness of the Registration
Statement, were subject to a properly confirmed agreement to purchase.
(d) The Selling Stockholders agree to indemnify and hold harmless
DLJSC and the DLJ Entities 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) related to, arising out of or in connection with a violation of
any applicable securities laws or regulations of foreign jurisdictions where
Directed Shares have been offered, or caused by (i) any untrue statement or
alleged untrue statement of a material fact contained in the prospectus wrapper
material prepared by or with the consent of the Sellers for distribution in
foreign jurisdictions in connection with the Directed Share Program attached to
the Prospectus or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement therein, when considered in conjunction with
the Prospectus or any applicable preliminary prospectus, not misleading or (ii)
the failure of any Participant to pay for and accept delivery of the shares
which immediately following the effectiveness of the Registration Statement,
were subject to a properly confirmed agreement to purchase; PROVIDED that,
notwithstanding the foregoing, the aggregate liability of any Selling
Stockholder pursuant to this Section 8(d) shall be limited to an amount equal to
the total proceeds (before deducting underwriting discounts and commissions and
expenses) received by such Selling Stockholder from the Underwriters for the
sale of the Shares sold by such Selling Stockholder hereunder.
(e) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Stockholder and each person, if any, who controls such Selling Stockholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnities from the Company and the Selling
Stockholders to such Underwriter but only with reference to information relating
to such Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus.
(f) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a), 8(b), 8(c),
20
8(d) or 8(e) (the "INDEMNIFIED PARTY"), the indemnified party shall promptly
notify the person against whom such indemnity may be sought (the "INDEMNIFYING
PARTY") in writing and the indemnifying party shall assume the defense of such
action, including the employment of counsel reasonably satisfactory to the
indemnified party and the payment of all fees and expenses of such counsel, as
incurred (except that in the case of any action in respect of which indemnity
may be sought pursuant to Sections 8(a), 8(b), 8(c), 8(d) or 8(e), the
Underwriter shall not be required to assume the defense of such action pursuant
to this Section 8(f), but may employ separate counsel and participate in the
defense thereof, but the fees and expenses of such counsel, except as provided
below, shall be at the expense of such Underwriter). Any indemnified party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for (i) the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all Underwriters, their
officers and directors and all persons, if any, who control any Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act, (ii) the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and all persons, if any, who control the Company
within the meaning of either such Section and (iii) the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all Selling Stockholders and all persons, if any, who control any Selling
Stockholder within the meaning of either such Section, and all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters, their officers and directors and such
control persons of any Underwriters, such firm shall be designated in writing by
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. 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. In the
case of any such separate firm for the Selling Stockholders and such control
21
persons of any Selling Stockholders, such firm shall be designated in writing by
Xxxxxxx Xxxxxx. Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to this Section 8(f) in respect of such action
or proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate foreign firm in each applicable foreign
jurisdiction for DLJSC for the defense of any losses, claims, damages and
liabilities arising out of the Directed Share Program, and all persons, if any,
who control DLJSC within the meaning of either Section 15 of the Act or Section
20 of the Exchange Act. The indemnifying party shall indemnify and hold harmless
the indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or has been threatened to be
made a party and indemnity or contribution may be or has been threatened to be
sought hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or have been threatened to be made the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(g) To the extent the indemnification provided for in this Section 8
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other hand
from the offering of the Shares or (ii) if the allocation provided by clause
8(g)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(g)(i) above but also the relative fault of the indemnifying party on the one
hand and the indemnified party on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company or the Selling
Stockholders, as applicable, on the
22
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions, but before deducting expenses) received
by the Company or the Selling Stockholders, as applicable, and the total
underwriting discounts and commissions received by the Underwriters, bear to the
total price to the public of the Shares, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault of the Company or the
Selling Stockholders, as applicable, on the one hand and the Underwriters 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 the Selling Stockholders on the one hand or the Underwriters on the other
hand and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(g) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no 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 which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8(g) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(h) 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.
SECTION 9. INDEMNIFICATION OF QIU. (a) The Sellers agree to indemnify
and hold harmless the QIU, its directors, its officers and each person, if any,
who
23
controls the QIU within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, from and against any and all loses, claims, damages,
liabilities and judgments (including, without limitation, any legal or other
expenses incurred in connection with investigating or defending any mater,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) related to, based upon or arising out of (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or 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 or (ii) the
QIU's activities as QIU under its engagement pursuant to Section 2 hereof,
except in the case of this clause (ii) insofar as any such losses, claims,
damages, liabilities or judgments are found in a final judgment by a court of
competent jurisdiction, not subject to further appeal, to have resulted solely
from the willful misconduct or gross negligence of the QIU.
(b) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 9(a) (the "QIU
INDEMNIFIED PARTY"), the QIU Indemnified Party shall promptly notify the Sellers
in writing and the Sellers shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the QIU Indemnified Party
and the payment of all fees and expenses of such counsel, as incurred. Any QIU
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the QIU Indemnified Party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the Sellers, (ii) the Sellers shall have failed to assume the defense of such
action or employ counsel reasonably satisfactory to the QIU Indemnified Party or
(iii) the named parties to any such action (including any impleaded parties)
include both the QIU Indemnified Party and the Sellers, and the QIU Indemnified
party shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to those
available to the Sellers (in which case the Sellers shall not have the right to
assume the defense of such action on behalf of the QIU Indemnified Party). In
any such case, the Sellers shall not, in connection with any one action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all QIU Indemnified Parties, which firm shall be
designated by the QIU, and all such fees and expenses shall be reimbursed as
they are incurred. The Sellers shall indemnify and hold harmless the QIU
Indemnified Party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with their written consent or (ii) effected without their written consent if the
settlement
24
is entered into more than twenty business days after each of the Sellers shall
have received a request from the QIU Indemnified Party for reimbursement for the
fees and expenses of counsel (in any case where such fees and expenses are at
the expense of the Sellers) and, prior to the date of such settlement, the
Sellers shall have failed to comply with such reimbursement request. The Sellers
shall not, without the prior written consent of the QIU Indemnified Party,
effect any settlement or compromise of, or consent to the entry of judgment with
respect to, any pending or threatened action in respect of which the QIU
Indemnified Party is or has been threatened to made a party and indemnity or
contribution may be or has been threatened to be sought hereunder by the QIU
Indemnified Party, unless such settlement, compromise or judgement (i) includes
an unconditional release of the QIU Indemnified Party from all liability on
claims that are or have been threatened to be made the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the QIU Indemnified Party.
(c) To the extent the indemnification provided for in this Section 9
is unavailable to a QIU Indemnified Party or insufficient in respect of all
losses, claims, damages, liabilities or judgments referred to therein, then the
Sellers, in lieu of indemnifying such QIU Indemnified Party, shall contribute to
the amount paid or payable by such QIU Indemnified Party as a result of such
losses, claims, damages, liabilities and judgments (i) in such proportion as in
appropriate to reflect the relative benefits received by the Sellers on the one
hand and the QIU on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 9(c)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 9(c)(i) above but also the relative fault of the
Sellers on the one hand and the QIU on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers on the one hand
and the QIU on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Sellers as set forth in the table on the cover page of the Prospectus, and
the fee received by the QIU pursuant to the Section 2 hereof, bear to the sum of
such total net proceeds and such fee. The relative fault of the Sellers on the
one hand and the QIU 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 Sellers or the QIU and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission and whether the QIU's activities as QIU under its
engagement pursuant to Section 2 hereof involved any willful misconduct or gross
negligence on the part of the QIU.
25
The Sellers and the QIU agree that it would not be just and equitable
if contribution pursuant to this Section 9(c) where determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by a QIU Indemnified Party as a result of the losses,
claims, damages, liabilities or judgements referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such QIU Indemnified Party
in connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. 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.
(d) The remedies provided for in this Section 9 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
QIU Indemnified Party at law or in equity.
SECTION 10. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate dated
the Closing Date, signed by Xxxxx X. Xxxxx and Xxxxxx Xxxxxxx, in their
capacities as the Chief Executive Officer and Chief Financial Officer,
respectively, of the Company, confirming the matters set forth in Sections 6(Z),
10(a) and 10(b) and that the Company has complied with all of the material
agreements and satisfied all of the conditions herein contained and required to
be complied with or satisfied by the Company on or prior to the Closing Date.
26
(d) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 10(d)(i),
10(d)(ii) or 10(d)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(e) All the representations and warranties of each Selling Stockholder
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date and you shall
have received on the Closing Date a certificate dated the Closing Date from each
Selling Stockholder to such effect and to the effect that such Selling
Stockholder has complied with all of the material agreements and satisfied all
of the conditions herein contained and required to be complied with or satisfied
by such Selling Stockholder on or prior to the Closing Date.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Ropes & Xxxx, counsel for the Company, or local counsel satisfactory to the
Underwriters, where applicable, to the effect that:
(i) each of the Company and its domestic subsidiaries has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has
the corporate power to carry on its business as described in the
Prospectus;
(ii) each of the Company and its domestic subsidiaries is duly
qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction listed on Exhibit A;
(iii) all the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable;
(iv) the Shares to be issued and sold by the Company hereunder
have been duly authorized and, when issued and delivered to the
27
Underwriters against payment therefor as provided by this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance
of such Shares will not be subject to any statutory or, to such
counsel's knowledge, contractual preemptive or similar rights;
(v) except as described in the Prospectus, all of the
outstanding shares of capital stock of each of the Company's domestic
subsidiaries have been duly authorized and validly issued and are fully
paid and non-assessable, and, to such counsel's knowledge, are owned by
the Company, directly or indirectly through one or more subsidiaries,
free and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the authorized capital stock of the Company conforms in
all material respects as to legal matters to the description thereof
contained in the Prospectus;
(viii) based solely upon the oral advice of the staff of the
Commission, the Registration Statement has become effective under the
Act, no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to such counsel's knowledge, pending
before or contemplated by the Commission;
(ix) the statements under the captions "Description of
Indebtedness", "Description of Capital Stock" and "Shares Eligible for
Future Sale" in the Prospectus and Items 14 and 15 of Part II of the
Registration Statement, insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein,
fairly present in all material respects the information called for with
respect to such legal matters, documents and proceedings;
(x) neither the Company nor any of its domestic Significant
Subsidiaries is in violation of its respective charter or by-laws and,
to such counsel's knowledge, neither the Company nor any of its
domestic Significant Subsidiaries is in default in the performance of
any material obligation, agreement, covenant or condition contained in
any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is filed as an exhibit to the Company's Registration
Statement;
(xi) the execution, delivery and performance of this Agreement
by the Company, the compliance by the Company with all the provisions
28
hereof and the consummation of the transactions contemplated hereby
will not (A) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or
agency (except such as may be required under the Act or the securities
or Blue Sky laws of the various states), (B) conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of its domestic
Significant Subsidiaries or any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is filed as an exhibit to
the Company's Registration Statement, or (C) violate or conflict with
any applicable Massachusetts or federal law or, to such counsel's
knowledge, any rule, regulation, judgment, order or decree of any
Massachusetts or Federal court or any Massachusetts or Federal
governmental body or agency having jurisdiction over the Company, any
of its domestic Significant Subsidiaries or their respective property
(except such counsel need not express an opinion as to state securities
or Blue Sky laws of the various states or as to compliance with
anti-fraud provisions of federal and state securities laws);
(xii) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
domestic Significant Subsidiaries is a party or to which any of their
respective property 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 so described or filed as required;
(xiii) 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, an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended;
(xiv) except as described in the 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 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;
(xv) (A) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for the financial statements
and
29
other financial and statistical data included therein as to which
no opinion need be expressed) comply as to form in all material
respects with the Act, (B) such counsel has no reason to believe that
at the time the Registration Statement became effective or on the date
of this Agreement, the Registration Statement and the prospectus
included therein (except for the financial statements and other
financial and statistical data as to which such counsel need not
express any belief) 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 (C) such
counsel has no reason to believe that the Prospectus, as amended or
supplemented, if applicable (except for the financial statements and
other financial and statistical data, as aforesaid) 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;
The opinion of Ropes & Xxxx described in Section 10(f) above shall be
rendered to you at the request of the Company and shall so state therein.
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of local counsel to the Company's significant foreign subsidiaries (as set forth
on Annex II hereto) substantially to the effect that:
(i) the subsidiary has been duly incorporated, is validly
existing as a corporation in good standing (or similar concept under
its jurisdiction) under the laws of its jurisdiction of incorporation
and has the corporate power to carry on its business as described in
the Prospectus; and
(ii) all the outstanding shares of capital stock of the
subsidiary have been duly authorized and validly issued and are fully
paid and non-assessable.
(h) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of counsel for each of the Selling Stockholders, to the effect that:
(i) each Selling Stockholder is the lawful owner of the
Additional Shares (or security entitlements with respect thereof) to be
sold by such Selling Stockholder pursuant to this Agreement and has
good and clear title to such Additional Shares (or security
entitlements with respect thereof), free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever;
30
(ii) each Selling Stockholder has the corporate or other power
and all authorization and approval required by law, to enter into this
Agreement and to sell, assign, transfer and deliver the Additional
Shares to be sold by such Selling Stockholder in the manner provided
herein;
(iii) upon payment for the Additional Shares to be sold by each
Selling Stockholder pursuant to this Agreement, and the deposit of the
Additional Shares registered in the name of Cede & Co. or such other
nominee designated by the Depository Trust Company, both as provided
for in this Agreement, and the crediting of the Underwriters accounts
with DTC, Cede & Co. or such other nominee designated by DTC, (A) DTC
will be a "protected purchaser" of the Additional Shares (as defined in
Section 8-303 of the Uniform Commercial Code as adopted in the State of
New York), (B) the Underwriters will acquire a valid "security
entitlement" (within the meaning of Section 8-501 of the Code) to the
Additional Shares, and (C) no action based on an "adverse claim" (as
defined in Section 8-102 of the Code) may be asserted against the
Underwriters with respect to such security entitlement (assuming that
the Underwriters are without notice of any such adverse claim);
(iv) the execution, delivery and performance of this Agreement
by such Selling Stockholder, the compliance by such Selling Stockholder
with all the provisions hereof and the consummation of the transactions
contemplated hereby will not (A) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (B) conflict with
or constitute a breach of any of the terms or provisions of, or a
default under, the organizational documents of such Selling
Stockholder, if such Selling Stockholder is not an individual, or any
indenture, loan agreement, mortgage, lease or other material agreement
or instrument to which such Selling Stockholder is a party or by which
any property of such Selling Stockholder is bound, (C) violate or
conflict with any applicable law, rule or regulation to which such
Selling Shareholder is subject to, or (D) to the best of such counsel's
knowledge, violate or conflict with any judgment, order or decree of
any court or any governmental body or agency having jurisdiction over
such Selling Stockholder or any property of such Selling Stockholder.
The opinion of counsel described in Section 10(h) above shall be
rendered to you at the request of the Selling Stockholders and shall so state
therein.
31
(i) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, as to the
matters referred to in Sections 10(f)(iv), 10(f)(vi) (but only with respect to
the Company), 10(f)(ix) (but only with respect to the statements under the
caption "Description of Capital Stock" and "Underwriting") and 10(f)(xv).
In giving such opinions with respect to the matters covered by Section
10(f)(xv), counsel for the Company, and counsel for the Underwriters 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 review and discussion of the contents thereof, but are
without independent check or verification except as specified.
(j) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to you, from PricewaterhouseCoopers
LLP, independent public accountants, containing the information and statements
of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(k) The Company shall have delivered to you the agreements specified
in Section 2 hereof which agreements shall be in full force and effect on the
Closing Date.
(l) The Shares shall have been duly approved for listing on the New
York Stock Exchange.
(m) The Company and the Selling Stockholders shall not have failed on
or prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the Company or
the Selling Stockholders, as the case may be, on or prior to the Closing Date.
(n) You shall have received on the Closing Date, a certificate of each
Selling Stockholder who is not a U.S. Person (as defined under applicable U.S.
federal tax legislation) to the effect that such Selling Stockholder is not a
U.S. Person, which certificate may be in the form of a properly completed and
executed United States Treasury Department Form W-8 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents described in this Section 10 as you may
32
reasonably request with respect to the good standing of the Company, the due
authorization and issuance of such Additional Shares and other matters related
to the issuance of such Additional Shares.
SECTION 11. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Sellers if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares,
33
as the case may be, which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Firm Shares or Additional Shares, as the case may be, which any
Underwriter has agreed to purchase pursuant to Section 2 hereof be increased
pursuant to this Section 11 by an amount in excess of one-ninth of such number
of Firm Shares or Additional Shares, as the case may be, without the written
consent of such Underwriter. If on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased by all
Underwriters and arrangements satisfactory to you and the Company for purchase
of such Firm Shares are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case which does not result in
termination of this Agreement, either you or the Sellers shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase such Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase on such date in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
SECTION 12. AGREEMENTS OF THE SELLING STOCKHOLDERS. Each Selling
Stockholder agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by such Selling
Stockholder to the Underwriters.
(b) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or to cause to be paid all
costs and expenses incident to the performance of the obligations of the Selling
Stockholders hereunder for which provision is not otherwise made in Section
5(h).
(c) To do and perform all things to be done and performed by such
Selling Stockholder under this Agreement prior to the Closing Date and to
satisfy
34
all conditions precedent to the delivery of the Shares to be sold by such
Selling Stockholder pursuant to this Agreement.
SECTION 13. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to
Manufacturers' Services Limited, 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxxxxx 00000, (ii) if to the Selling Stockholders, to Xxxxxxx Xxxxxx, c/x
Xxxxxxxxx Xxxxxx & Xxxxxxxx Merchant Banking, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 and (iii) if to any Underwriter or to you, to you c/x Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have previously requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, any QIU Indemnified Party, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company, any person controlling the Company, any Selling
Stockholder or any person controlling such Selling Stockholder, (ii) acceptance
of the Shares and payment for them hereunder and (iii) termination of this
Agreement.
If for any reason the Shares are not delivered by or on behalf of any
Seller as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10), the Sellers agree, jointly and severally, to
reimburse the several Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of counsel) incurred by them. Notwithstanding
any termination of this Agreement (other than the termination by you pursuant to
Section 11 hereof), the Company shall be liable for all expenses which it has
agreed to pay pursuant to Section 5(h) hereof. The Sellers also agree, jointly
and severally, to reimburse the several Underwriters, their directors, officers
and any persons controlling any of the Underwriters and the QIU Indemnified
Parties for any and all reasonable fees and expenses (including, without
limitation, the reasonable fees disbursements of counsel) incurred by them in
connection with enforcing their rights hereunder (including, without limitation,
pursuant to Section 8 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Selling
Stockholders, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, the QIU Indemnified Parties, the
Company's directors and the Company's officers who sign the Registration
Statement and their respective
35
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
36
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
MANUFACTURERS' SERVICES
LIMITED
By:
-------------------------------
Name:
Title:
DLJ Merchant Banking Partners, L.P.
By:
-------------------------------
Name:
Title:
DLJ International Partners, C.V.
By:
-------------------------------
Name:
Title:
DLJ First ESC L.L.C.
By:
-------------------------------
Name:
Title:
DLJ Merchant Banking Funding, Inc.
By:
-------------------------------
Name:
Title:
DLJ Offshore Partners, C.V.
By:
-------------------------------
Name:
Title:
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
FLEETBOSTON XXXXXXXXX
XXXXXXXX INC.
XXXXXX XXXXXX PARTNERS LLC
DLJDIRECT INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By
---------------------------
SCHEDULE I
Underwriters Number of Firm Shares
to be Purchased
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation......
Banc of America Securities LLC...........................
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.......................
Xxxxxx Xxxxxx Partners LLC...............................
DLJDIRECT Inc............................................
---------------------
11,000,000
Total ==========
SCHEDULE II
SELLING STOCKHOLDERS
Name Number of Additional
==== Shares To Be Sold
(if the Underwriters exercise
the over-allotment option)
DLJ Merchant Banking Partners, L.P. 776,428
DLJ International Partners, C.V. 347,862
DLJ First ESC L.P. 193,176
DLJ Merchant Banking Funding, Inc. 311,394
DLJ Offshore Partners, C.V. 20,169
DLJ ESC II, L.P. 971
Total 1,650,000
=========
Annex I
Directors & Officers
--------------------
Xxxxxxxx Xxxx Director
Xxxx Xxxx Director
Xxxx X. Fort, III Director
Xxxxxxx X. Xxxxxx Director
Xxxxxx X. Xxxxxxxxxx Director
Xxxxx X. Xxxxx Chairman, CEO and Director
Xxxxxx X. Xxxxxxx President, CFO and Director
Xxxxxxx Xxxxxxxx Executive Vice President and
Chief Technology Officer
Xxxxxx X. Xxxxxx Executive Vice President,
Business Development and
General Counsel
Xxxxx X. Poor Executive Vice President, Human
Resources
Selling Stockholders
--------------------
DLJ Merchant Banking Partners, L.P.
DLJ International Partners, C.V.
DLJ First ESC L.P.
DLJ Merchant Banking Funding, Inc.
DLJ Offshore Partners, C.V.
DLJ ESC II, L.P.
Other Stockholders
------------------
Annex II
SIGNIFICANT FOREIGN SUBSIDIARIES
SUBSIDIARY JURISDICTION
Manufacturers' Services Athlone Limited Ireland
MSL Technology Services (Malaysia) dn Bhd Malaysia
Manufacturers' Services Singapore Pte Ltd. Singapore
Global Manufacturers' Services Xxxxxxxx X.X. Spain
