DRAFT OF JUNE 27, 2000
3,000,000 SHARES*
MICRO COMPONENT TECHNOLOGY, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
______, 2000
XXXXXXX & COMPANY, INC.
X.X. XXXXXXX & SONS, INC.
X. X. XXXXXXXX & CO.
As Representatives of the several Underwriters
c/o Needham & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Micro Component Technology, Inc., a Minnesota corporation (the
"Company"), proposes to issue and sell 3,000,000 shares (the "Firm Shares") of
the Company's Common Stock, $.0.01 par value per share (the "Common Stock"), to
you and to the several other Underwriters named in Schedule I hereto
(collectively, the "Underwriters"), for whom you are acting as representatives
(the "Representatives"). The Company and the stockholders of the Company named
in Schedule II hereto (the "Selling Stockholders") have also agreed to grant to
you and the other Underwriters an option (the "Option") to purchase up to an
additional 290,000 shares of Common Stock (the "Company Option Shares") and
160,000 shares of Common Stock (the "Selling Stockholder Option Shares"),
respectively, on the terms and for the purposes set forth in Section 1(b) (the
Company Option Shares and the Selling Stockholder Option Shares are referred to
collectively as the "Option Shares"). The Firm Shares and the Option Shares are
referred to collectively herein as the "Shares."
The Company confirms as follows their respective agreements with the
Representatives and the several other Underwriters.
1. AGREEMENT TO SELL AND PURCHASE.
(a) On the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions of this Agreement, (i) the Company
agrees to issue and sell the Firm Shares to the several Underwriters, and (ii)
each of the Underwriters, severally and not jointly, agrees to purchase from the
Company the respective number of Firm Shares set forth opposite that
Underwriter's name in Schedule I hereto, at the purchase price of $____ for each
Firm Share.
(b) Subject to all the terms and conditions of this
Agreement, the Company and the Selling Stockholders grant the Option to the
several Underwriters to purchase, severally and not jointly, up to the
--------------------------------
* Plus an option to purchase up to an additional 450,000 shares to cover
over-allotments.
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maximum number of Option Shares set forth in Schedule II hereto at the same
price per share as the Underwriters shall pay for the Firm Shares. The Option
may be exercised only to cover over-allotments in the sale of the Firm Shares by
the Underwriters and may be exercised in whole or in part at any time (but not
more than once) on or before the 30th day after the date of this Agreement upon
written or telegraphic notice (the "Option Shares Notice") by the
Representatives to the Company and the Selling Stockholders no later than 12:00
noon, New York City time, at least two and no more than five business days
before the date specified for closing in the Option Shares Notice (the "Option
Closing Date"), setting forth the aggregate number of Option Shares to be
purchased and the time and date for such purchase. On the Option Closing Date,
the Company will issue and sell and the Selling Stockholders will sell to the
Underwriters the number of Option Shares set forth in the Option Shares Notice,
and each Underwriter will purchase such percentage of the Option Shares as is
equal to the percentage of Firm Shares that such Underwriter is purchasing, as
adjusted by the Representatives in such manner as they deem advisable to avoid
fractional shares; provided, however, that if the Option is not exercised in
full, the first 290,000 shares subject to such Option shall be purchased from
the Company, with any remaining amount purchased pro rata from the Selling
Stockholders.
2. DELIVERY AND PAYMENT. Delivery of the Firm Shares shall be
made to the Representatives for the accounts of the Underwriters against payment
of the purchase price by certified or official bank checks or by wire transfers
payable in same-day funds to the order of the Company for the Firm Shares at the
office of Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, xx
10:00 a.m., New York City time, on the third (or, if the purchase price set
forth in Section 1(a) hereof is determined after 4:30 p.m., Washington D.C.
time, the fourth) business day following the commencement of the offering
contemplated by this Agreement, or at such time on such other date, not later
than seven business days after the date of this Agreement, as may be agreed upon
by the Company and the Representatives (such date is hereinafter referred to as
the "Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters of the purchase price by certified or
official bank checks or by wire transfers payable in same day funds to the order
of the Company for the Company Option Shares to be sold by it and to
___________, as Custodian for the Selling Stockholders (the "Custodian") for the
Option Shares to be sold by the Selling Stockholders will take place at the
offices specified above for the Closing Date at the time and date (which may be
the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Shares by the Company to the respective
Underwriters shall be borne by the Company. The Company will pay and save each
Underwriter and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
such Underwriter of the Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No. 333-___) on Form
S-1 relating to the Shares, including a preliminary prospectus and such
amendments to such registration statement as may have been required to the date
of this Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and
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has been filed with the Commission. The term "preliminary prospectus" as used
herein means a preliminary prospectus as contemplated by Rule 430 or Rule 430A
of the Rules and Regulations included at any time as part of the registration
statement. Copies of such registration statement and amendments and of each
related preliminary prospectus have been delivered to the Representatives. If
such registration statement has not become effective, a further amendment to
such registration statement, including a form of final prospectus, necessary to
permit such registration statement to become effective will be filed promptly by
the Company with the Commission. If such registration statement has become
effective, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A of the Rules and Regulations will be
filed promptly by the Company with the Commission in accordance with Rule 424(b)
of the Rules and Regulations. The term "Registration Statement" means the
registration statement as amended at the time it becomes or became effective
(the "Effective Date"), including the financial statements and all exhibits and
any information deemed to be included by Rule 430A and includes any registration
statement relating to the offering contemplated by this Agreement and filed
pursuant to Rule 462(b) of the Rules and Regulations. The term "Prospectus"
means the prospectus as first filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations or, if no such filing is required, the form of
final prospectus included in the Registration Statement at the Effective Date.
(b) No order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission. On the Effective Date, the date
the Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times subsequent to and including the Closing Date and, if
later, the Option Closing Date and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included in the Prospectus, did and will comply with all applicable
provisions of the Act, the Exchange Act and the Rules and Regulations and will
contain all statements required to be stated therein in accordance with the Act
and the Rules and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement, the Prospectus or any such amendment or supplement did
or will contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date and, if later, the Option Closing Date, the
Prospectus did not and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(b) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company acknowledges that
the statements set forth under the heading "Underwriting" in the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives specifically for inclusion in the
Registration Statement.
(c) The Company does not own, and at the Closing Date and, if
later, the Option Closing Date, will not own, directly or indirectly, any shares
of stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any corporation, firm, partnership, joint venture,
association or other entity, other than the subsidiaries listed in Exhibit 21 to
the Registration Statement (the "Subsidiaries"). The Company and each of its
Subsidiaries is, and at the Closing Date and, if later, the Option Closing Date,
will be, a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. The Company and each of its
Subsidiaries has, and at the Closing Date and, if later, the Option Closing
Date, will have, full corporate power and authority to conduct all the
activities conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Registration Statement and the
Prospectus. The Company and each of its Subsidiaries is, and at the Closing Date
and, if later, the Option Closing Date, will be, duly licensed or qualified to
do business and in good standing as a foreign corporation in all jurisdictions
in which the nature of the activities conducted by it or the character of the
assets owned or leased by it makes such license or qualification necessary,
except to the extent that the
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failure to be so qualified or be in good standing would not materially and
adversely affect the Company or its business, properties, business prospects,
condition (financial or other) or results of operations. All of the outstanding
shares of capital stock of each Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable, and owned by the Company free and
clear of all claims, liens, charges and encumbrances; there are no securities
outstanding that are convertible into or exercisable or exchangeable for capital
stock of any Subsidiary. The Company is not, and at the Closing Date and, if
later, the Option Closing Date, will not be, engaged in any discussions or a
party to any agreement or understanding, written or oral, regarding the
acquisition of an interest in any corporation, firm, partnership, joint venture,
association or other entity where such discussions, agreements or understandings
would require amendment to the Registration Statement pursuant to applicable
securities laws. Complete and correct copies of the articles of incorporation
and of the by-laws of the Company and each of its Subsidiaries and all
amendments thereto have been delivered to the Representatives, and no changes
therein will be made subsequent to the date hereof and prior to the Closing Date
or, if later, the Option Closing Date.
(d) All of the outstanding shares of capital stock of the Company
(including the Selling Stockholder Option Shares) have been duly authorized,
validly issued and are fully paid and nonassessable and were issued in
compliance with all applicable state and federal securities laws; the Shares to
be issued by the Company hereunder have been duly authorized and when issued and
paid for as contemplated herein will be validly issued, fully paid and
nonassessable; no preemptive or similar rights exist with respect to any of the
Shares or the issue and sale thereof. The description of the capital stock of
the Company in the Registration Statement and the Prospectus is, and at the
Closing Date and, if later, the Option Closing Date, will be, complete and
accurate in all respects. Except as set forth in the Prospectus, neither the
Company nor any Subsidiary has outstanding, and at the Closing Date and, if
later, the Option Closing Date, will have outstanding, any options to purchase,
or any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any shares
of capital stock, or any such warrants, convertible securities or obligations.
No further approval or authority of stockholders or the Board of Directors of
the Company will be required for the issuance and sale of the Shares as
contemplated herein.
(e) The financial statements and schedules included in the
Registration Statement or the Prospectus present fairly the financial condition
of the Company and its consolidated Subsidiaries as of the respective dates
thereof and the results of operations and cash flows of the Company and its
consolidated Subsidiaries for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except as otherwise disclosed in
the Prospectus. No other financial statements or schedules of the Company or of
any Subsidiary are required by the Act or the Rules and Regulations to be
included in the Registration Statement or the Prospectus. Xxxxxxxx & Touche, LLP
and Ernst & Young LLP (collectively, the "Accountants"), who have reported on
such financial statements and schedules, are independent accountants with
respect to the Company as required by the Act and the Rules and Regulations. The
summary consolidated financial and statistical data included in the Registration
Statement present fairly the information shown therein and have been compiled on
a basis consistent with the financial statements presented therein.
(f) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the Closing
Date and, if later, the Option Closing Date, except as set forth in or
contemplated by the Registration Statement and the Prospectus, (i) there has not
been and will not have been any change in the capitalization of the Company
(other than in connection with the exercise of options to purchase the Company's
Common Stock granted pursuant to the Company's stock option plan[s] from the
shares reserved therefor as described in the Registration Statement), or any
material adverse change in the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company or
any of its Subsidiaries, arising for any reason whatsoever, (ii) neither the
Company nor any of its Subsidiaries has incurred nor will any of them incur,
except in the ordinary course of business as described in the Prospectus, any
material liabilities or obligations, direct or contingent, nor has the Company
or any of its Subsidiaries entered into nor will it enter into, except in the
ordinary course of business as described in the Prospectus, any material
transactions other than pursuant to this Agreement and the transactions referred
to
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herein and (iii) the Company has not and will not have paid or declared any
dividends or other distributions of any kind on any class of its capital stock.
(g) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its business in
a manner that would cause it to become, an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(h) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company, any of
its Subsidiaries or any of their officers in their capacity as such, nor any
basis therefor, before or by any Federal or state court, commission, regulatory
body, administrative agency or other governmental body, domestic or foreign,
wherein an unfavorable ruling, decision or finding might materially and
adversely affect the Company, any of its Subsidiaries or the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company or any of its Subsidiaries.
(i) The Company and each Subsidiary has, and at the Closing Date
and, if later, the Option Closing Date, will have, performed all the obligations
required to be performed by it, and neither the Company nor any Subsidiary, and
at the Closing Date, and, if later, the Option Closing Date, will be, in
default, under any contract or other instrument to which it is a party or by
which its property is bound or affected, which default might materially and
adversely affect the Company or any Subsidiary or the business, properties,
business prospects, condition (financial or other) or results of operations of
the Company or any of its Subsidiaries. To the best knowledge of the Company, no
other party under any contract or other instrument to which it or any of its
Subsidiaries is a party is in default in any respect thereunder, which default
might materially and adversely affect the Company, any of its Subsidiaries, or
the business, properties, business prospects, condition (financial or other) or
results of operations of the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries is, and at the Closing Date and, if later,
the Option Closing Date, will be, in violation of any provision of its
certificate or articles of incorporation or by-laws or other organizational
documents.
(j) No consent, approval, authorization or order of, or any filing
or declaration with, any court or governmental agency or body is required for
the consummation by the Company of the transactions on its part contemplated
herein, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state securities or Blue Sky laws
or the by-laws and rules of the National Association of Securities Dealers, Inc.
(the "NASD") in connection with the purchase and distribution by the
Underwriters of the Shares.
(k) The Company has full corporate power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with the terms hereof,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. The performance of this Agreement and
the consummation of the transactions contemplated hereby will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Company pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or give any party a right to terminate any of its obligations under, or result
in the acceleration of any obligation under, the certificate or articles of
incorporation or by-laws of the Company or any of its Subsidiaries, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company, any of its Subsidiaries or any
of their properties is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company or any of its Subsidiaries.
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(l) The Company or one of its Subsidiaries has good and marketable
title to all properties and assets described in the Prospectus as owned by them,
free and clear of all liens, charges, encumbrances or restrictions, except such
as are described in the Prospectus or are not material to the business of the
Company or its Subsidiaries. The Company or its Subsidiaries has valid,
subsisting and enforceable leases for the properties described in the Prospectus
as leased by them. The Company or one of its Subsidiaries owns or leases all
such properties as are necessary to its operations as now conducted or as
proposed to be conducted, except where the failure to so own or lease would not
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company or
its Subsidiaries.
(m) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company or any of its Subsidiaries is
a party have been duly authorized, executed and delivered by the Company or such
Subsidiary, constitute valid and binding agreements of the Company or such
Subsidiary and are enforceable against and by the Company or such Subsidiary in
accordance with the terms thereof.
(n) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
Section 5 of this Agreement to be delivered to the Representatives was or will
be, when made, inaccurate, untrue or incorrect.
(o) Neither the Company nor any of its directors or officers has
taken, directly or indirectly, any action designed, or which might reasonably be
expected, to cause or result, under the Act or otherwise, in, or which has
constituted, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(p) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement, which rights have not been waived by the holder thereof
as of the date hereof.
(q) The Company has filed an application to list the Shares on the
Nasdaq National Market ("NNM"), and has received notification that the listing
has been approved, subject to notice of issuance of such Shares.
(r) Except as disclosed in or specifically contemplated by the
Prospectus (i) the Company and its Subsidiaries have sufficient trademarks,
trade names, patent rights, mask works, copyrights, licenses, approvals and
governmental authorizations to conduct their businesses as now conducted and as
proposed to be conducted, (ii) the Company has no knowledge of any infringement
by it or any of its Subsidiaries of trademarks, trade name rights, patent
rights, mask work rights, copyrights, licenses, trade secrets or other similar
rights of others, where such infringement could have a material and adverse
effect on the Company, any of its Subsidiaries or the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company or any of its Subsidiaries, and (iii) there is no claim being
made against the Company or any of its Subsidiaries, or to the best of the
Company's knowledge, any employee of the Company or any of its Subsidiaries,
regarding trademark, trade name, patent, mask work, copyright, license, trade
secret or other infringement which could have a material and adverse effect on
the Company, any of its Subsidiaries or the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company or any of its Subsidiaries.
(s) The Company and each of its Subsidiaries has filed all
federal, state, local and foreign income and other tax returns which have been
required to be filed and has paid all taxes and assessments received by it to
the extent that such taxes or assessments have become due. Neither the Company
nor any of its Subsidiaries has any tax deficiency which has been or, to the
best knowledge of the Company, might be asserted or threatened against it which
could have a material and adverse effect on the business, properties,
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business prospects, condition (financial or otherwise) or results of operations
of the Company or its Subsidiaries.
(t) The pro forma financial information set forth in the
Registration Statement reflects, subject to the limitations set forth in the
Registration Statement as to such pro forma financial information, the results
of operations of the Company and its consolidated Subsidiaries purported to be
shown thereby for the periods indicated and conforms to the requirements of
Regulation S-X of the Rules and Regulations and management of the Company
believes (i) the assumptions underlying the pro forma adjustments are
reasonable, (ii) that such adjustments have been properly applied to the
historical amounts in the compilation of such statements, and (iii) that such
statements present fairly, with respect to the Company and its consolidated
Subsidiaries, the pro forma financial position and results of operations and the
other information purported to be shown therein at the respective dates or for
the respective periods therein specified.
(u) The Company or its Subsidiaries owns or possesses all
authorizations, approvals, orders, licenses, registrations, other certificates
and permits of and from all governmental regulatory officials and bodies,
necessary to conduct their respective businesses as contemplated in the
Prospectus, except where the failure to own or possess all such authorizations,
approvals, orders, licenses, registrations, other certificates and permits would
not materially and adversely affect the Company, any of its Subsidiaries or the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company or any of its Subsidiaries. There is no
proceeding pending or known to be threatened (or any basis therefor known to the
Company) which may cause any such authorization, approval, order, license,
registration, certificate or permit to be revoked, withdrawn, cancelled,
suspended or not renewed; and the Company and each of its Subsidiaries is
conducting its business in compliance with all laws, rules and regulations
applicable thereto (including, without limitation, all applicable federal, state
and local environmental laws and regulations) except where such noncompliance
would not materially and adversely affect the Company, any of its Subsidiaries
or the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company or any of its Subsidiaries.
(v) The Company and each of its Subsidiaries maintains insurance
of the types and in the amounts generally deemed adequate for its business,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and its Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
(w) Neither the Company nor any of its Subsidiaries has nor, to
the best of the Company's knowledge, any of their respective employees or agents
at any time during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.
(x) There are no business relationships or related-party
transactions involving the Company or any other person required to be described
in the Prospectus which have not been described as required.
(y) The Company maintains a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(z) All disclosure regarding year 2000 compliance that is required
to be described under the Act (including disclosures required by Staff Legal
Bulletin No. 5) has been included in the Prospectus. The
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Company will not incur significant operating expenses or costs to ensure that
its information systems will be year 2000 compliant, other than as disclosed in
the Prospectus.
(aa) All reports, statements and registrations and amendments
thereto (including without limitation Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K) previously filed by the
Company with Commission, on the dates of their respective filings with the
Commission, conformed, in all material respects to the requirements of the Act
or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
applicable, and the rules and regulations of the Commission thereunder, and none
of such documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
first statements therein not misleading.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLING
STOCKHOLDERS. Each Selling Stockholder, severally and not jointly, represents,
warrants and covenants to each Underwriter that:
(a) All consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Stockholder of this Agreement and
the Power-of-Attorney and the Custody Agreement (hereinafter referred to as the
"Stockholders' Agreements") hereinafter referred to, and for the sale and
delivery of the Selling Stockholder Option Shares to be sold by such Selling
Stockholder hereunder, have been obtained; and such Selling Stockholder has full
right, power and authority to enter into this Agreement and the Stockholders'
Agreements, to make the representations, warranties and agreements hereunder and
thereunder, and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Stockholder hereunder.
(b) Certificates in negotiable form representing all of the
Selling Stockholder Option Shares to be sold by such Selling Stockholder have
been placed in custody under the Stockholders' Agreement, in the form heretofore
furnished to you, duly executed and delivered by such Selling Stockholder to the
Custodian, and such Selling Stockholder has duly appointed _________ and
___________, and each of them, as such Selling Stockholder's attorney-in-fact
(the "Attorneys-in-Fact") with authority to execute and deliver this Agreement
on behalf of such Selling Stockholder, to determine (subject to the provisions
of the Stockholders' Agreements) the purchase price to be paid by the
Underwriters to the Selling Stockholders as provided in Section 2 hereof, to
authorize the delivery of the Selling Stockholder Option Shares to be sold by
such Selling Stockholder hereunder and otherwise to act on behalf of such
Selling Stockholder in connection with the transactions contemplated by this
Agreement and the Stockholders' Agreements.
(c) Such Selling Stockholder specifically agrees that the Selling
Stockholder Option Shares represented by the certificates held in custody for
such Selling Stockholder under the Stockholders' Agreement are for the benefit
of and coupled with and subject to the interests of the Underwriters, the
Custodian, the Attorneys-in-Fact, each other Selling Stockholder and the
Company, that the arrangements made by such Selling Stockholder for such
custody, and the appointment by such Selling Stockholder of the
Attorneys-in-Fact by the Power-of-Attorney, are to that extent irrevocable, and
that the obligations of such Selling Stockholder hereunder shall not be
terminated by operation of law, whether by the death, disability, incapacity,
liquidation or dissolution of any Selling Stockholder or by the occurrence of
any other event. If any individual Selling Stockholder or any executor or
trustee for a Selling Stockholder should die or become incapacitated, or if any
Selling Stockholder that is an estate or trust should be terminated, or if any
Selling Stockholder that is a partnership or corporation should be dissolved, or
if any other such event should occur, before the delivery of the Selling
Stockholder Option Shares hereunder, certificates representing the Selling
Stockholder Option Shares shall be delivered by or on behalf of the Selling
Stockholders in accordance with the terms and conditions of this Agreement and
of the Stockholders' Agreements, and actions taken by the Attorneys-in-Fact
pursuant to the Powers-of-Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred, regardless
of whether or not the Custodian, the Attorneys-in-Fact, or any of them, shall
have received notice of such death, incapacity, termination, dissolution or
other event.
8
(d) This Agreement and the Stockholders' Agreements have each been
duly authorized, executed and delivered by such Selling Stockholder and each
such document constitutes a valid and binding obligation of such Selling
Stockholder, enforceable in accordance with its terms.
(e) No consent, approval, authorization or order of, or any filing
or declaration with, any court or governmental agency or body is required in
connection with the sale of the Selling Stockholder Option Shares by such
Selling Stockholder or the consummation by such Selling Stockholder of the
transactions on its part contemplated by this Agreement and the Stockholders'
Agreements, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state securities or Blue Sky laws
or the by-laws and rules of the NASD in connection with the purchase and
distribution by the Underwriters of the Shares to be sold by such Selling
Stockholder.
(f) The sale of the Selling Stockholder Option Shares to be sold
by such Selling Stockholder hereunder and the performance by such Selling
Stockholder of this Agreement and the Stockholders' Agreements and the
consummation of the transactions contemplated hereby and thereby will not result
in the creation or imposition of any lien, charge or encumbrance upon any of the
assets of such Selling Stockholder pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder or any of its properties is bound or
affected, or violate or conflict with any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental agency or body
applicable to such Selling Stockholder or, if such Selling Stockholder is a
corporation, partnership or other entity, the organizational documents of such
Selling Stockholder.
(g) Such Selling Stockholder has, and at the Option Closing Date,
will have, good and marketable title to the Selling Stockholder Option Shares to
be sold by such Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims whatsoever; and, upon delivery of such Selling
Stockholder Option Shares and payment therefor pursuant hereto, good and
marketable title to such Selling Stockholder Option Shares, free and clear of
all liens, encumbrances, equities or claims whatsoever, will be delivered to the
Underwriters.
(h) On the Option Closing Date, all stock transfer or other taxes
(other than income taxes) that are required to be paid in connection with the
sale and transfer of the Shares to be sold by such Selling Stockholder to the
several Underwriters hereunder will be have been fully paid or provided for by
such Selling Stockholder and all laws imposing such taxes will have been fully
complied with.
(i) Other than as permitted by the Act and the Rules and
Regulations, such Selling Stockholder has not distributed and will not
distribute any preliminary prospectus, the Prospectus or any other offering
material in connection with the offering and sale of the Shares. Such Selling
Stockholder has not taken and will not at any time take, directly or indirectly,
any action designed, or which might reasonably be expected, to cause or result
in, or which will constitute, stabilization of the price of shares of Common
Stock to facilitate the sale or resale of any of the Shares.
(j) All information with respect to such Selling Stockholder
contained in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement thereto complied or will comply in all
material respects with all applicable requirements of the Act and the Rules and
Regulations and does not and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(k) Such Selling Stockholder has no knowledge of any material fact
or condition not set forth in the Registration Statement or the Prospectus that
has adversely affected, or may adversely affect, the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company, and
9
the sale of the Shares proposed to be sold by such Selling Stockholder is not
prompted by any such knowledge.
(l) Such Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 3 hereof are
not true and correct.
(m) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 with respect to the transactions herein contemplated, such Selling
Stockholder agrees to deliver to you prior to or at the Option Closing Date a
properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
5. AGREEMENTS OF THE COMPANY AND THE SELLING STOCKHOLDERS. Each
of the Company and the Selling Stockholders respectively covenants and agrees
with the several Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify the Representatives
promptly, and will confirm such advice in writing, (i) when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective, (ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose or the threat thereof, (iv) of the happening of
any event during the period mentioned in the second sentence of Section 4(e)
that in the judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any changes in
the Registration Statement or the Prospectus in order to make the statements
therein, in the light of the circumstances in which they are made, not
misleading and (v) of receipt by the Company or any representative or attorney
of the Company of any other communication from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A of the Rules and Regulations, the
Company will comply with the provisions of and make all requisite filings with
the Commission pursuant to said Rule 430A and notify the Representatives
promptly of all such filings.
(c) The Company will furnish to each Representative, without
charge, one signed copy of each of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representatives, without
charge, for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the
Company will deliver to each of the Underwriters, without charge, as many copies
of the Prospectus or any amendment or supplement thereto as the Representatives
may reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the several Underwriters and by all dealers
to whom the Shares may be sold, both in connection with the offering or sale of
the Shares and for any period of time thereafter during
10
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur which in the judgment of the
Company or counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Company will forthwith prepare and duly
file with the Commission an appropriate supplement or amendment thereto, and
will deliver to each of the Underwriters, without charge, such number of copies
of such supplement or amendment to the Prospectus as the Representatives may
reasonably request. The Company will not file any document under the Exchange
Act or the Exchange Act Rules and Regulations before the termination of the
offering of the Shares by the Underwriters, if such document would be deemed to
be incorporated by reference into the Prospectus, that is not approved by the
Representatives after reasonable notice thereof.
(f) Prior to any public offering of the Shares, the Company will
cooperate with the Representatives and counsel to the Underwriters in connection
with the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representatives may
request; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject.
(g) The Company will, so long as required under the Rules and
Regulations, furnish to its stockholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flow of the Company and its consolidated
Subsidiaries, if any, certified by independent public accountants) and, as soon
as practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company and its Subsidiaries, if any, for such quarter in reasonable detail.
(h) During the period of five years commencing on the Effective
Date, the Company will furnish to the Representatives and each other Underwriter
who may so request copies of such financial statements and other periodic and
special reports as the Company may from time to time distribute generally to the
holders of any class of its capital stock, and will furnish to the
Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
(i) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(j) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company and, unless
otherwise paid by the Company, the Selling Stockholders will pay or reimburse if
paid by the Representatives, all costs and expenses incident to the performance
of the obligations of the Company under this Agreement and in connection with
the transactions contemplated hereby, including but not limited to costs and
expenses of or relating to (i) the preparation, printing and filing of the
Registration Statement and exhibits to it, each preliminary prospectus,
Prospectus and any amendment or supplement to the Registration Statement or
Prospectus, (ii) the preparation and delivery of certificates representing the
Shares, (iii) the printing of this Agreement, the Agreement Among Underwriters,
any Selected Dealer Agreements, any Underwriters' Questionnaires, the
Stockholders' Agreements, any Underwriters' Powers of Attorney, and any
invitation letters to prospective Underwriters, (iv) furnishing (including costs
of shipping and mailing) such copies of the Registration Statement, the
Prospectus and any preliminary prospectus, and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale of
the Shares by the Underwriters or by dealers to whom Shares may be sold, (v) the
listing of the Shares on the NNM, (vi) any filings required to be made by the
Underwriters with the NASD, and the fees, disbursements and other charges of
counsel for the Underwriters in connection
11
therewith, (vii) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions designated
pursuant to Section 4(f), including the fees, disbursements and other charges of
counsel to the Underwriters in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda, (viii) fees,
disbursements and other charges of counsel to the Company (but not those of
counsel for the Underwriters, except as otherwise provided herein) and (ix) the
transfer agent for the Shares. The Underwriters may deem the Company to be the
primary obligor with respect to all costs, fees and expenses to be paid by the
Company and by the Selling Stockholders. The Selling Stockholders will pay
(directly or by reimbursement) all fees and expenses incident to the performance
of their obligations under this Agreement that are not otherwise specifically
provided for herein, including but not limited to any fees and expenses of
counsel for such Selling Stockholders, any fees and expenses of the
Attorneys-in-Fact and the Custodian, and all expenses and taxes incident to the
sale and delivery of the Shares to be sold by such Selling Stockholders to the
Underwriters hereunder.
(k) The Company will not at any time, directly or indirectly, take
any action designed or which might reasonably be expected to cause or result in,
or which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds."
(m) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the Prospectus,
without the prior written consent of Xxxxxxx & Company, Inc., the Company will
not offer, sell, contract to sell, grant options to purchase or otherwise
dispose of any of the Company's equity securities of the Company or any other
securities convertible into or exchangeable with its Common Stock or other
equity security (other than pursuant to employee stock option plans, including
the Company's Employee Stock Purchase Plan, or the conversion of convertible
securities or the exercise of warrants outstanding on the date of this
Agreement).
(n) During the period of 90 days after the date of the Prospectus,
the Company will not, without the prior written consent of Xxxxxxx & Company,
Inc., grant options to purchase shares of Common Stock at a price less than the
initial public offering price. During the period of 90 days after the date of
the Prospectus, the Company will not file with the Commission or cause to become
effective any registration statement relating to any securities of the Company
without the prior written consent of Xxxxxxx & Company, Inc.
(o) The Selling Stockholders will, and the Company will cause each
of its officers, directors and certain stockholders designated by the
Representatives to, enter into lock-up agreements with the Representatives
substantially in the form of Schedule III hereto, to the effect that they will
not, without the prior written consent of Xxxxxxx & Company, Inc., sell,
contract to sell or otherwise dispose of any shares of Common Stock or rights to
acquire such shares according to the terms set forth in Schedule II hereto.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has become
effective shall be received by the Representatives not later than 5:00 p.m., New
York City time, on the date of this Agreement or at such later date and time as
shall be consented to in writing by the Representatives and all filings required
by Rule 424 and Rule 430A of the Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such
12
authorities shall have been complied with to the satisfaction of the staff of
the Commission or such authorities and (iv) after the date hereof no amendment
or supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to the Representatives and the
Representatives do not object thereto in good faith, and the Representatives
shall have received certificates, dated the Closing Date and, if later, the
Option Closing Date and signed by the Chief Executive Officer and the Chief
Financial Officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of clauses (i),
(ii) and (iii) of this paragraph.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company or any of its Subsidiaries, whether or not arising
from transactions in the ordinary course of business, in each case other than as
described in or contemplated by the Registration Statement and the Prospectus,
and (ii) the Company shall not have sustained any material loss or interference
with its business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not
described in the Registration Statement and the Prospectus, if in the judgment
of the Representatives any such development makes it impracticable or
inadvisable to consummate the sale and delivery of the Shares by the
Underwriters at the initial public offering price.
(d) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company, any of its
Subsidiaries, or any of their officers or directors in their capacities as such,
before or by any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding would, in
the judgment of the Representatives, materially and adversely affect the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company or any of its Subsidiaries.
(e) Each of the representations and warranties of the Company and
the Selling Stockholders contained herein shall be true and correct in all
material respects at the Closing Date and, with respect to the Option Shares, at
the Option Closing Date, and all covenants and agreements contained herein to be
performed on the part of the Company or the Selling Stockholders and all
conditions contained herein to be fulfilled or complied with by the Company or
the Selling Stockholders at or prior to the Closing Date and, with respect to
the Option Shares, at or prior to the Option Closing Date, shall have been duly
performed, fulfilled or complied with.
(f) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to the Representatives and counsel for the
Underwriters from Best & Xxxxxxxx, LLP, counsel to the Company, with respect to
the following matters):
(i) Each of the Company and its Subsidiaries is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation; has full corporate power
and authority to conduct all the activities conducted by it, to own or
lease all the assets owed or leased by it and to conduct its business
as described in the Registration Statement and Prospectus; and is duly
licensed or qualified to do business and is in good standing as a
foreign corporation in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or
leased by it makes such license or qualification necessary and where
the failure to be licensed or qualified would have a material and
adverse effect on the business or financial condition of the Company or
any of its Subsidiaries.
(ii) All of the outstanding shares of capital stock of the
Company have been duly authorized, validly issued and are fully paid
and nonassessable, end, to such counsel's
13
knowledge, were issued pursuant to exemptions from the registration and
qualification requirements of federal and applicable state securities
laws, and were not issued in violation of or subject to any preemptive
or, to such counsel's knowledge, similar rights;
(iii) The specimen certificate evidencing the Common Stock
filed as an exhibit to the Registration Statement is in due and proper
form under Minnesota law, the Shares to be sold by the Company
hereunder have been duly authorized and, when issued and paid for as
contemplated by this Agreement, will be validly issued, fully paid and
nonassessable; and no preemptive or similar rights exist with respect
to any of the Shares or the issue and sale thereof.
(iv) All of the outstanding shares of capital stock of
each Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable, and, to such counsel's knowledge, are
owned by the Company free and clear of all claims, liens, charges and
encumbrances; to such counsel's knowledge, there are no securities
outstanding that are convertible into or exercisable or exchangeable
for capital stock of any Subsidiary.
(v) The authorized and outstanding capital stock of the
Company is as set forth in the Registration Statement and the
Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
this Agreement or pursuant to reservations, agreements, employee
benefit plans or the exercise of convertible securities, options or
warrants referred to in the Prospectus). To such counsel's knowledge,
except as disclosed in or specifically contemplated by the Prospectus,
there are no outstanding options, warrants of other rights calling for
the issuance of, and no commitments, plans or arrangements to issue,
any shares of capital stock of the Company or any security convertible
into or exchangeable or exercisable for capital stock of the Company.
The description of the capital stock of the Company in the Registration
Statement and the Prospectus conforms in all material respects to the
terms thereof.
(vi) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of its Subsidiaries is a party or to which any of their respective
properties is subject that are required to be described in the
Registration Statement or the Prospectus but are not so described.
(vii) No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency or
body is required for the consummation by the Company of the
transactions on its part contemplated under this Agreement, except such
as have been obtained or made under the Act or the Rules and
Regulations and such as may be required under state securities or Blue
Sky laws or the by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares.
(viii) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The execution and delivery of this Agreement, the
compliance by the Company with all of the terms hereof and the
consummation of the transactions contemplated hereby does not
contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or any of its Subsidiaries, and
to the best of such counsel's knowledge will not result in the creation
or imposition of any lien, charge or encumbrance upon any of the assets
of the Company or any of its Subsidiaries pursuant to the terms and
provisions of, result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any party a right
to terminate any of its obligations under, or result in the
acceleration of any obligation under, any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other
agreement
14
or instrument known to such counsel to which the Company or any of its
Subsidiaries is a party or by which the Company, any of its
Subsidiaries, or any of their respective properties is bound or
affected, or violate or conflict with (i) any judgment, ruling, decree
or order known to such counsel or (ii) any statute, rule or regulation
of any court or other governmental agency or body, applicable to the
business or properties of the Company or any of its Subsidiaries.
(x) To such counsel's knowledge, there is no document or
contract of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed or incorporated
by reference as required, and each description of such contracts and
documents that is contained in the Registration Statement and
Prospectus fairly presents in all material respects the information
required under the Act and the Rules and Regulations.
(xi) The statements under the captions [appropriate
sections to be listed] in the Prospectus, insofar as the statements
constitute a summary of documents referred to therein or matters of
law, are accurate summaries and fairly and correctly present, in all
material respects, the information called for with respect to such
documents and matters (provided, however, that such counsel may rely on
representations of the Company with respect to the factual matters
contained in such statements, and provided further that such counsel
shall state that nothing has come to the attention of such counsel
which leads them to believe that such representations are not true and
correct in all material respects).
(xii) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
(xiii) The Shares have been duly authorized for listing on
the NNM, subject to notice of issuance.
(xiv) To such counsel's knowledge, no holder of securities
of the Company has rights, which have not been waived [or satisfied],
to require the register with the Commission shares of Common Stock or
other securities, as part of the offering contemplated hereby.
(xv) The Registration Statement has become effective under
the Act, and to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or is
pending, threatened or contemplated.
(xvi) The Registration Statement and the Prospectus comply
as to form in all material respects with the requirements of the Act
and the Rules and Regulations (other than the financial statements,
schedules and other financial data contained in the Registration
Statement or the Prospectus, as to which such counsel need express no
opinion).
(xvii) Such counsel has participated in the preparation of
the Registration Statement and Prospectus and has no reason to believe
that, as of the Effective Date the Registration Statement, or any
amendment or supplement thereto, (other than the financial statements,
schedules and other financial data contained therein, as to which such
counsel need express no opinion) 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 or
that the Prospectus, or any amendment or supplement thereto, as of its
date and the Closing Date and, if later, the Option Closing Date,
contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading (other than the financial
15
statements, schedules and other financial data contained therein, as to
which such counsel need express no opinion).
(xviii) This Agreement and the Stockholders' Agreements have
each been duly executed and delivered by or on behalf of each Selling
Stockholder; the Stockholders' Agreements each constitutes a valid and
binding agreement of such Selling Stockholder in accordance with its
terms, except as enforceability may be limited by the application of
bankruptcy, insolvency or other laws affecting creditors' rights
generally or by general principles of equity; the Attorneys-in-Fact and
the Custodian have been duly authorized by such Selling Stockholder to
deliver the Shares on behalf of such Selling Stockholder in accordance
with the terms of this Agreement; and the sale of the Shares to be sold
by such Selling Stockholder hereunder, the performance by such Selling
Stockholder of this Agreement and the Stockholders' Agreements and the
consummation of the transactions contemplated hereby and thereby will
not result in a breach or violation of any of the terms or provisions
of, or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration
of any obligation under any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract or other agreement or
instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder or any of its properties is bound or affected,
or violate or conflict with any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental agency
or body applicable to such Selling Stockholder or, if such Selling
Stockholder is a corporation, partnership or other entity, the
organizational documents of such Selling Stockholder.
(xix) No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency or
body is required for the consummation by the Selling Stockholders of
the transactions on their part contemplated by this Agreement, except
such as have been obtained or made under the Act or the Rules and
Regulations and such as may be required under state securities or Blue
Sky laws or the by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares.
(xx) Each Selling Stockholder has full legal right, power
and authority to enter into this Agreement and the Stockholders'
Agreements and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder hereunder and, upon payment for such
Shares and assuming that the Underwriters are purchasing such Shares in
good faith and without notice of any other adverse claim within the
meaning of the Uniform Commercial Code, the Underwriters will have
acquired all rights of such Selling Stockholder in such Shares free of
any adverse claim, any lien in favor of the Company and any
restrictions on transfer imposed by the Company.
In rendering such opinion, such counsel may rely as to matters of fact
on certificates of the Selling Stockholders, officers of the Company and
governmental officials and the representations and warranties of the Company and
the Selling Stockholders contained in this Agreement and the Stockholders'
Agreements, provided that the opinion of counsel to the Company and Selling
Stockholders shall state that they are doing so, that they have no reason to
believe that they and the Underwriters are not entitled to rely on such
certificates and that copies of such opinions or certificates are to be attached
to the opinion.
In rendering such opinion, such counsel may rely upon as to matters of
local law on opinions of counsel satisfactory in form and substance to the
Representatives and counsel for the Underwriters, provided that the opinion of
counsel to the Company shall state that they are doing so, that they have no
reason to believe that they and the Underwriters are not entitled to rely on
such opinions and that copies of such opinions are to be attached to the
opinion.
16
(g) The Representatives shall have received an opinion, dated the
Closing Date and the Option Closing Date, from Xxxxxx & Xxxxxx LLP, counsel to
the Underwriters, with respect to the Registration Statement, the Prospectus,
and this Agreement, which opinion shall be satisfactory in all respects to the
Representatives.
(h) Concurrently with the execution and delivery of this
Agreement, each of the Accountants shall have furnished to the Representatives a
letter, dated the date of its delivery, addressed to the Representatives and in
form and substance satisfactory to the Representatives, confirming that they are
independent accountants with respect to the Company and its Subsidiaries as
required by the Act and the Exchange Act and the Rules and Regulations and with
respect to certain financial and other statistical and numerical information
contained in the Registration Statement. At the Closing Date and, as to the
Option Shares, the Option Closing Date, each of the Accountants shall have
furnished to the Representatives a letter, dated the date of its delivery, which
shall confirm, on the basis of a review in accordance with the procedures set
forth in the letter from the Accountants, that nothing has come to their
attention during the period from the date of the letter referred to in the prior
sentence to a date (specified in the letter) not more than five days prior to
the Closing Date and the Option Closing Date, as the case may be, which would
require any change in their letter dated the date hereof if it were required to
be dated and delivered at the Closing Date and the Option Closing Date.
(i) Concurrently with the execution and delivery of this Agreement
and at the Closing Date and, as to the Option Shares, the Option Closing Date,
there shall be furnished to the Representatives a certificate, dated the date of
its delivery, signed by each of the Chief Executive Officer and the Chief
Financial Officer of the Company, in form and substance satisfactory to the
Representatives, to the effect that:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus and (A) as of
the date of such certificate, such documents are true and correct in
all material respects and do not omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein not untrue or misleading and (B) in the case of the certificate
delivered at the Closing Date and the Option Closing Date, since the
Effective Date no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein not untrue or misleading.
(ii) Each of the representations and warranties of the
Company contained in this Agreement were, when originally made, and
are, at the time such certificate is delivered, as if made on and as of
each date, true and correct.
(iii) Each of the covenants required to be performed by the
Company herein on or prior to the date of such certificate has been
duly, timely and fully performed and each condition herein required to
be satisfied or fulfilled on or prior to the date of such certificate
has been duly, timely and fully satisfied or fulfilled.
(j) Concurrently with the execution and delivery of this Agreement
and at the Closing Date and, as to the Option Shares, the Option Closing Date,
there shall be furnished to the Representatives a certificate, dated the date of
its delivery, signed by the Selling Stockholders (or the Attorneys-in-Fact on
their behalf), in form and substance satisfactory to the Representatives, to the
effect that the representations and warranties of the Selling Stockholders
contained herein were, when originally made, true and correct and are true and
correct in all material respects on and as of the date of such certificate as if
made on and as of the date of such certificate, and each of the covenants and
conditions required herein to be performed or complied with by the Selling
Stockholders on or prior to the date of such certificate has been duly, timely
and fully performed or complied with.
(k) On or prior to the Closing Date, the Representatives shall
have received the executed agreements referred to in Section 5(o).
17
(l) The Shares shall be qualified for sale in such jurisdictions
as the Representatives may reasonably request and each such qualification shall
be in effect and not subject to any stop order or other proceeding on the
Closing Date or the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall have been duly
authorized for listing on the NNM upon official notice of issuance.
(n) The Company and the Selling Stockholders shall have furnished
to the Representatives such certificates, in addition to those specifically
mentioned herein, as the Representatives may have reasonably requested as to the
accuracy and completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus, as to the accuracy at
the Closing Date and the Option Closing Date of the representations and
warranties of the Company and the Selling Stockholders herein, as to the
performance by the Company and the Selling Stockholders of its and their
respective obligations hereunder, or as to the fulfillment of the conditions
concurrent and precedent to the obligations hereunder of the Representatives.
7. INDEMNIFICATION.
(a) The Company and each of the Selling Stockholders, jointly and
severally, will indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person, if any, who
controls each Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims,
liabilities, expenses and damages (including any and all investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it not misleading in the light of the circumstances in which
they were made, or arise out of or are based in whole or in part on any
inaccuracy in the representations and warranties of the Company or the Selling
Stockholders contained herein or any failure of the Company or the Selling
Stockholders to perform its or their obligations hereunder or under law in
connection with the transactions contemplated hereby; PROVIDED, HOWEVER, that
(i) the Company and the Selling Stockholders will not be liable to the extent
that such loss, claim, liability, expense or damage arises from the sale of the
Shares in the public offering to any person by an Underwriter and is based on an
untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives, on behalf of any
Underwriter, expressly for inclusion in the Registration Statement, the
preliminary prospectus or the Prospectus; (ii) the Company and the Selling
Stockholders will not be liable to any Underwriter, the directors, officers,
employees or agents of such Underwriter or any person controlling such
Underwriter with respect to any loss, claim, liability, expense, or damage
arising out of or based on any untrue statement or omission or alleged untrue
statement or omission or alleged omission to state a material fact in the
preliminary prospectus which is corrected in the Prospectus if the person
asserting any such loss, claim, liability, charge or damage purchased Shares
from such Underwriter but was not sent or given a copy of the Prospectus at or
prior to the written confirmation of the sale of such Shares to such person; and
(iii) the liability of such Selling Stockholder under this Section 7(a) shall
not exceed the product of the purchase for each Share set forth in Section 1(a)
hereof multiplied by the number of Shares sold by such Selling Stockholder
hereunder. The Company and the Selling Stockholders acknowledge that the
statements set forth under the heading "Underwriting" in the preliminary
prospectus and the Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of the Underwriters expressly for inclusion in the Registration Statement, the
preliminary prospectus or the Prospectus. This indemnity agreement will be in
addition to any liability that the Company and the Selling Stockholders might
otherwise have.
18
(b) Each Underwriter will indemnify and hold harmless the Company,
each director of the Company, each officer of the Company who signs 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, and each
Selling Stockholder to the same extent as the foregoing indemnity from the
Company and each Selling Stockholder to each Underwriter, as set forth in
Section 7(a), but only insofar as losses, claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives, on behalf of such Underwriter, expressly for use in the
Registration Statement, the preliminary prospectus or the Prospectus. The
Company and the Selling Stockholders acknowledge that the statements set forth
under the heading "Underwriting" in the preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by the Representatives on behalf of the Underwriters
expressly for inclusion in the Registration Statement, the preliminary
prospectus or the Prospectus. This indemnity will be in addition to any
liability that each Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section 7 shall, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 7, notify each such
indemnifying party in writing of the commencement of such action, enclosing with
such notice a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the loss of substantive
rights or defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (ii)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. Any indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not be
unreasonably withheld).
(d) If the indemnification provided for in this Section 7 is
applicable in accordance with its terms but for any reason is held to be
unavailable to or insufficient to hold harmless an indemnified party under
paragraphs (a), (b) and (c) of this Section 7 in respect of any losses, claims,
liabilities, expenses and damages referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable (including any investigative, legal and
other expenses
19
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company or the Selling Stockholders from persons
other than the Underwriters, such as persons who control the Company within the
meaning of the Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for contribution)
by such indemnified party as a result of such losses, claims, liabilities,
expenses and damages in such proportion as shall be appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders, on the
one hand, and the Underwriters, on the other hand. The relative benefits
received by the Company and the Selling Stockholders, on the 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 (before deducting expenses) received by
the Company and the Selling Stockholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company and the Selling
Stockholders, on the one hand, and the Underwriters, on the other hand, with
respect to the statements or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Selling Stockholders or
the Representatives on behalf of the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling Stockholders and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 7(d) shall be deemed to
include, for purposes of this Section 7(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts received by it and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 7(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 7(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer of the
Company who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against any such party in respect of which a claim for
contribution may be made under this Section 7(d), will notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 7(d). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company and the Selling
Stockholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of any of the Shares and payment therefor or (iii)
any termination of this Agreement.
8. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other
obligations under Section 7(a) of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon,
in whole or in part, any statement or
20
omission or alleged statement or omission, or any inaccuracy in the
representations and warranties of the Company or the Selling Stockholders
contained herein or failure of the Company or the Selling Stockholders to
perform its or their respective obligations hereunder or under law, all as
described in Section 7(a), notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this Section 8 and the possibility that such payment might later be held to be
improper; PROVIDED, HOWEVER, that, to the extent any such payment is ultimately
held to be improper, the persons receiving such payments shall promptly refund
them.
9. TERMINATION. The obligations of the several Underwriters under
this Agreement may be terminated at any time on or prior to the Closing Date
(or, with respect to the Option Shares, on or prior to the Option Closing Date),
by notice to the Company and the Selling Stockholders from the Representatives,
without liability on the part of any Underwriter to the Company or the Selling
Stockholders if, prior to delivery and payment for the Firm Shares or Option
Shares, as the case may be, in the sole judgment of the Representatives, (i)
trading in any of the equity securities of the Company shall have been suspended
by the Commission or by The Nasdaq Stock Market, (ii) trading in securities
generally on the New York Stock Exchange or The Nasdaq Stock Market shall have
been suspended or limited or minimum or maximum prices shall have been generally
established on such exchange, or additional material governmental restrictions,
not in force on the date of this Agreement, shall have been imposed upon trading
in securities generally by such exchange, by order of the Commission or any
court or other governmental authority, or by The Nasdaq Stock Market, (iii) a
general banking moratorium shall have been declared by either Federal or
Minnesota or New York State authorities or (iv) any material adverse change in
the financial or securities markets in the United States or in political,
financial or economic conditions in the United States or any outbreak or
material escalation of hostilities or other calamity or crisis shall have
occurred, the effect of which is such as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with completion of the
public offering or the delivery of and payment for the Shares.
If this Agreement is terminated pursuant to Section 10 hereof, neither
the Company nor any Selling Stockholder shall be under any liability to any
Underwriter except as provided in Sections 5(j), 7 and 8 hereof; but, if for any
other reason the purchase of the Shares by the Underwriters is not consummated
or if for any reason the Company or the Selling Stockholders shall be unable to
perform its or their obligations hereunder, the Company and the Selling
Stockholders will reimburse the several Underwriters for all out-of-pocket
expenses (including the fees, disbursements and other charges of counsel to the
Underwriters) incurred by them in connection with the offering of the Shares.
10. SUBSTITUTION OF UNDERWRITERS. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of Firm Shares,
the other Underwriters shall be obligated, severally, to purchase the Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 10 by more than one-ninth of such number of
Firm Shares without the prior written consent of such Underwriter. If any
Underwriter or Underwriters shall fail or refuse to purchase any Firm Shares and
the aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase exceeds one-tenth of the
aggregate number of the Firm Shares and arrangements satisfactory to the
Representatives and the Company for the purchase of such Firm Shares are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Stockholders for the purchase or sale of any Shares under this
Agreement. In any such case either the Representatives or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or in any other documents or arrangements may be effected.
Any action taken pursuant to
21
this Section 10 shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
11. MISCELLANEOUS. Notice given pursuant to any of the provisions
of this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company or the Selling Stockholders, at the
office of the Company, 0000 Xxxx Xxxxxx Xxxx X, Xx. Xxxx, Xxxxxxxxx 00000,
Attention: Chief Executive Officer, with a copy to Xxxxx X. Xxxxxxxx, Esq., Best
& Xxxxxxxx LLP, 0000 X.X. Xxxx Xxxxx, 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, or (b) if to the Underwriters, to the Representatives at the
offices of Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Finance Department, with a copy to Xxxxxxx X. Xxxx, Esq.,
Faegre & Xxxxxx LLP, 0000 Xxxxxxx Xxxxxx, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000. Any such notice shall be effective only upon receipt. Any
notice under such Section 9 or 10 may be made by telex or telephone, but if so
made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, the Selling Stockholders and the controlling
persons, directors and officers referred to in Section 7, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as used
in this Agreement shall not include a purchaser, as such purchaser, of Shares
from any of the several Underwriters.
Any action required or permitted to be made by the Representatives
under this Agreement may be taken by them jointly or by Xxxxxxx & Company, Inc.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby waive any right they may
have to a trial by jury in respect of any claim based upon or arising out of
this Agreement or the transactions contemplated hereby.
22
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
MICRO COMPONENT TECHNOLOGY CORPORATION
By: ___________________________________________
Title:
SELLING STOCKHOLDERS
(named in Schedule II hereto)
By: ___________________________________________
Attorney-in-Fact
Confirmed as of the date first
above mentioned:
XXXXXXX & COMPANY, INC.
X. X. XXXXXXX & SONS, INC.
X. X. XXXXXXXX & CO.
Acting on behalf of
themselves and as the
Representatives of the
other several Underwriters
named in Schedule I
hereto.
By: XXXXXXX & COMPANY, INC.
By: ____________________________________________
Title:
23
SCHEDULE I
UNDERWRITERS
Number of
Firm
Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxxx & Company, Inc........................................................
X. X. Xxxxxxx & Sons, Inc.....................................................
X. X. Xxxxxxxx & Co...........................................................
--------
Total.............................................................. 3,000,000
=========
24
SCHEDULE II
Total Number of
Option Shares
to be Sold
----------
Micro Component Technology, Inc.................... 290,000
Xxxxx X. Xxxxx..................................... 100,000
Xxxxxx X. Xxxxxx................................... 25,000
Xxxxxxxx X. Xxxxxxxxx.............................. 20,000
Xxxxxxx X. Xxxxxxxxx............................... 15,000
-------
TOTAL....................................... 450,000
=======
25
SCHEDULE III
FORM OF LOCK-UP AGREEMENT
AND DIRECTORS, OFFICERS AND STOCKHOLDERS
OF THE COMPANY WHO SHALL SIGN SUCH AGREEMENT
The undersigned is a holder of securities of Micro Component
Technology, Inc., a Minnesota corporation (the "Company"), and wishes to
facilitate the public offering of shares of the Common Stock (the "Common
Stock") of the Company (the "Offering"). The undersigned recognizes that such
Offering will be of benefit to the undersigned.
In consideration of the foregoing and in order to induce you to act as
underwriters in connection with the Offering, the undersigned hereby agrees that
he, she or it will not, without the prior written approval of Xxxxxxx & Company,
Inc., acting on its own behalf and/or on behalf of other representatives of the
underwriters, directly or indirectly, sell, contract to sell, make any short
sale, pledge, or otherwise dispose of, or enter into any hedging transaction
that is likely to result in a transfer of, any shares of Common Stock, options
to acquire shares of Common Stock or securities exchangeable for or convertible
into shares of Common Stock of the Company which he, she or it may own, for a
period commencing as of the date hereof and ending on the date which is ninety
(90) days after the date of the final Prospectus relating to the Offering;
provided, however, that the foregoing shall not prohibit any distribution by a
partnership to its partners so long as such partners agree to be bound by the
terms of this Agreement. The undersigned confirms that he, she or it understands
that the underwriters and the Company will rely upon the representations set
forth in this Agreement in proceeding with the Offering. The undersigned further
confirms that the agreements of the undersigned are irrevocable and shall be
binding upon the undersigned's heirs, legal representatives, successors and
assigns. The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of
securities held by the undersigned except in compliance with this Agreement.
This Agreement shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns.
________________________________________
26
