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EXHIBIT 1.1
TelCom Semiconductor, Inc.
3,190,000 Shares
Common Stock
UNDERWRITING AGREEMENT
March __, 2000
PRUDENTIAL SECURITIES INCORPORATED
X.X. XXXXXXXXX, TOWBIN
XXXXXXXX INC.
As Representatives of the Several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TelCom Semiconductor, Inc., a Delaware corporation (the "Company"), and
certain stockholders of the Company named in Schedule 2 hereto (the "Selling
Securityholders"), hereby confirm their agreements with the several underwriters
named in Schedule 1 hereto (the "Underwriters"), for whom you have been duly
authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. Securities. Subject to the terms and conditions herein contained, the
Company and Selling Securityholders propose to issue and sell to the several
Underwriters an aggregate of 3,190,000 shares (the "Firm Securities") of the
Company's Common Stock, par value $.001 ("Common Stock"). The number of Firm
Securities to be sold by each Selling Securityholder is set forth opposite such
Selling Securityholder's name on Schedule 2 hereto. The Company and the Selling
Securityholders also propose to issue and sell to the several Underwriters not
more than an aggregate of 478,500 additional shares of Common Stock if requested
by the Representatives as provided in Section 4 of this Agreement. Any and all
shares of Common Stock to be purchased by the Underwriters pursuant to such
option are referred to herein as the "Option Securities", and the Firm
Securities and any Option Securities are collectively referred to herein as the
"Securities".
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each of the several Underwriters that:
(a) The Company meets the requirements for use of Form S3 under the
Securities Act of 1933, as amended (the "Act"). A registration statement on such
Form (File No. 333-30910) with respect to the Securities, including a prospectus
subject to completion, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Act, and one or more amendments
to such registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (i) if such
registration statement, as it may have been amended, has been declared by the
Commission to be effective under the Act, either (A) if the Company relies on
Rule 434 under the Act, a Term Sheet (as hereinafter defined) relating to the
Securities, that shall identify the Preliminary
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Prospectus (as hereinafter defined) that it supplements and, if required to be
filed pursuant to Rules 434(c)(2) and 424(b), an Integrated prospectus (as
hereinafter defined), in either case, containing such information as is required
or permitted by Rule 434, 430A and 424(b) under the Act or (B) if the Company
does not rely on Rule 434 under the Act, a prospectus in the form most recently
included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with such
changes or insertions as are required by Rule 430A under the Act or permitted by
Rule 424(b) under the Act, and in the case of clause (i)(A) or (i)(B) of this
sentence as have been provided to and approved by the Representatives, or (ii)
if such registration statement, as it may have been amended, has not been
declared by the Commission to be effective under the Act, an amendment to such
registration statement, including a form of prospectus, a copy of which
amendment has been furnished to and approved by the Representatives. The Company
may also file a related registration statement with the Commission pursuant to
Rule 462(b) under the Act for the purpose of registering certain additional
Securities, which registration shall be effective upon filing with the
Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared effective,
including (A) all financial schedules and exhibits thereto, (B) all documents
(or portions thereof) incorporated by reference therein filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (C) any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined) or, if required to be filed pursuant
to Rule 434(c)(2) and 424(b), in the Integrated Prospectus; the term "Rule
462(b) Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Act (including the Registration
Statement and any Preliminary Prospectus or Prospectus incorporated therein at
the time such Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with such registration statement or any amendment
thereto (including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it was or is
declared effective), including all documents (or portions thereof) incorporated
by reference therein filed under the Exchange Act; the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the preliminary Prospectus
identified therein that such Term Sheet supplements:
(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under
the Act, the prospectus included in the Registration Statement,
including, in the case of clauses (A), (B) or (C) of this sentence,
all documents (or portions thereof) incorporated by reference
therein filed under the Exchange Act; the term "Integrated
Prospectus" means a prospectus first filed with the Commission
pursuant to Rules 434(c)(2) and 424(b) under the Act; and the term
"Term Sheet" means any abbreviated term sheet that satisfies the
requirements of Rule 434 under the Act. Any reference in this
Agreement to an "amendment or supplement" to any Preliminary
Prospectus or the Prospectus or any Integrated Prospectus or an
"amendment" to any registration statement (including the
Registration Statement) shall be deemed to include any document
incorporated by reference therein that is filed with the Commission
under the Exchange Act after the date of such Preliminary
Prospectus,
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Prospectus, Integrated Prospectus or registration statement, as the case may be;
any reference herein to the "date" of a Prospectus that includes a Term Sheet
shall mean the date of such Term Sheet. For purposes of the preceding sentence,
any reference to the "effective date" of an amendment to a registration
statement shall, if such amendment is effected by means of the filing with the
Commission under the Exchange Act of a document incorporated by reference in
such registration statement, be deemed to refer to the date on which such
document was so filed with the Commission.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus. When any Preliminary Prospectus and
any amendment or supplement thereto was filed with the Commission, it (i)
contained all statements required to be stated therein in accordance with,
and complied in all material respects with the requirements of, the Act,
the Exchange Act and the respective rules and regulations of the
Commission thereunder, and (ii) did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading. When the Registration Statement or any
amendment thereto was or is declared effective, it (i) contained or will
contain all statements required to be stated therein in accordance with,
and complied or will comply in all material respects with the requirements
of, the Act, the Exchange Act and the respective rules and regulations of
the Commission thereunder and (ii) did not or will not include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading. When the Prospectus or any
Term Sheet that is a part thereof or any Integrated Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission
pursuant to Rule 424(b) (or, if the Prospectus or part thereof or such
amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such amendment
or supplement to the Prospectus was or is declared effective), on the date
when the Prospectus is otherwise amended or supplemented and on the Firm
Closing Date and any Option Closing Date (both as hereinafter defined),
each of the Prospectus, and, if required to be filed pursuant to Rules
434(c)(2) and 424(b) under the Act, the Integrated Prospectus as amended
or supplemented at any such time, (i) contained or will contain all
statements required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements of, the Act,
the Exchange Act and the respective rules and regulations of the
Commission thereunder and (ii) did not or will not include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The foregoing provisions of
this paragraph (b) do not apply to statements or omissions made in any
Preliminary Prospectus or any amendment or supplement thereto, the
Registration Statement or any amendment thereto or the Prospectus or, if
required to be filed pursuant to Rules 434(c)(2) and 424(b) and the Act,
the Integrated Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for
use therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective (i) the
Company has filed a Rule 462(b) Registration Statement in compliance with
and that is effective upon filing pursuant to Rule 462(b) and (ii) the
Company has given irrevocable instructions for transmission of the
applicable filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 promulgated under the
Act or the Commission has received payment of such filing fee.
(d) The Company and each of its subsidiaries have been duly organized
and are validly existing as corporations in good standing under the laws
of their respective jurisdictions of
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incorporation and are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not amount
to a material liability or disability to the Company and its subsidiaries,
taken as a whole.
(e) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement and each of the Prospectus and any Integrated Prospectus or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus; and the Company has full power (corporate and other) to enter
into this Agreement and to carry out all the terms and provisions hereof
to be carried out by it.
(f) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and, except for directors' qualifying shares and as
otherwise set forth in each of the Prospectus and any Integrated
Prospectus or, if the Prospectus and any required Integrated Prospectus
are not in existence, the most recent Preliminary Prospectus, are owned
beneficially by the Company free and clear of any security interests,
liens, encumbrances, equities or claims.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in each of the Prospectus and any Integrated
Prospectus or, if the Prospectus and any required Integrated Prospectus
are not in existence, the most recent Preliminary Prospectus. All of the
issued shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. The Firm
Securities and the Option Securities have been duly authorized and at the
Firm Closing Date or the related Option Closing Date (as the case may be),
after payment therefor in accordance herewith, will be validly issued,
fully paid and nonassessable. No holders of outstanding shares of capital
stock of the Company are entitled as such to any preemptive or other
rights to subscribe for any of the Securities, and no holder of securities
of the Company has any right which has not been fully exercised or waived
to require the Company to register the offer or sale of any securities
owned by such holder under the Act in the public offering contemplated by
this agreement.
(h) The capital stock of the Company conforms to the description
thereof contained in each of the Prospectus and any Integrated Prospectus
or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus or each of the Prospectus
and any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), there are not outstanding (A) securities or obligations of
the Company or any of its subsidiaries convertible into or exchangeable
for any capital stock of the Company or any such subsidiary, (B) warrants,
rights or options to subscribe for or purchase from the Company or any
such subsidiary any such capital stock or any such convertible or
exchangeable securities or obligations, or (C) obligations of the Company
or any such subsidiary to issue any shares of capital stock, any such
convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
(j) The consolidated financial statements and schedules of the Company
and its consolidated subsidiaries included in the Registration Statement
and the Prospectus or each of the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus) fairly present the
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financial position of the Company and its consolidated subsidiaries and
the results of operations and changes in financial condition as of the
dates and periods therein specified. Such financial statements and
schedules have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise noted therein). The selected financial data set forth
under the caption "Selected Consolidated Financial Information" in the
Prospectus or each of the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus), fairly present, on the
basis stated in each of the Prospectus and any Integrated Prospectus (or
such Preliminary Prospectus) and such Annual Report, the information
included therein.
(k) To the Company's knowledge, PricewaterhouseCoopers LLP, who have
certified certain financial statements of the Company and its consolidated
subsidiaries and delivered their report with respect to the audited
consolidated financial statements and schedules included in the
Registration Statement, the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus), are independent public
accountants as required by the Act, the Exchange Act and the related
published rules and regulations thereunder.
(l) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as rights to indemnification or contribution hereunder may be
limited by applicable law and except as the enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
(m) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of
the Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus or each of the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus), and, to the Company's knowledge, no such
proceedings have been threatened against the Company or any of its
subsidiaries or with respect to any of their respective properties; and no
contract or other document is required to be described in the Registration
Statement or the Prospectus or any Integrated Prospectus or to be filed as
an exhibit to the Registration Statement that is not described therein
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus) or filed as required.
(n) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have
been obtained, such as may be required under state securities or blue sky
laws or the rules and regulations of the NASD and, if the registration
statement filed with respect to the Securities (as amended) is not
effective under the Act as of the time of execution hereof, such as may be
required (and shall be obtained as provided in this Agreement) under the
Act, or (ii) conflict with or result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective properties are
bound, or the charter documents or
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by-laws of the Company or any of its subsidiaries, or any statute or any
judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to the Company or any
of its subsidiaries, except any conflict, breach, violation or default
which would not result in a material adverse change in the condition
(financial or otherwise), management, business, prospects, net worth or
results of operations of the Company and its subsidiaries, taken as a
whole.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement, the Prospectus or any Integrated
Prospectus or, if the Prospectus and any required Integrated Prospectus
are not in existence, the most recent Preliminary Prospectus, neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding and there has not been any material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or otherwise), management, business, prospects, net
worth, or results of operations of the Company or its subsidiaries, taken
as a whole, except in each case as described in or contemplated by the
Prospectus or, if each of the Prospectus and any Integrated Prospectus or,
if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus.
(p) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) since the filing of the Registration Statement
(A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to
any person any compensation for soliciting another to purchase any other
securities of the Company (except for the sale of Securities under this
Agreement).
(q) The Company has not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any offering material in connection with
the offering and sale of the Securities other than the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or other materials, if
any, permitted by the Act.
(r) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
(i) the Company and its subsidiaries have not incurred any material
liability or obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business; (ii) the
Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock; and (iii) there has not been any material change in
the capital stock, shortterm debt or longterm debt of the Company and its
consolidated subsidiaries, except in each case as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) other than pursuant to the
Company's stock option plans or employee stock purchase plan or as
otherwise contemplated by the Prospectus.
(s) The Company and each of its subsidiaries have good and marketable
title in fee simple to all items of real property and marketable title to
all personal property owned by each of them, in each case free and clear
of any security interests, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value
of such property and do not interfere in any material respect with the use
made or proposed to be
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made of such property by the Company or such subsidiary, and any real
property and buildings held under lease by the Company or any such
subsidiary are held under valid, subsisting and enforceable leases, with
such exceptions as are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company or
such subsidiary, in each case except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(t) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the Company's knowledge, is threatened or
imminent that could result in a material adverse change in the condition
(financial or otherwise), business, prospects, net worth or results of
operations of the Company and its subsidiaries taken as a whole, except as
described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(u) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent applications, trademarks,
service marks, trade names, licenses, copyrights and proprietary or other
confidential information currently employed by them in connection with
their respective businesses, and neither the Company nor any such
subsidiary has received any notice of infringement of or conflict with
asserted rights of any third party with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a material adverse change in
the condition (financial or otherwise), business, prospects, net worth or
results of operations of the Company and its subsidiaries taken as a
whole, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(v) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which
they are engaged; neither the Company nor any such subsidiary has been
refused any insurance coverage sought or applied for; and neither the
Company nor any such subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Company and its
subsidiaries taken as a whole, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(w) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any
other distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the Company or
from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(x) The Company and its subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a material adverse change in
the condition (financial or otherwise), business, prospects, net worth or
results of operations of the
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Company and its subsidiaries taken as a whole, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(y) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment
Company Act of 1940, as amended, and this transaction will not cause the
Company to become an investment company subject to registration under such
Act.
(z) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith or as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(aa) Neither the Company nor any of its subsidiaries is in violation
of any federal or state law or regulation relating to occupational safety
and health or to the storage, handling or transportation of hazardous or
toxic materials and the Company and its subsidiaries have received all
permits, licenses or other approvals required of them under applicable
federal and state occupational safety and health and environmental laws
and regulations to conduct their respective businesses, and the Company
and each such subsidiary is in compliance with all terms and conditions of
any such permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the
aggregate, result in a material adverse change in the condition (financial
or otherwise), business, prospects, net worth or results of operations of
the Company and its subsidiaries taken as a whole, except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(bb) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
(cc) Except for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries, neither the
Company nor any such subsidiary owns any shares of stock or any other
equity securities of any corporation or has any equity interest in any
firm, partnership, association or other entity, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(dd) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (1) transactions are executed in accordance with management's general
or specific authorizations; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3)
access to assets is permitted only in accordance with management's general
or specific authorization; and (4) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(ee) No default exists, and no event has occurred which, with notice
or lapse of time or
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both, would constitute a default in the due performance and observance
of any term, covenant or condition of any material indenture, mortgage,
deed of trust, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of their respective properties is bound or may be
affected in any material adverse respect with regard to property, business
or operations of the Company and its subsidiaries.
(ff) The Company has no significant subsidiaries within the meaning of
Section 210-02(w) of Regulation S-X other than TelCom Hong Kong, Ltd. (the
"Hong Kong Subsidiary").
3. Representations and Warranties of the Selling Securityholders.
Each Selling Securityholder severally and not jointly represents and
warrants to, and agrees with, each of the several Underwriters that:
(a) Such Selling Securityholder has full power to enter into this
Agreement and to sell, assign, transfer and deliver to the Underwriters
the Securities to be sold by such Selling Securityholder hereunder in
accordance with the terms of this Agreement, and this Agreement has been
duly executed and delivered by such Selling Securityholder.
(b) Such Selling Securityholder has duly executed and delivered a
power of attorney and custody agreement (with respect to such Selling
Securityholder, the "Power of Attorney" and the "Custody Agreement",
respectively), each in the form heretofore delivered to the
Representatives, appointing Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx as such
Selling Securityholder's attorney in fact (the "Attorney in Fact") with
authority to execute, deliver and perform this Agreement on behalf of such
Selling Securityholder and appointing Chasemellon Shareholder Services, as
custodian thereunder (the "Custodian"). Certificates in negotiable form,
endorsed in blank or accompanied by blank stock bond powers duly executed,
with signatures appropriately guaranteed, representing the Securities to
be sold by such Selling Securityholder hereunder have been deposited with
the Custodian pursuant to the Custody Agreement for the purpose of
delivery pursuant to this Agreement. Such Selling Securityholder has full
power to enter into the Custody Agreement and the Power of Attorney and to
perform its obligations under the Custody Agreement. The Custody Agreement
and the Power of Attorney have been duly executed and delivered by such
Selling Securityholder and, assuming due authorization, execution and
delivery by the Custodian, are the legal, valid, binding and enforceable
instruments of such Selling Securityholder, except as rights to
indemnification or contribution hereunder may be limited by applicable law
and except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting the rights and remedies of creditors or by general equitable
principles. Such Selling Securityholder agrees that each of the Securities
represented by the certificates on deposit with the Custodian is subject
to the interests of the Underwriters hereunder, that the arrangements made
for such custody, the appointment of the Attorney in Fact and the right,
power and authority of the Attorney in Fact to execute and deliver this
Agreement, to agree on the price at which the Securities (including such
Selling Securityholder's Securities) are to be sold to the Underwriters,
and to carry out the terms of this Agreement, are to that extent
irrevocable and that the obligations of such Selling Securityholder
hereunder shall not be terminated, except as provided in this Agreement or
the Custody Agreement, by any act of such Selling Securityholder, by
operation of law or otherwise, whether in the case of any individual
Selling Securityholder by the death or incapacity of such Selling
Securityholder, in the case of a trust or estate by the death of the
trustee or trustees or the executor or executors or the termination of
such trust or estate, or in the case of a corporate or partnership Selling
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Securityholder by its liquidation or dissolution or by the occurrence of
any other event. If any individual Selling Securityholder, trustee or
executor should die or become incapacitated or any such trust should be
terminated, or if any corporate or partnership Selling Securityholder
shall liquidate or dissolve, or if any other event should occur, before
the delivery of such Securities hereunder, the certificates for such
Securities deposited with the Custodian shall be delivered by the
Custodian in accordance with the respective terms and conditions of this
Agreement as if such death, incapacity, termination, liquidation or
dissolution or other event had not occurred, regardless of whether or not
the Custodian or the Attorney in Fact shall have received notice thereof.
(c) Such Selling Securityholder is the lawful owner of the Securities
to be sold by such Selling Securityholder hereunder and upon sale and
delivery of, and payment for, such Securities, as provided herein, such
Selling Securityholder will convey good and marketable title to such
Securities, free and clear of any security interests, liens, encumbrances,
equities, claims or other defects.
(d) Such Selling Securityholder has not, directly or indirectly, (i)
taken any action designed to cause or result in, or that has constituted
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company (except for the sale of
Securities under this Agreement.
(e) To the extent that any statements or omissions are made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by such Selling
Securityholder specifically for use therein, such Preliminary Prospectus
did, and the Registration Statement and the Prospectus and any amendments
or supplements thereto, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder 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, in the
light of the circumstances under which they are made, not misleading. Such
Selling Securityholder has reviewed the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) and the
Registration Statement, and the information regarding such Selling
Securityholder set forth therein under the caption "Principal and Selling
Securityholders" is complete and accurate.
(f) The sale by such Selling Securityholder of Securities pursuant
hereto is not prompted by any material adverse information concerning the
Company that is not set forth in the Registration Statement or the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(g) The sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by such Selling
Securityholder with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained, such as may be required under state
securities or blue sky laws or the rules and
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regulations of the NASD and, if the registration statement filed with
respect to the Securities (as amended) is not effective under the Act as
of the time of execution hereof, such as may be required (and shall be
obtained as provided in this Agreement) under the Act and the Exchange
Act, or (ii) conflict with or result in a breach or violation of any of
the terms and provisions of, or constitute a default under any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
such Selling Securityholder is a party or by which such Selling
Securityholder or any of such Selling Securityholder's properties are
bound, or any statute or any judgment, decree, order, rule or regulation
of any court or other governmental authority or any arbitrator applicable
to such Selling Securityholder, except any conflict, breach, violation or
default which would not result in a material adverse affect with respect
to the ability of the Selling Securityholder to perform its obligations
under this Agreement.
(h) Xxxxxxx X. Xxxxxx (the "Officer Selling Securityholder")
represents and warrants to, and agrees with, each of the several
Underwriters that (i) the Registration Statement when it became effective
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Prospectus does not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that the
representations and warranties in this Section 3(h) do not apply to
statements or omissions in the Registration Statement or the Prospectus
based upon (x) information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you for use therein or (y)
information relating to any other Selling Security holder furnished by or
on behalf of such Selling Securityholder for use therein.
4. Purchase, Sale and Delivery of the Securities. (a) On the basis of
the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Company and
the Selling Securityholders, severally and not jointly, agree to issue and
sell to each of the Underwriters, and each of the Underwriters, severally
and not jointly, agrees to purchase from the Company and the Selling
Securityholders, at a purchase price of $_______ per share, the number of
Firm Securities set forth opposite the name of such Underwriter in
Schedule 1 hereto. One or more certificates in definitive form for the
Firm Securities that the several Underwriters have agreed to purchase
hereunder, and in such denomination or denominations and registered in
such name or names as the Representatives request upon notice to the
Company and Selling Securityholders at least 48 hours prior to the Firm
Closing Date, shall be delivered by or on behalf of the Company and
Selling Securityholders to the Representatives for the respective accounts
of the Underwriters, against payment by or on behalf of the Underwriters
of the purchase price therefor by wire transfer in same-day funds (the
"Wired Funds") to the account of the Company and the Selling
Securityholders. Such delivery of and payment for the Firm Securities
shall be made at the offices of Xxxxxx Xxxxxxx Xxxxxxxx and Xxxxxx, P.C.,
000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx at 9:30 A.M., New York time, on
March , 2000, or at such other place, time or date as the Representatives
and the Company may agree upon or as the Representatives may determine
pursuant to Section 11 hereof, such time and date of delivery against
payment being herein referred to as the "Firm Closing Date". The Company
and Selling Securityholders will make such certificate or certificates for
the Firm Securities available for checking and packaging by the
Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential Securities Incorporated at
least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the
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several Underwriters an option to purchase, severally and not jointly,
378,500 Option Securities and each Selling Securityholder hereby grants to
the several Underwriters an option to purchase, severally and not jointly,
the number of Option Securities set forth opposite such Selling
Securityholder's name on Schedule 2 hereto. The purchase price to be paid
for any Option Securities shall be the same price per share as the price
per share for the Firm Securities set forth above in paragraph (a) of this
Section 4. The option granted hereby may be exercised as to all or any
part of the Option Securities from time to time within thirty days after
the date of the Prospectus (or, if such 30th day shall be a Saturday or
Sunday or a holiday, on the next business day thereafter when the New York
Stock Exchange is open for trading). In the event such option is exercised
with respect to less than 478,500 Option Securities, the Officer Selling
Securityholder will sell the first 100,000 Option Securities and the
Company will sell the remaining Option Securities to be sold. The
Underwriters shall not be under any obligation to purchase any of the
Option Securities prior to the exercise of such option. The
Representatives may from time to time exercise the option granted hereby
by giving notice in writing or by telephone (confirmed in writing) to the
Company and the Selling Securityholders setting forth the aggregate amount
of Option Securities as to which the several Underwriters are then
exercising the option and the date and time for delivery of and payment
for such Option Securities. Any such date of delivery shall be determined
by the Representatives but shall not be earlier than two business days or
later than five business days after such exercise of the option and, in
any event, shall not be earlier than the Firm Closing Date. The time and
date set forth in such notice, or such other time on such other date as
the Representatives, the Selling Securityholders and the Company may agree
upon or as the Representatives may determine pursuant to Section 11
hereof, is herein called the "Option Closing Date" with respect to such
Option Securities. Upon exercise of the option as provided herein, the
Company and each Selling Securityholder shall become obligated to sell to
each of the several Underwriters, and, subject to the terms and conditions
herein set forth, each of the Underwriters (severally and not jointly)
shall become obligated to purchase from the Company and each Selling
Securityholder, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the
option as such Underwriter is obligated to purchase of the aggregate
number of Firm Securities, as adjusted by the Representatives in such
manner as they deem advisable to avoid fractional shares. If the option is
exercised as to all or any portion of the Option Securities, one or more
certificates in definitive form for such Option Securities, and payment
therefor, shall be delivered by and to the Company and the Selling
Securityholders on the related Option Closing Date in the manner, and upon
the terms and conditions, set forth in paragraph (a) of this Section 4,
except that reference therein to the Firm Securities and the Firm Closing
Date shall be deemed, for purposes of this paragraph (b), to refer to such
Option Securities and Option Closing Date, respectively.
(c) The Company and the Selling Securityholders hereby acknowledge that
the wire transfer by or on behalf of the Underwriters of the purchase
price for any Securities does not constitute closing of a purchase and
sale of the Securities. Only execution and delivery of a receipt for
Securities by the Underwriters indicates completion of the closing of a
purchase of the Securities from the Company or the Selling
Securityholders. Furthermore, in the event that the Underwriters wire
funds to the Company or the Selling Securityholders prior to the
completion of the closing of a purchase of Securities, the Company and the
Selling Securityholders hereby acknowledge that until the Underwriters
execute and deliver a receipt for the Securities, by facsimile or
otherwise, the Company and the Selling Securityholders will not be
entitled to the Wired Funds and shall return the Wired Funds to the
Underwriters as soon as practicable (by wire transfer of same-day funds)
upon demand. In the event that the closing of a purchase of Securities is
not completed and the Wired Funds are not returned by the Company or the
Selling Securityholders to the Underwriters on the same day the Wired
Funds were received by the Company or the Selling Securityholders, the
Company, or the Selling Securityholder who received
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such Wired Funds, as applicable, agrees to pay to the Underwriters in
respect of each day the Wired Funds are not returned by it, in same-day
funds, interest on the amount of such Wired Funds in an amount
representing the Underwriters' cost of financing as reasonably determined
by Prudential Securities Incorporated.
(d) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall
relieve such Underwriter or Underwriters from any of its or their
obligations hereunder.
5. Offering by the Underwriters. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer
the Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
6. Covenants of the Company. The Company covenants and agrees with
each of the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement,
and any amendments thereto to become effective as promptly as possible. If
required, the Company will file the Prospectus or any Term Sheet that
constitutes a part thereof and any amendment or supplement thereto with
the Commission in the manner and within the time period required by Rule
434 and 424(b) under the Act. During any time when a prospectus relating
to the Securities is required to be delivered under the Act, the Company
(i) will comply with all requirements imposed upon it by the Act and the
Exchange Act and the respective rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of
or dealings in the Securities in accordance with the provisions hereof and
each of the Prospectus and any Integrated Prospectus, as then amended or
supplemented, and (ii) will not file with the Commission the prospectus or
the amendment referred to in the third sentence of Section 2(a) hereof,
any amendment or supplement to such prospectus or any amendment to the
Registration Statement or any Rule 462(b) Registration Statement of which
the Representatives shall not previously have been advised and furnished
with a copy for a reasonable period of time prior to the proposed filing
and as to which filing the Representatives shall not have given their
consent. The Company will prepare and file with the Commission, in
accordance with the rules and regulations of the Commission, promptly upon
request by the Representatives or counsel for the Underwriters, any
amendments to the Registration Statement or amendments or supplements to
the Prospectus and any Integrated Prospectus that may be necessary or
advisable in connection with the distribution of the Securities by the
several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time when
the Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectus and any Integrated Prospectus or any
amendment or supplement thereto has been filed and will provide evidence
reasonably satisfactory to the Representatives of each such filing or
effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the
Original Registration Statement or any Rule 462(b) Registration Statement
or any post-effective amendment thereto or any order directed at any
document incorporated by reference in the Registration Statement or the
Prospectus and any required Integrated Prospectus are or any amendment or
supplement thereto or any order preventing or
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suspending the use of any Preliminary Prospectus, the Prospectus and
any Integrated Prospectus or any amendment or supplement thereto, (ii) the
suspension of the qualification of the Securities for offering or sale in
any jurisdiction, (iii) the institution, threatening or contemplation of
any proceeding for any such purpose or (iv) any request made by the
Commission for amending the Original Registration Statement or any Rule
462(b) Registration Statement, for amending or supplementing any
Preliminary Prospectus, the Prospectus and any Integrated Prospectus or
for additional information. The Company will use its best efforts to
prevent the issuance of any such stop order and, if any such stop order is
issued, to obtain the withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the Securities
for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under
the Act or (ii) the Option Closing Date, any event occurs as a result of
which the Prospectus, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for any
other reason it is necessary at any time to amend or supplement the
Prospectus to comply with the Act, the Exchange Act or the respective
rules or regulations of the Commission thereunder, the Company will
promptly notify the Representatives thereof and, subject to Section 6(a)
hereof, will prepare and file with the Commission, at the Company's
expense, an amendment to the Registration Statement, an amendment or
supplement to the Prospectus or any Integrated Prospectus that corrects
such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a conformed copy of
the registration statement originally filed with respect to the Securities
and each amendment thereto (in each case including exhibits thereto) or
any Rule 462(b) Registration Statement, (ii) to each other Underwriter, a
conformed copy of such registration statement or any Rule 462(b)
Registration Statement and each amendment thereto (in each case without
exhibits thereto) and (iii) so long as a prospectus relating to the
Securities is required to be delivered under the Act, as many copies of
each Preliminary Prospectus, the Prospectus or any Integrated Prospectus
or any amendment or supplement thereto as the Representatives may
reasonably request; without limiting the application of clause (iii) of
this sentence, the Company, not later than (A) 6:00 PM, New York City
time, on the date of determination of the public offering price, if such
determination occurred at or prior to 10:00 AM, New York City time on such
date or (B) 2:00 PM, New York City time, on the business day following the
date of determination of the public offering price, if such determination
occurred after 10:00 AM, New York City time, on such date, will deliver to
the Underwriters, without charge, as many copies of the Prospectus and any
amendment or supplement thereto as the Representatives may reasonably
request for purposes of confirming orders that are expected to settle on
the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally
available to its securityholders and to the Representatives a consolidated
earnings statement of the Company and its subsidiaries that satisfies the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
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(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus or any
Integrated Prospectus.
(h) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant
any option to purchase or otherwise sell or dispose (or announce any
offer, sale, offer of sale, contract of sale, pledge, grant of any option
to purchase or other sale or disposition) of any shares of Common Stock or
any securities convertible into, or exchangeable or exercisable for,
shares of Common Stock for a period of 90 days after the date hereof,
except pursuant to (i) this Agreement, (ii) the Company's stock option
plans and employee stock purchase plan in effect on the date hereof and
(iii) any stock plan adopted after the date hereof, provided that any
shares of Common Stock or options issued thereunder shall be subject to
customary vesting schedules.
(i) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) (A) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Securities or (B) pay or
agree to pay to any person any compensation for soliciting another to
purchase any other securities of the Company (except for the sale of
Securities under this Agreement).
(j) The Company will obtain the agreements described in Section 9(f)
hereof prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing
Date, any rumor, publication or event relating to or affecting the Company
shall occur as a result of which in your opinion the market price of the
Common Stock has been or is likely to be materially affected (regardless
of whether such rumor, publication or event necessitates a supplement to
or amendment of the Prospectus and any Integrated Prospectus), the Company
will, after notice from you advising the Company to the effect set forth
above, forthwith prepare, consult with you concerning the substance of,
and disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor,
publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall
both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 promulgated under the Act by the earlier of (i) 10:00 P.M.
Eastern time on the date of this Agreement and (ii) the time confirmations
are sent or given, as specified by Rule 462(b)(2).
(m) The Company will effect all required filings with The Nasdaq Stock
Market's National Market (the "Nasdaq National Market") prior to the Firm
Closing Date with respect to the issuance of Securities by the Company.
The Company will ensure that the Securities remain included for quotation
on the Nasdaq National Market following the Firm Closing Date.
7. Covenants of the Selling Securityholders.
(a) Each Selling Securityholder will not, directly or indirectly,
without the prior written consent of Prudential Securities Incorporated,
offer, sell, offer to sell, contract to sell, pledge,
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grant any option to purchase or otherwise sell or dispose (or announce
any offer, sale, offer of sale, contract of sale, pledge, grant of any
option to purchase or other sale or disposition) of any Securities legally
or beneficially owned by such Selling Securityholder or any securities
convertible into, or exchangeable or exercisable for, Securities for a
period of 90 days after the date hereof.
(b) Each Selling Securityholder will not, directly or indirectly, (i)
take any action designed to cause or result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities or (ii) (A) sell, bid for, purchase, or
pay anyone any compensation for soliciting purchases of, the Securities or
(B) pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Company (except for the
sale of Securities under this Agreement).
8. Expenses. The Company will pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not
the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 13 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect
to the transactions, including any costs of printing the registration
statement originally filed with respect to the Securities and any
amendment thereto, any Rule 462(b) Registration Statement, any Preliminary
Prospectus, the Prospectus and any Integrated Prospectus and any amendment
or supplement thereto, this Agreement and any blue sky memoranda, (ii) all
arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (iii) the fees and disbursements of the counsel,
accountants and any other experts or advisors retained by the Company,
(iv) preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Securities, including transfer agent's and
registrar's fees, (v) the qualification of the Securities under state
securities and blue sky laws, including filing fees and fees and
reasonable disbursements of counsel for the Underwriters relating thereto,
(vi) the filing fees of the Commission and the National Association of
Securities Dealers, Inc. relating to the Securities, (vii) the quotation
of the Securities on the Nasdaq National Market, (viii) meetings with
prospective investors in the Securities (other than shall have been
specifically approved by the Representatives to be paid for by the
Underwriters) and (ix) advertising relating to the offering of the
Securities (other than shall have been specifically approved by the
Representatives to be paid for by the Underwriters). If the sale of the
Securities provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth in Section 9 hereof is not
satisfied, because this Agreement is terminated pursuant to Section 13
hereof or because of any failure, refusal or inability on the part of the
Company or the Selling Securityholders to perform all obligations and
satisfy all conditions on its or their part to be performed or satisfied
hereunder other than by reason of a default by any of the Underwriters,
the Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. The Company shall not in any
event be liable to any of the Underwriters for the loss of anticipated
profits from the transactions covered by this Agreement.
To the extent not otherwise paid by the Company, each of the
Selling Securityholders will pay (directly or by reimbursement) all fees
and expenses incident to the performance of their respective obligations
under this Agreement which are not otherwise specifically provided for
herein, including but not limited to (i) any fees and expenses of counsel
to such Selling Securityholders; (ii) any fees and expenses of the
Custodian; and (iii) all expenses and taxes incident to the sale and
delivery of the Option Securities to be sold by such Selling
Securityholders
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to the Underwriters hereunder.
9. Conditions of the Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Selling
Securityholders contained herein as of the date hereof and as of the Firm
Closing Date, as if made on and as of the Firm Closing Date, to the
accuracy of the statements of the Company's officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Securityholders of their respective covenants and agreements hereunder and
to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of
the time of execution hereof, such Original Registration Statement or such
amendment and, if the Company has elected to rely upon Rule 462(b), the
Rule 462(b) Registration Statement, shall have been declared effective not
later than the earlier of (i) 11:00 A.M., New York time, on the date on
which the amendment to the registration statement originally filed with
respect to the Securities or to the Registration Statement, as the case
may be, containing information regarding the initial public offering price
of the Securities has been filed with the Commission and (ii) the time
confirmations are sent or given as specified by Rule 462(b)(2), or with
respect to the Original Registration Statement, or such later time and
date as shall have been consented to by the Representatives; if required,
the Prospectus or any Term Sheet that constitutes a part thereof and any
Integrated Prospectus and any amendment or supplement thereto shall have
been filed with the Commission in the manner and within the time period
required by Rule 434 and 424(b) under the Act; no stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated by
reference in the Registration Statement, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto shall have been issued
and no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Company or the Representatives,
shall be contemplated by the Commission; and the Company shall have
complied with any request of the Commission for additional information (to
be included in the Registration Statement, the Prospectus or any
Integrated Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, a Professional
Corporation, counsel for the Company and the Selling Securityholders, to
the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware and is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified does not amount to a material liability or
disability to the Company and its subsidiaries, taken as a whole;
(ii) the Company has the corporate power to own or lease its
properties and conduct its business as described in the Registration
Statement and the Prospectus or any Integrated Prospectus, and the
Company has corporate power to enter into this Agreement and to carry
out all the terms and provisions hereof and thereof to be carried out
by it;
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(iii) Except for directors' qualifying shares and as otherwise
set forth in each of the Prospectus and any Integrated Prospectus, the
issued shares of capital stock of each of the Company's subsidiaries
are owned beneficially by the Company free and clear of any perfected
security interests or, to the best knowledge of such counsel, any
other security interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized capitalization as set forth
in each of the Prospectus or any Integrated Prospectus; the Firm
Securities have been duly authorized by all necessary corporate action
of the Company and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly issued, fully
paid and nonassessable; the Securities have been duly included for
trading on the Nasdaq National Market; no holders of outstanding
shares of capital stock of the Company are entitled as such to any
preemptive or other rights to subscribe for any of the Securities; and
no holders of securities of the Company are entitled to have such
securities registered under the Registration Statement;
(v) the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(vi) no legal or governmental proceedings are pending to which
the Company is a party or to which the property of the Company is
subject that are required to be described in the Registration
Statement, the Prospectus or any Integrated Prospectus and are not
described therein, and, to the best knowledge of such counsel, no such
proceedings have been threatened against the Company or any of the
Company's subsidiaries or with respect to any of their respective
properties; and no contract or other document is required to be
described in the Registration Statement, the Prospectus or any
Integrated Prospectus or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as required;
(vii) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws or the rules and regulations of the NASD, or (B)
conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument known
to such counsel to which the Company or any of the Subsidiaries is a
party or by which the Company or any of its subsidiaries or any of
their respective properties are bound and in each case which is filed
as an exhibit to the Company's most recent annual report on Form 10-K,
or the charter documents or by-laws of the Company, or any statute or
any judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to the Company or any of its subsidiaries;
(viii) the Registration Statement is effective under the Act;
any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, and any Integrated Prospectus pursuant to
Rules 434 and 424(b) has been made in the manner and within the time
period required by Rules 434 and 424(b); and, to such
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counsel's knowledge after due inquiry, no stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated
by reference in the Registration Statement, the Prospectus and any
Integrated Prospectus or any amendment or supplement thereto has been
issued, and no proceedings for that purpose have been instituted or,
to such counsel's knowledge, threatened or are contemplated by the
Commission; and
(ix) the Registration Statement originally filed with respect
to the Securities and each amendment thereto and any Rule 462(b)
Registration Statement, the Prospectus and any Integrated Prospectus
(in each case, including the documents incorporated by reference
therein but not including the financial statements and related notes
and schedules and other financial data contained therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act, the
Exchange Act and the respective rules and regulations of the
Commission thereunder.
(x) If the Company elects to rely on Rule 434, the Prospectus
is not "materially different", as such term is used in Rule 434, from
the prospectus included in the Registration Statement at the time of
its effectiveness or any effective post-effective amendment thereto
(including such information that is permitted to be omitted pursuant
to Rule 430A).
(xi) this Agreement, the Custody Agreement and the Power of
Attorney have been duly executed and delivered by each Selling
Securityholder; assuming due authorization, execution and delivery by
the Custodian, the Custody Agreement and the Power of Attorney are the
legal, valid, binding and enforceable instruments of such Selling
Securityholder, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(xii) upon delivery of and payment for the Securities to be
sold by each Selling Securityholder as contemplated by this Agreement,
the Underwriters will be "protected purchasers" within the meaning of
Division 8 of the Uniform Commercial Code, and will acquire their
interests therein free of any "adverse claim" within the meaning of
Division 8 of the Uniform Commercial Code, provided that the
Underwriters are purchasing such Securities in good faith and without
notice of any such adverse claim;
(xiii) the sale of the Securities to the Underwriters by such
Selling Securityholder pursuant to this Agreement, the compliance by
such Selling Securityholder with the other provisions of this
Agreement, the Custody Agreement and the consummation of the other
transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained and such as
may be required under state securities or blue sky laws or the rules
and regulations of the NASD, or (ii) conflict with or result in a
breach or violation of any of the terms and provisions of, or
constitute a default under any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which such Selling
Securityholder is a party or by which such Selling Securityholder or
any of such Selling Securityholder's properties are bound, or, to our
knowledge, any statute or any judgment, decree,
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order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to such Selling
Securityholder, except any conflict, breach, violation or default
which would not result in a material adverse affect with respect to
the ability of the Selling Securityholder to perform its
obligations under this Agreement.
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus and any Integrated Prospectus, as of
its date or the date of such opinion, included or includes any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company, on the representations and warranties
of the Selling Securityholders contained herein and in the Power of
Attorney and Custody Agreement, and public officials.
References to the Registration Statement and the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Deacons (in association with Xxxxxx & Xxxxx LLP),
counsel for the Company in Hong Kong, to the effect that:
(i) The Hong Kong Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation and is duly qualified to transact
business as a foreign corporation and is in good standing under the
laws of all other jurisdictions where the ownership or leasing of
its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company and its
subsidiaries, taken as a whole;
(ii) The Hong Kong Subsidiary has corporate power to own or lease
its properties and conduct its business as described in the
Registration Statement and the Prospectus or any Integrated
Prospectus;
(iii) the issued shares of capital stock of the Hong Kong
Subsidiary have been duly authorized and validly issued, are fully
paid and nonassessable and, except for directors' qualifying shares
and as otherwise set forth in each of the Prospectus and any
Integrated Prospectus, are owned beneficially by the Company free
and clear of any perfected security interests or, to the best
knowledge of such counsel, any other security interests, liens,
encumbrances, equities or claims;
(iv) no legal or governmental proceedings are pending to which
the Hong Kong Subsidiary is a party or to which the property of the
Hong Kong Subsidiary is subject that are required to be described in
the Registration Statement, the Prospectus or any Integrated
Prospectus and are not described therein, and, to the best knowledge
of such counsel, no such proceedings have been threatened against
the Hong Kong Subsidiary or with respect to its properties; and
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(v) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this
Agreement and the consummation of the other transactions herein
contemplated do not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument known to such counsel to which the Hong Kong
Subsidiary is a party or by which the Hong Kong Subsidiary or any of
its properties are bound, or the charter documents or by-laws of the
Hong Kong Subsidiary, or any statute or any judgment, decree, order,
rule or regulation of any court or other governmental authority or
any arbitrator known to such counsel and applicable to the Hong Kong
Subsidiary.
In rendering any such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials.
References to the Registration Statement and the Prospectus and any
Integrated Prospectus in this paragraph (c) shall include any amendment or
supplement thereto at the date of such opinion.
(d) The Representatives shall have received an opinion, dated the
Firm Closing Date, of Pillsbury Madison & Sutro LLP, counsel for the
Underwriters, with respect to the issuance and sale of the Firm
Securities, the Registration Statement, the Prospectus or any Integrated
Prospectus, and such other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel
such documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(e) The Representatives shall have received from
PricewaterhouseCoopers LLP a letter or letters dated, respectively, the
date hereof and the Firm Closing Date, in form and substance satisfactory
to the Representatives, to the effect that:
(i) they are independent accountants with respect to the Company
and its consolidated subsidiaries within the meaning of the Act, the
Exchange Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules examined by them and included in the
Registration Statement, the Prospectus and any Integrated Prospectus
comply in form in all material respects with the applicable
accounting requirements of the Act, the Exchange Act and the related
published rules and regulations thereunder;
(iii) on the basis of a reading of the latest available interim
unaudited consolidated condensed financial statements of the Company
and its consolidated subsidiaries, carrying out certain specified
procedures (which do not constitute an examination made in
accordance with generally accepted auditing standards) that would
not necessarily reveal matters of significance with respect to the
comments set forth in this paragraph (iii), a reading of the minute
books of the shareholders, the board of directors and any committees
thereof of the Company and each of its consolidated subsidiaries,
and inquiries of certain officials of the Company and its
consolidated subsidiaries who have responsibility for financial and
accounting
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matters, nothing came to their attention that caused them to
believe that: at March __, 2000, there were any changes in the
capital stock or long-term debt of the Company and its consolidated
subsidiaries or any decreases in net current assets or stockholders'
equity of the Company and its consolidated subsidiaries, in each
case compared with amounts shown on the December 31, 1999 audited
balance sheet included in the Registration Statement, the Prospectus
and any Integrated Prospectus, or for the period from January 1,
2000 to such specified date there were any decreases, as compared
with amounts shown on the December 31, 1999 audited statement of
income included in the Registration Statement, in sales, net
revenues, net income before income taxes or total or per share
amounts of net income of the Company and its consolidated
subsidiaries, except in all instances for changes, decreases or
increases set forth in such letter;
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial information that are derived from the general
accounting records of the Company and its consolidated subsidiaries
and are included in the Registration Statement, the Prospectus and
any Integrated Prospectus or under any Exchange Act reports
incorporated by reference in the Registration Statement, the
Prospectus and any Integrated Prospectus, and have compared such
amounts, percentages and financial information with such records of
the Company and its consolidated subsidiaries and with information
derived from such records and have found them to be in agreement,
excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied
by a written explanation of the Company as to the significance thereof,
unless the Representatives deem such explanation unnecessary, and (B) such
changes, decreases or increases do not, in the sole judgment of the
Representatives, make it impractical or inadvisable to proceed with the
purchase and delivery of the Securities as contemplated by the
Registration Statement, as amended as of the date hereof.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (e) with respect to either letter
referred to above shall include any amendment or supplement thereto at the
date of such letter.
(f) The Representatives shall have received a certificate on behalf
of the Company, dated the Firm Closing Date, of the principal executive
officer and the principal financial or accounting officer of the Company
to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein not misleading; the Prospectus and any Integrated
Prospectus, as amended or supplemented as of the Firm Closing Date,
does not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and the Company has performed all covenants
and agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Firm Closing Date;
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(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and
no order directed at any document incorporated by reference in the
Registration Statement or the Prospectus or any amendment or
supplement thereto has been issued, and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened or are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information
is given in the Registration Statement, the Prospectus and any
Integrated Prospectus, neither the Company nor any of its
Subsidiaries has sustained any material loss or interference with
their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding, and there has not been any material adverse change, or
any development involving a prospective material adverse change, in
the condition (financial or otherwise), management, business,
prospects, net worth or results of operations of the Company or any
of its subsidiaries, taken as a whole, except in each case as
described in or contemplated by the Prospectus and any Integrated
Prospectus.
(g) The Representatives shall have received from each person who is a
director or executive officer of the Company an agreement to the effect that
such person will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant
any option to purchase or otherwise sell or dispose (or announce any offer,
sale, offer of sale, contract of sale, pledge, grant of an option to
purchase or other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days after the date of this Agreement.
(h) The Representatives shall have received a certificate executed by or
on behalf of each Selling Securityholder and dated the Firm Closing Date to
the effect that:
(i) the representations and warranties of such Selling
Securityholder in this Agreement are true and correct as if made
on and as of the Firm Closing Date; and
(ii) such Selling Securityholder has performed all
covenants and agreements on its part to be performed or satisfied
at or prior to the Firm Closing Date.
(i) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from
the Company.
(j) Prior to the commencement of the offering of the Securities,
the Securities shall have been included for trading on the Nasdaq National
Market.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if
they are reasonably satisfactory in all material respects to the
Representatives and counsel for the Underwriters. The Company shall furnish
to the Representatives such conformed copies of such opinions, certificates,
letters and documents in such quantities as the Representatives and counsel
for the Underwriters shall reasonably request.
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The respective obligations of the several Underwriters to purchase
and pay for any Option Securities shall be subject, in their discretion,
to each of the foregoing conditions to purchase the Firm Securities,
except that all references to the Firm Securities and the Firm Closing
Date shall be deemed to refer to such Option Securities and the related
Option Closing Date, respectively.
10. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter or such controlling person may become subject under
the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon:
(i) any untrue statement or alleged untrue statement made by
the Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus and
any Integrated Prospectus or any amendment or supplement thereto or
(B) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Securities under the securities
or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an
"Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus and any Integrated Prospectus or any
amendment or supplement thereto, or any Application, a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials provided by
the Company or based upon written information furnished by or on
behalf of the Company, including without limitation, slides, videos,
films and tape recordings, used in connection with the marketing of
the Securities, including, without limitation, statements
communicated to securities analysts employed by the Underwriters;
and will reimburse, as incurred, each Underwriter and each such
controlling person for any legal or other expenses reasonably
incurred by such Underwriter or such controlling person in
connection with investigating, defending against or appearing as a
third-party witness in connection with any such loss, claim, damage,
liability or action; provided, however, that the Company will not
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be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged
omission made in such registration statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus or any amendment or supplement thereto, or any
Application in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein; and provided, further,
that the Company will not be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue
statement or omission made in any Preliminary Prospectus that is
corrected in the Prospectus (or any amendment or supplement thereto)
if the person asserting any such loss, claim, damage or liability
purchased Securities from such Underwriter but was not sent or given
a copy of the Prospectus (as amended or supplemented), other than
the documents incorporated by reference therein, at or prior to the
written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or
supplemented) is required by the Act, unless such failure to deliver
the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 6(d) or (a) of this
Agreement. This indemnity agreement will be in addition to any
liability which the Company may otherwise have. The Company will
not, without the prior written consent of the Underwriter or
Underwriters purchasing, in the aggregate, more than fifty percent
(50%) of the Securities, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not any such Underwriter or any person who
controls any such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of all of the Underwriters
and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.
(b) Each Selling Securityholder, severally and not jointly, agrees
to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus and
any Integrated Prospectus or any amendment or supplement thereto or
any Application or the omission or alleged omission to state therein
a material fact required to be stated in the Registration Statement
or any amendment thereto, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading , in each
case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by such Selling Securityholder
specifically for use therein;
(ii) In addition to (b)(i) above, with respect to the Officer
Selling Securityholder only, any untrue statement or alleged untrue
statement made by such Officer Selling Securityholder in Section
3(h) of this Agreement,
and, subject to the limitations set forth immediately preceding this
clause, will reimburse, as incurred, each Underwriter and such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigation,
defending against or appearing as a third-party witness in connection with
any such loss, claim, damage, liability or action; provided, however, that
the Selling Securityholder will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged
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26
omission made in such Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus and any Integrated
Prospectus or any amendment or supplement thereto, or any Application in
reliance upon and in conformity with written information furnished to the
Company by any other Selling Securityholder or by such Underwriter
specifically for use therein; and provided, further, that the Selling
Securityholder will not be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the
Prospectus (or any amendment or supplement thereto) if the person
asserting any such loss, claim, damage or liability purchased Securities
from such Underwriter but was not sent or given a copy of the Prospectus
(as amended or supplemented), other than the documents incorporated by
reference therein, at or prior to the written confirmation of the sale of
such Securities to such person in any case where such delivery of the
Prospectus (as amended or supplemented) is required by the Act.
(c) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, each Selling Securityholder, and each
person, if any, who controls the Company or such Selling Securityholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act against any losses, claims, damages or liabilities to which the
Company, any director or officer of the Company, such Selling
Securityholder or any such controlling person of the Company or such
Selling Securityholder may become subject under the Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or any amendment
or supplement thereto, or any Application or (ii) the omission or the
alleged omission to state therein a material fact required to be stated in
the Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or any
Application or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company or any such director,
officer or controlling person or such Selling Securityholder in connection
with investigating or defending any such loss, claim, damage, liability or
any action in respect thereof. This indemnity agreement will be in
addition to any liability which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 10, except to the
extent the indemnifying party is prejudiced thereby. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there may be
one or more legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnifying party shall not have the right to
direct
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the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party
or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by
such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 10 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party
shall have employed separate counsel in accordance with the proviso to the
next preceding sentence (it being understood, however, that in connection
with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel)
in any one action or separate but substantially similar actions arising
out of the same general allegations or circumstances, designated by the
Representatives in the case of paragraph (a) of this Section 10,
representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does not
promptly retain counsel reasonably satisfactory to the indemnified party
or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party. After
such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(e) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 10 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities (or actions in
respect thereof), each indemnifying party, in order to provide for just
and equitable contribution, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law,
not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company
and the Selling Securityholders on the one hand and the Underwriters on
the other shall be deemed to be in the same proportion as the total
proceeds from the offering (before deducting expenses) received by the
Company and the Selling Securityholders bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault
of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Securityholders or the
Underwriters, the parties' relative intents, knowledge, access to
information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro rata
or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does
not take into account the equitable considerations referred to above in
this paragraph (e). Notwithstanding any other provision of this paragraph
(e), no Underwriter shall be obligated to make contributions hereunder
that in the aggregate exceed the total public offering price of the
Securities purchased by such Underwriter under this Agreement, less the
aggregate amount of any damages that such Underwriter has otherwise been
required to pay in respect of the same or
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any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
hereunder are several in proportion to their respective underwriting
obligations and not joint, and contributions among Underwriters shall be
governed by the provisions of the Prudential Securities Incorporated
Master Agreement Among Underwriters. For purposes of this paragraph (e),
each person, if any, who controls an Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement
and each person, if any, who controls the Company or any Selling
Securityholders within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, shall have the same rights to contribution as the
Company or such Selling Securityholder, as the case may be.
(f) Notwithstanding any other provision herein, the liability of
each Selling Securityholder hereunder shall not exceed an amount equal to
the purchase price per share set forth in Section 4 hereof multiplied by
the number of Securities sold by such Selling Securityholder.
(g) The Company and each of the Underwriters agree with the Officer
Selling Securityholder that any claim of such Underwriters against such
Officer Selling Securityholder for indemnification, contribution,
reimbursement or advancement of expenses or breach of any representation
or warranty herein (other than with respect to the representations and
warranties in Sections 3(a) through 3(e) and Section 3(g) hereof) shall
first be sought by such Underwriter to be satisfied in full by the Company
and, subject to the limitation on the aggregate liability of the Officer
Selling Securityholder set forth in Section 10(f), shall be satisfied by
the Officer Selling Securityholder only to the extent that such claim has
not been satisfied by the Company within the sixty (60) day period
following the date requested for payment in accordance with the terms of
this Agreement.
11. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities
hereunder and the aggregate number of such Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent
or less of the aggregate number of Firm Securities or Option Securities to
be purchased by all of the Underwriters at such time hereunder, the other
Underwriters may make arrangements satisfactory to the Representatives for
the purchase of such Securities by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representatives),
but if no such arrangements are made by the Firm Closing Date or the
related Option Closing Date, as the case may be, the other Underwriters
shall be obligated severally in proportion to their respective commitments
hereunder to purchase the Firm Securities or Option Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase. If
one or more Underwriters so default with respect to an aggregate number of
Securities that is more than ten percent of the aggregate number of Firm
Securities or Option Securities, as the case may be, to be purchased by
all of the Underwriters at such time hereunder, and if arrangements
satisfactory to the Representatives are not made within 36 hours after
such default for the purchase by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representatives) of
the Securities with respect to which such default occurs, this Agreement
will terminate without liability on the part of any non-defaulting
Underwriter, the Company or any Selling Securityholder other than as
provided in Section 12 hereof. In the event of any default by one or more
Underwriters as described in this Section 11, the Representatives shall
have the right to postpone the Firm Closing Date or the Option Closing
Date, as the case may be, established as provided in Section 4 hereof for
not more than seven business days in order that any necessary changes may
be made in the
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arrangements or documents for the purchase and delivery of the Firm
Securities or Option Securities, as the case may be. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 11. Nothing herein shall relieve any
defaulting Underwriter from liability for its default.
12. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company,
its officers, each Selling Securityholder and the several Underwriters set
forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Selling Securityholder, any
Underwriter or any controlling person referred to in Section 10 hereof and
(ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth in
Sections 8 and 10 hereof shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement.
13. Termination. (a) This Agreement may be terminated with respect
to the Firm Securities or any Option Securities in the sole discretion of
the Representatives by notice to the Company and the Selling
Securityholders given prior to the Firm Closing Date or the related Option
Closing Date, respectively, in the event that the Company or any Selling
Securityholder shall have failed, refused or been unable to perform all
obligations and satisfy all conditions on its part to be performed or
satisfied hereunder at or prior thereto or, if at or prior to the Firm
Closing Date or such Option Closing Date, respectively,
(i) the Company or any of its subsidiaries shall have, in
the sole judgment of the Representatives, sustained any material
loss or interference with their respective businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or
governmental proceeding or there shall have been any material
adverse change, or any development involving a prospective material
adverse change (including without limitation a change in management
or control of the Company), in the condition (financial or
otherwise), business, prospects, net worth or results of operations
of the Company and its subsidiaries, taken as a whole, except in
each case as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by
the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq
National Market shall have been suspended or minimum or maximum
prices shall have been established on such exchange.
(iii) a banking moratorium shall have been declared by New York
or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U. S. financial markets that, in
the sole judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of
the Securities as contemplated by the Registration
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Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 13 shall
be without liability of any party to any other party except as provided in
Section 12 hereof.
14. Information Supplied by Underwriters. The statements set forth
in the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus (to the extent such statements relate to the
Underwriters) constitute the only information furnished by any Underwriter
through the Representatives to the Company for the purposes of Sections
2(b) and 10 hereof. The Underwriters confirm that such statements (to such
extent) are correct.
15. Notices. All communications hereunder shall be in writing and,
if sent to any of the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to Prudential
Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Equity Transactions Group; if sent to the Company, shall be
delivered or sent by mail, telex or facsimile transmission and confirmed
in writing to the Company at Telcom Semiconductor, Inc., 0000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000; and if sent to the Selling
Securityholders, shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to the Selling Securityholders at
the foregoing address for the Company.
16. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, the Selling
Securityholders and their respective successors and legal representatives,
and nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the
indemnities of the Company and the Selling Securityholders contained in
Section 10 of this Agreement shall also be for the benefit of any person
or persons who control any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Underwriters contained in Section 10 of this Agreement shall also be for
the benefit of the directors of the Company, the officers of the Company
who have signed the Registration Statement, the Selling Securityholders
and any person or persons who control the Company or any Selling
Securityholder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act. No purchaser of Securities from any Underwriter shall
be deemed a successor because of such purchase.
17. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be
governed by and construed in accordance with the laws of the State of New
York, without giving effect to any provisions relating to conflicts of
laws.
18. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in
any state or federal court of competent jurisdiction in the State of New
York, and by execution and delivery of this Agreement, each Selling
Securityholder accepts, generally and unconditionally, the nonexclusive
jurisdiction of the aforesaid courts and waives any defense of forum non
conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. Each Selling Securityholder
designates and appoints Xxxxxxx X. Xxxxxx, and such other persons as may
hereafter be selected by the Selling Securityholders irrevocably agreeing
in writing to so serve, as its agent to receive on its behalf service of
all process in any such proceedings in any such court,
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such service being hereby acknowledged by each Selling Securityholder to
be effective and binding service in every respect. A copy of any such
process so served shall be mailed by registered mail to each Selling
Securityholder at its address provided in Section 15 hereof; provided,
however, that, unless otherwise provided by applicable law, any failure to
mail such copy shall not affect the validity of service of such process.
If any agent appointed by the Selling Securityholders refuses to accept
service, each Selling Securityholder hereby agrees that service of process
sufficient for personal jurisdiction in any action against such Selling
Securityholder in the State of New York may be made by registered or
certified mail, return receipt requested, to the Selling Securityholder at
its address provided in Section 15 hereof, and each Selling Securityholder
hereby acknowledges that such service shall be effective and binding in
every respect. Nothing herein shall affect the right to serve process in
any other manner permitted by law or shall limit the right of any
Underwriter to bring proceedings against the Selling Securityholders in
the courts of any other jurisdiction.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company
and each of the several Underwriters.
Very truly yours,
TELCOM SEMICONDUCTOR, INC.
By
---------------------------
Name:
-------------------
Title:
------------------
SELLING SECURITYHOLDERS
By
---------------------------
Name:
-------------------
Title:
------------------
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
PRUDENTIAL SECURITIES INCORPORATED
X.X. XXXXXXXXX, TOWBIN
XXXXXXXX INC.
By PRUDENTIAL SECURITIES INCORPORATED
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By
-------------------------------
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of Representatives.
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SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
Prudential Securities Incorporated.........................
X.X. Xxxxxxxxx, Towbin.....................................
Xxxxxxxx Inc...............................................
Total...................................................... 3,190,000
34
SCHEDULE 2
SELLING SECURITYHOLDERS
Name Firm Securities to be Sold Option Securities to be Sold
---- -------------------------- ---------------------------
Xxxxxxx X. Xxxxxx 162,580 100,000
IVP Founders Fund I 27,420 None
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