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EXHIBIT 1.1
WJ COMMUNICATIONS, INC.
5,400,000 SHARES
COMMON STOCK
UNDERWRITING AGREEMENT
August ___, 2000
CHASE SECURITIES INC.
CIBC WORLD MARKETS CORP.
XXXXXX XXXXXX PARTNERS LLC
c/o Chase Securities Inc.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
WJ Communications, Inc., a Delaware corporation (herein called the
"Company"), proposes to issue and sell 5,400,000 shares of its authorized but
unissued common stock, $0.01 par value (herein called the "Common Stock"). Said
shares of Common Stock are herein called the "Underwritten Stock." The Company
proposes to grant to the Underwriters (as hereinafter defined) an option to
purchase up to 810,000 additional shares of Common Stock to cover
over-allotments (herein called the "Option Stock" and, with the Underwritten
Stock, herein collectively called the "Stock"). The Common Stock is more fully
described in the Registration Statement and the Prospectus hereinafter
mentioned.
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters named in Schedule I hereto
(herein collectively called the "Underwriters," which term shall also include
any underwriter purchasing Stock pursuant to Section 3(b) hereof), for whom you
are acting as the "Representatives." You represent and warrant that you have
been authorized by each of the other Underwriters to enter into this Agreement
on its behalf and to act for it in the manner herein provided.
1. REGISTRATION STATEMENT. The Company has filed with the Securities
and Exchange Commission (herein called the "Commission") a registration
statement on Form S-1 (File No. 333-38518) (as amended by pre-effective
amendments), including the related preliminary prospectus, for the registration
under the Securities Act of 1933, as amended (herein called the "Securities
Act") of the Stock. Copies of such registration statement and of each amendment
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thereto, including the related preliminary prospectus (meeting the requirements
of Rule 430A of the rules and regulations of the Commission (herein called "Rule
430A")) heretofore filed by the Company with the Commission have been delivered
to you.
The term Registration Statement as used in this Agreement shall mean
such registration statement, all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a "Rule
462(b) registration statement"), and, in the event of any amendment thereto
after the effective date of such registration statement (herein called the
"Effective Date"), shall also mean (from and after the effectiveness of such
amendment) such registration statement as so amended (including any Rule 462(b)
registration statement). The term Prospectus as used in this Agreement shall
mean the prospectus relating to the Stock first filed with the Commission
pursuant to Rule 424(b) and Rule 430A (or if no such filing is required, as
included in the Registration Statement) and, in the event of any supplement or
amendment to such prospectus after the Effective Date, shall also mean (from and
after the filing with the Commission of such supplement or the effectiveness of
such amendment) such prospectus as so supplemented or amended. The term
Preliminary Prospectus as used in this Agreement shall mean each preliminary
prospectus included in such registration statement prior to the time it becomes
effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants as follows:
(a) The Company and each of its material domestic subsidiaries has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has full corporate
power and authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus and as being
conducted, and is duly qualified as a foreign corporation and in good standing
in all jurisdictions in which the character of the property owned or leased or
the nature of the business transacted by it makes qualification necessary,
except where the failure to have such power and authority or to be so qualified
would not have a material adverse effect on the business, properties, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole (herein called a "Material Adverse Effect").
(b) All of the outstanding capital stock of each subsidiary of the
Company is owned, directly or indirectly, by the Company, free and clear of any
security interest, claim, lien, limitation on voting rights or encumbrance
(other than the security interest granted in connection with the Company's
credit facility to CIBC World Markets Corp. and the other lenders thereunder)
except for security interests, claims, liens, limitations on voting rights or
encumbrances that would not have a Material Adverse Effect; and all such
securities have been
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duly authorized and validly issued, are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights. The Company has no
"significant subsidiaries," within the meaning of Rule 405 of the Securities
Act.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as disclosed in the
Registration Statement and the Prospectus, (i) there has not occurred any
Material Adverse Effect, whether or not occurring in the ordinary course of
business; (ii) there has not been any change in the capital stock (other than
the exercise of stock options or warrants and grants under the employee stock
plans as described in the Prospectus) or long-term debt of the Company, whether
or not arising from transactions in the ordinary course of business; (iii)
except in the ordinary course of business, neither the Company nor any of its
subsidiaries has entered into any transaction that could reasonably be expected
to have a Material Adverse Effect; (iv) neither the Company, nor any of its
subsidiaries has incurred any liabilities or obligations, direct or contingent,
that are material, either individually or in the aggregate, to the Company and
its subsidiaries, taken as a whole, and that are required to be disclosed on the
latest balance sheet or notes thereto included in the Prospectus in accordance
with generally accepted accounting principles and are not so disclosed; (v)
there has been no dividend or distribution of any kind declared, paid or made by
the Company or, except for dividends paid to the Company or other subsidiaries,
any of its subsidiaries on any class of capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class of capital
stock; (vi) there has been no capital expenditure or commitment by the Company
or any of its subsidiaries exceeding $250,000, either individually or in the
aggregate except in the ordinary course of business as generally contemplated by
the Prospectus; (vii) there has been no material change in accounting methods or
practices (including any change in depreciation or amortization policies or
rates) by the Company or any of its subsidiaries; (viii) there has been no
material revaluation by the Company or any of its subsidiaries of any of their
assets; (ix) except in the ordinary course of business, there has been no
increase in the salary or other compensation payable or to become payable by the
Company or any of its subsidiaries to any of their executive officers or
directors nor any declaration, payment or commitment or obligation of any kind
for the payment by the Company or any of its subsidiaries of a bonus or other
additional salary or compensation to any such person; (x) there has been no
amendment or termination of any contract, agreement or license to which the
Company or any subsidiary is a party or by which it is bound that could
reasonably be expected to have a Material Adverse Effect; and (xi) there has
been no waiver or release of any right or claim of the Company or any
subsidiary, including any write-off or other compromise of any account
receivable of the Company or any subsidiary that could reasonably be expected to
have a Material Adverse Effect.
(d) The Registration Statement and the Prospectus comply, and on the
Closing Date (as hereinafter defined) and the Option Closing Date (as
hereinafter defined), as the case may be, the Prospectus will comply, in all
material respects, with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder; on the Effective Date, the
Registration Statement did not contain any untrue statement of a material fact
and did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and, on the
Effective Date the Prospectus did not and, on the Closing Date and the Option
Closing Date, as the case may be, will not contain 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; PROVIDED, HOWEVER, that none of the representations and
warranties in this subparagraph (d) shall apply to statements in, or
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omissions from, the Registration Statement or the Prospectus made in reliance
upon and in conformity with information herein or otherwise furnished in writing
to the Company by or on behalf of the Underwriters for use in the Registration
Statement or the Prospectus.
(e) To the knowledge of the Company, no action has been taken and no
statute, rule, regulation or order has been enacted, adopted or issued by any
governmental agency that prevents the issuance or sale of the Stock or prevents
or suspends the use of the Prospectus; no injunction, restraining order or order
of any nature by a federal, state or foreign court of competent jurisdiction has
been issued that prevents the issuance of the Stock, prevents or suspends the
sale of the Stock in any jurisdiction or could adversely affect the consummation
of the transactions contemplated by this Agreement or the Prospectus; and every
request from any securities authority or agency of any jurisdiction for
additional information has been complied with in all material respects.
(f) The outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable; the
Stock is duly and validly authorized and will be, when issued and sold to the
Underwriters as provided herein, duly and validly issued, fully paid and
non-assessable; and no preemptive, co-sale, right of first refusal or other
similar right of stockholders exists with respect to any of the Stock or the
issue and sale thereof. No further approval or authority of the stockholders or
the Board of Directors of the Company will be required for the issuance and sale
of the Stock as contemplated hereby. Neither the filing of the Registration
Statement nor the offering or sale of the Stock as contemplated by this
Agreement gives rise to any rights relating to the registration of any shares of
capital stock of the Company. Except as disclosed in the Registration Statement
and Prospectus, there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered pursuant to any
other registration statement filed by the Company under the Securities Act.
Except as disclosed in the Registration Statement and Prospectus, there are no
outstanding subscriptions, rights, warrants, options, calls, convertible
securities, commitments of sale or liens related to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of, or other
ownership interest in, the Company other than stock options granted to
individuals in the ordinary course of business.
(g) The information set forth under the heading "Capitalization" in the
Prospectus is true and correct in all material respects. All of the Stock
conforms in all material respects to the description thereof contained in the
Registration Statement. The form of certificates for the Stock conforms to the
legal requirements of the State of Delaware.
(h) The financial statements of the Company and its subsidiaries,
together with the related notes and schedules as set forth in the Registration
Statement, present fairly the financial position and the results of operations
and cash flows of the Company and its subsidiaries on a consolidated basis at
the indicated dates and for the indicated periods. Such financial statements and
related schedules have been prepared in accordance with generally accepted
principles of accounting, consistently applied throughout the periods involved,
and all adjustments necessary for a fair presentation of results for such
periods have been made. The financial data set forth in
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the Prospectus under the headings "Prospectus Summary -- Summary Consolidated
Financial Data," "Capitalization" and "Selected Consolidated Financial Data"
present fairly the information set forth therein on a basis consistent with that
of the audited financial statements of the Company and its subsidiaries on a
consolidated basis included in the Prospectus.
(i) Xxxxxx Xxxxxxxx LLP, who have certified certain of the financial
statements of the Company and its subsidiaries filed with the Commission as part
of the Registration Statement, are independent public accountants as required by
the Securities Act and the rules and regulations of the Commission thereunder.
Deloitte & Touche LLP, who have certified certain of the financial statements of
the Company and its subsidiaries filed with the Commission as part of the
Registration Statement, are also independent public accountants as required by
the Securities Act and the rules and regulations of the Commission thereunder.
(j) Except as disclosed in the Registration Statement and the
Prospectus, there is no action, suit, claim, proceeding or investigation pending
or, to the knowledge of the Company threatened against the Company or any of its
subsidiaries or any of their respective directors, officers or properties before
any court or administrative agency or otherwise, which if determined adversely
to the Company or a subsidiary could reasonably be expected to result, either
individually or in the aggregate, in any Material Adverse Effect or prevent the
consummation of the transactions contemplated hereby; and there are no
agreements, employee stock plans, contracts, leases or documents of the Company
or any of its subsidiaries of a character required to be described or referred
to in the Registration Statement or Prospectus or to be filed as an exhibit to
the Registration Statement by the Securities Act or the rules and regulations of
the Commission thereunder which have not been accurately described in all
material respects in the Registration Statement or Prospectus or filed as
exhibits to the Registration Statement. The contracts so described in the
Registration Statement and Prospectus are in full force and effect on the date
hereof, and neither the Company nor any of its subsidiaries nor, to the
Company's knowledge, any other party, is in breach of or default under any of
such contracts where such breach or default, either individually or in the
aggregate, would have a Material Adverse Effect.
(k) Each of the Company and its subsidiaries has good and marketable
title to all of its properties and assets that are material to its business as
described in the Registration Statement or as reflected in the financial
statements filed with the Commission as part of the Registration Statement, free
and clear of any lien, mortgage, pledge, charge or encumbrance of any kind
(other than the security interest granted in connection with the Company's
credit facility to CIBC World Markets Corp. and the other lenders thereunder)
except those reflected in such financial statements or as described in the
Registration Statement or such as do not materially affect the value of the
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries. All material leases
of real property to which the Company or any of its subsidiaries is a party are
valid and binding obligations of the Company or its subsidiaries, respectively,
and no default by the Company or any of its subsidiaries has occurred or is
continuing thereunder which could reasonably be expected to result in a Material
Adverse Effect; and the Company and its subsidiaries enjoy peaceful and
undisturbed possession under all such leases to which they are a party as
lessee.
(l) Each of the Company and, to the extent applicable, its subsidiaries
has timely
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filed all federal, state, local and foreign income tax returns, as the case may
be, which have been required to be filed and has paid all taxes required by said
returns and all assessments received by it to the extent that such taxes have
become due and are not being contested in good faith except where the failure to
file such returns and pay such taxes would not have, either individually or in
the aggregate, a Material Adverse Effect. All tax liabilities (including those
being contested in good faith) for the periods covered by the financial
statements of the Company and its subsidiaries on a consolidated basis included
in the Registration Statement have been adequately accounted for or described in
such financial statements. The Company has made adequate charges, accruals and
reserves in the financial statements of the Company and its subsidiaries on a
consolidated basis included in the Prospectus in respect of all federal, state
and foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of its subsidiaries has not been finally
determined.
(m) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby, including, without limitation,
the corporate power and authority to issue, sell and deliver the Stock as
provided herein and the power to effect the "Use of Proceeds" as described in
the Prospectus.
(n) This Agreement has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company, enforceable
against it in accordance with its terms except insofar as indemnification and
contribution provisions may be limited by applicable law or equitable principles
and except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally or by general equitable principles.
(o) Neither the Company nor any of its subsidiaries is, nor with the
giving of notice or lapse of time or both will be, (i) in violation of its
certificate of incorporation or bylaws or equivalent organizational documents,
(ii) in default under an agreement, mortgage, lease, contract, indenture or
other instrument or obligation to which it is a party or by which it, or any of
its properties, is bound or subject or (iii) in violation of any federal, state,
local or foreign law, statute, ordinance, rule, regulation, requirement,
judgment or court decree applicable to the Company, its subsidiaries or any of
their assets or properties (whether owned or leased) other than, in the case of
clause (ii) and (iii), any default or violation that could not reasonably be
expected to (A) result, either individually or in the aggregate, in a Material
Adverse Effect, or (B) adversely affect the consummation of the transactions
contemplated hereby.
(p) None of (i) the execution, delivery or performance by the Company
of this Agreement, (ii) the issuance or sale of the Stock, (iii) the
consummation by the Company of the transactions contemplated hereby and (iv) the
reincorporation of the Company in Delaware violate, conflict with or constitute
a breach of any of the terms or provisions of, or a default (or an event that
with notice or the lapse of time, or both, would constitute a default) under, or
require consent which has not been obtained under, or result in the imposition
of a lien on any properties of the Company or any of its subsidiaries, or an
acceleration of any indebtedness of the Company or any of its subsidiaries
pursuant to (A) the certificate of incorporation, bylaws or equivalent
organizational documents of the Company or any of its subsidiaries, (B) any
bond, debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which the
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Company or any of its subsidiaries is a party or by which the Company or its
subsidiaries or their properties is or may be bound or subject, (C) any statute,
rule or regulation applicable to the Company or any of its subsidiaries or any
of their assets or properties or (D) any judgment, order or decree of any court
or governmental agency or authority having jurisdiction over the Company or any
of its subsidiaries or any of their assets or properties, except in the case of
clauses (B), (C) and (D) for such violations, conflicts, breaches, defaults,
consents, impositions of liens or accelerations that would not result, either
individually or in the aggregate, in a Material Adverse Effect.
(q) Each material approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions hereby
contemplated (except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (herein called the "NASD") or such
additional steps as may be necessary to qualify the Stock for public offering by
the Underwriters under state securities or blue sky laws) has been obtained or
made and is in full force and effect.
(r) The Company and its subsidiaries are operating in compliance with
all federal, state, local and foreign statutes, laws, regulations, ordinances or
court decrees applicable to its businesses and operations, except where any such
non-compliance, either individually or in the aggregate, would not have a
Material Adverse Effect. Except as disclosed in the Registration Statement and
the Prospectus, and except for matters that either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect:
(A) neither the Company nor any of its subsidiaries has violated any federal,
state, local or foreign statute, law, regulation, ordinance, court decree or
code, policy or rule of common law or any judicial or administrative
interpretation thereof currently in effect, including any judicial or
administrative order, consent decree, judgment or regulation relating to
pollution or to protection of human health and safety, the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of chemicals,
hazardous or toxic substances, petroleum or petroleum products, wastes,
pollutants or contaminants (herein called "Hazardous Materials") or to the
manufacturing, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (herein called "Environmental
Laws"); (B) the Company and its subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are each in
compliance with their requirements; (C) there are no pending or, to the
knowledge of the Company, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries; and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting the Company or any of
its subsidiaries relating to Hazardous Materials or any Environmental Laws.
(s) No material labor disturbance by the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent,
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its principal suppliers, manufacturers' representatives
or international distributors that might be expected to
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result, either individually or in the aggregate, in a Material Adverse Effect.
No collective bargaining agreement exists with any of the Company's or its
subsidiaries' employees and, to the best of the Company's knowledge, no such
agreement is imminent.
(t) The Company is in compliance in all material respects with all
currently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder (herein called "ERISA"); no "reportable event" (as defined in ERISA)
has occurred with respect to any "pension plan" (as defined in ERISA) for which
the Company would have any material liability; the Company has not incurred and
does not expect to incur any material liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (herein called the
"Code"); and each "pension plan" for which the Company would have any material
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, that would cause the loss of such qualification.
(u) The Company and its subsidiaries hold all material licenses,
certificates and permits from governmental authorities and third parties that
are necessary to the conduct of their businesses and as contemplated by the
Prospectus.
(v) Except where the failure to do so could not reasonably be
expected to result in a Material Adverse Effect, the Company and its
subsidiaries own, possess or have the right to use all issued and pending
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable designs, software and
other computer programs, computer codes, proprietary or confidential
information, software, systems or procedures), trademarks, copyrights and
trade names, technical data and other information (herein collectively called
"Intellectual Property") that are necessary to conduct their businesses as
described in the Registration Statement and the Prospectus. Except as
disclosed in the Registration Statement and the Prospectus neither the
Company nor any of its subsidiaries has received any notice of, and the
Company has no knowledge of, any infringement of or conflict with any rights
of the Company or any of its subsidiaries by others with respect to any
Intellectual Property which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Except as disclosed
in the Registration Statement and the Prospectus neither the Company nor any
of its subsidiaries has received any notice of, and the Company has no
knowledge of, any infringement of or conflict with any rights of others with
respect to any Intellectual Property which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect; to the
Company's knowledge, none of the material Intellectual Property licensed to
or by the Company or any of its subsidiaries is unenforceable or invalid; and
the Company is not aware of the granting of any patent rights to third
parties or the filing of any patent applications by third parties or any
other rights of third parties to any material Intellectual Property owned by
the Company and its subsidiaries.
(w) The Company is not and, after giving effect to the offering and
sale of the Stock and the application of the net proceeds therefrom as described
in the Prospectus, will not be an "investment company" as such term is defined
in the Investment Company Act of 1940, as
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amended (herein called the "Investment Company Act") and the rules and
regulations of the Commission thereunder.
(x) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(y) Each of the Company and its subsidiaries is insured with policies
in such amounts and with such deductibles and covering such risks as are
customary for similarly situated businesses including, but not limited to,
policies covering real and personal property owned or leased by the Company or
any of its subsidiaries against theft, damage, destruction and acts of
vandalism. The Company has no reason to believe that it or any subsidiary will
not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and,
in each case, at a cost that would not result in a Material Adverse Effect.
(z) The statements in the Prospectus under the heading "Certain
Transactions" set forth all existing agreements, arrangements, understandings or
transactions or proposed agreements, arrangements, understandings or
transactions between or among the Company or any of its subsidiaries, on the one
hand, and any officer, director or stockholder of the Company or any partner,
affiliate or associate of any of the foregoing persons or entities, on the other
hand, required to be set forth or described thereunder pursuant to the
Securities Act and the rules and regulations of the Commission thereunder; and
no relationship, direct or indirect, exists between or among the Company on the
one hand, and the directors, officers, stockholders, customers or suppliers of
the Company on the other hand, which is required to be described in the
Prospectus which is not so described.
(aa) To the Company's knowledge, neither the Company nor any of its
subsidiaries has at any time since its inception (i) made any unlawful
contribution to any candidate for foreign office, failed to disclose fully any
contribution in violation of applicable law or violated the Foreign Corrupt
Practices Act of 1977, as amended, or (ii) made any payment to any federal or
state governmental officer or official or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof.
(bb) Neither the Company nor any of its subsidiaries has distributed,
nor will any of them distribute prior to the later of (i) the Closing Date or
the Option Closing Date, as the case may be, and (ii) the completion of the
distribution of the Stock, any offering material in connection with the offering
and sale of the Stock other than any Preliminary Prospectus, the Prospectus, the
Registration Statement and other materials, if any, permitted by the Securities
Act.
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(cc) The Company has not incurred any liability for any finder's fees
or similar payments in connection with the transactions contemplated hereby
other than to the Underwriters.
(dd) The Registration Statement, the Prospectus and any Preliminary
Prospectus comply, and any amendments or supplements thereto will comply, with
any applicable laws or regulations of foreign jurisdictions in which the
Prospectus or any Preliminary Prospectus, as amended or supplemented, if
applicable, is distributed by the Company in connection with the Directed Share
Program (as defined in Section 12); and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency, other than
those already obtained, is required in connection with the offering of the
Directed Shares in any jurisdiction where the Directed Shares are being offered
by the Company.
(ee) The Company has not offered, or caused any of the Underwriters to
offer, Stock to any person pursuant to the Directed Share Program with the
intent to unlawfully influence: (i) a customer or supplier of the Company to
alter the customer's or supplier's level or type of business with the Company,
or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
(ff) The minute books of the Company for the past five years have been
made available to the Representatives and their counsel and contain a complete
summary of all meetings and actions of the directors, stockholders, audit
committee, compensation committee and any other committee of the Board of
Directors of the Company, respectively, that occurred during that period, and
reflect all transactions referred to in such minutes accurately.
(gg) The Stock to be issued and sold by the Company has been authorized
for listing by the Nasdaq National Market System upon official notice of
issuance.
(hh) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters pursuant to this
Agreement shall be deemed to be a representation and warranty by the Company to
the Underwriters as to the matters covered thereby. The Company acknowledges
that each of the Underwriters and, for purposes of the opinion letter to be
delivered to the Underwriters, counsel to the Underwriters, will rely upon the
accuracy and truth of the foregoing representations and hereby consents to such
reliance.
(ii) The Company has not taken, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of the Common Stock to facilitate the sale or resale of the
Stock.
(jj) To the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's officers or
directors or stockholders that own at least five percent of the aggregate number
of outstanding shares of Common Stock.
(kk) The unaudited financial data of the Company as of and for the year
ended December 31, 1996, included in the Prospectus under the headings
"Prospectus Summary -- Summary Consolidated Financial Data" and "Selected
Consolidated Financial Data," present
11
fairly the financial position and the results of operations and cash flows of
the Company and its subsidiaries on a consolidated basis as of December 31, 1996
and for the year then ended (reflecting only the continuing operations of the
Company in the consolidated statement of operations data and excluding net
assets from its discontinued operations in the selected consolidated balance
sheet data). Such financial data have been prepared in accordance with generally
accepted principles of accounting, consistently applied throughout the period
involved, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the related rules and
regulations promulgated by the Commission, and have been prepared on a basis
consistent with that of the audited financial statements of the Company and its
subsidiaries on a consolidated basis, and all adjustments, which are only
normally recurring adjustments, necessary for a fair presentation of the
financial position and results of operation for that period have been made.
(ll) The recapitalization merger in January 2000 was, and the
reincorporation of the Company in Delaware in August 2000 has been, duly
authorized by all necessary corporate action.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company agrees to issue and sell
5,400,000 shares of the Underwritten Stock to the several Underwriters, and each
of the Underwriters agrees to purchase from the Company the respective aggregate
number of shares of Underwritten Stock set forth opposite its name in Schedule
I. The price at which such shares of Underwritten Stock shall be sold by the
Company and purchased by the several Underwriters shall be $___ per share. The
obligation of each Underwriter to the Company shall be to purchase from the
Company that number of shares of the Underwritten Stock which represents the
same proportion of the total number of shares of the Underwritten Stock to be
sold by the Company pursuant to this Agreement as the number of shares of the
Underwritten Stock set forth opposite the name of such Underwriter in Schedule I
hereto represents of the total number of shares of the Underwritten Stock to be
purchased by all Underwriters pursuant to this Agreement, as adjusted by you in
such manner as you deem advisable to avoid fractional shares. In making this
Agreement, each Underwriter is contracting severally and not jointly; except as
provided in paragraphs (b) and (c) of this Section 3, the agreement of each
Underwriter is to purchase only the respective number of shares of the
Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company shall immediately give notice thereof
to you, and the non-defaulting Underwriters shall have the right within 24 hours
after the receipt by you of such notice to purchase, or procure one or more
other Underwriters to purchase, in such proportions as may be agreed upon
between you and such purchasing Underwriter or Underwriters and upon the terms
herein set forth, all or any part of the shares of the Stock which such
defaulting Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such shares
and portion, the number of shares of the Stock which each non-defaulting
Underwriter is
12
otherwise obligated to purchase under this Agreement shall be automatically
increased on a pro rata basis to absorb the remaining shares and portion which
the defaulting Underwriter or Underwriters agreed to purchase; PROVIDED,
HOWEVER, that the non-defaulting Underwriters shall not be obligated to purchase
the shares and portion which the defaulting Underwriter or Underwriters agreed
to purchase if the aggregate number of such shares of the Stock exceeds 10% of
the total number of shares of the Stock which all Underwriters agreed to
purchase hereunder. If the total number of shares of the Stock which the
defaulting Underwriter or Underwriters agreed to purchase shall not be purchased
or absorbed in accordance with the two preceding sentences, the Company shall
have the right, within 24 hours next succeeding the 24-hour period above
referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such shares and portion on the terms herein
set forth. In any such case, either you or the Company shall have the right to
postpone the Closing Date determined as provided in Section 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. If neither the non-defaulting Underwriters nor the Company shall
make arrangements within the 24-hour periods stated above for the purchase of
all the shares of the Stock which the defaulting Underwriter or Underwriters
agreed to purchase hereunder, this Agreement shall be terminated without further
act or deed and without any liability on the part of the Company to any
non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company. Nothing in this paragraph (b), and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase, severally and
not jointly, up to 810,000 shares in the aggregate of Option Stock from the
Company at the same price per share as the Underwriters shall pay for the
Underwritten Stock. Said option may be exercised only to cover over-allotments
in the sale of the Underwritten Stock by the Underwriters and may be exercised
in whole or in part at any time on or before the thirtieth day after the date of
this Agreement upon written or telegraphic notice by you to the Company setting
forth the aggregate number of shares of the Option Stock as to which the several
Underwriters are exercising the option. Delivery of certificates for the shares
of Option Stock, and payment therefor, shall be made as provided in Section 5
hereof. The number of shares of the Option Stock to be purchased by each
Underwriter shall be the same percentage of the total number of shares of the
Option Stock to be purchased by the several Underwriters as such Underwriter is
purchasing of the Underwritten Stock, as adjusted by you in such manner as you
deem advisable to avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of the
Stock to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine.
(b) The information set forth on the cover page of any Preliminary
Prospectus and the
13
Prospectus and under "Underwriting" in the Registration Statement, any
Preliminary Prospectus and the Prospectus relating to the Stock filed by the
Company (insofar as such information relates to the Underwriters) constitutes
the only information furnished by the Underwriters to the Company for inclusion
in the Registration Statement, any Preliminary Prospectus, and the Prospectus,
and you on behalf of the respective Underwriters represent and warrant to the
Company that the statements made therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the Underwritten Stock
and the Option Stock (if the option granted by Section 3(c) hereof shall have
been exercised not later than 7:00 A.M., California time, on the date two
business days preceding the Closing Date), and payment therefor, shall be made
at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx, [425 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, at 9:00 a.m., New York time], on the fourth business day after
the date of this Agreement, or at such time on such other day, not later than
seven full business days after such fourth business day, as shall be agreed upon
in writing by the Company and you. The date and hour of such delivery and
payment (which may be postponed as provided in Section 3(b) hereof) are herein
called the "Closing Date."
(b) If the option granted by Section 3(c) hereof shall be exercised
after 7:00 a.m., California time, on the date two business days preceding the
Closing Date, delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx,
[425 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00 a.m., New York time] on
the third business day after the exercise of such option. The date and hour of
such delivery and payment are herein called the "Option Closing Date."
(c) Payment for the Stock purchased from the Company shall be made to
the Company or its order by one or more certified or official bank check or
checks in same day funds or by wire transfer in immediately available funds.
Such payment shall be made upon delivery of certificates for the Stock to you
for the respective accounts of the several Underwriters against receipt therefor
signed by you. Certificates for the Stock to be delivered to you shall be
registered in such name or names and shall be in such denominations as you may
request at least one business day prior to the Closing Date, in the case of
Underwritten Stock and at least one business day prior to the Option Closing
Date, in the case of Option Stock. Such certificates will be made available to
the Underwriters for inspection, checking and packaging at the offices of
Xxxxxxx Xxxxxxx & Xxxxxxxx, [425 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000] on
the business day prior to the Closing Date or, in the case of the Option Stock,
by 3:00 p.m., California time, on the business day prior to the Option Closing
Date.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check or wire transfer shall
not have been received by you on the Closing Date or on the Option Closing Date,
as the case may be. Any such payment by you shall not relieve such Underwriter
from any of its obligations hereunder.
14
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees
as follows:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A and
(ii) not file any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and furnished
with a copy or to which you shall have reasonably objected in writing or which
is not in compliance with the Securities Act and the rules and regulations of
the Commission thereunder.
(b) The Company will promptly notify each Underwriter in the event of
(i) the request by the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceeding for that purpose, (iv) the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction or (v) the receipt by it of notice of the
initiation or threatening of any proceeding for such purpose. The Company will
make every reasonable effort to prevent the issuance of such a stop order and,
if such an order shall at any time be issued, to obtain the withdrawal thereof
at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you
a signed copy of the Registration Statement as originally filed and of each
amendment thereto filed prior to the time the Registration Statement becomes
effective and, promptly upon the filing thereof, a signed copy of each
post-effective amendment, if any, to the Registration Statement (together with,
in each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters, at
such office or offices as you may designate, as many copies of the Prospectus as
you may reasonably request and (iii) thereafter from time to time during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, likewise send to the Underwriters as many additional
copies of the Prospectus and as many copies of any supplement to the Prospectus
and of any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer, any event relating to or
affecting the Company, or of which the Company shall be advised in writing by
you, shall occur as a result of which it is necessary, in the opinion of counsel
for the Company or of counsel for the Underwriters, to supplement or amend the
Prospectus so that it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements contained in the Prospectus in the light of the
circumstances existing at the time it is delivered to a purchaser of the Stock,
not misleading, the Company will forthwith prepare and file with the Commission
a supplement to the Prospectus or an amended prospectus so that the Prospectus
as so supplemented or amended will not contain any untrue statement of a
material
15
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time such
Prospectus is delivered to such purchaser, not misleading. If, after the initial
public offering of the Stock by the Underwriters and during such period, the
Underwriters shall propose to vary the terms of offering thereof by reason of
changes in general market conditions or otherwise, you will advise the Company
in writing of the proposed variation, and, if in the opinion either of counsel
for the Company or of counsel for the Underwriters such proposed variation
requires that the Prospectus be supplemented or amended, the Company will
forthwith prepare and file with the Commission a supplement to the Prospectus or
an amended prospectus setting forth such variation. The Company authorizes the
Underwriters and all dealers to whom any of the Stock may be sold by the several
Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the rules and regulations of the
Commission thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment to
the Registration Statement and any supplement to the Prospectus or any amended
prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; PROVIDED, HOWEVER, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. The Company will, from time to
time, prepare and file such statements, reports and other documents as are or
may be required to continue such qualifications in effect for so long a period
as you may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, as
long as the Company continues to have reporting obligations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Company will furnish
to you, and to each Underwriter who may so request in writing, copies of all
periodic and special reports furnished to stockholders of the Company and of all
information, documents and reports filed with the Commission.
(h) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the Effective Date, the Company
will make generally available to its securityholders an earnings statement in
accordance with Section 11(a) of the Securities Act and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including all costs and
expenses incident to (i) the preparation, printing and filing with the
Commission and the NASD of the Registration Statement, any Preliminary
Prospectus and the Prospectus, (ii) any applicable listing or other fees, (iii)
the furnishing to the Underwriters of copies of any Preliminary Prospectus and
of the several documents required by paragraph (c) of this Section 6 to be so
furnished, (iv) the printing of this Agreement and related documents delivered
to the Underwriters, (v) the preparation, printing and filing of all supplements
and amendments to the Prospectus referred to in paragraph
16
(d) of this Section 6, (vi) the furnishing to you and the Underwriters of the
reports and information referred to in paragraph (g) of this Section 6, (vii)
the printing and issuance of stock certificates, including the transfer
agent's fees and (viii) all costs and expenses of the Underwriters incident
to the Directed Share Program, including the fees and disbursements of
counsel to the Underwriters and any stamp duties or other taxes. It is
understood, however, that, except as provided in this Section 6, the
Underwriters will pay all of their own costs and expenses, including the fees
of their counsel, and stock transfer taxes on resale of any of the Stock by
them.
(j) The Company agrees to reimburse you, for the account of the several
Underwriters, for blue sky fees and related disbursements (including counsel
fees and disbursements and the cost of printing memoranda for the Underwriters)
paid by or for the account of the Underwriters or their counsel in qualifying
the Stock under state securities or blue sky laws and in the review of the
offering by the NASD.
(k) The Company agrees that, without the prior written consent of
Chase Securities Inc. on behalf of the Underwriters, the Company will not,
for a period of 180 days following the commencement of the public offering of
the Stock by the Underwriters, directly or indirectly, (i) offer, sell,
contract to sell, make any short sale, pledge, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any shares of Common
Stock or any securities convertible into or exchangeable or exercisable for
or any rights to purchase or acquire Common Stock or (ii) enter into any swap
or other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Stock to be sold to the Underwriters pursuant to
this Agreement, (B) shares of Common Stock issued by the Company upon the
exercise of options granted prior to the date of the Prospectus under the
stock option plans of the Company described in the Preliminary Prospectus
(the "Option Plans"), (C) options to purchase Common Stock granted under the
Option Plans; PROVIDED THAT, for purposes of this clause (C) any such options
granted after the date hereof until the end of the 180-day period shall not
be exercisable until 180 days after the commencement of the public offering
of the Stock by the Underwriters, and (D) Common Stock sold or otherwise
issued in connection with a sale of control of the Company (which shall mean
the acquisition by a person or group (other than Fox Xxxxx or its affiliates)
of a majority of the voting power of the Company); PROVIDED in the event of
this clause (D) that the Company gives notice to Chase Securities Inc. in
writing of its intention to engage in such a sale or other issuance and, to
the extent that the Company remains a publicly traded company after such sale
or other issuance, prior to any such sale or other issuance, each person who
acquires such shares shall execute an agreement satisfactory to Chase
Securities, Inc. pursuant to which each such person shall agree to receive
and hold such shares of Common Stock or securities convertible into or
exchangeable for the Common Stock, subject to the provisions hereof, and that
there shall be no further transfer except in accordance with the provisions
hereof.
(l) The Company agrees to use all reasonable efforts to cause all
directors, officers and holders of 98% of the shares of Common Stock and any
options or similar rights to purchase Common Stock to furnish to you, prior to
the Closing Date, executed lock-up agreements in the form of Annex C attached
hereto.
(m) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your reasonable
opinion the market price for the 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), the Company will, after written
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.
(n) The Company shall apply the net proceeds of its sale of the Stock
as set forth in
17
the Prospectus under the heading "Use of Proceeds."
(o) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, registrar (which may be the
same entity as the transfer agent) for its Common Stock.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and the QUI (as defined) and each person (including each partner or officer
thereof) who controls any Underwriter and the QIU within the meaning of Section
15 of the Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Securities Act, the Exchange Act, or the common law
or otherwise, and the Company agrees to reimburse each such Underwriter, QIU and
controlling person for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement), or the
omission or alleged omission to state in such Registration Statement or
post-effective amendment thereto a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that (A) the indemnity agreements of the Company contained in this paragraph (a)
shall not apply to any such losses, claims, damages, liabilities or expenses if
such statement or omission was made in reliance upon and in conformity with
information furnished as herein stated or otherwise furnished in writing to the
Company by or on behalf of any Underwriter for use in any Preliminary Prospectus
or the Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto and (B) the indemnity agreement contained in this paragraph
(a) with respect to any Preliminary Prospectus shall not inure to the benefit of
any Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless the failure is the result of noncompliance by
the Company with paragraph (c) of Section 6 hereof. The indemnity agreements of
the Company contained in this paragraph (a) and the representations and
warranties of the Company contained in Section 2 hereof shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any indemnified party and shall survive the delivery of and payment
for the Stock.
18
The Company hereby confirms that at its request Chase Securities Inc.
has acted as "qualified independent underwriter" (in such capacity, the "QIU")
within the meaning of Rule 2710 of the Conduct Rules of the National Association
of Securities Dealers, Inc. in connection with the offering of the Stock. The
Company will indemnify and hold harmless the QIU against any losses, claims,
damages or liabilities, joint or several, to which the QIU may become subject,
under the Securities Act, the Exchange Act, or the common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon the QIU's acting (or alleged failing to
act) as such "qualified independent underwriter" and will reimburse the QIU for
any legal or other expenses reasonably incurred by the QIU in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its officers who signs the Registration Statement on his
own behalf or pursuant to a power of attorney, each of its directors, each other
Underwriter (including the QIU) and each person (including each partner or
officer thereof) who controls the Company or any such other Underwriter or QIU
within the meaning of Section 15 of the Securities Act, from and against any and
all losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, or the common law or otherwise and to reimburse each of them
for any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished as herein stated or otherwise
furnished in writing to the Company by or on behalf of such indemnifying
Underwriter for use in the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto. The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and
(b) of this Section 7 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the "Notice") of
such service or notification to the party or
19
parties from whom indemnification may be sought hereunder. No indemnification
provided for in such paragraphs shall be available to any party who shall fail
so to give the Notice if the party to whom such Notice was not given was unaware
of the action, suit, investigation, inquiry or proceeding to which the Notice
would have related and was prejudiced by the failure to give the Notice, but the
omission so to notify such indemnifying party or parties of any such service or
notification shall not relieve such indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of such indemnity agreement. Any indemnifying party
shall be entitled at its own expense to participate in the defense of any
action, suit or proceeding against, or investigation or inquiry of, an
indemnified party. Any indemnifying party shall be entitled, if it so elects
within a reasonable time after receipt of the Notice by giving written notice
(herein called the "Notice of Defense") to the indemnified party, to assume
(alone or in conjunction with any other indemnifying party or parties) the
entire defense of such action, suit, investigation, inquiry or proceeding, in
which event such defense shall be conducted, at the expense of the indemnifying
party or parties, by counsel chosen by such indemnifying party or parties and
reasonably satisfactory to the indemnified party or parties; PROVIDED, HOWEVER,
that (i) if the indemnified party or parties reasonably determine that there may
be a conflict between the positions of the indemnifying party or parties and of
the indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and (ii) in any event, the
indemnified party or parties shall be entitled to have counsel chosen by such
indemnified party or parties participate in, but not conduct, the defense. In no
event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances except to the extent an
indemnified party reasonably determines that there may be a conflict between the
positions of such indemnified party and the other indemnified parties in
conducting the defense of such action, suit, investigation, inquiry or
proceeding or that there may be one or more legal defenses available to it which
are different from or in addition to those available to other indemnified
parties in which case such indemnified party shall have the right to select
separate counsel to defend such action on its behalf. All such fees and expenses
shall be reimbursed as they are incurred. In the case of parties indemnified
pursuant to Section 7(a) above, counsel to the indemnified parties shall
(subject to the following sentence) be selected by Chase Securities Inc., and,
in the case of parties indemnified pursuant to Section 6(b) above, counsel to
the indemnified parties shall be selected by the Company. If, within a
reasonable time after receipt of the Notice, an indemnifying party gives a
Notice of Defense and the counsel chosen by the indemnifying party or parties is
reasonably satisfactory to the indemnified party or parties, the indemnifying
party or parties will not be liable under paragraphs (a) through (c) of this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party or parties in connection with the defense of the action, suit,
investigation, inquiry or proceeding, except that (A) the indemnifying party or
parties shall bear the legal and other expenses incurred in connection with the
conduct of the defense as referred to in clause (i) of the proviso to the fourth
preceding sentence and (B) the indemnifying party or parties shall bear such
other expenses as it or they have authorized to be incurred by the indemnified
party or parties. If, within a reasonable time after receipt of the Notice, no
Notice of Defense has been given, the
20
indemnifying party or parties shall be responsible for any legal or other
expenses incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party in
connection with the 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 on the one hand and the Underwriters and the QIU on the other shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of the Stock received by the Company and the total underwriting
discount received by the Underwriters (or other fees, with respect to the QIU),
as set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Stock. Relative fault 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 each indemnifying party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters, together with the QIU, were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to in the first sentence
of this paragraph (d). The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities, or actions in respect thereof,
referred to in the first sentence of this paragraph (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigation, preparing to defend or defending against
any action or claim which is the subject of this paragraph (d). Notwithstanding
the provisions of this paragraph (d), no Underwriter shall be required to
contribute any amount in excess of the underwriting discount applicable to the
Stock purchased by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this paragraph
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
21
(e) The Company will not, without the prior written consent of each
Underwriter and the QIU, 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 such
Underwriter or the QIU or any person who controls such Underwriter or the QIU
within the meaning of Section 15 of the Securities 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 such
Underwriter and the QIU and each such controlling person from all liability
arising out of such claim, action, suit or proceeding.
8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company if after the
date of this Agreement trading in the Common Stock shall have been suspended by
the SEC or NASDAQ, or if there shall have occurred (a) the engagement in
hostilities or an escalation of major hostilities by the United States or the
declaration of war or a national emergency by the United States on or after the
date hereof, (b) any outbreak of hostilities or other national or international
calamity or crisis or change in economic or political conditions if the effect
of such outbreak, calamity, crisis or change in economic or political conditions
in the financial markets of the United States would, in the Underwriters'
reasonable judgment, make the offering or delivery of the Stock impracticable,
(c) suspension of trading in securities generally or a material adverse decline
in the value of securities generally on the New York Stock Exchange, the
American Stock Exchange, or the Nasdaq Stock Market, or limitations on prices
(other than limitations on hours or numbers of days of trading) for securities
on either such exchange or system, (d) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order
of, or commencement of any proceeding or investigation by, any court,
legislative body, agency or other governmental authority which in the
Underwriters' reasonable opinion materially and adversely affects or will
materially or adversely affect the business or operations of the Company, (e)
declaration of a banking moratorium by either federal or New York State
authorities or (f) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in the
Underwriters' reasonable opinion has a material adverse effect on the securities
markets in the United States. If this Agreement shall be terminated pursuant to
this Section 8, there shall be no liability of the Company to the Underwriters
and no liability of the Underwriters to the Company; PROVIDED, HOWEVER, that in
the event of any such termination the Company agrees to indemnify and hold
harmless the Underwriters from all costs or expenses incident to the performance
of the obligations of the Company under this Agreement, including all costs and
expenses referred to in paragraphs (i) and (j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company of all of its obligations to be performed hereunder
at or prior to the Closing Date or the Option Closing Date, as the case may be,
and to the following further conditions:
(a) The Registration Statement shall have become effective; and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
22
(b) The Prospectus shall have been printed and copies distributed to
the Underwriters not later than 10:00 a.m., California time, on the second
business day following the date of this Agreement or at such later date and time
as to which the Underwriters may agree.
(c) The legality and sufficiency of the sale of the Stock hereunder and
the validity and form of the certificates representing the Stock, all corporate
proceedings and other legal matters incident to the foregoing, and the form of
the Registration Statement and of the Prospectus (except as to the financial
statements contained therein), shall have been approved at or prior to the
Closing Date by Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriters.
(d) You shall have received from Wachtell, Lipton, Xxxxx & Xxxx,
counsel for the Company, an opinion addressed to the Underwriters and dated
the Closing Date, covering the matters set forth in Annex A hereto, from
Irell & Xxxxxxx LLP, co-counsel for the Company, an opinion addressed to the
Underwriters and dated the Closing Date, in a form satisfactory to the
Underwriters, and from Flehr Xxxxxxx Test Xxxxxxxxx & Xxxxxxx, LLC,
intellectual property counsel to the Company, an opinion addressed to the
Underwriters and dated the Closing Date, covering the matters set forth in
Annex B hereto; and if Option Stock is purchased at any date after the
Closing Date, additional opinions from each of such counsel, addressed to the
Underwriters and dated the Option Closing Date, confirming that the
statements expressed as of the Closing Date in such opinions remain valid as
of such later date.
(e) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true and
correct and neither the Registration Statement nor the Prospectus omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, respectively, not misleading, (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in such a
supplement or amendment, (iii) since the respective dates as of which
information is given in the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein, there has not
been any Material Adverse Effect whether or not arising from transactions in the
ordinary course of business, and, since such dates, except in the ordinary
course of business, neither the Company nor any of its subsidiaries has entered
into any transaction which could reasonably be expected to have a Material
Adverse Effect and which is not referred to in the Registration Statement in the
form in which it originally became effective and the Prospectus contained
therein, (iv) neither the Company nor any of its subsidiaries has any material
contingent obligations which are not disclosed in the Registration Statement and
the Prospectus, (v) there are not any pending or, to the Company's knowledge,
threatened legal proceedings to which the Company or any of its subsidiaries is
a party or of which property of the Company or any of its subsidiaries is the
subject which could reasonably be expected to have a Material Adverse Effect and
which are not disclosed in the Registration Statement and the Prospectus, (vi)
there are not any franchises, contracts, leases or other documents which are
required to be filed as exhibits to the Registration Statement which have not
been filed as required, (vii) the representations and warranties of the Company
herein are true and correct in all material respects as of the Closing Date and
the Option Closing Date, as the case may be, and (viii) there has not been any
material change in the market for securities in general or in political,
financial or economic conditions from those reasonably foreseeable as to render
it impracticable in your reasonable judgment to make a public offering of the
Stock or a material adverse change in market levels for securities in general
(or those of companies in particular) or financial or economic conditions which
render it
23
inadvisable to proceed with such offering
(f) You shall have received on the Closing Date and on the Option
Closing Date, as the case may be, a certificate, dated the Closing Date or
Option Closing Date, as the case may be, and signed by the Chief Executive
Officer and the Chief Financial Officer of the Company, stating that the
respective signers of said certificate have carefully examined the Registration
Statement in the form in which it originally became effective and the Prospectus
contained therein and any supplements or amendments thereto, and that the
statements included in clauses (i) through (vii) of paragraph (e) of this
Section 9 are true and correct.
(g) You shall have received from Xxxxxx Xxxxxxxx LLP and Deloitte &
Touche LLP letters addressed to the Underwriters and dated the date hereof, the
Closing Date and the Option Closing Date, as the case may be, in each case, in
form and substance satisfactory to the Underwriters (i) confirming that they are
independent public accountants with respect to the Company within the meaning of
the Securities Act and the rules and regulations of the Commission thereunder;
(ii) containing statements and information of the type ordinarily included in
auditors' "comfort letters" to underwriters with respect to financial statements
and certain information of the Company and its subsidiaries contained in the
Registration Statement and the Prospectus; (iii) with respect to the letters
delivered on the Closing Date or the Option Closing Date, as the case may be,
based upon the procedures described in its letter delivered to you concurrently
with the execution of this Agreement (herein called the "Original Letter"), but
carried out to a date not more than three business days prior to the Closing
Date or the Option Closing Date, as the case may be, (A) confirming, to the
extent true, that the statements and conclusions set forth in the Original
Letter are accurate as of the Closing Date and the Option Closing Date, as the
case may be, and (B) setting forth any revisions and additions to the statements
and conclusions set forth in the Original Letter which are necessary to reflect
any changes in the facts described in the Original Letter since the date of the
Original Letter or to reflect the availability of more recent financial
statements, data or information; (iv) confirming that the underlying
information, determinations, estimates and assumptions contained in the section
of the Prospectus entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" provide a reasonable basis for the
statements contained therein; and (v) addressing other matters agreed upon by
Xxxxxx Xxxxxxxx LLP, Deloitte & Touche LLP and you. The letters shall not
disclose any change, or any development involving a prospective change, in or
affecting the business or properties of the Company or any of its subsidiaries
which, in your sole judgment, makes it impractical or inadvisable to proceed
with the public offering of the Stock or the purchase of the Option Stock as
contemplated by the Prospectus.
(h) You shall have received from Xxxxxx Xxxxxxxx LLP a letter addressed
to the Company and made available to you and your counsel for the use of the
Underwriters stating that their review of the Company's system of internal
accounting controls, to the extent they deemed necessary in establishing the
scope of their examination of the Company's consolidated financial statements as
of June 30, 2000, did not disclose any weaknesses in internal controls that they
considered to be material weaknesses.
(i) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several jurisdictions,
or other evidence satisfactory to you, of
24
the qualification referred to in paragraph (f) of Section 6 hereof.
(j) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly authorized for listing by the Nasdaq National
Market System upon official notice of issuance.
(k) On or prior to the Closing Date, you shall have received from all
directors, officers, and holders of 98% of all shares of Common Stock and any
options or similar rights to purchase Common Stock, executed lock-up agreements
in the form of Annex C attached hereto, which shall be reasonably satisfactory
to Chase Securities Inc.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the
Underwriters, shall be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; PROVIDED,
HOWEVER, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein, to fulfill any of the conditions herein, or to comply with any
provision hereof 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 transactions
contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of the
Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company by giving notice
to you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; PROVIDED,
HOWEVER, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other
obligations under Section 7 of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis the
25
Underwriters for all reasonable legal and other expenses incurred in connection
with investigating or defending any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in paragraph (a) of Section 7 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 11 and the
possibility that such payments might later be held to be improper; PROVIDED,
HOWEVER, that (a) to the extent any such payment is ultimately held to be
improper, the persons receiving such payments shall promptly refund them and (b)
such persons shall provide to the Company, upon request, reasonable assurances
of their ability to effect any refund, when and if due.
12. DIRECTED SHARE PROGRAM. It is understood that approximately 270,000
shares of the Underwritten Stock ("Directed Shares") will initially be reserved
by the Underwriters for offer and sale upon the terms and conditions set forth
in the Prospectus and in accordance with the rules and regulations of the NASD
(the "Directed Share Program") to directors, officers, employees, business
associates and related persons of the Company ("Directed Share Participants")
who have heretofore delivered to you offers to purchase shares of Underwritten
Stock in form satisfactory to you, and that any allocation of such Underwritten
Stock among such persons will be made in accordance with timely directions
received by you from the Company. Under no circumstances will any Underwriter be
liable to the Company or to any Directed Share Participant for any action taken
or omitted to be taken in good faith in connection with such Directed Share
Program. It is further understood that to the extent that any Directed Shares
are not affirmatively reconfirmed for purchase by any Directed Share Participant
on or immediately after the date of this Agreement, such Directed Shares may be
offered to the public as part of the public offering contemplated hereby.
The Company agrees to pay all fees and disbursements incurred by the
Underwriters in connection with the Directed Share Program, including counsel
fees and any stamp duties or other taxes incurred by the Underwriters in
connection with the Directed Share Program.
In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon a request in writing, to indemnify and hold
harmless the Underwriters from and against any loss, claim, damage, expense,
liability or action which (i) arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
material prepared by or with the approval of the Company for distribution to
Directed Share Participants in connection with the Directed Share Program or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
arises out of the failure of any Directed Share Program participant to pay for
and accept delivery of Directed Shares that the Directed Share Participant
agreed to purchase, (iii) arises out of the failure of any Directed Share
Participant that is also an employee of the Company to pay for and accept
delivery by the end of the first day after the date of this Agreement any
Directed Shares that were allocated to such employee Directed Share Participant
or (iv) is otherwise related to the Directed Share Program, other than losses,
claims, damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted directly from the bad faith or gross
negligence of such Underwriter.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company and the several Underwriters and, with
respect to the provisions of Section 7 hereof, the several parties (in addition
to the Company and the several Underwriters)
26
indemnified under the provisions of said Section 7, and their respective
personal representatives, successors and assigns. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation
any legal or equitable remedy or claim under or in respect of this Agreement or
any provision herein contained. The term "successors and assigns" as herein used
shall not include any purchaser, as such purchaser, of any of the Stock from any
of the several Underwriters.
14. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Chase Securities Inc., Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, with a copy, which shall not constitute notice,
to Xxxxxxx Xxxxxxx & Xxxxxxxx, 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx, XX
00000, Attention: Xxxxxxx Xxxxxxxxx, Esq.; and if to the Company, shall be
mailed, telegraphed or delivered to it at its office, 0000 Xxxxxxxx Xxxxxx, Xxxx
Xxxx, Xxxxxxxxxx 00000, Attention: Corporate Secretary, with a copy to Wachtell,
Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, 00x Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxxx X. Xxxxxxx, Esq. All notices given by telegraph shall be
promptly confirmed by letter.
15. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers, and (c) delivery and payment for the
Stock under this Agreement; PROVIDED, HOWEVER, that if this Agreement is
terminated prior to the Closing Date, the provisions of paragraphs (k), (l) and
(m) of Section 6 hereof shall be of no further force or effect.
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.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
WJ COMMUNICATIONS, INC.
By ___________________________
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
CHASE SECURITIES INC.
CIBC WORLD MARKETS CORP.
XXXXXX XXXXXX PARTNERS LLC
By Chase Securities Inc.
By __________________________
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
SCHEDULE I
UNDERWRITERS
NUMBER OF SHARES
UNDERWRITERS TO BE PURCHASED
------------ ----------------
Chase Securities Inc. .......................................
CIBC World Markets Corp......................................
Xxxxxx Xxxxxx Partners LLC...................................
Total............................................
----------------
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF
WACHTELL, LIPTON, XXXXX & XXXX,
COUNSEL FOR THE COMPANY
(i) We have been advised by the staff of the Commission that the
Registration Statement was declared effective under the Securities Act as of
____ [a.m./p.m.] on August __, 2000 and, to such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement or suspending
or preventing the use of the Prospectus is in effect and no proceedings for that
purpose have been instituted or are pending by the Commission;
(ii) the Registration Statement and the Prospectus (except as to the
financial statements, 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 requirements of the Securities Act and
the rules and regulations of the Commission thereunder; and
(iii) the Company is not, and upon receipt and pending payment of the
net proceeds from the sale of Stock to be sold by the Company in the manner
described in the Prospectus, will not be an "investment company" within the
meaning of such term under the Investment Company Act and the rules and
regulations of the Commission thereunder.
Such counsel shall also state that it has no reason to believe that the
Registration Statement (except as to the financial statements and schedules and
other financial data contained therein, as to which such counsel need not
express any opinion or belief) at the Effective Date contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus (except as to the financial statements and schedules and
other financial data contained therein, as to which such counsel need not
express any opinion or belief) as of its date or at the Closing Date (or at the
Option Closing Date, as the case may be) contained or contains 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 light of the circumstances
under which they were made, not misleading.
ANNEX B
MATTERS TO BE COVERED IN THE OPINION OF
FLEHR XXXXXXX TEST XXXXXXXXX & XXXXXXX, LLC,
INTELLECTUAL PROPERTY COUNSEL FOR THE COMPANY
Such counsel is familiar with the technology used by the Company in its
business and the manner of its use thereof and has read the Registration
Statement and the Prospectus, including particularly the portions of the
Registration Statement and the Prospectus referring to issued and pending
patents, trade secrets, trademarks, copyrights or other proprietary processes,
technology, information and materials and:
(i) such counsel has no reason to believe that the
Registration Statement or the Prospectus (A) contains any untrue
statement of a material fact with respect to issued and pending
patents, trade secrets, trademarks, copyrights or other proprietary
processes, technology, information and materials owned or used by the
Company or any of its subsidiaries, or the manner of their use
thereof, or any allegation on the part of any person that the Company
or any of its subsidiaries is infringing any patent rights, trade
secrets, trademarks, copyrights or other proprietary processes,
technology, information and materials of any such person which could
reasonably be expected to have a Material Adverse Effect or (B) omits
to state any material fact relating to issued and pending patents,
trade secrets, trademarks, copyrights or other proprietary processes,
technology, information and materials owned or used by the Company or
any of its subsidiaries, or the manner of its use thereof, or any
allegation of which such counsel has knowledge, that is required to be
stated in the Registration Statement or the Prospectus or is necessary
to make the statements therein not misleading;
(ii) The statements in the Registration Statement and the
Prospectus under the headings "Risk Factors -- Our business is subject
to the risks of product returns, product liability and product
defects." "-- Infringement of our proprietary rights could affect our
competitive position, harm our reputation or cost us money." and "--
Claims that we are infringing third-party intellectual property rights
may result in costly litigation." and "Business -- Intellectual
Property," to such counsel's knowledge and belief, are accurate and
complete statements or summaries of the matters therein set forth and
nothing has come to such counsel's attention that causes such counsel
to believe that the above-described portions of the Registration
Statement and the Prospectus contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(iii) to such counsel's knowledge there are no legal or
governmental proceedings pending relating to patent rights, trade
secrets, trademarks, copyrights or
B-2
other proprietary processes, technology, information and materials of
the Company or any of its subsidiaries, and to such counsel's
knowledge no such proceedings are threatened or contemplated by
governmental authorities or others;
(iv) such counsel does not know of any contracts or other
documents, relating to governmental regulation affecting the Company
or any of its subsidiaries or the Company's or any of its
subsidiaries' issued and pending patents, trade secrets, trademarks,
copyrights or other proprietary processes, technology, information and
materials of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement or the Prospectus that are not filed or described as
required;
(v) to such counsel's knowledge, neither the Company nor any
of its subsidiaries is infringing or otherwise violating any patents,
trade secrets, trademarks, copyrights or other proprietary processes,
technology, information and materials, of others, and, to such
counsel's knowledge there are no infringements by others of any of the
Company's patents, trade secrets, trademarks, copyrights or other
proprietary processes, technology, information and materials which in
the judgment of such counsel could affect materially the use thereof
by the Company; and
(vi) to such counsel's knowledge, except where the failure to
do so would not reasonably be expected to result in Material Adverse
Effect, the Company and its subsidiaries own or possess sufficient
licenses or other rights to use all issued and pending patents, trade
secrets, trademarks, copyrights or other proprietary processes,
technology, information and materials necessary to conduct the
business now being or proposed to be conducted by the Company and its
subsidiaries as described in the Prospectus.
ANNEX C
FORM OF LOCK-UP AGREEMENT
Chase Securities Inc.
CIBC World Markets Corp.
Xxxxxx Xxxxxx Partners LLC
As Representatives of the
Several Underwriters
c/o Chase Securities Inc.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned is a shareholder of WJ Communications, Inc. (the "Company") and
wishes to facilitate the public offering (the "Offering") of Common Stock of the
Company ("Common Stock") pursuant to a Registration Statement on Form S-1 (the
"Registration Statement") to be transmitted for filing with the Securities and
Exchange Commission on or about June 2, 2000.
In consideration of the foregoing, and in order to induce you to act as
underwriters in the Offering, the undersigned hereby irrevocably agrees that it
will not, directly or indirectly, sell, offer, contract to sell, transfer the
economic risk of ownership in, make any short sale, pledge or otherwise dispose
of any shares of Common Stock or any securities convertible into or exchangeable
or exercisable for or any other rights to purchase or acquire Common Stock,
without the prior written consent of Chase Securities Inc. acting alone or of
each of the Representatives of the Underwriters acting jointly, for a period of
180 days from the effective date of the Registration Statement.
Notwithstanding the foregoing, (a) the undersigned may transfer its shares of
Common Stock in connection with a sale of control of the Company and (b) if the
undersigned is an individual, he or she may transfer any shares of Common Stock
or securities convertible into or exchangeable or exercisable for the Company's
Common Stock either during his or her lifetime or on death by will or intestacy
to his or her immediate family or to a trust the beneficiaries of which are
exclusively the undersigned and/or a member or members of his or her immediate
family; provided, however, that in the case of (a) the undersigned or the
Company gives notice to Chase Securities Inc. in writing of its intention to
engage in such a sale of control of the Company, and that in the case of (a) to
the extent that the Company remains a publicly traded company after
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such sale of control, and (b), prior to any such transfer each transferee shall
execute an agreement, satisfactory to Chase Securities Inc., pursuant to which
each transferee shall agree to receive and hold such shares of Common Stock, or
securities convertible into or exchangeable or exercisable for the Common Stock,
subject to the provisions hereof, and there shall be no further transfer except
in accordance with the provisions hereof. For the purposes of this paragraph,
"immediate family" shall mean spouse, lineal descendant, father, mother, brother
or sister of the transferor.
The undersigned hereby waives any rights of the undersigned to sell shares of
Common Stock or any other security issued by the Company pursuant to the
Registration Statement, and acknowledges and agrees that for a period of 180
days from the effective date of the Registration Statement the undersigned has
no right to require the Company to register under the Securities Act of 1933, as
amended, such Common Stock or other securities issued by the Company and
beneficially owned by the undersigned.
The undersigned understands that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns. The undersigned agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of Common Stock or other securities of the Company held by
the undersigned except in compliance with this agreement.
Very truly yours,
Dated: ________________________ ____________________________________
Signature
____________________________________
Printed Name and Title
