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EXHIBIT 1.1
NOVELLUS SYSTEMS, INC.
3,860,000 Shares(1)
COMMON STOCK
UNDERWRITING AGREEMENT
February 24, 0000
XXXXXXXXX & XXXXX LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Novellus Systems, Inc., a California corporation (herein called the
Company), proposes to issue and sell 3,860,000 shares of its authorized but
unissued Common Stock, no par value (herein called the Common Stock, said
3,860,000 shares of Common Stock being herein called the Underwritten Stock).
The Company proposes to grant to you, the Underwriter, an option to purchase up
to 579,000 additional shares of Common Stock (herein called the Option Stock and
with the Underwritten Stock herein collectively called the Stock) solely to
cover over-allotments. The Common Stock is more fully described in the
Registration Statement and the Prospectus hereinafter mentioned. Capitalized
terms used herein without definition have the respective meanings specified in
the Prospectus. The Company hereby confirms the agreements made with respect to
the purchase of the Stock by you.
1. REGISTRATION STATEMENT. The Company has filed with the Securities and
Exchange Commission (herein called the Commission) a registration statement on
Form S-3 (No. 333-48037), including the related Base Prospectus (as hereinafter
defined), for
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(1) Plus an option to purchase from the Company up to 579,000 additional
shares to cover over-allotments.
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the registration under the Securities Act of 1933, as amended (herein called the
Securities Act) of the Stock (and certain other securities). Copies of the such
registration statement and of each amendment thereto, if any, including the
related Base Prospectus (meeting the requirements of Rule 430A of the rules and
regulations of the Commission) heretofore filed by the Company with the
Commission have been made available to you.
Such registration statement, dated May 13, 1998, has been declared
effective by the Commission and, as amended through the date hereof, including
the information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Act, is hereinafter
referred to as the "Registration Statement." The prospectus contained in the
Registration Statement at the time that the Registration Statement first became
effective is hereinafter referred to as the "Base Prospectus"; and the
prospectus supplement specifically relating to the offer and sale of the Stock
in the form as filed with the Commission and used to confirm the sale of Stock
is hereinafter referred to as the "Prospectus Supplement." The term "Prospectus"
means the Base Prospectus and the Prospectus Supplement. The Registration
Statement and the Prospectus shall include, in each case, all exhibits and
schedules thereto and the documents incorporated therein by reference. The terms
"supplement" and "amendment" or "amend" as used in this Agreement with respect
to the Registration Statement or the Prospectus shall include all documents
subsequently filed by the Company with the Commission pursuant to the Securities
Act of 1934, as amended, and the rules and regulations of the Commission
thereunder (herein called the Exchange Act) that are deemed to be incorporated
by reference in the Registration Statement and the Prospectus.
The Registration Statement has been declared effective under the
Securities Act, and, other than a post-effective amendment filed pursuant to
Rule 424(b)(3) under the Securities Act, on June 19, 1998, 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 the
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.
(a) The Company hereby represents and warrants as follows:
(i) Each of the Company and its material subsidiaries has
been duly incorporated and is validly existing as a corporation
in good
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standing, with respect to those subsidiaries incorporated under
the laws of the United States, 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
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).
(ii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has
not been any materially adverse change in the business,
properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
other than as set forth in the Registration Statement and the
Prospectus, and since such dates, except in the ordinary course
of business, neither the Company nor any of its subsidiaries has
entered into any material transaction not referred to in the
Registration Statement or the Prospectus.
(iii) The Prospectus and Registration Statement, as
originally filed or as part of any amendment thereto and filed
pursuant to Rule 424, including without limitation Rule 415,
under the Act, complied when so filed in all material respects
with the Securities Act. The Registration Statement and the
Prospectus comply, and on the Closing Date (as hereinafter
defined) and any later date on which Option Stock is to be
purchased, the Prospectus will comply, in all material respects,
with the provisions of the Securities Act and the Exchange Act;
on the date when declared effective by the Commission (herein
called 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 the Prospectus as of the dates thereof did not and, on the
Closing Date and any later date on which Option Stock is to be
purchased, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements
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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 (iii) shall
apply to statements in, or 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 the Underwriter for use in the
Registration Statement or the Prospectus.
(iv) The authorized capital stock of the Company consists
of 10,000,000 shares of Preferred Stock, none of which are
outstanding, and 80,000,000 shares of Common Stock, no par value,
of which there are outstanding 38,742,302 shares (including the
Underwritten Stock plus the number of shares of Option Stock, if
any, issued on the date hereof, as of close of business on
February 23, 1999); proper corporate proceedings have been taken
validly to authorize such authorized capital stock; all of the
shares of such capital stock outstanding prior to the issuance of
the Stock have been duly and validly issued and are fully paid
and nonassessable; all outstanding shares of capital stock and
options and other rights to acquire capital stock have been
issued in compliance with the registration and qualification
provisions of all applicable securities laws, as applicable, and
were not issued in violation of any preemptive rights, rights of
first refusal or other similar rights; and no preemptive rights
of, or rights of refusal exist with respect to the Stock, or the
issue and sale thereof, pursuant to the Restated Articles of
Incorporation or Bylaws of the Company, and there are no
contractual or statutory preemptive rights that have not been
waived, rights of first refusal or rights of co-sale which exist
with respect to the issue and sale of the Stock; except as
described in the Prospectus, there are no options (other than
options issued pursuant to the Company's existing stock option
plans), warrants or other rights to purchase, agreements to issue
or other rights to convert any obligations into shares of capital
stock of the Company or any of its subsidiaries;
(v) All of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned,
directly or indirectly, by the Company, free and clear of any
security interest, lien, encumbrance, equity, claim or adverse
interest of any nature;
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(vi) The Stock, when issued and sold to the Underwriter as
provided herein, will be duly and validly issued, fully paid and
nonassessable and conform to the description thereof in the
Prospectus. 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 by the Company, as contemplated
herein.
(vii) The Company and each of its subsidiaries own or
possess valid licenses or other rights to use all patents, patent
rights, inventions, trade secrets, copyrights, trademarks,
service marks, trade names, technology and know-how (herein
called Intellectual Property) currently employed by them in
connection with their business as currently conducted and as
described in the Prospectus. Except as disclosed in the
Prospectus, neither the Company nor any of its subsidiaries has
received any notice of infringement or conflict with (and neither
the Company nor any of its subsidiaries knows of any infringement
or conflict with) asserted rights of others with respect to any
Intellectual Property that is reasonably likely to have a
material adverse effect on the Company and its subsidiaries,
taken as a whole. The discoveries, inventions, products or
processes of the Company and its subsidiaries referred to in the
Prospectus do not, to the Company's knowledge, infringe or
conflict with any right or patent of any third party, or any
discovery, invention, product or process that is the subject of a
patent application filed by any third party, that could have a
material adverse effect on the Company and its subsidiaries,
taken as a whole, except as disclosed in the Prospectus.
(viii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except such
as have been obtained under the Securities Act and such as may be
required under state securities or blue sky laws in connection
with the purchase and distribution of the Stock by the
Underwriter.
(ix) All outstanding shares of Common Stock held by
officers, directors, and all securities convertible into or
exercisable or exchangeable for Common Stock, are subject to
valid, binding and enforceable agreements (herein called the
Lock-up Agreements) that restrict the holders thereof from
selling, making any short sale of, granting any
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option for the purchase of, or otherwise transferring or
disposing of, any of such shares of Common Stock, or any such
securities convertible into or exercisable or exchangeable for
Common Stock, for a period of 90 days after the date of the
Prospectus without the prior written consent of Xxxxxxxxx & Xxxxx
LLC.
(x) The schedules of backlog to be provided to counsel for
the Underwriter accurately reflects, in all material respects,
the backlog of the Company as of December 30, 1998 and the date
hereof, subject to the qualifications and limitations specified
therein.
(xi) Except as to defaults which individually or in the
aggregate would not have a material adverse effect on the
business, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, neither the
Company nor any of its subsidiaries is in violation of any
provision of its Restated Articles of Incorporation or Bylaws or
other organizational documents nor is the Company or any of its
subsidiaries (or to the Company's knowledge any other party) in
breach of or default with respect to any provision of any
agreement, judgment, decree, order, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument
to which it is a party or by which it or any of its properties
are bound; and to the Company's knowledge, there does not exist
any state of facts which constitutes an event of default on the
part of the Company or any such subsidiary as defined in such
documents or which, with notice or lapse of time or both, would
constitute such an event of default.
(xii) There are no franchises, contracts, leases or
documents which are of a character required to be described in
the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement, which are not described
and filed as required; the franchises, contracts, leases and
documents so described in the Prospectus (assuming due
authorization, execution and delivery by and enforceability
against the parties thereto, other than the Company) are in full
force and effect on the date hereof;
(xiii) The Company has not been advised, and has no reason
to believe, that either it or any of its subsidiaries is not
conducting business in compliance with all applicable laws, rules
and regulations of the
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jurisdictions in which they are conducting business, including,
without limitation, all applicable local, state and federal
environmental laws and regulations, except where failure to be so
in compliance would not have a material adverse effect on the
business, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
(xiv) This Agreement and the transactions contemplated
herein have been duly and validly authorized by the Company and
this Agreement has been duly and validly executed and delivered
by the Company and is a valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, except (i) to the extent that rights to indemnity
hereunder may be limited by federal or state securities laws or
the public policy underlying such laws; (ii) as may be limited by
applicable bankruptcy, insolvency, reorganization and other laws
affecting creditors' rights; and (iii) as may be limited by
general principles of equity.
(xv) The Common Stock is listed and duly admitted to
trading on the Nasdaq National Market, and the Stock to be issued
and sold by the Company will be authorized for listing by the
Nasdaq National Market upon official notice of issuance.
(xvi) The conditions for use of Form S-3 in effect on the
date hereof and as set forth in this Form prior to October 21,
1992, as set forth in the General Instructions thereto, have been
satisfied.
(xvii) Except as disclosed in the Prospectus and
Registration Statements, there is no litigation or governmental
proceeding to which the Company or any of its subsidiaries is a
party or to which any property of the Company or any of its
subsidiaries is subject or, to the knowledge of the Company,
contemplated against the Company or any of its subsidiaries
which, if determined adversely to the Company or any of its
subsidiaries, could have a material adverse effect on the
condition (financial or other), results of operations, business
or properties of the Company and its subsidiaries taken as a
whole or which is required to be disclosed in the Prospectus.
(xviii)The Company has not taken and will not take,
directly or indirectly, any action designed to cause or result
in, or which constituted
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or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Stock.
(xix) The consolidated financial statements, including the
notes thereto, and supporting schedules incorporated by reference
into the Registration Statement and the Prospectus present
fairly, in all material respects, the financial position of the
Company and its subsidiaries as of the dates indicated and the
results of its operations for the periods specified.
(xx) Except as described in the Prospectus or as validly
waived or satisfied, no holder of securities of the Company has
any rights to the registration of securities of the Company
because of the filing of the Registration Statement or otherwise
in connection with the sale of the Stock contemplated hereby.
(xxi) The Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax
returns and have paid all taxes required to be paid by them; and
there is no tax deficiency that has been, or to the knowledge of
the Company is reasonably likely to be, asserted against the
Company, any of its subsidiaries or any of their respective
properties or assets that would materially and adversely affect
the financial position, business or operations of the Company and
its subsidiaries taken as a whole.
3. PURCHASE OF THE STOCK BY THE UNDERWRITER.
(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 3,860,000 shares of the Underwritten Stock to the Underwriter and
the Underwriter agrees to purchase from the Company such shares of Underwritten
Stock. The price at which such shares of Underwritten Stock shall be sold by the
Company and purchased by the Underwriter shall be $66.15 per share. The
obligation of the Underwriter to the Company shall be to purchase from the
Company all such shares of the Underwritten Stock.
(b) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company
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grants an option to the Underwriter to purchase, up to 579,000 shares in the
aggregate of the Option Stock from the Company at the same price per share as
the Underwriter 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 Underwriter and may be exercised in whole or in part at any time (but not
more than once) 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 Underwriter is
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 the Underwriter shall be the
total number of shares of the Option Stock elected to be purchased by the
Underwriter, pursuant to the exercise of the option.
4. OFFERING BY UNDERWRITER.
(a) The terms of the public offering by the Underwriter of the
Stock to be purchased shall be as set forth in the Prospectus. The Underwriter
may from time to time change the public offering price after the closing of the
public offering and increase or decrease the concessions and discounts to
dealers as they may determine.
(b) The information set forth under "Underwriting" in the
Prospectus relating to the Stock filed by the Company (insofar as such
information relates to the Underwriter) constitutes the only information
furnished by the Underwriter to the Company for inclusion in the Prospectus, and
you 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(b) hereof shall
have been exercised not later than 7:00 A.M., San Francisco time, on the date
two business days preceding the Closing Date), and payment therefor, shall be
made at the office of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, at 7:00 a.m.,
San Francisco 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 are herein called the
Closing Date.
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(b) If the option granted by Section 3(b) hereof shall be
exercised after 7:00 a.m., San Francisco 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 Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, at 7:00 a.m., San Francisco time, on the third
business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company by federal
wire transfer of funds to the Company's designated account. Such payment shall
be made upon delivery of certificates for the Stock to you 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 before the Closing Date, in the case of
Underwritten Stock, and at least one business day prior to the purchase thereof,
in the case of the Option Stock. Such certificates will be made available to the
Underwriter for inspection, checking and packaging at the offices of Lewco
Securities Corporation, 0 Xxxxxxxx, 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., New
York time, on the business day preceding the date of purchase.
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), the Prospectus Supplement 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 or the
rules and regulations of the Commission.
(b) The Company will promptly notify the 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
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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 any post-effective amendment to the Registration
Statement made in connection with the transactions contemplated hereunder and
will also deliver to you a conformed copy of the Registration Statement, as
originally filed and of each amendment thereto filed prior to the time the
Registration Statement becomes effective (together with, in each case, all
exhibits thereto unless previously furnished to you), (ii) as promptly as
possible deliver to you 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 the Underwriter or dealer, likewise send to the Underwriter 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 the 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 Underwriter, to supplement or
amend the Prospectus in order to make the Prospectus not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser of the
Stock, 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
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 Underwriter and during such period, the
Underwriter 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 Underwriter 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
Underwriter and all dealers to whom any of the Stock may be sold by the
Underwriter to use the Prospectus, as from time to time amended or supplemented,
in connection
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with the sale of the Stock in accordance with the applicable provisions of the
Securities Act and the applicable rules and regulations 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 the 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, the Company will furnish to you, copies of all periodic and special
reports furnished to shareholders 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 Closing Date, the
Company will make generally available to its security holders 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 National Association of Securities Dealers, Inc. ("NASD") of
the Registration Statement and the Prospectus, (ii) the furnishing to the
Underwriter of copies of any Prospectus required by paragraph (c) of this
Section 6 to be so furnished, (iii) the printing of this Agreement and related
documents delivered to the Underwriter, (iv) the preparation, printing and
filing of all supplements and amendments to the Prospectus referred to in
paragraph (d) of this Section 6, (v) the furnishing to you of the reports and
information referred to in
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paragraph (g) of this Section 6 and (vi) the printing and issuance of stock
certificates, including the transfer agent's fees.
(j) The Company agrees to reimburse you, for your account, for
blue sky fees and related disbursements (including counsel fees and
disbursements and cost of printing memoranda for you) paid by or for your
account or your counsel in qualifying the Stock under state securities or blue
sky laws and in the review of the offering by the NASD.
(k) The provisions of paragraphs (i) and (j) of this Section are
intended to relieve you from the payment of the expenses and costs which the
Company hereby agrees to pay and shall not affect any agreement which the
Company may make, or may have made, for the sharing of any such expenses and
costs.
(l) The Company hereby agrees that, without the prior written
consent of Xxxxxxxxx & Xxxxx LLC, the Company, will not, for a period of 90 days
following the commencement of the public offering of the Stock by the
Underwriter, directly or indirectly, (i) sell, offer, 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 Underwriter pursuant to this Agreement, (B) shares of Common Stock issued by
the Company upon the exercise of options granted under the stock option plans of
the Company (the "Option Plans") or upon the exercise of warrants outstanding as
of the date hereof, and (C) options to purchase Common Stock granted under the
Option Plans.
(m) The Company agrees to use its best efforts to cause all
directors and officers to agree that, without the prior written consent of
Xxxxxxxxx & Xxxxx LLC, such person or entity will not, for a period of 90 days
following the commencement of the public offering of the Stock by the
Underwriter, directly or indirectly, (i) sell, offer, 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
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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.
(n) The Company is familiar with the Investment Company Act of
1940, as amended, and has in the past conducted its affairs, and will in the
future conduct its affairs, in such a manner to ensure that the Company was not
and will not be an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person (including each partner or officer thereof) who
controls the Underwriter 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 the Underwriter 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) or any
post-effective amendment thereto, 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;
provided, however, that (1) 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 the
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Underwriter for use in the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto and (2) the indemnity agreement
contained in this paragraph (a) with respect to any preliminary prospectus shall
not inure to the benefit of the 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 (excluding the documents incorporated
therein by reference) 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.
(b) The Underwriter 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 and each person
(including each partner or officer thereof) who controls the Company 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) or any
post-effective amendment thereto 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
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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 the Underwriter for use in the Registration Statement or the
Prospectus or any such amendment thereof or supplement thereto. The indemnity
agreement of the 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 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
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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. 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 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 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 Underwriter 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 Underwriter, 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
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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 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), the Underwriter shall not be required to contribute any
amount in excess of the aggregate underwriting discount applicable to the Stock
purchased by the 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.
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).
(e) No indemnifying party will, without the prior written consent
of the indemnified party, 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 any person who controls such Underwriter 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 indemnified party 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, or
if there shall
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have occurred (i) 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, (ii) 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 Underwriter's reasonable judgment, make the
offering or delivery of the Stock impracticable, (iii) suspension of trading in
securities generally or a material adverse decline in 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,
(iv) 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 Underwriter's reasonable opinion materially and adversely
affects or will materially or adversely affect the business or operations of the
Company, (v) declaration of a banking moratorium by either federal or New York
State authorities or (vi) the taking of any action by any federal, state or
local government or agency in respect of its monetary or fiscal affairs which in
the Underwriter's 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
Underwriter and no liability of the Underwriter to the Company; provided,
however, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriter 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 UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriter to purchase and pay for the Stock shall be subject to the
performance by the Company of all its respective obligations to be performed
hereunder at or prior to the Closing Date or any later date on which Option
Stock is to be purchased, as the case may be, and to the following further
conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings therefor shall
be pending or threatened by the Commission.
(b) 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
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and other legal matters incident to the foregoing, and the form of the
Prospectus (except as to the financial statements contained therein), shall have
been approved at or prior to the Closing Date by Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, counsel for the Underwriter.
(c) You shall have received from Xxxxxxxx & Xxxxxxxx, LLP,
counsel for the Company, an opinion, addressed to the Underwriter and dated the
Closing Date, covering the matters set forth in Annex A hereto, and if Option
Stock is purchased at any date after the Closing Date, additional opinions from
each such counsel, addressed to the Underwriter and dated such later date,
confirming that the statements expressed as of the Closing Date in such opinions
remain valid as of such later date.
(d) You shall be satisfied that (i) as of the Closing Date and
the date hereof, 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 date hereof, 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 change or any development involving a prospective
material adverse change in or affecting the business, properties, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole, 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 material
transaction 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 known 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 are material 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 or
any later date on which Option Stock is to be purchased, as the case may be, and
(viii) there has not been any material change in the
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21
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 inadvisable
to proceed.
(e) You shall have received on the Closing Date and on any later
date on which Option Stock is purchased a certificate, dated the Closing Date or
such later date, as the case may be, and signed by the President 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 (d) of this Section 9 are true and
correct.
(f) You shall have received from Ernst & Young LLP, a letter or
letters (herein called the Original Letter), addressed to the Underwriter as of
the date hereof stating that they are independent public accountants with
respect to the Company within the meaning of the Securities Act and the
applicable published rules and regulations thereunder and covering such
procedures as are customary for a transaction of this type and such procedures
as you or your counsel shall request, and carried out to a date not more than
three business days prior to the date hereof.
(g) You shall have received from Ernst & Young LLP, a letter or
letters, addressed to the Underwriter and dated the Closing Date and any later
date on which Option Stock is purchased, confirming that they are independent
public accountants with respect to the Company within the meaning of the
Securities Act and the applicable published rules and regulations thereunder and
based upon the procedures described in their Original Letter, but carried out to
a date not more than three business days prior to the Closing Date or such later
date on which Option Stock is purchased (i) confirming, to the extent true, that
the statements and conclusions set forth in the Original Letter are accurate as
of the Closing Date or such later date, as the case may be, and (ii) 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. 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
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offering of the Stock or the purchase of the Option Stock as contemplated by the
Prospectus.
(h) 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 the qualification referred to in
paragraph (f) of Section 6 hereof.
(i) 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 upon official notice of issuance.
(j) On or prior to the Closing Date, you shall have received from
all of the Company's directors and officers agreements, in form reasonably
satisfactory to you, stating that without the prior written consent of Xxxxxxxxx
& Xxxxx LLC on behalf of the Underwriter, such person or entity will not, for a
period of 90- days following the commencement of the public offering of the
Stock by the Underwriter, directly or indirectly, (i) sell, offer, 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.
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 Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for
the Underwriter, 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
Underwriter and without liability of the Underwriter to the Company; provided,
however, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriter 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
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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
Underwriter, the Company will reimburse the Underwriter 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, and any amendments thereto, 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
Underwriter and without liability of the Underwriter to the Company; provided,
however, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriter 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 their other
obligations under Section 7 of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis the Underwriter 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 (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of the Company, and the Underwriter and, with respect to the
provisions of Section 7 hereof, the several parties (in addition to the Company
and the Under-
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writer) 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 the
Underwriter.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriter, shall
be mailed, telegraphed or delivered to Xxxxxxxxx & Xxxxx LLC, Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, with a copy to Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, 000 Xxxxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 Attention: Xxxxxxx
X. Xxxxx; and if to the Company, shall be mailed, telegraphed or delivered to it
at its office, 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxx Xxxxx, with a copy to Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxx Xxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxx. All notices given by
telegraph shall be promptly confirmed by letter.
14. 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 the Underwriter or controlling person thereof, or by or on behalf of
the Company or their respective 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
(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 California.
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Please sign and return to the Company in care of the Company the
enclosed duplicates of this letter, whereupon this letter will become a binding
agreement between the Company and you in accordance with its terms.
Very truly yours,
NOVELLUS SYSTEMS, INC.
By /s/ Xxxxxx X. Xxxxx
------------------------------------
Chief Financial Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
XXXXXXXXX & XXXXX LLC
By /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Managing Director
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ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF XXXXXXXX & XXXXXXXX LLP
COUNSEL FOR THE COMPANY
1. The Company and its substantial subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under the
laws of the State of California, are duly qualified to transact business as
corporations and in good standing in each state of the United States of America
in which their ownership or leasing of property requires such qualification
(except where the failure to be so qualified would not have a material adverse
effect on the business, properties, financial condition or results of operations
of the company and its subsidiaries, taken as a whole) and have full corporate
power and authority to own or lease their properties and conduct their business
as described in the Registration Statement; each of the Company's foreign
substantial subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation ; all the issued and outstanding capital stock of each of the
Company's substantial subsidiaries has been duly authorized and validly issued
and is fully paid and nonassessable, and is owned by the Company free and clear
of all liens, encumbrances and security interests, and to the knowledge of such
counsel, no options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into shares of
capital stock or ownership interests in the substantial subsidiaries are
outstanding;
2. The authorized capital stock of the Company consists of 10,000,000
shares of Preferred Stock, of which there are no shares outstanding, and
80,000,000 shares of Common Stock, no par value, of which there are outstanding
38,742,302 shares (including the Underwritten Stock plus the number of shares of
Option Stock issued on the date hereof); proper corporate proceedings have been
taken validly to authorize such authorized capital stock; all of the outstanding
shares of such capital stock (including the Underwritten Stock and the shares of
Option Stock issued, if any) have been duly and validly issued and are fully
paid and nonassessable; any Option Stock purchased after the Closing Date, when
issued and delivered to and paid for by the Underwriters as provided in the
Underwriting Agreement, will have been duly and validly issued and be fully paid
and nonassessable; and no preemptive rights of, or rights of refusal exist with
respect to the Stock, or the issue and sale thereof, pursuant to the Restated
Articles of Incorporation or Bylaws of the Company and, to the knowledge of such
counsel, there are no contractual preemptive rights that have not
A-1
27
been waived, rights of first refusal or rights of co-sale which exist with
respect to the issue and sale of the Stock; except as set forth in the
Prospectus, to such counsel's knowledge, there are no options, warrants, rights,
agreements or understandings to purchase or acquire any securities of the
Company or its subsidiaries (other than options issued pursuant to the Company's
existing stock option plans).
3. The Registration Statement is effective under the Securities Act and,
to the best of 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 or contemplated by the Commission;
4. As of its effective date, the Registration Statement, and as of the
date of the Prospectus (except as to the financial statements, schedules,
footnotes and other financial data derived therefrom and contained therein, as
to which such counsel need express no opinion), complied as to form in all
material respects with the requirements of the Securities Act, the Exchange Act
and with the rules and regulations of the Commission thereunder;
5. Such counsel have no reason to believe that the Registration
Statement (except as to the financial statements and schedules and other
financial and statistical data derived therefrom and contained or incorporated
by reference 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 and statistical
data derived therefrom and contained or incorporated by reference therein, as to
which such counsel need not express any opinion or belief) as of its date or at
the Closing Date (or any later date on which Option Stock is purchased),
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;
6. The information required to be set forth in the Registration
Statement in answer to Item 10 (insofar as it relates to such counsel) of Form
S-3 is to such counsel's knowledge accurately and adequately set forth therein
in all material respects or no response is required with respect to such Item;
A-2
28
7. Such counsel do not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion of
such counsel are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required or incorporated by
reference;
8. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
9. The issue and sale by the Company of the shares of Stock sold by the
Company as contemplated by the Underwriting Agreement will not conflict with, or
result in a breach of, the Restated Articles of Incorporation or Bylaws of the
Company or, to our knowledge, any agreement or instrument known to such counsel
to which the Company or any of its substantial subsidiaries is a party or any
applicable law or regulation, or so far as is known to such counsel, any order,
writ, injunction or decree, of any jurisdiction, court or governmental
instrumentality, except to the extent such conflict or breach of such
instrument, order, writ, injunction or decree would not have a material adverse
effect on the business or financial condition of the Company and its
subsidiaries taken as a whole;
10. To our knowledge, no holders of securities of the Company have
rights to the registration of shares of Common Stock, or other securities,
because of the filing of the Registration Statement by the Company;
11. No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated in the Underwriting Agreement, except such as have been obtained
under the Securities Act and such as may be required under state securities or
blue sky laws in connection with the purchase and distribution of the Stock by
the Underwriters; and
12. The Stock issued and sold by the Company has been authorized for
listing on the Nasdaq National Market.
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Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States or of the State of California, upon
opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to the
Underwriter and to counsel for the
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Underwriter and the foregoing opinion shall also state that counsel knows of no
reason the Underwriters are not entitled to rely upon the opinions of such local
counsel.
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