1
Exhibit 1.1
Maxtor Corporation
38,000,000 Shares a/
Common Stock
($0.01 par value)
Form of U. S. Underwriting Agreement
New York, New York
o , 1998
Xxxxx Xxxxxx Inc.
Xxxxxxxxx & Xxxxx LLC
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
NationsBanc Xxxxxxxxxx Securities LLC
As U.S. Representatives of the several U.S. Underwriters,
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Maxtor Corporation, a Delaware corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule I hereto (the
"U.S. Underwriters"), for whom you (the "U.S. Representatives") are acting as
representatives, 38,000,000 shares of Common Stock, $0.01 par value ("Common
Stock") of the Company (said shares to be issued and sold by the Company being
hereinafter called the "U.S. Underwritten Securities"). The Company also
proposes to grant to the U.S. Underwriters an option to purchase up to 5,700,000
additional shares of Common Stock to cover over-allotments (the "U.S. Option
Securities"; the U.S. Option Securities, together with the U.S. Underwritten
Securities, being hereinafter called the "U.S. Securities").
It is understood that the Company and Hyundai Electronics America
("HEA"), a stockholder of the Company, are concurrently entering into an
International Underwriting Agreement dated the date hereof (the "International
Underwriting Agreement") providing for the sale by the Company of an aggregate
of 9,500,000 shares of Common Stock (said shares to be issued and sold by the
Company pursuant to the International Underwriting Agreement being hereinafter
called the "International Underwritten Securities"), and providing for the grant
to the
----------
a/ Plus an option to purchase from the Company up to 5,700,000 additional
shares of Common Stock to cover over-allotments.
2
2
underwriters named in Schedule I thereto (the "Managers") of an option to
purchase from the Company up to 1,425,000 additional shares of Common Stock (the
"International Option Securities"; the International Option Securities, together
with the International Underwritten Securities, being hereinafter called the
"International Securities"; and the U.S. Securities, together with the
International Securities, being hereinafter called the "Securities").
It is further understood and agreed that the Managers and the
U.S. Underwriters have entered into an Agreement Between U.S. Underwriters and
Managers dated the date hereof (the "Agreement Between U.S. Underwriters and
Managers"), pursuant to which, among other things, the Managers may purchase
from the U.S. Underwriters a portion of the U.S. Securities to be sold pursuant
to the U.S. Underwriting Agreement and the U.S. Underwriters may purchase from
the Managers a portion of the International Securities to be sold pursuant to
the International Underwriting Agreement. To the extent there are no additional
U.S. Underwriters listed on Schedule I other than you, the term U.S.
Representatives as used herein shall mean you, as U.S. Underwriters, and the
terms U.S. Representatives and U.S. Underwriters shall mean either the singular
or plural as the context requires. The use of the neuter in this Agreement shall
include the feminine and masculine wherever appropriate. Certain terms used
herein are defined in Section 17 hereof.
1. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, each
U.S. Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-56099) on Form S-1, including
the related Preliminary Prospectuses, for registration under the Act of
the offering and sale of the Securities. The Company may have filed one
or more amendments thereto, including the related Preliminary
Prospectuses, each of which has previously been furnished to you. The
Company will next file with the Commission either (1) prior to the
Effective Date of such registration statement, a further amendment to
such registration statement (including the form of the final
Prospectuses) or (2) after the Effective Date of such registration
statement, a final prospectus in accordance with Rules 430A and 424(b).
In the case of clause (2), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to
be included in such registration statement and the Prospectuses. As
filed, such amendment and form of final Prospectuses, or such final
Prospectuses, shall contain all Rule 430A Information, together with all
other such required information, and, except to the extent the U.S.
Representatives shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other
changes (beyond that contained in the latest U.S. Preliminary
Prospectus) as the Company has advised you, prior to the Execution Time,
will be included or made therein.
3
3
It is understood that two forms of prospectus are to be used in
connection with the offering and sale of the Securities: one form of
prospectus relating to the U.S. Securities, which are to be offered and
sold to United States and Canadian Persons, and one form of prospectus
relating to the International Securities, which are to be offered and
sold to persons other than United States and Canadian Persons. The two
forms of prospectus are identical except for the outside front cover
page, the discussion under the heading "Underwriting" and the outside
back cover page. Such form of prospectus relating to the U.S. Securities
as first filed pursuant to Rule 424(b) after the Execution Time or, if
no filing pursuant to Rule 424(b) is made, such form of prospectus
included in the Registration Statement at the Effective Date, is
hereinafter called the "U.S. Prospectus"; such form of prospectus
relating to the International Securities as first filed pursuant to Rule
424(b) after the Execution Time or, if no filing pursuant to Rule 424(b)
is made, such form of prospectus included in the Registration Statement
at the Effective Date, is hereinafter called the "International
Prospectus"; and the U.S. Prospectus and the International Prospectus
are hereinafter collectively called the "Prospectuses".
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectuses are first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any date on which U.S. Option Securities are purchased, if such
date is not the Closing Date (a "settlement date"), each Prospectus (and
any supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and the rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement did
not or 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 therein not misleading; and, on the
Effective Date, each Prospectus, if not filed pursuant to Rule 424(b),
will not, and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date and any settlement date, each Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the
Prospectuses (or any supplement thereto) in reliance upon and in
conformity with information furnished herein or in writing to the
Company by or on behalf of any U.S. Underwriter through the U.S.
Representatives specifically for inclusion in the Registration Statement
or the Prospectuses (or any supplement thereto).
(c) Each of the Company and Maxtor Asia Pacific Limited, Maxtor
Disc Drives Pty. Limited, Maxtor Europe GmbH, Maxtor Europe Limited,
Maxtor Europe SARL, Maxtor (Japan) Limited, Maxtor Korea Limited, Maxtor
Ireland Limited, Maxtor Peripherals (S) Pte. Limited, Maxtor Receivables
Corporation, Maxtor Sales Private Limited, Maxtor (Thailand) Limited and
Old SDI Sub (each a "Subsidiary" and collectively the "Subsidiaries")
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized with full corporate power and authority to own or
lease, as the case may be,
4
4
and to operate its properties and conduct its business as described in
the Prospectuses, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification except to the extent that the failure
to be so qualified or be in good standing could not reasonably be
expected to have a Material Adverse Effect (as defined herein).
(d) All the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and all outstanding shares of capital
stock of the Subsidiaries are owned by the Company either directly or
through wholly owned Subsidiaries free and clear of any perfected
security interest or any other security interests, claims, liens or
encumbrances.
(e) The Company's authorized equity capitalization is as set
forth in the Prospectuses; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectuses; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
U.S. Securities being sold hereunder by the Company have been duly and
validly authorized, and, when issued and delivered to and paid for by
the U.S. Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the U.S. Securities being sold hereunder are duly listed,
and admitted and authorized for trading, subject to official notice of
issuance, on the Nasdaq National Market; the certificates for the U.S.
Securities are in valid and sufficient form; the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the U.S. Securities; and, except as set
forth in the Prospectuses, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to convert
any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding.
(f) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectuses, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Prospectuses
under the headings "Risk Factors--Limited Protection of Intellectual
Property; Risk of Third Party Claims of Infringement", "Relationship
Between the Company and HEA", "Business--Intellectual Property",
"Description of Capital Stock", "Shares Eligible for Future Sale",
"Certain Transactions" and "Certain United States Federal Tax
Consequences to Holders of Common Stock" insofar as such statements
summarize legal matters, agreements, documents, or proceedings discussed
therein, are accurate and fair summaries of such legal matters,
agreements, documents or proceedings.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company, enforceable in accordance with its terms, except (i) as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles and (ii) to
5
5
the extent that rights to indemnity or contribution under this Agreement
may be limited by Federal and state securities laws or the public policy
underlying such laws.
(h) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectuses, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated herein,
except such as have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the U.S. Securities by the U.S.
Underwriters in the manner contemplated herein and in the Prospectuses.
(j) Neither the issue and sale of the U.S. Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, or result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any Subsidiaries pursuant
to, (i) the charter or by-laws of the Company or any Subsidiaries, (ii)
the terms of any material indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other material agreement,
obligation, condition, covenant or instrument to which the Company or
any Subsidiary is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any Subsidiary of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any Subsidiary
or any of its or their properties.
(k) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement which
have not been waived in writing prior to the Execution Time.
(l) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries included in
the Prospectuses and the Registration Statement present fairly in all
material respects the financial condition, results of operations and
cash flows of the Company as of the dates and for the periods indicated,
comply as to form with the applicable accounting requirements of the Act
and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved
(except as otherwise noted therein). The selected financial data set
forth under the caption "Selected Consolidated Financial Data" in the
Prospectuses and Registration Statement fairly present, on the basis
stated in the Prospectuses and the Registration Statement, the
information included therein.
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiaries or its or their property is pending or, to
the knowledge of the Company, threatened that (i) could
6
6
reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected to
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and the Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business (a "Material Adverse
Effect"), except as set forth in or contemplated in the Prospectuses
(exclusive of any supplement thereto).
(n) Each of the Company and the Subsidiaries owns, leases or has
sufficient rights to use all such properties as are necessary to the
conduct of its operations as presently conducted.
(o) Neither the Company nor any Subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms of
any material indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other material agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or such subsidiary or any of its
properties, as applicable, the violation of which could reasonably be
expected to have a Material Adverse Effect.
(p) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectuses, and
Ernst & Young LLP, who have certified certain financial statements of
the Company and its consolidated subsidiaries and delivered their report
with respect to the audited consolidated financial statements included
in the Prospectuses, are each independent public accountants with
respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
(q) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance and sale by the Company of
the U.S. Securities.
(r) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not
have a Material Adverse Effect) and has paid all taxes required to be
paid by it and any other assessment, fine or penalty levied against it,
to the extent that any of the foregoing is due and payable, except for
any such assessment, fine or penalty that is currently being contested
in good faith or as could not reasonably be expected to have a Material
Adverse Effect.
7
7
(s) No labor problem or dispute with the employees of the Company
or any Subsidiary exists or, to the knowledge of the Company, is
threatened or imminent, that could, in any such case, reasonably be
expected to have a Material Adverse Effect.
(t) The Company and each Subsidiary carry, or are entitled to the
benefits of, insurance (including self-insurance) in such amounts and
covering such risks as are prudent and customary in the businesses in
which they are engaged and all such insurance is, and after consummation
of the transactions contemplated herein will be, in full force and
effect; and neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that could not reasonably be expected to have a Material Adverse
Effect.
(u) No Subsidiary is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any
other distribution on such Subsidiary's capital stock, from repaying to
the Company any loans or advances to such Subsidiary from the Company or
from transferring any of such Subsidiary's property or assets to the
Company or any other Subsidiary, except for any requirements under the
laws of the jurisdictions in which any Subsidiary is organized that
corporations organized in such jurisdictions maintain specified levels
of capital or statutory reserves.
(v) The Company and the Subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses as presently conducted except where the
failure to possess such licenses, certificates, permits or
authorizations would not have a Material Adverse Effect, and neither the
Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any such license,
certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to have a Material Adverse Effect.
(w) The Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(x) Neither the Company nor its affiliated purchasers, as defined
in Rule 100 of Regulation M ("Regulation M") under the Exchange Act,
either alone or with one or more other persons, (i) has taken, either
directly or indirectly, any action which was
8
8
designed to cause or result in, or which has constituted, or which might
reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company ("Subject
Securities") in connection with the offering of the Securities or (ii)
will bid for or purchase any Subject Securities of the Company or any
other covered securities (within the meaning of Regulation M) relating
to the Subject Securities (together with Subject Securities, "Covered
Securities"), or attempt to induce any person to bid for or purchase any
Covered Securities, in either case, for the purpose of creating actual
or apparent active trading in, or raising the price of the Securities.
(y) The Company and the Subsidiaries (i) are in material
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses as presently conducted and (iii) have not received
notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances
or wastes, pollutants or contaminants, except where such non-compliance
with Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any
Subsidiary has been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended.
(z) Each of the Company and the Subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx 000
xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in Section 3(3) of ERISA and
such regulations and published interpretations) in which employees of
the Company or any of the Subsidiaries are eligible to participate. Each
such plan is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations, except where the failure to so comply could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. Neither the Company nor any of the Subsidiaries
has incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary
course) or to any such plan under Title IV of ERISA.
(aa) Maxtor Peripherals (S) Pte. Limited ("Maxtor Singapore") is
the only Subsidiary that reasonably could be deemed to be a "significant
subsidiary" of the Company within the meaning of Rule 11-02(w) of
Regulation S-X under the Act.
(bb) The Company and the Subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the
9
9
"Intellectual Property") necessary for the conduct of their respective
businesses as now conducted (as described in the Prospectuses), except
where the failure to own or possess any such Intellectual Property could
not reasonably be expected, singly or in the aggregate, to have a
Material Adverse Effect and (i) to the knowledge of the Company, there
are no rights of third parties to any such Intellectual Property; (ii)
to the knowledge of the Company, there is no material infringement by
third parties of any such Intellectual Property; (iii) there is no
pending or, to the knowledge of the Company, threatened action, suit,
proceeding or claim by others challenging the Company's rights in or to
any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (iv) there is no
pending or to the knowledge of the Company, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any
such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (v) except as
specifically set forth in the Prospectuses under the caption
"Business--Intellectual Property," there is no pending or, to the
knowledge of the Company, threatened action, suit, proceeding or claim
by others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a
reasonable basis for any such claim and (vi) to the Company's knowledge,
all U.S. patents owned by the Company are valid and enforceable.
(cc) Except as disclosed in the Prospectuses, the Company (i)
does not have any material lending or other relationship with any bank
or lending affiliate of any of the U.S. Underwriters and (ii) does not
intend to use any of the proceeds from the sale of the U.S. Securities
hereunder to repay any outstanding debt owed to any affiliate of any of
the U.S. Underwriters.
(dd) The Company and the Subsidiaries have determined that the
computer hardware and software used by them may be unable to recognize
and properly execute date-sensitive functions involving certain dates
prior to and any dates after December 31, 1999 (the "Year 2000
Problem"), and reasonably believe that the Company's implementation of a
new enterprise-wide information system provided by SAP, AG will remedy
such risk on a timely basis and that such risk could not reasonably be
expected to have a Material Adverse Effect. The Company is in compliance
with the Commission's staff legal bulletin No. 5 dated January 12, 1998
related to Year 2000 compliance.
(ee) Neither the Company nor any of the Subsidiaries has
distributed nor will it distribute prior to the latest of (i) the
Closing Date, (ii) any settlement date and (iii) completion of the
distribution of the U.S. Securities, any offering material in connection
with the offering and sale of the U.S. Securities other than any
Preliminary Prospectuses, the Prospectuses, the Registration Statement
and other materials, if any, permitted by the Act.
(ff) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by
10
10
the Company or any of the Subsidiaries to or for the benefit of any of
the officers or directors of the Company or any Subsidiary or any of the
members of the families of any of them, which loans, advances or
guarantees are required to be, and are not, disclosed in the
Registration Statement and Prospectuses.
(gg) There have not been, and there are not proposed, any
transactions or agreements between the Company or any of the
Subsidiaries on the one hand and the officers, directors or stockholders
of the Company or any of the Subsidiaries on the other, which
transactions or agreements are required to be, and are not, disclosed in
the Registration Statement and Prospectuses.
(hh) No officer or director of the Company is in breach or
violation of any employment agreement, non-competition agreement,
confidentiality agreement, or other agreement restricting the nature or
scope of employment to which such officer or director is a party, other
than such breaches or violations which could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; the
conduct of the Company's business, as described in the Registration
Statement and Prospectuses, will not result in a breach or violation of
any such agreement.
(ii) There are no outstanding options to acquire shares of
capital stock of the Company that are vested and exercisable, and there
are no outstanding options to acquire shares of capital stock of the
Company that can, by their terms, become exercisable within 180 days of
the date hereof, except as disclosed in the Registration Statement and
the Prospectuses.
(jj) The Company has not received any notice or communication (in
writing or otherwise), or any other information, indicating that there
is a material possibility that any customer of the Company identified in
the "Business-Customers" section of the Registration Statement will
cease dealing with the Company or otherwise materially reduce the volume
of business transacted by such customer with the Company below
historical levels.
Any certificate signed by any officer of the Company and
delivered to the U.S. Representatives or counsel for the U.S. Underwriters in
connection with this Agreement shall be deemed a representation and warranty by
the Company, as to matters covered thereby, to each U.S. Underwriter.
(ii) HEA represents and warrants to, and agrees with, each U.S.
Underwriter that:
(a) HEA has full legal right, capacity, power and authority to
enter into and perform this Agreement.
(b) Neither HEA nor its affiliated purchasers, as defined in
Regulation M under the Exchange Act, either alone or with one or more
other persons, (i) has taken, either directly or indirectly, any action
which was designed to cause or result in, or which has constituted, or
which might reasonably be expected to cause or result in, stabilization
or
11
11
manipulation of the price of any Subject Securities in connection with
the offering of the Securities or (ii) will bid for or purchase any
Covered Securities or attempt to induce any person to bid for or
purchase any Covered Securities, in either case, for the purpose of
creating actual or apparent active trading in, or raising the price of
the Securities.
(c) Neither the issue and sale by the Company of the U.S.
Securities nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will conflict with,
or result in a breach or violation or imposition of any lien, charge or
encumbrance upon any property or assets of HEA pursuant to, (i) the
charter or by-laws of HEA, (ii) the terms of any material indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement
or other material agreement, obligation, condition, covenant or
instrument to which HEA is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to HEA of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over HEA or any of its properties.
(f) On the Effective Date, the Registration Statement did or
will, and when the Prospectuses are first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any settlement date, each Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act and the rules thereunder; on the Effective Date
and at the Execution Time, the Registration Statement did not or 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 therein not misleading; and, on the Effective Date,
each Prospectus, if not filed pursuant to Rule 424(b), will not, and on
the date of any filing pursuant to Rule 424(b) and on the Closing Date
and any settlement date, each Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that HEA makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement, or the Prospectuses (or any supplement thereto)
in reliance upon and in conformity with information furnished herein or
in writing to the Company or HEA by or on behalf of any U.S. Underwriter
through the U.S. Representatives specifically for inclusion in the
Registration Statement or the Prospectuses (or any supplement thereto).
(g) This Agreement has been duly authorized, executed and
delivered by HEA and constitutes a valid and binding obligation of HEA
enforceable in accordance with its terms, except (i) as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles and (ii) to the extent that rights to indemnity or
contribution under this Agreement may be limited by Federal and state
securities laws or the public policy underlying such laws.
12
12
(h) HEA is not and, after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as
described in the Prospectuses, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(j) Except as disclosed in the Prospectuses, HEA (i) does not
have any material lending or other relationship with any bank or lending
affiliate of any of the U.S. Underwriters and (ii) does not intend to
use any of the proceeds from the sale of the U.S. Securities hereunder
to repay any outstanding debt owed to any affiliate of any of the U.S.
Underwriters.
(k) There have not been, and there are not proposed, any
transactions or agreements between HEA or any of its subsidiaries
(excluding the Company and the Subsidiaries) on the one hand and the
officers, directors or stockholders of the Company or any of the
Subsidiaries on the other, which transactions or agreements are required
to be, and are not, disclosed in the Registration Statement and
Prospectuses.
Any certificate signed by any officer of HEA and delivered to the
U.S. Representatives or counsel for the U.S. Underwriters in connection with
this Agreement shall be deemed a representation and warranty by HEA, as to
matters covered thereby, to each U.S. Underwriter.
2. Purchase and Sale. (a) Subject to such adjustments as you may
determine in order to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each U.S. Underwriter and, upon the basis of the representations, warranties and
agreements of the Company and HEA herein contained and subject to all the terms
and conditions set forth herein, each U.S. Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of -- per share
(the "purchase price per share"), the number of U.S. Underwritten Securities
which bears the same proportion to the aggregate number of U.S. Underwritten
Securities to be issued and sold by the Company as the number of U.S.
Underwritten Securities set forth opposite the name of such U.S. Underwriter in
Schedule I hereto (or such number of U.S. Underwritten Securities increased as
set forth in Section 9 hereof) bears to the aggregate number of U.S.
Underwritten Securities to be sold by the Company.
(b) The Company also agrees, subject to all the terms and
conditions set forth herein, to sell to the U.S. Underwriters, and, upon the
basis of the representations, warranties and agreements of the Company and HEA
herein contained and subject to all the terms and conditions set forth herein,
the U.S. Underwriters shall have the right to purchase from the Company, at the
purchase price per share, pursuant to an option (the "over-allotment option")
which may be exercised at any time (but not more than once) prior to 9:00 P.M.,
New York City time, on the 30th day after the date of the Prospectus (or, if
such 30th day shall be a Saturday or Sunday or a holiday, on the next business
day thereafter when the Nasdaq National Market is open for trading), up to an
aggregate of 5,700,000 shares of U.S. Option Securities from the Company. U.S.
Option Securities may be purchased only for the purpose of covering
over-
13
13
allotments made in connection with the sale of the U.S. Underwritten Securities
by the U.S. Underwriters. The number of U.S. Option Securities which the U.S.
Underwriters elect to purchase upon any exercise of the over-allotment option
shall be provided by the Company in proportion to the maximum number of U.S.
Option Securities which the Company has agreed to sell. Upon any exercise of the
over-allotment option, each U.S. Underwriter, severally and not jointly, agrees
to purchase from the Company the number of U.S. Option Securities (subject to
such adjustments as you may determine in order to avoid fractional shares) which
bears the same proportion to the number of U.S. Option Securities to be sold by
the Company as the number of U.S. Underwritten Securities set forth opposite the
name of such U.S. Underwriters in Schedule I hereto (or such number of U.S.
Underwritten Securities increased as set forth in Section 9 hereof) bears to the
aggregate number of U.S. Underwritten Securities to be sold by the Company.
3. Delivery and Payment. Delivery of and payment for the U.S.
Underwritten Securities and the U.S. Option Securities (if the option provided
for in Section 2(b) hereof shall have been exercised on or before the third
Business Day prior to the Closing Date) shall be made at 10:00 AM, New York City
time, on --, 1998, or at such time on such later date not more than three
Business Days after the foregoing date as the U.S. Representatives shall
designate, which date and time may be postponed by agreement among the U.S.
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the U.S. Securities being herein called the
"Closing Date"). Delivery of the U.S. Securities shall be made to the U.S.
Representatives for the respective accounts of the several U.S. Underwriters
against payment by the several U.S. Underwriters through the U.S.
Representatives of the respective aggregate purchase prices of the U.S.
Securities being sold by the Company to or upon the order of the Company by wire
transfer payable in same-day funds to the accounts specified by the Company.
Delivery of the U.S. Underwritten Securities and the U.S. Option Securities
shall be made through the facilities of The Depository Trust Company unless the
U.S. Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will deliver
the U.S. Option Securities (at the expense of the Company) to the U.S.
Representatives on the date specified by the U.S. Representatives (which shall
be within three Business Days after exercise of said option) for the respective
accounts of the several U.S. Underwriters, against payment by the several U.S.
Underwriters through the U.S. Representatives of the purchase price thereof to
or upon the order of the Company by wire transfer payable in same-day funds to
the accounts specified by the Company. If settlement for the U.S. Option
Securities occurs after the Closing Date, the Company and HEA will deliver to
the U.S. Representatives on the settlement date for the U.S. Option Securities,
and the obligation of the U.S. Underwriters to purchase the U.S. Option
Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by U.S. Underwriters. It is understood that the
several U.S. Underwriters propose to offer the U.S. Securities for sale to the
public as set forth in the Prospectuses.
14
14
5. Agreements.
(i) The Company agrees with the several U.S. Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the U.S. Securities, the Company will not file any amendment
of the Registration Statement or supplement to the Prospectuses or any
Rule 462(b) Registration Statement unless the Company has furnished you
a copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object. Subject
to the foregoing sentence, if the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Prospectuses
is otherwise required under Rule 424(b), the Company will cause the
Prospectuses, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory
to the U.S. Representatives of such timely filing. The Company will
promptly advise the U.S. Representatives (1) when the Registration
Statement, if not effective at the Execution Time, shall have become
effective, (2) when the Prospectuses, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (3) when, prior to termination of the
offering of the U.S. Securities, any amendment to the Registration
Statement shall have been filed or become effective, (4) of any request
by the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the Prospectuses or for any additional information, (5) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the U.S. Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the U.S.
Securities is required to be delivered under the Act, any event occurs
as a result of which either of the Prospectuses as then supplemented
would include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein in the light
of the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
either of the Prospectuses to comply with the Act or the rules
thereunder, the Company promptly will (1) notify the U.S.
Representatives of any such event; (2) prepare and file with the
Commission, subject to the second sentence of paragraph (i)(a) of this
Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance; and (3) supply any supplemented
Prospectuses to you in such quantities as you may reasonably request.
15
15
(c) As soon as practicable, the Company will make generally
available to its security holders and to the U.S. Representatives an
earnings statement or statements of the Company and the Subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the U.S. Representatives and
counsel for the U.S. Underwriters signed copies of the Registration
Statement (including exhibits thereto) and to each other U.S.
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by a U.S. Underwriter
or dealer may be required by the Act, as many copies of each Preliminary
Prospectus and the U.S. Prospectus and any supplement thereto as the
U.S. Representatives may reasonably request.
(e) The Company will use its best efforts to arrange, if
necessary, for the qualification of the U.S. Securities for sale under
the laws of such jurisdictions as the U.S. Representatives may designate
and will maintain such qualifications in effect so long as required for
the distribution of the U.S. Securities; provided that in no event shall
the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those arising out
of the offering or sale of the U.S. Securities, in any jurisdiction
where it is not now so subject.
(f) The Company will not, without the prior written consent of
Xxxxx Xxxxxx Inc., for a period of 180 days following the Execution
Time, offer, sell or contract to sell, or otherwise dispose of (or enter
into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by
the Company or any affiliate of the Company or any person in privity
with the Company or any affiliate of the Company) directly or
indirectly, or announce the offering of, any other shares of Common
Stock or any securities convertible into, or exchangeable for, shares of
Common Stock; provided, however, that the Company may issue and sell
Common Stock pursuant to any employee stock option plan, restricted
stock plan, employee stock purchase plan or dividend reinvestment plan
of the Company in effect at the Execution Time and the Company may issue
Common Stock issuable upon the conversion of securities or the exercise
of warrants outstanding at the Execution Time.
(g) Neither the Company nor its affiliated purchasers, as defined
in Regulation M under the Exchange Act, either alone or with one or more
other persons, (i) will take, either directly or indirectly, any action
which is designed to cause or result in, or which will constitute, or
which might reasonably be expected to cause or result in, stabilization
or manipulation of the price of any Subject Securities in connection
with the offering of the Securities or (ii) will bid for or purchase any
Covered Securities or attempt to induce any person to bid for or
purchase any Covered Securities, in either case, for the purpose of
creating actual or apparent active trading in, or raising the price of
the Securities.
16
16
(h) The Company agrees to pay the costs and expenses relating to
the following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary Prospectus,
the U.S. Prospectus, and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies
of the Registration Statement, each Preliminary Prospectus, the U.S.
Prospectus, and all amendments or supplements to any of them, as may, in
each case, be reasonably requested for use in connection with the
offering and sale of the U.S. Securities; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the
U.S. Securities, including any stamp or transfer taxes in connection
with the original issuance and sale of the U.S. Securities; (iv) the
printing (or reproduction) and delivery of this Agreement, any blue sky
memorandum and all other agreements or documents printed (or reproduced)
and delivered in connection with the offering of the U.S. Securities;
(v) the registration of the U.S. Securities under the Exchange Act and
the listing of the U.S. Securities on the Nasdaq National Market; (vi)
any registration or qualification of the U.S. Securities for offer and
sale under the securities or blue sky laws of the several states
(including filing fees and the reasonable fees and expenses of counsel
for the U.S. Underwriters relating to such registration and
qualification); (vii) any filings required to be made with the National
Association of Securities Dealers, Inc. (including filing fees and the
reasonable fees and expenses of counsel for the U.S. Underwriters
relating to such filings); (viii) the transportation and other expenses
incurred by or on behalf of Company representatives (excluding the U.S.
Underwriters) in connection with presentations to prospective purchasers
of the U.S. Securities; (ix) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and
special counsel) for the Company and HEA; and (x) all other costs and
expenses incident to the performance by the Company and HEA of their
obligations hereunder.
(i) The Company will use the net proceeds to the Company of the
offering of the Securities as described under the heading "Use of
Proceeds" in the Prospectuses.
(ii) HEA agrees with the several U.S. Underwriters that:
(a) HEA will not, without the prior written consent of Xxxxx
Xxxxxx Inc., offer, sell, contract to sell, pledge or otherwise dispose
of, or file (or participate in the filing of) a registration statement
with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act with respect to,
any shares of capital stock of the Company or any securities convertible
into or exercisable or exchangeable for such capital stock, or publicly
announce an intention to effect any such transaction, for a period of
180 days after the date of this Agreement, other than shares of Common
Stock disposed of as bona fide gifts approved by Xxxxx Xxxxxx Inc.
(b) Neither HEA nor its affiliated purchasers, as defined in
Regulation M under the Exchange Act, either alone or with one or more
other persons, (i) will take, either
17
17
directly or indirectly, any action which is designed to cause or result
in, or which will constitute, or which might reasonably be expected to
cause or result in, stabilization or manipulation of the price of any
Subject Securities in connection with the offering of the Securities or
(ii) will bid for or purchase any Covered Securities or attempt to
induce any person to bid for or purchase any Covered Securities, in
either case, for the purpose of creating actual or apparent active
trading in, or raising the price of the Securities.
(c) HEA will advise you promptly, and if requested by you, will
confirm such advice in writing, so long as delivery of a prospectus
relating to the U.S. Securities by an underwriter or dealer may be
required under the Act, of (i) any material change in the Company's
condition (financial or otherwise), prospects, earnings, business or
properties, (ii) any change in information in the Registration Statement
or the Prospectuses relating to HEA or (iii) any new material
information relating to the Company or relating to any matter stated in
the Prospectuses which comes to the attention of HEA.
(iii) Each U.S. Underwriter agrees that (i) it is not purchasing
any of the U.S. Securities for the account of anyone other than a United States
or Canadian Person, (ii) it has not offered or sold, and will not offer or sell,
directly or indirectly, any of the U.S. Securities or distribute any U.S.
Prospectus to any person outside the United States or Canada, or to anyone other
than a United States or Canadian Person, and (iii) any dealer to whom it may
sell any of the U.S. Securities will represent that it is not purchasing for the
account of anyone other than a United States or Canadian Person and agree that
it will not offer or resell, directly or indirectly, any of the U.S. Securities
outside the United States or Canada, or to anyone other than a United States or
Canadian Person or to any other dealer who does not so represent and agree;
provided, however, that the foregoing shall not restrict (i) purchases and sales
between the Managers on the one hand and the U.S. Underwriters on the other hand
pursuant to the Agreement Between U.S. Underwriters and Managers, (ii)
stabilization transactions contemplated under the Agreement Between U.S.
Underwriters and Managers, conducted through Xxxxx Xxxxxx Inc. (or through the
U.S. Representatives and Lead Managers) as part of the distribution of the
Securities, and (iii) sales to or through (or distributions of U.S. Prospectuses
or Preliminary Prospectuses to) United States or Canadian Persons who are
investment advisors, or who otherwise exercise investment discretion, and who
are purchasing for the account of anyone other than a United States or Canadian
Person.
The agreement of the U.S. Underwriters set forth in the above
paragraph shall terminate upon the earlier of the following events:
(a) a mutual agreement of the U.S. Representatives and the Lead
Managers to terminate the selling restrictions set forth in such
paragraph and in Section 5(iii)(a) of the International Underwriting
Agreement; or
(b) the expiration of a period of 30 days after the Closing Date,
unless (A) the Lead Managers shall have given notice to the Company and
the U.S. Representatives that the distribution of the International
Securities by the Managers has not yet been completed, or (B) the U.S.
Representatives shall have given notice to the Company and
18
18
the Managers that the distribution of the U.S. Securities by the U.S.
Underwriters has not yet been completed. If such notice by the U.S.
Representatives or the Lead Managers is given, the agreements set forth
in such paragraph shall survive until the earlier of (1) the event
referred to in clause (a) above or (2) the expiration of an additional
period of 30 days from the date of any such notice.
6. Conditions to the Obligations of the U.S. Underwriters. The
obligations of the U.S. Underwriters to purchase the U.S. Underwritten
Securities and the U.S. Option Securities, as the case may be, shall be subject
to the accuracy of the representations and warranties on the part of the Company
and HEA contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and HEA made in any certificates pursuant to the provisions
hereof, to the performance by the Company and HEA of their respective
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the U.S. Representatives agree in writing
to a later time, the Registration Statement will become effective not
later than (i) 6:00 PM New York City time on the date of determination
of the public offering price, if such determination occurred at or prior
to 3:00 PM New York City time on such date or (ii) 9:30 AM on the
Business Day following the day on which the public offering price was
determined, if such determination occurred after 3:00 PM New York City
time on such date; if filing of any of the Prospectuses, or any
supplement thereto, is required pursuant to Rule 424(b), the
Prospectuses, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have caused Xxxx Xxxx Xxxx & Freidenrich
LLP, counsel for the Company, to have furnished to the U.S.
Representatives their opinion, dated the Closing Date and addressed to
the U.S. Representatives, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its businesses as described in the Prospectuses, and is
duly qualified to do business as foreign corporation and is in
good standing under the laws of the State of California and, to
the knowledge of such counsel, each other jurisdiction which
requires such qualification, except where the failure to be so
qualified or be in good standing could not reasonably be expected
to have a Material Adverse Effect.
(ii) except as otherwise set forth in the Prospectuses,
all outstanding shares of capital stock of each Subsidiary are
owned of record by the Company or by another Subsidiary;
19
19
(iii) the Company's authorized equity capitalization is as
set forth in the Prospectuses; the capital stock of the Company
conforms in all material respects to the description thereof
contained in the Prospectuses; the outstanding shares of Common
Stock have been duly and validly authorized and issued and are
fully paid and nonassessable; the U.S. Securities being sold
hereunder by the Company have been duly and validly authorized,
and, when issued and delivered to and paid for by the U.S.
Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the U.S. Securities being sold hereunder are duly
listed, and admitted and authorized for trading, subject to
official notice of issuance, on the Nasdaq National Market; the
certificates for the U.S. Securities are in valid and sufficient
form; the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive rights under the Company's
charter documents, Delaware corporate law or any agreements of
which such counsel is aware, or to such counsel's knowledge,
similar rights to subscribe for the U.S. Securities except for
the ownership maintenance rights granted to HEA under the
stockholder agreement, dated as of June 25, 1998 among the
Company, HEA and Hyundai Electronics Industries Co., Ltd. (the
"Stockholder Agreement) ; and, except as set forth in the
Prospectuses, to the knowledge of such counsel, no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into
or exchange any securities for, shares of capital stock of or
ownership interests in the Company are outstanding;
(iv) to the knowledge of such counsel, there is no pending
or threatened action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator
involving the Company or any Subsidiaries or its or their
property of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectuses, and, to the knowledge of such counsel, there is no
franchise, contract or other document of a character required to
be described in the Registration Statement or Prospectuses, or to
be filed as an exhibit thereto, which is not described or filed
as required under the Act or the applicable rules and regulations
of the Commission thereunder; and the statements in the
Prospectuses under the headings "Relationship Between the Company
and Hyundai," "Business--Intellectual Property," "Certain
Transactions," "Management--Executive Compensation--Employment
Agreements--Benefit Plans," "Description of Capital Stock,"
"Shares Eligible for Future Sale" and "Certain United States
Federal Tax Consequences to Holders of Common Stock" accurately
summarize in all material respects the matters therein described
to the extent they are matters of law and descriptions of
contractual arrangements;
(v) the Registration Statement has become effective under
the Act; any required filing of the Prospectuses, and any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); to the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no
proceedings for
20
20
that purpose have been instituted or threatened and the
Registration Statement and the Prospectuses (other than the
financial statements, schedules and other financial information
contained therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
applicable requirements of the Act and the rules thereunder;
(vi) each of this Agreement and the International
Underwriting Agreement has been duly authorized, executed and
delivered by the Company (assuming due authorization and
execution by each party thereto other than the Company);
(vii) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectuses, will not be,
an "investment company" as defined in the Investment Company Act
of 1940, as amended;
(viii) no consent, approval, authorization, filing with or
order of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such
as have been obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the U.S. Securities by the U.S.
Underwriters in the manner contemplated in this Agreement and in
the Prospectuses and such other approvals (specified in such
opinion) as have been obtained;
(ix) neither the issuance and sale of the U.S. Securities,
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of or imposition
of any lien, charge or encumbrance upon any property or assets of
the Company pursuant to, (i) the charter or by-laws of the
Company, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which
the Company is a party or bound or to which its property is
subject and that is filed as an exhibit to the Registration
Statement, or (iii) any statute, law, rule or regulation which,
in the experience of such counsel, typically is applicable to the
types of transactions contemplated herein or, to the knowledge of
such counsel, any judgment, order or decree applicable to the
Company of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority asserting
jurisdiction over the Company or any of its properties; and
(x) to the knowledge of such counsel, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement except for rights
granted to HEA under the Stockholder Agreement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of California, the General Corporation Law of the State of
Delaware or the Federal laws of the United States, to
21
21
the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are reasonably satisfactory to counsel for the U.S.
Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and
public officials. References to the Prospectuses in this paragraph (b)
include any supplements thereto at the Closing Date.
In addition, such counsel shall state that such counsel has participated
in conferences and in telephone conversations with officers and other
representatives of the Company, representatives of the U.S.
Representatives and representatives of the independent public
accountants of the Company, during which conferences and conversations
the contents of the Registration Statement and the Prospectuses were
discussed, and such counsel has reviewed certain corporate records and
documents furnished to such counsel by the Company and that, although
such counsel has not undertaken to independently verify and does not
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the
Prospectuses (except as specified in the foregoing opinion), on the
basis of the foregoing, and such counsel's understanding of the U.S.
federal securities laws, no information has come to the attention of
such counsel that causes such counsel to believe that the Registration
Statement on the Effective Date or at the Execution Time contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectuses as of their date and on
the Closing Date included or include any untrue statement of a material
fact or omitted or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading (other than financial statements and schedules
and other financial information contained therein, as to which such
counsel need express no opinion).
(c) The Company shall have caused counsel for Maxtor Singapore
(such counsel to be reasonably satisfactory to the U.S. Representatives)
to have furnished to the U.S. Representatives an opinion, dated the
Closing Date and addressed to the U.S. Representatives, to the effect
that:
(i) Maxtor Singapore has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction in which it is chartered or organized, with
corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its businesses as
described in the Prospectuses, and, to the knowledge of such
counsel, is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the
failure to be so qualified or be in good standing could not
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business
or properties of Maxtor Singapore, whether or not arising from
transactions in the ordinary course of business;
22
22
(ii) all the outstanding shares of capital stock of Maxtor
Singapore have been duly and validly authorized and issued and
are fully paid and nonassessable, and except as otherwise set
forth in the Prospectuses, are owned of record by the Company;
(iii) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator
involving Maxtor Singapore or its property which, if determined
adversely to Maxtor Singapore, would have, individually or in the
aggregate, could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of Maxtor Singapore,
whether or not arising from transactions in the ordinary course
of business; and
(iv) neither the issue and sale of the U.S. Securities,
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of or imposition
of any lien, charge or encumbrance upon any property or assets of
Maxtor Singapore pursuant to, (i) the charter or by-laws of
Maxtor Singapore, (ii) to the knowledge of such counsel, the
terms of any material indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other material
agreement, obligation, condition, covenant or instrument to which
Maxtor Singapore is a party or bound or to which its property is
subject, or (iii) any statute, law, rule or regulation which, in
the experience of such counsel, typically is applicable to the
types of transactions contemplated herein or, to the knowledge of
such counsel, any judgment, order or decree applicable to Maxtor
Singapore of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority asserting
jurisdiction over Maxtor Singapore or any of its property.
In rendering such opinion, such counsel may rely as to matters of fact,
to the extent they deem proper and specified in such opinion, upon
certificates of responsible officers of the Company, Maxtor Singapore
and public officials. References to the Prospectuses in this paragraph
(c) include any supplements thereto at the Closing Date.
(d) HEA shall have caused Xxx Xxxxxxx, counsel for HEA, to have
furnished to the U.S. Representatives his opinion dated the Closing Date
and addressed to the U.S. Representatives, to the effect that:
(i) HEA is duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction
in which it is chartered or organized, with corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the
Prospectuses, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of the State
of California and, to the knowledge
23
23
of such counsel, each other jurisdiction which requires such
qualification, except where the failure to be so qualified or be
in good standing could not reasonably be expected to have a
material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of HEA
and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business.
(ii) each of this Agreement and the International
Underwriting Agreement has been duly authorized, executed and
delivered by HEA (assuming due authorization and execution by
each party thereto other than HEA);
(iii) HEA is not, and after giving effect to the offering
and sale of the Securities and the application of the proceeds
thereof as described in the Prospectuses, will not be, an
"investment company" as defined in the Investment Company Act of
1940, as amended.
(iv) no consent, approval, authorization, filing with or
order of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such
as have been obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the U.S. Securities by the U.S.
Underwriters in the manner contemplated in this Agreement and in
the Prospectuses and such other approvals (specified in such
opinion) as have been obtained; and
(v) neither the sale of the U.S. Securities being sold by
the Company nor the consummation of any other of the transactions
herein contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of or imposition
of any lien, charge or encumbrance upon any property or assets of
HEA pursuant to, (i) the charter or by-laws of the HEA, (ii) to
the knowledge of such counsel, the terms of any material
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other material agreement,
obligation, condition, covenant or instrument to which HEA is a
party or bound or to which its property is subject, or (iii) any
statute, law, rule or regulation which, in the experience of such
counsel, typically is applicable to the types of transactions
contemplated herein or, to the knowledge of such counsel, any
judgment, order or decree applicable to HEA of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority asserting jurisdiction over HEA or
any of its properties.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of California, the General Corporation Law of the State of
Delaware or the Federal laws of the United States, to the extent it
deems proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
reasonably satisfactory to
24
24
counsel for the U.S. Underwriters, and (B) as to matters of fact, to the
extent it deems proper, on certificates of responsible officers of HEA
and public officials.
(e) The U.S. Representatives shall have received from Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, counsel for the U.S. Underwriters, such
opinion or opinions, dated the Closing Date and addressed to the U.S.
Representatives, with respect to the issuance and sale of the U.S.
Securities, the Registration Statement, the Prospectuses (together with
any supplement thereto) and other related matters as the U.S.
Representatives may reasonably require, and the Company and HEA shall
have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the U.S. Representatives
a certificate of the Company, signed by the Chief Executive Officer and
the Chief Financial Officer of the Company, dated the Closing Date, to
the effect that the signers of such certificate have carefully examined
the Registration Statement, the Prospectuses, any supplements to the
Prospectuses and this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing Date
with the same effect as if made on the Closing Date and the
Company has complied in all material respects with all the
agreements and satisfied in all material respects all the
conditions on its part to be performed or satisfied at or prior
to the Closing Date (such certificate to set forth all known
failures to comply with such agreements or satisfy such
conditions, whether such known failures are material or
immaterial);
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the Company's
knowledge, after due inquiry with the Commission, no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectuses (exclusive of any
supplement thereto), there has been no material adverse effect on
the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and the Subsidiaries, taken
as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectuses (exclusive of any supplement
thereto).
(g) HEA shall have furnished to the U.S. Representatives a
certificate, signed by the Chief Executive Officer, dated the Closing
Date, to the effect that the signer of such certificate has carefully
examined the Registration Statement, the Prospectuses, any supplement to
the Prospectuses and this Agreement and that the representations and
warranties of HEA in this Agreement are true and correct in all material
respects on and as of the Closing Date to the same effect as if made on
the Closing Date.
25
25
(h) The Company shall have caused PricewaterhouseCoopers LLP to
have furnished to the U.S. Representatives letters, at the Execution
Time and at the Closing Date, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance reasonably
satisfactory to the U.S. Representatives, confirming that they are
independent accountants within the meaning of the Act and the applicable
published rules and regulations thereunder and that they have performed
a review of the unaudited interim financial information of the Company
for the six-month period ended June 30, 1998 and as at June 30, 1998, as
well as for the six quarterly periods for the period ended June 30, 1998
in accordance with Statement on Auditing Standards No. 71, and stating
in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration
Statement and the Prospectuses and reported on by them comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and the
Subsidiaries; their limited review, in accordance with standards
established under Statement on Auditing Standards No. 71, of the
unaudited interim financial information for the six-month period
ended June 30, 1998, and as at June 30, 1998; carrying out
certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and the
audit, executive and compensation committees of the Company and
the Subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and the Subsidiaries as to transactions
and events subsequent to December 27, 1997, nothing came to their
attention which caused them to believe that:
(1) the unaudited financial statements described in
(ii) above and included in the Registration Statement and
the Prospectuses do not comply as to form in all material
respects with the applicable accounting requirements of
the Act and with the published rules and regulations of
the Commission with respect to registration statements on
Form S-1; and said unaudited financial statements are not
in conformity with generally accepted accounting
principles applied on a basis substantially consistent
with that of the audited financial statements included in
the Registration Statement and the Prospectuses;
(2) with respect to the period subsequent to June
30, 1998, there were any changes, at a specified date not
more than five days prior to the date of the letter, in
the long-term debt and capital lease obligations due
26
26
after one year of the Company and the Subsidiaries or
capital stock of the Company or increases in the
stockholders' deficit of the Company or decreases in
working capital of the Company and the Subsidiaries as
compared with the amounts shown on the June 30, 1998,
consolidated balance sheet included in the Registration
Statement and the Prospectuses, or for the period from
July 1, 1998 to such specified date there were any
decreases, as compared with the corresponding period in
the preceding quarter in total revenue or income from
operations or income before income taxes or in per share
amounts of net income of the Company and the Subsidiaries,
except in all instances for changes or decreases set forth
in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the U.S. Representatives; and
(3) the information included in the Registration
Statement and Prospectuses in response to Regulation S-K,
Item 301 (Selected Financial Data), Item 302
(Supplementary Financial Information) and Item 402
(Executive Compensation) is not in conformity with the
applicable disclosure requirements of Regulation S-K.
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and the Subsidiaries) set forth in the Registration
Statement and the Prospectuses, including the information set
forth under the captions "Summary Consolidated Financial Data"
and "Selected Consolidated Financial Data" in the Prospectuses,
agrees with the accounting records of the Company and the
Subsidiaries, excluding any questions of legal interpretation.
References to the Prospectuses in this paragraph (h) include any
supplement thereto at the date of the letter.
(i) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive
of any amendment thereof) and the Prospectuses (exclusive of any
supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (g)
of this Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and the Subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectuses (exclusive of any supplement
thereto) the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the sole judgment of the U.S. Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the U.S. Securities as contemplated by
the
27
27
Registration Statement (exclusive of any amendment thereof) and the
Prospectuses (exclusive of any supplement thereto).
(j) Subsequent to the Execution Time, there shall not have been
any decrease in the rating of any of the Company's debt securities by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
(k) The U.S. Securities shall have been listed and admitted and
authorized for trading on the Nasdaq National Market, and satisfactory
evidence of such actions shall have been provided to the U.S.
Representatives.
(l) Prior to the Closing Date, all of the conditions set forth in
the International Underwriting Agreement with respect to the obligations
of the Managers to purchase the International Securities shall have been
satisfied and not waived, and the purchase and sale of the International
Underwritten Securities shall have been completed in accordance with the
terms of the International Underwriting Agreement.
(m) Prior to the Closing Date, the Company shall have furnished
to the U.S. Representatives evidence satisfactory to the U.S.
Representatives that (i) the Company has obtained an asset
securitization facility (or a commitment to provide an asset
securitization facility) in an aggregate amount reasonably acceptable to
the U.S. Representatives and not guaranteed in any manner by, or
dependent upon or linked in any way to the creditworthiness of, HEA or
any affiliates of HEA and (ii) the Company has obtained a direct license
with SAP Korea Ltd. that provides the Company with substantially the
same terms, rights and services as those currently available to or
received by the Company pursuant to the license agreement between
Hyundai Information Technology Co. Ltd. and SAP Korea Ltd.
(n) At the Execution Time, the Company shall have furnished to
the U.S. Representatives and the Lead Managers a letter substantially in
the form of Exhibit A hereto from each officer, director, and
stockholder of the Company, which persons are listed on Schedule II
hereto, addressed to the U.S. Representatives and the Lead Managers.
(o) Prior to the Closing Date, the Company and HEA shall have
furnished to the U.S. Representatives such further information,
certificates and documents as the U.S. Representatives may reasonably
request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the U.S. Representatives and counsel for
the U.S. Underwriters, this Agreement and all obligations of the U.S.
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the U.S. Representatives. Notice of
28
28
such cancellation shall be given to the Company and HEA in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxx Xxxx Xxxx & Freidenrich LLP, counsel for the
Company, at 000 Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, on the Closing
Date.
7. Reimbursement of U.S. Underwriters' Expenses. If the sale of
the U.S. Securities provided for herein is not consummated because any condition
to the obligations of the U.S. Underwriters set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because
of any refusal, inability or failure on the part of the Company or HEA to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the U.S. Underwriters, the Company will reimburse
the U.S. Underwriters severally through Xxxxx Xxxxxx Inc. on demand for all
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company and HEA
jointly and severally agree to indemnify and hold harmless each U.S.
Underwriter, the directors, officers, employees and agents of each U.S.
Underwriter and each person who controls any U.S. Underwriter within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the U.S.
Securities as originally filed or in any amendment thereof, or arise out of or
are based upon 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 arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus or
the Prospectuses, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company and HEA will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any U.S. Underwriter
through the U.S. Representatives specifically for inclusion therein; provided,
further, that with respect to any untrue statement or omission of material fact
made in any Preliminary Prospectus, the indemnity agreement contained in this
Section 8(a) shall not inure to the benefit of any U.S. Underwriter from whom
the person asserting any such loss, claim, damage or liability purchased the
securities concerned, to the extent that any such loss, claim, damage or
liability of such U.S. Underwriter
29
29
occurs under the circumstance where it shall have been determined by final
nonappealable judgment that (w) the Company had previously furnished copies of
the U.S. Prospectus to the U.S. Representatives, (x) delivery of the U.S.
Prospectus was required by the Act to be made to such person, (y) the untrue
statement or omission of a material fact contained in the Preliminary Prospectus
was corrected in the U.S. Prospectus and (z) there was not sent or given to such
person, at or prior to the written confirmation of the sale of such securities
to such person, a copy of the U.S. Prospectus.
This indemnity agreement will be in addition to any liability
which the Company or HEA may otherwise have.
(b) Each U.S. Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, each person who controls the
Company within the meaning of either the Act or the Exchange Act and HEA, to the
same extent as the foregoing indemnity to each U.S. Underwriter, but only with
reference to written information relating to such U.S. Underwriter furnished to
the Company by or on behalf of such U.S. Underwriter through the U.S.
Representatives specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any U.S. Underwriter may otherwise have. The Company and HEA
acknowledge that the statements set forth in the last paragraph of the cover
page regarding delivery of the U.S. Securities, the legend in block capital
letters on the inside front cover related to stabilization, syndicate covering
transactions and penalty bids, and under the heading "Underwriting" in any
Preliminary Prospectus and the Prospectuses constitute the only information
furnished in writing by or on behalf of the several U.S. Underwriters for
inclusion in any Preliminary Prospectus or the Prospectuses.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
30
30
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and HEA, jointly and severally,
and the U.S. Underwriters severally agree to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which the Company, HEA and one or more of the U.S. Underwriters may
be subject in such proportion as is appropriate to reflect the relative benefits
received by the Company and HEA on the one hand and by the U.S. Underwriters on
the other from the offering of the U.S. Securities; provided, however, that in
no case shall any U.S. Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the U.S. Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the U.S. Securities purchased by such U.S. Underwriter hereunder.
If the allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and HEA, jointly and severally, and the U.S.
Underwriters severally shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and HEA on the one hand and of the U.S. Underwriters on the other in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company and HEA shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by them, and benefits received by
the U.S. Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of the
Prospectuses. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
provided by the Company or HEA on the one hand or the U.S. Underwriters on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company, HEA and the U.S. Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was
31
31
not guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls a U.S. Underwriter within the meaning of either the Act
or the Exchange Act and each director, officer, employee and agent of a U.S.
Underwriter shall have the same rights to contribution as such U.S. Underwriter,
and each person who controls the Company within the meaning of either the Act or
the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
(e) The liability of HEA under the indemnity and contribution
provisions contained in this Section 8 and the corresponding section in the
International Underwriting Agreement shall be limited to an amount equal to
$25,000,000; provided, however, that the U.S. Underwriters shall not make any
claim for indemnity or contribution against HEA pursuant to this Section 8
unless the U.S. Underwriters shall have first made a claim on the Company
pursuant to this Section 8 and such claim is not paid within 15 days from the
time it is made. The Company and HEA may agree, as among themselves and without
limiting the rights of the U.S. Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
9. Default by a U.S. Underwriter. If any one or more U.S.
Underwriters shall fail to purchase and pay for any of the U.S. Securities
agreed to be purchased by such U.S. Underwriter or U.S. Underwriters hereunder
and such failure to purchase shall constitute a default in the performance of
its or their obligations under this Agreement, the remaining U.S. Underwriters
shall be obligated severally to take up and pay for (in the respective
proportions which the amount of U.S. Securities set forth opposite their names
in Schedule I hereto bears to the aggregate amount of U.S. Securities set forth
opposite the names of all the remaining U.S. Underwriters) the U.S. Securities
which the defaulting U.S. Underwriter or U.S. Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of U.S.
Securities which the defaulting U.S. Underwriter or U.S. Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of U.S. Securities
set forth in Schedule I hereto, the remaining U.S. Underwriters shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the U.S. Securities, and if such nondefaulting U.S. Underwriters do not purchase
all the U.S. Securities, then the Company shall have 36 hours within which it
may, but is not obligated, to find one or more substitute underwriters
satisfactory to the U.S. Representatives to purchase such U.S. Securities upon
the terms set forth in this Agreement and, if the Company is unable to find one
or more such underwriters that are satisfactory to the U.S. Representatives,
this Agreement will terminate without liability to any nondefaulting U.S.
Underwriter, HEA or the Company. In the event of a default by any U.S.
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the U.S. Representatives
shall determine in order that the required changes in the Registration Statement
and the Prospectuses or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting U.S.
Underwriter of its liability, if any, to the Company, HEA and any nondefaulting
U.S. Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination
in the absolute discretion of the U.S. Representatives, by notice given to the
Company prior to delivery of and payment for the U.S. Securities, if at any time
prior to such time (i) trading in any of the
32
32
Company's securities shall have been suspended by the Commission or the Nasdaq
National Market or trading in securities generally on the New York Stock
Exchange or the Nasdaq National Market shall have been suspended or limited or
minimum prices shall have been established on either of such Exchanges, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the U.S. Representatives, impractical or
inadvisable to proceed with the offering or delivery of the U.S. Securities as
contemplated by the Prospectuses (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of HEA and of the U.S. Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any U.S. Underwriter, HEA or the
Company or any of the officers, directors or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the U.S.
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the U.S. Representatives, will be
mailed, delivered or telefaxed to the SBI General Counsel (fax no.: (212)
000-0000) and confirmed to the General Counsel, c/o Xxxxx Xxxxxx Inc., at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General Counsel; or, if
sent to the Company, will be mailed, delivered or telefaxed to Chief Financial
Officer c/o of Maxtor Corporation, 000 Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx
00000 (fax no. (000) 000-0000) and confirmed to the General Counsel c/o Maxtor
Corporation, 0000 Xxxxxx Xxxxx, Xxxxxxxx. Xxxxxxxx 00000 (fax no. (303)
000-0000), attention of the Legal Department, with a copy to Xxxxx Xxxx Xxxxxxx
(fax no. (000) 000-0000) at Xxxx Xxxx Xxxx & Freidenrich LLP, 000 Xxxxxxxx
Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000; or if sent to HEA, will be mailed,
delivered or telefaxed to Chief Executive Officer, c/o Hyundai Electronics
America, 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000 (fax no. (408)
000-0000) and confirmed to the General Counsel c/o Hyundai Electronics America,
0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000 (fax no. (000) 000-0000),
attention of the Legal Department.
13. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
33
33
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City
or London.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement
is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
with respect to the offering of the U.S. Securities and the
International Securities, as the case may be, referred to in paragraph
1(i)(a) above and any preliminary prospectus with respect to the
offering of the U.S. Securities and the International Securities, as the
case may be, included in the Registration Statement at the Effective
Date that omits Rule 430A Information.
"Prospectuses" shall mean, collectively, the U.S. Prospectus and
the International Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective) and,
in the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date,
shall also mean such registration statement as so amended or such Rule
462(b) Registration
34
34
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under
the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
"United States or Canadian Persons" means any person who is a
national or resident of the United States or Canada, any corporation,
partnership or other entity created or organized in or under the laws of
the United States or Canada or of any political subdivision thereof, and
any estate or trust the income of which is subject to United States or
Canadian federal income taxation, regardless of its source (other than a
foreign branch of such entity) and includes any United States or
Canadian branch of a person other than a United States or Canadian
Person.
35
35
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, HEA and the several U.S. Underwriters.
Very truly yours,
Maxtor Corporation
By:
------------------------------
Name:
Title:
Hyundai Electronics America
By:
------------------------------
Name:
Title:
36
36
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxx Xxxxxx Inc.
Xxxxxxxxx & Xxxxx LLC
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
NationsBanc Xxxxxxxxxx Securities LLC
By: Xxxxx Xxxxxx Inc.
By:
------------------------------
Name:
Title:
For themselves and the other
several U.S. Underwriters named in
Schedule I to the foregoing
Agreement.
37
SCHEDULE I
NUMBER OF U.S.
UNDERWRITERS UNDERWRITTEN SECURITIES
------------ TO BE PURCHASED
---------------
Xxxxx Xxxxxx Inc..............................................
Xxxxxxxxx & Xxxxx LLC.........................................
Xxxxxx Brothers Inc...........................................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated............
NationsBanc Xxxxxxxxxx Securities LLC.........................
----------
Total................................................. 38,000,000
==========
38
SCHEDULE II
List of Officers, Directors and Shareholders
Executive Officers and Directors
Name Position
Xx. X.X. Xxxx Chairman of the Board of Directors
Xxxxxxx X. Xxxxxx President, Chief Executive Officer, Director
Xxxxxxx X. Xxxxxx Director
Xxxxx See Xxxxx Director
Xxxxxxx Xxxx Director
Y.H. Xxx Xxxxxxxx
Xxxxxxx X. Xxxx Director
Xxxxxx X. Xxxxxx Senior Vice President
Xxxxxxx X. Xxxxx Senior Vice president
Xxxx X. Xxxxxx Vice President
Xxxxx X. Xxxxxxx Vice President
Xxxxxxx X. Xxxxxx Vice President
Xxxx Xxxxxxxx Vice President
X.X. Xxx Vice President
Xxxxx Xxxxxxxxx Vice President
K.H. Teh Vice President
Xxxxx X. Xxxxxx Vice President
Principal Stockholders
Hyundai Electronics America
