EXHIBIT 1.1
SOLECTRON CORPORATION
COMMON STOCK
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UNDERWRITING AGREEMENT
May 6, 2004
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Solectron Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to Xxxxxxx,
Sachs & Co. (the "Underwriter") an aggregate of 17,109,948 shares of common
stock, par value $0.001 per share ("Common Stock") of the Company (the
"Shares").
1. The Company represents and warrants to, and agrees with, the
Underwriter as of the date hereof that:
(a) A registration statement on Form S-3 (File No. 333-64454-01) and
amendments thereto filed prior to the date hereof (collectively, the "Initial
Registration Statement") in respect of the Shares has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto prior to the date hereof,
excluding exhibits to the Initial Registration Statement, but including all
documents incorporated by reference in the prospectus contained therein as of
the date hereof, each in the form heretofore delivered to the Underwriter, have
been declared effective by the Commission in such form; no other document with
respect to the Initial Registration Statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing with the
Commission (other than filings by the Company under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), other than a prospectus filed pursuant
to Rule 424(b) of the rules and regulations of the Commission under the
Securities Act of 1933, as amended (the "Securities Act"); and no stop order
suspending the effectiveness of the Initial Registration Statement or any
post-effective amendment thereto has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) under the Securities Act relating to the
Shares is hereinafter called a "Preliminary Prospectus"; the various parts of
the Initial Registration Statement, and any post-effective amendment thereto,
including all exhibits thereto and the documents incorporated by reference in
the prospectus contained in the Initial Registration Statement at the time such
part of the Initial Registration Statement became effective, each as amended at
the time such part of the Initial Registration Statement became effective, are
hereinafter collectively called the "Registration Statement"; the prospectus
relating to the offer and sale of the Shares, in the form in which it has most
recently been filed, or transmitted for filing, with the
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Commission on or prior to the date of this Agreement, being hereinafter called
the "Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed under the Exchange Act after
the date of such Preliminary Prospectus or Prospectus, as the case may be, and
on or prior to the date hereof or the Time of Delivery (as defined in Section 4
hereof), as applicable, and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any amendment to
the Initial Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Sections 13(a) or 15(d) of the
Exchange Act after the effective date of the Initial Registration Statement that
is incorporated by reference in the Registration Statement and on or prior to
the date hereof or the Time of Delivery, as applicable; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to the Prospectus
as amended or supplemented in relation to the Shares in the form in which it is
filed with the Commission pursuant to Rule 424(b) under the Securities Act in
accordance with Section 5(a) hereof including any documents incorporated by
reference therein as of the date of such filing);
(b) No order preventing or suspending the use of the Prospectus has been
issued by the Commission, and the Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Securities Act and
the rules and regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by the Underwriter expressly for use therein;
(c) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be, on or
prior to the date hereof or the Time of Delivery, as applicable, conformed and
will conform in all material respects with the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and when read together with the other information in the
Prospectus none of such documents contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements in the Prospectus, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by the Underwriter;
(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform on and prior to the date hereof and the Time of
Delivery, as applicable, comply, in all material respects with the requirements
of the Securities Act and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date of the Registration
Statement and any amendment thereto and as of the applicable filing date of the
Prospectus and any amendment or supplement thereto, in
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any case on and prior to the date hereof and the Time of Delivery, as
applicable, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriter expressly for use therein;
(e) Since the respective dates as of which information is given in the
Prospectus, except as otherwise stated therein, (a) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (b) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those arising
in the ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise, and (c) except for
dividends on the Company's preferred stock that may be outstanding from time to
time, in amounts per share that are consistent with the applicable charter
document or supplement thereto, respectively, no dividend or distribution of any
kind has been declared, paid or made by the Company on any class of its capital
stock;
(f) The Company and its subsidiaries (i) have good and marketable title to
all real property owned by them and (ii) hold all personal property owned by
them, in each case free and clear of all adverse claims, liens, encumbrances and
defects except such as are described in the Prospectus or such as would not
result, singly or in the aggregate, in a Material Adverse Effect; and all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, are held by them under valid,
subsisting and enforceable leases with such exceptions as do not interfere with
the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, except as would not, singly or in the aggregate,
result in a Material Adverse Effect;
(g) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under or as contemplated under this Agreement. The
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect;
(h) Each subsidiary of the Company has been duly organized and is validly
existing as an entity in good standing under the laws of the jurisdiction of its
organization, has the power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign organization to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing would not result
in a Material Adverse Effect. The Company does not have any "significant
subsidiaries" (as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the Securities Act) other than those listed on Schedule I
hereto.
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Except as otherwise stated in the Registration Statement and the Prospectus, all
of the issued and outstanding capital stock of each significant subsidiary has
been duly authorized and is validly issued, fully paid and non-assessable and is
owned by the Company (except for directors qualifying shares), directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. None of the outstanding shares of capital
stock of any significant subsidiary were issued in violation of preemptive or
other similar rights of any securityholder of such subsidiary;
(i) The Company has the capitalization set forth in the Prospectus under
the heading "Capitalization," and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable; the Shares have been duly and validly authorized and
reserved for issuance and, when issued and delivered in accordance with the
terms of this Agreement, will be duly and validly issued, fully paid and
non-assessable and will conform in all material respects to the description of
Common Stock contained in the Prospectus and the issuance of the Shares will not
be subject to any preemptive or other similar right;
(j) The issue and sale of the Shares and the compliance by the Company
with all of the terms of this Agreement and the consummation of the transactions
herein contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, (i) any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, except
as disclosed in the Prospectus and except for such conflicts, breaches,
violations or defaults that would not result in a Material Adverse Effect, (ii)
nor will such action result in any violation of (A) the provisions of the
Certificate of Incorporation or the By-laws of the Company, or (B) any
applicable statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its subsidiaries
or any of their properties, except for such violations in the case of this
clause (B) that would not result in a Material Adverse Effect; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue and sale of
the Shares or the consummation by the Company of the transactions contemplated
by this Agreement, except for (i) those consents, approvals, authorizations,
orders, registrations or qualifications which have already been obtained or (ii)
such consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares;
(k) Neither the Company nor any of its subsidiaries is (i) in violation of
its charter or by-laws or similar governing documents or (ii) in default in the
performance or observance of any material obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound, except, in the case of this clause (ii), as
disclosed in the Prospectus on the date hereof, and except for such defaults as
would not result in a Material Adverse Effect;
(l) The statements set forth in the Prospectus under the caption
"Description of Capital Stock" insofar as they purport to constitute a summary
of Common Stock, and the statements set forth in Prospectus under the caption
"Underwriting" (other than statements made under such caption solely in reliance
upon and in conformity with
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information furnished in writing to the Company by the Underwriter expressly for
such use therein), insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate, complete and fair in all
material respects;
(m) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending, or to the knowledge of the Company,
threatened, to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect;
(n) The Company is not and, after giving effect to the offering and sale
of the Shares, will not be an "investment company" or an entity "controlled" by
an "investment company", as such terms are defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act");
(o) KPMG, LLP, who have certified certain financial statements of the
Company and its subsidiaries, are independent public accountants as required by
the Securities Act and the rules and regulations of the Commission thereunder;
(p) The financial statements of the Company (excluding for purposes of
this clause (p), any pro forma financial information) included in the
Registration Statement and the Prospectus, together with the related schedules
and notes, as well as those financial statements, schedules and notes of any
other entity included therein (or incorporated by reference), present fairly the
financial position of the Company and its consolidated subsidiaries, or such
other entity, as the case may be, at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries, or such other entity, as the case may be, for the
periods specified. Such financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved except to the extent that the interim
audited financial statements are subject to normal year-end adjustments, lack of
footnotes and other presentation items. The supporting schedules, if any,
included in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in the Prospectus
present fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement and the Prospectus;
(q) The pro forma condensed consolidated balance sheet and condensed
consolidated statements of operations, the related notes thereto and the related
pro forma supplementary information set forth (or incorporated by reference) in
the Registration Statement and the Prospectus have been prepared in all material
respects in accordance with the applicable requirements of Rule 11-02 of
Regulation S-X promulgated under the Exchange Act, have been compiled on the pro
forma basis described therein and, in the opinion of the Company, the
assumptions used in the preparation thereof were reasonable at the time made and
the adjustments used therein are based upon good faith estimates and assumptions
believed by the Company to be reasonable at the time made;
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(r) The Company maintains and will maintain disclosure controls and
procedures (as defined in Rule 13a-15 of the Exchange Act) designed to ensure
that information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported in accordance with the Exchange Act and the rules and regulations
thereunder. The Company has carried out and will carry out evaluations, under
the supervision and with the participation of the Company's management, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures in accordance with Rule 13a-15 of the Exchange Act;
(s) This Agreement has been duly authorized, executed and delivered by the
Company;
(t) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business now
operated by them, and other than as described in the Prospectus, neither the
Company nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of, or conflict with, asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate, would result
in a Material Adverse Effect;
(u) The Company and its subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them,
except as would not, singly or in the aggregate, have a Material Adverse Effect.
The Company and its subsidiaries are in compliance with the terms and conditions
of all such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect. All of the
Governmental Licenses are valid and in full force and effect, except where the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not result in a Material Adverse
Effect. Neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect; and
(v) Except as otherwise stated in the Registration Statement and the
Prospectus or as would not, singly or in the aggregate, result in a Material
Adverse Effect, (a) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants,
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contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), (b) the
Company and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance with
their requirements, (c) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company or any of its subsidiaries and (d)
there are no events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to Hazardous Materials
or any Environmental Laws.
2. Subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Underwriter, and the Underwriter agrees
to purchase from the Company, at a purchase price per share of $4.775, all of
the Shares.
3. Upon the authorization by the Company of the release of the
Shares, the Underwriter proposes to offer the Shares for sale upon the terms and
conditions set forth in this Agreement and the Prospectus.
4. (a) Payment for the Shares shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Shares for the account of the Underwriter at the office of Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxx (the "Closing Location"), on May 11, 2004 at 9:30 a.m. New York
City Time, or at such other time on the same or such other date as shall be
agreed upon in writing by the Company and the Underwriter. The time and date of
such payment are hereinafter referred to as the "Time of Delivery".
(b) Certificates for the Shares shall be in definitive form and registered
in such names and in such denominations as you shall request in writing not
later than one full business day prior to the Time of Delivery. The certificates
evidencing the Shares shall be delivered to you on the Time of Delivery, for the
respective account of the Underwriter, with any transfer taxes payable in
connection with the transfer of the Shares to the Underwriter duly paid, against
payment of the purchase price therefor.
5. The Company agrees with the Underwriter:
(a) To prepare the Prospectus in a form approved by the Underwriter and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act not later
than the Commission's close of business on the second business day following the
date hereto or, if applicable, such earlier time as may be required by Rule
424(b); to make no further amendment or any supplement to the Registration
Statement or Prospectus and prior to the Time of Delivery for the Shares which
shall be reasonably disapproved by the Underwriter for such Shares promptly
after reasonable notice thereof; to advise the Underwriter promptly of any such
amendment or supplement after such Time of Delivery and furnish the Underwriter
with copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
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Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares, and during such same period to advise the
Underwriter, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective or
any supplement to the Prospectus or any amended Prospectus has been filed with
the Commission, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any prospectus relating to the Shares,
of the suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Shares or
suspending any such qualification, to promptly use its best efforts to obtain
the withdrawal of such order;
(b) Promptly from time to time to take such action as the Underwriter may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as the Underwriter may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction or subject itself to taxation
in excess of a nominal dollar amount in any such jurisdiction where it is not
then so subject;
(c) Prior to 10:00 a.m., New York City time, on the second business day
following the date of this Agreement and from time to time, to furnish the
Underwriter with written and electronic copies of the Prospectus in New York
City in such quantities as the Underwriter may reasonably request, and, if the
delivery of a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with the offering
or sale of the Shares and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Underwriter and upon the
Underwriter request to file such document and to prepare and furnish without
charge to the Underwriter and to any dealer in securities as many written and
electronic copies as the Underwriter may from time to time reasonably request of
an amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance; and in case the Underwriter is
required to deliver a prospectus in connection with sales of any of the Shares
at any time nine months or more after the time of issue of the Prospectus, upon
the Underwriter's request but at the expense of the Underwriter, to prepare and
deliver to the Underwriter as many written and electronic copies as the
Underwriter may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Securities Act;
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(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c)), an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) During the period beginning from the date hereof and continuing to and
including the date 45 days after the date of the Prospectus, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company that are substantially similar to the Shares,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive the Shares, without the
prior written consent of the Underwriter. The foregoing sentence shall not apply
to (i) the Shares to be sold hereunder, (ii) any shares of Common Stock issued
by the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the Prospectus, (iii)
any securities of the Company issued in the ordinary course of business
consistent with past practice pursuant to the Company's stock option plans,
stock option agreements and employee stock purchase plans existing as of the
date of this Agreement;
(f) To make available pursuant to the Commission's Electronic Data
Gathering and Retrieval system ("XXXXX") or, if XXXXX is not available, to
furnish to the holders of the Shares as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three fiscal quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), to make available pursuant to XXXXX or, if XXXXX
is not available, to furnish to the holders of Securities consolidated summary
financial information of the Company and its subsidiaries for such quarter in
reasonable detail;
(g) During a period of two years from the effective date of the
Registration Statement, to furnish to the Underwriter copies of all reports or
other communications (financial or other) furnished to stockholders generally,
and to deliver to the Underwriter (i) as soon as they are available, copies of
any reports and financial statements furnished to or filed with the Commission
or any national securities exchange on which the Shares or any class of
securities of the Company is listed (excluding any report or financial statement
which is available publicly through XXXXX); and (ii) for such time as the
Underwriter may continue to hold an unsold allotment of Shares, such additional
information concerning the business and financial condition of the Company as
the Underwriter may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission); provided, that the Company shall
not be required to furnish to the Underwriter information if in the opinion of
counsel to the Company, the provision of such information would amount to a
violation of Regulation FD under the Securities Act;
(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds"; and
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(i) To use its reasonable efforts to list, subject to notice of issuance,
the Shares on the New York Stock Exchange (the "Exchange").
6. The Company covenants and agrees with the Underwriter that the
Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Securities Act
and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriter and dealers; (ii) the cost
of printing or producing this Agreement and any document prepared or
executed by the Company (or based upon any written information furnished
by the Company) specifically for the purpose of qualifying all or any of
the Shares under the securities laws of any state or other jurisdiction,
closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for
the Underwriter in connection with such qualification and in connection
with the Blue Sky and legal investment surveys; (iv) the filing fees
incident to, and the fees and disbursements of counsel for the Underwriter
in connection with, any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; (v) the
cost of preparing the Shares; and (vi) all other costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 8 and 10
hereof, the Underwriter will pay all of its own costs and expenses,
including the fees of its counsel, transfer taxes on resale of any of the
Shares by it, and any advertising expenses connected with any offers it
may make.
7. The obligations of the Underwriter hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in its
discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of such Time of
Delivery, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Securities Act and in accordance with Section
5(a) hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to the Underwriter reasonable satisfaction;
(b) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Underwriter,
shall have furnished to the Underwriter a written opinion or opinions reasonably
acceptable to the Underwriter;
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(c) Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel
for the Company, shall have furnished to the Underwriter a written opinion,
dated such Time of Delivery, subject to customary and reasonable qualifications
and limitations previously approved by you, in form and substance satisfactory
to the Underwriter, substantially to the effect set forth in Annex II hereto;
(d) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, KPMG LLP shall have
furnished to the Underwriter a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to the Underwriter, to the
effect set forth in Annex I hereto;
(e) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or any
material change in the capital stock or long-term or short-term debt of the
Company and its subsidiaries considered as one enterprise, otherwise than as set
forth or contemplated in the Prospectus, the effect of which is, in the judgment
of the Underwriter, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being issued at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(f) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either federal, New York or California State authorities or a material
disruption in commercial banking or securities settlement or clearance services
in the United States; (iv) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war or (v) the occurrence of any other calamity or crisis or any
change in financial, political or economic conditions in the United States or
elsewhere, if the effect of any such event specified in clause (iv) or (v) in
the judgment of the Underwriter makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being issued at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus;
(g) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement;
(h) The Shares shall have been duly listed, subject to notice of issuance,
on the Exchange
(i) The Company shall have furnished or caused to be furnished to the
Underwriter at such Time of Delivery certificates of officers of the Company
satisfactory to the Underwriter as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to the
performance by the
11
Company of all of its obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and (e) of this
Section 7 and as to such other matters as the Underwriter may reasonably
request;
(j) The Underwriter shall have received from each executive officer and
director of the Company listed on Annex III(a) a signed "lock-up" agreement
substantially in the form of Annex III(b) hereto and such lock-up agreements
shall be in full force and effect; and
(k) On or after the date hereof, (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities.
8. (a) The Company will indemnify and hold harmless the Underwriter, each
person, if any, who controls the Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, and
each affiliate of the Underwriter within the meaning of Rule 405 under the
Securities Act against any losses, claims, damages or liabilities, joint
or several, to which the Underwriter may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
(i) an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment or supplement
thereto, or arise out of or are based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) an untrue
statement or alleged untrue statement of a material fact contained in a
Preliminary Prospectus or a Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon any omission or alleged
omission to state therein a material fact necessary in order to make the
statements, in the light of the circumstances under which they were made,
not misleading; and will reimburse the Underwriter for any legal or other
expenses reasonably incurred by the Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall 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 an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use
therein.
(b) The Underwriter will indemnify and hold harmless the Company, its
directors, its officers and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or any
amendment or supplement thereto, or arise out of or are based upon any omission
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or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (ii) an
untrue statement or alleged untrue statement of a material fact contained in a
Preliminary Prospectus or a Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon any omission or alleged omission to state
therein a material fact necessary in order to make the statements, in the light
of the circumstances under which they were made, not misleading; to the extent,
but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriter on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified
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party in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and the
Underwriter on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriter on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriter.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriter on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriter
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Underwriter within the meaning of the Securities Act; and the obligations of the
Underwriter under this Section 8 shall be in addition to any liability which the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Securities Act.
9. If the Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder, the Company shall be
entitled to a period of thirty-six hours within which to procure another
party or other parties satisfactory to the Underwriter to purchase such
Shares on such terms. In the event that, within the prescribed period, the
Company notifies the Underwriter that it has so arranged for the purchase
of such Shares, the Company shall have the right to postpone such Time of
Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements,
and the Company agrees to file promptly any amendments to the Registration
Statement or the Prospectus which in the Underwriter's opinion may thereby
be made necessary. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section 9 with like effect as if
such person had originally been a party to this Agreement with respect to
the Shares.
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10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the Underwriter, as set
forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of the Underwriter or any controlling person
of the Underwriter, or the Company, or any officer or director or
controlling person of the Company, and shall survive delivery of and
payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to the
Underwriter except as provided in Sections 6 and 8 hereof; but, if for any
other reason, any Shares are not delivered by or on behalf of the Company
as provided herein, the Company will reimburse the Underwriter for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriter in making
preparations for the purchase, sale and delivery of the Shares, but the
Company shall then be under no further liability to the Underwriter,
except as provided in Sections 6 and 8 hereof.
12. All statements, requests, notices and agreements hereunder shall
be in writing, and if to the Underwriter shall be delivered or sent by
mail, telex or facsimile transmission to 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Legal Department; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address
of the Company set forth in the Registration Statement, Attention:
Secretary. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriter, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and
each person who controls the Company or the Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from the Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be
an original, but all such respective counterparts shall together
constitute one and the same instrument.
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If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and one for each counsel counterparts hereof,
and upon the acceptance hereof by you, this letter and such acceptance hereof
shall constitute a binding agreement between the Underwriter and the Company.
Very truly yours,
Solectron Corporation
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President and
Chief Financial Officer
Accepted and Agreed to as of the date hereof:
/s/ Xxxxxxx, Sachs & Co.
--------------------------------------
(Xxxxxxx, Xxxxx & Co.)
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SCHEDULE I
SIGNIFICANT SUBSIDIARIES
Solectron USA, Inc.
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