[ ] SHARES
INTEGRATED TELECOM EXPRESS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
[------], 2000
XXXXXX BROTHERS INC.
BEAR XXXXXXX & CO. INC.
WITSOUNDVIEW
FIDELITY CAPITAL MARKETS, a division of
National Financial Services Corporation
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Intregrated Telecom Express, Inc., a Delaware corporation (the
"Company" or "ITeX"), proposes to sell [ ] shares (the "Firm Stock") of the
Company's Common Stock, par value $[ ] per share (the "Common Stock").
It is understood that, subject to the conditions hereinafter stated,[ ]
shares of the Firm Stock will be sold to the several Underwriters named in
Schedule 1 hereto (the "Underwriters") in connection with the offering and sale
of such Firm Stock.
In addition, the Company proposes to grant to the Underwriters an
option to purchase up to an additional [ ] shares of the Common Stock on the
terms and for the purposes set forth in Section 2 (the "Option Stock"). The
Firm Stock and the Option Stock, if purchased, are hereinafter collectively
called the "STOCK". This is to confirm the agreement concerning the purchase of
the Stock from the Company by the Underwriters.
It is understood and agreed that prior to the Closing Date (as defined
below), the Company has and will consummate transactions (the "Transactions")
pursuant to which the Company has entered into a strategic alliance (the
"Strategic Alliance") with NEC prior to the Closing Date and will sell shares of
Common Stock to NEC Corporation ("NEC") as of the Closing Date pursuant to a
Securities Purchase Agreement dated as of _____________, 2000 (the "Securities
Purchase Agreement") (as more fully described in the Prospectus). The sale of
the Common Stock to NEC shall be deemed to take place on the Closing Date
simultaneously with the sale of the stock to the Underwriters.
1.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the Stock
has (i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the Securities Act.
Copies of such registration statement and each of the amendments thereto have
been delivered by the Company to you. As used in this Agreement, "EFFECTIVE
TIME" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective
by the Commission; "EFFECTIVE DATE" means the date of the Effective Time;
"PRELIMINARY PROSPECTUS" means each prospectus included in such registration
statement, or amendments thereof, before it became effective under the
Securities Act and any prospectus filed with the Commission by the Company with
the consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "REGISTRATION STATEMENT" means such registration statement, as
amended at the Effective Time, including all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part of the Registration Statement as of the
Effective Time pursuant to Rule 430A of the Rules and Regulations; and
"PROSPECTUS" means the prospectus in the form first used to confirm sales of
Stock. If the Company has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such Rule
462 Registration Statement. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations and do not and will not, as of the applicable
effective date (as to the Registration Statement and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any amendment or
supplement thereto) 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 that no representation or warranty
is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein.
(c) Except as described in the Prospectus, the Company has no
subsidiaries and does not own, directly or indirectly, any equity interest in
any other corporation, partnership, limited liability company or other entity.
(d) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state of Delaware, is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which its ownership or lease of property or the conduct
of its business requires such qualification, and has all power and
2.
authority necessary to own or hold its properties and to conduct the business in
which it is engaged.
(e) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable, conform to the description thereof contained in the Prospectus
and were issued in compliance with all applicable laws.
(f) The shares of the Stock to be issued and sold by the Company
to the Underwriters hereunder and the shares of Common Stock to be issued and
sold by the Company to NEC in connection with the Strategic Alliance have been
duly and validly authorized and, when issued and delivered against payment
therefor in accordance with this Agreement and the Securities Purchase
Agreement, respectively, will be duly and validly issued, fully paid and
non-assessable; and the Stock and the Common Stock will conform to the
descriptions thereof contained in the Prospectus and will not be subject to any
liens, encumbrances, equities or claims.
(g) This Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company, enforceable
in accordance with its terms, except as rights to indemnification hereunder may
be limited by applicable law and except as the enforcement hereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(h) The execution, delivery and performance of this Agreement and
each of the other documents to be entered into in connection with the
Transactions by the Company and the consummation of the transactions
contemplated hereby and thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound or
to which any of the property or assets of the Company is subject, nor will such
actions result in any violation of the provisions of the charter or by-laws of
the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
properties or assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of the Stock by
the Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement or any of the other
documents to be entered into in connection with the Transactions by the Company
and the consummation of the transactions contemplated hereby.
(i) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in
3.
any securities being registered pursuant to any other registration statement
filed by the Company under the Securities Act.
(j) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock since the initial filing of the
Registration Statement or during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or
S of, the Securities Act other than shares issued pursuant to employee benefit
plans, or pursuant to outstanding options, rights or warrants.
(k) Subsequent to the respective dates as of which information is
given in the Prospectus: (i) there has been no material loss or interference
with the Company's business including from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree; (ii) there has been no material
adverse change, or any development that could reasonably be expected to result
in a material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity, results of operations, business or
prospects of the Company (any such change is called a "Material Adverse
Change"); (iii) the Company has not incurred any material liability or
obligation, indirect, direct or contingent, not in the ordinary course of
business or entered into any material transaction or agreement not in the
ordinary course of business; and (iv) there has been no dividend or distribution
of any kind declared, paid or made by the Company or, except for dividends paid
to the Company, on any class of capital stock or repurchase or redemption by the
Company of any class of capital stock.
(l) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved.
(m) PriceWaterhouseCoopers LLP, who have certified certain
financial statements of the Company, whose report appears in the Prospectus and
who have delivered the initial letter referred to in Section 7(e) hereof, are
independent public accountants as required by the Securities Act and the Rules
and Regulations.
(n) The Company has good and marketable title in fee simple to all
real property and good and marketable title to all personal property purportedly
owned by it, in each case free and clear of all liens, encumbrances and defects,
except as are described in the Prospectus or as do not materially affect the
value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company; and all assets held under
lease by the Company are held by it under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such assets by the Company.
(o) The Company carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of its business
and the value of its properties and as is customary for companies engaged in
similar businesses in similar industries.
4.
(p) The Company owns or possesses sufficient trademarks, trade
names, patent rights, copyrights, licenses, approvals, trade secrets and other
similar rights (collectively, "Intellectual Property Rights") reasonably
necessary to conduct its business as described in the Prospectus; and the
expected expiration of any of such Intellectual Property Rights would not result
in a Material Adverse Change. The Company has not received any notice of
infringement or conflict with asserted Intellectual Property Rights of others,
which infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Change.
(q) There are no legal or governmental proceedings pending to
which the Company is a party or of which any property or assets of the Company
is the subject which, if determined adversely to the Company, might have a
material adverse effect on the general affairs, financial position, stockholders
equity, results of operations, business or prospects of the Company (a "Material
Adverse Effect"); and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others nor is there any basis therefore.
(r) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have not
been described in the Prospectus or filed as exhibits to the Registration
Statement.
(s) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, employees,
stockholders, customers or suppliers of the Company on the other hand, which is
required to be described in the Prospectus which is not so described.
(t) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent or likely to occur, which might
have a Material Adverse Effect.
(u) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder (ERISA); no reportable event (as defined in ERISA) has occurred with
respect to any pension plan (as defined in ERISA) for which the Company would
have any liability; the Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any pension plan or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the Code); and each Pension Plan for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification.
(v) The Company has accurately and timely filed all federal,
state, local and foreign tax returns required to be filed through the date
hereof and has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company which has had (nor does the Company have any
knowledge of any tax deficiency which, if determined adversely to the Company
might have) a Material Adverse Effect.
5.
(w) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business and which are not material, (iii) entered into any transaction not in
the ordinary course of business and which is not material or (iv) declared or
paid any dividend on its capital stock.
(x) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable assurance
that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit accurate
preparation of its financial statements and to maintain accountability for its
assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(y) The Company is not (i) in violation of its charter or by-laws,
(ii) in default in any material respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to which any of
its properties or assets is subject or (iii) in violation in any material
respect of any law, ordinance, governmental rule, regulation or court decree to
which it or its property or assets may be subject or has failed to obtain any
license, permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of "its
business.
(z) Neither the Company nor any director, officer, agent, employee
or other person associated with or acting on behalf of the Company has used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(aa) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company (or, to the
knowledge of the Company, any of its predecessors in interest) at, upon or from
any of the property now or previously owned or leased by the Company in
violation of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action under any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit, except for
any violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a Material Adverse Effect. There has been no
spill, discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or with respect to which the Company
has or should have knowledge, except for any such spill,
6.
discharge, leak, emission, injection, escape, dumping or release which would not
have or would not be reasonably likely to have, singularly or in the aggregate
with all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a Material Adverse Effect; and the terms hazardous
wastes, toxic wastes, hazardous substances and medical wastes shall have the
meanings specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(bb) The Company is not, and as of the Closing Date after giving
effect to the sale of the Stock to the Underwriters and the Transactions and the
application of the net proceeds therefrom as described in the Prospectus, will
not, be an "investment company" as defined in the Investment Company Act of
1940, as amended.
(cc) On or prior to the Closing Date, each of the documents to be
entered into in connection with the Transactions (other than this Agreement)
will have been duly authorized, executed and delivered by the Company in
substantially the form previously provided to the Underwriters and will conform
to the descriptions thereof in the Prospectus.
(dd) None of the Directed Stock (as defined below) distributed in
connection with the Directed Stock (as defined below) Program will be offered or
sold outside of the United States.
(ee) As of the date the Registration Statement became effective,
the Common Stock was authorized for listing on the Nasdaq National Market upon
official notice of issuance.
(ff) Except for the Shares or as disclosed in the Prospectus, all
outstanding shares of Common Stock, and all securities convertible into or
exercisable or exchangeable for Common Stock, are subject to valid and binding
agreements (collectively, the "Lock-up Agreements") that restrict the holders
thereof from selling, making any short sale of, granting any option for the
purchase of, or otherwise transferring or disposing of, any of such shares of
Common Stock, or any such securities convertible into or exercisable or
exchangeable for Common Stock, for a period of 180 days after the date of the
Prospectus without the prior written consent of Xxxxxx Brothers, Inc.
(gg) The Company (i) has notified each holder of a currently
outstanding option issued under the 1996 Stock Plan, the 2000 Stock Plan, the
2000 Restricted Stock Purchase Plan, or the 2000 Employee Stock Purchase Plan
(collectively, the "Plans") and each person who has acquired shares of Common
Stock pursuant to the exercise of any option granted under the Plans that
pursuant to the terms of the Plans, that none of such options or shares may be
sold or otherwise transferred or disposed of for a period of 180 days after the
date of the Prospectus and (ii) has imposed a stop-transfer instruction with the
Company's transfer agent in order to enforce the foregoing lock-up provision
imposed pursuant to the Plans.
(hh) The Company (i) has notified each shareholder who is party to
the First Amended and Restated Stockholders'Agreement dates as of October 6,
(the "Stockholder Agreement"), that pursuant to the terms of the Stockholder
Agreement, none of the shares of the Company's capital stock held by such
stockholder or capital stock into which such shares are convertible may be sold
or otherwise transferred or disposed of for a period of 180 days after the date
of the Prospectus and (ii) has imposed a stop-transfer instruction with the
Company's transfer agent in
7.
order to enforce the foregoing lock-up provision imposed pursuant to the
Stockholder Agreement.
(ii) The Company represents and warrants that (i) the Registration
Statement, the Prospectus and any preliminary prospectus comply, and any further
amendments or supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any preliminary
prospectus, as amended or supplemented, if applicable, are distributed in
connection with the Directed Share Program, and that (ii) no authorization,
approval, consent, license, order, registration or qualification of or with any
government, governmental instrumentality or court, other than such as have been
obtained, is necessary under the securities laws and regulations of foreign
jurisdictions in which the Directed Shares are offered.
2. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell [ ] shares of the Firm
Stock to the several Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase the number of shares of the Firm Stock set
forth opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to [ ] shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 4 hereto. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set forth opposite the name of such
Underwriters in Schedule 1 hereto. The respective purchase obligations of
each Underwriter with respect to the Option Stock shall be adjusted by the
Representatives so that no Underwriter shall be obligated to purchase Option
Stock other than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be $[ ]
per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), except upon payment for
all the Stock to be purchased on such Delivery Date as provided herein.
3. OFFERING OF STOCK BY THE UNDERWRITERS. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set
forth in the Prospectus. It is understood that [________] shares of the Firm
Stock ("Directed Shares") will initially be reserved by the Underwriters for
offer and sale to employees and persons having business relationships with
the Company ("Directed Share Participants") upon the terms and conditions set
forth in the Prospectus and in accordance with the rules and regulations of
the NASD ("Directed Share Program"). Under no circumstance will Xxxxxx
Brothers Inc. or any Underwriter be liable to the Company or to any Directed
Share Participant for any action taken or omitted to be taken in good faith
in connection with such Directed Share Program. To the extent that any
Directed Shares are not affirmatively reconfirmed for purchase by any
Directed Shares Participant on or immediately after the date of
8.
this Agreement, such Directed Shares may be offered to the public as part of the
public offering contemplated hereby.
The Company agrees to pay all fees and disbursements incurred by the
Underwrites in connection with the Directed Share Program, including counsel
fees and any stamp duties or other taxes incurred by the Underwriters in
connection with the Directed Share Program.
In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon a request in writing, to indemnify and hold
harmless Xxxxxx Brothers, Inc. and the other Underwriters from and against any
loss, claim, damage, expense, liability or action which (i) arises out of, or is
based upon, any untrue statement of a material fact contained in any material
prepared by or with the approval of the Company for distribution to Directed
Share Participants in connection with the Directed Share Program or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) arises
out of the failure of any Directed Share Participant to pay for and accept
delivery of Directed Shares that the Directed Share Participant agreed to
purchase or (iii) is otherwise related to the Directed Share Program, other than
losses claims, damages or liabilities (or expenses relating thereto) that are
finally judicially determined to have resulted directly from the bad faith or
gross negligence of Xxxxxx Brothers Inc.
4. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and payment for the
Firm Stock shall be made at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000
Xxxx Xxxx Xxxx, Xxxx Xxxx, XX 00000, at 10:00 A.M., New York City time, on the
fourth full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives
and the Company. This date and time are sometimes referred to as the First
Delivery Date. On the First Delivery Date, the Company shall deliver or cause to
be delivered certificates representing the Firm Stock to the Representatives for
the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Firm Stock shall be registered in such
names and in such denominations as the Representatives shall request in writing
not less than two full business days prior to the First Delivery Date. For the
purpose of expediting the checking and packaging of the certificates for the
Firm Stock, the Company shall make the certificates representing the Firm Stock
available for inspection by the Representatives in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to the First
Delivery Date.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are
9.
sometimes referred to as a Second Delivery Date, and the First Delivery Date and
any Second Delivery Date are sometimes each referred to as a Delivery Date.
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the Representatives shall request in the
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
5. FURTHER AGREEMENTS OF THE COMPANY. THE COMPANY AGREES:
(a) To prepare the Prospectus in a form approved by the
Representatives 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 execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Representatives, 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 and to furnish promptly the Representatives with copies thereof; to advise
the Representatives, promptly after it receives notice thereof, of the issuance
by the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock 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 the Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
10.
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Stock or any
other securities relating thereto and if at such time any events 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 the 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 to amend or
supplement the Prospectus in order to comply with the Securities Act, to notify
promptly the Representatives and, upon their request, to file such document and
to prepare and furnish promptly without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Prospectus which will correct
such statement or omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by the Company
to its stockholders and all public reports and all reports and financial
statements furnished by the Company to the National Association of Security
Dealers (the "NASD") or the principal national securities exchange upon which
the Common Stock may be listed pursuant to requirements of or agreements with
such exchange or to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives 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 Stock; 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;
11.
(i) To enforce the terms of each Lock-Up Agreement and to issue
stop-transfer instructions to the transfer agent for the Common Stock with
respect to any transaction or contemplated transaction that would constitute a
breach of or default under the applicable Lock-Up Agreement. In addition,
without the prior written consent of Xxxxxx Brothers, Inc. not to amend or
terminate, or waive any right under, any Lock-Up Agreement, or take any other
action that would directly or indirectly have the same effect as an amendment or
termination, or waiver of any right under, any Lock-Up Agreement, that would
permit any holder of shares of Common Stock, or securities convertible into or
exercisable or exchangeable for Common Stock, to (1) offer, pledge, sell,
contract to sell, sell any option, right or warrant or contract to purchase,
purchase any option, right or warrant or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock other than the exercise of
options granted under the Plans or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or not to consent to any of the foregoing.
(j) To apply for the listing of the Stock on the Nasdaq
National Market, and complete that listing, subject only to official notice
of issuance, prior to the First Delivery Date;
(k) To apply the net proceeds from the Transactions as set forth
in the Prospectus ;
(l) To take such steps as shall be necessary to ensure that the
Company shall not become an "investment company" as defined in the Investment
Company Act of 1940, as amended; and
(m) In connection with the Directed Stock Program to ensure that
the Directed Stock will be restricted to the extent required by the NASD or the
rules of such association from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement, the Company will direct the
transfer agent to place stop transfer restrictions upon such securities for such
period of time.
6. EXPENSES. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement and,
any Supplemental Agreement Among Underwriters and any other related documents in
connection with the offering, purchase, sale and delivery of the Stock; (e) the
filing fees incident to securing the review by the NASD of the terms of sale of
the Stock; (f) any applicable listing or other fees; (g) the fees and expenses
of qualifying the Stock under the securities laws of the several jurisdictions
as provided in Section 5(h) and of preparing, printing and distributing a Blue
Sky Memorandum (including related fees and expenses of counsel to the
Underwriters); (h) all costs and expenses of the Underwriters,
12.
including the fees and disbursements of counsel for the Underwriters, incident
to the Directed Stock Program described in Section 3; (i) the costs and expenses
of the Company relating to investor presentations on any road show undertaken in
connection with the marketing of the offering of the Stock, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show, and (j) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement; provided that, except as
provided in this Section 6 and in Section 11 the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of
the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); 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 any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of Xxxxxx Godward LLP, counsel for the
Underwriters, is material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters relating
to this Agreement, the transactions contemplated hereby and the Transactions
shall be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon
such matters.
(d) Wilson, Sonsini, Xxxxxxxx & Xxxxxx, a professional corporation
shall have furnished to the Representatives their written opinion, as counsel to
the Company, addressed to the Underwriters and dated such Delivery Date, in form
and substance reasonably satisfactory to the Representatives, to the effect
that:
13.
(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, is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which its ownership or lease of property or the conduct
of its business requires such qualification and has all power and authority
necessary to own or hold its properties and conduct the business in which it is
engaged;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus;
(iii) The shares of the Stock being delivered on such Delivery Date
to the Underwriters hereunder and the shares of Common Stock being delivered on
such Delivery Date to NEC in connection with the Strategic Alliance have been
duly and validly authorized and, when issued and delivered against payment
therefor will be duly and validly issued, fully paid and non-assessable and
conform in all material respects to the description thereof in the Prospectus;
(iv) Except as described in the Prospectus, there are no preemptive
or other rights to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the Company's charter
or by-laws or any agreement or other instrument known to such counsel;
(v) To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Company is a party or of which any
property or assets of the Company is the subject which, if determined adversely
to the Company, might have a Material Adverse Effect and, to the best of such
counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vi) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the Prospectus
was filed with the Commission pursuant to the subparagraph of Rule 424(b) of the
Rules and Regulations specified in such opinion on the date specified therein
and no stop order suspending the effectiveness of the Registration Statement has
been issued and, to the knowledge of such counsel, no proceeding for that
purpose is pending or threatened by the Commission;
(vii) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to such Delivery
Date (except for the financial statements and financial schedules and other
financial and statistical data included therein, as to which such counsel need
express no belief) comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations;
(viii) The statements (i) in or incorporated by reference in the
Prospectus under the caption "Description of Capital Stock," "Risks Factors - We
depend on third party licensed technology to develop our products, and we may be
unable to market our products if these licenses are not available to us or if
they are terminated; The measures on which we rely to
14.
protect our intellectual property rights afford only limited protections;
Because our industry is characterized by frequent litigation over intellectual
property rights, we may be required to incur substantial expenses and divert
management attention and resources in defending the use of our intellectual
property; We may incur substantial expenses and divert management resources in
prosecuting others for their unauthorized use of our intellectual property
rights; The large number of shares eligible for public sale after this offering
could cause our stock price to decline; and Some provisions of our charter
documents may make acquiring control of our company more difficult for a third
party, which could harm our stock's market price or reduce any premium over
market price that an acquiror might otherwise pay," "Management-Stock Plans,"
"Limitations on Directors Liability," "Employment Arrangements," "Certain
Transactions - Relationships with UMC," "Indemnification Agreements," and
"Shares Eligible for Future Sale," and (ii) in Item 14 and Item 15 of the
Registration Statement, insofar as such statements constitute matters of law,
summaries of legal matters, the Company's charter or by-law provisions,
documents or legal proceedings, or legal conclusions, has been reviewed by such
counsel and fairly present and summarize, in all material respects, the
information required to be disclosed with respect to such matters referred to
therein.
(ix) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the Securities
Act or by the Rules and Regulations which have not been described or filed as
exhibits to the Registration Statement;
(x) This Agreement has been duly authorized, executed and
delivered by the Company; and each of the other documents relating to the
Transactions to which the Company is a party has been duly authorized, executed
and delivered by the Company;
(xi) The issue and sale of the shares of Stock being delivered on
such Delivery Date by the Company pursuant to this Agreement and the issue and
sale of the shares of Common Stock being delivered on such Delivery Date to NEC
in connection with the Strategic Alliance, and the execution, delivery and
compliance by the Company with all of the provisions of this Agreement and each
of the other documents to be entered into in connection with the other
Transactions and the consummation of the transactions contemplated hereby and
thereby will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known to such
counsel to which the Company is a party or by which the Company is bound or to
which any of the property or assets of the Company is subject, nor will such
actions result in any violation of the provisions of the charter or by-laws of
the Company or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction over the
Company or any of its properties or assets; and, except for the registration of
the Stock under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement or any of the other documents to be entered into
in connection with the other Transactions by the Company and the consummation of
the transactions
15.
contemplated hereby and thereby, except for such consents, approvals,
authorizations, orders, filings or registrations as have been obtained or made;
(xii) Except as described in the Prospectus, to the best of such
counsel's knowledge, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Securities Act;
(xiii) The Company is in compliance in all material respects with all
presently applicable provisions of ERISA; no reportable event (as defined in
ERISA) has occurred with respect to any pension plan (as defined in ERISA) for
which the Company would have any liability; the Company has not incurred and
does not expect to incur liability under (i)Title IV of ERISA with respect to
termination of, or withdrawal from, any pension plan or (ii) Sections 412 or
4971 of the Code; and each pension plan for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification;
(xiv) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company (or, to the
knowledge of the Company, any of its predecessors in interest) at, upon or from
any of the property now or previously owned or leased by the Company in
violation of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action under any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit, except for
any violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a Material Adverse Effect on the general
affairs, management, consolidated financial position, stockholders' equity or
results of operations of the Company; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any kind
onto such property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or with respect to which the Company
has knowledge, except for any such spill, discharge, leak, emission, injection,
escape, dumping or release which would not have or would not be reasonably
likely to have, singularly or in the aggregate with all such spills, discharges,
leaks, emissions, injections, escapes, dumpings and releases, a Material Adverse
Effect on the general affairs, management, financial position, stockholders
equity or results of operations of the Company; and
(xv) The Company is not, and after receipt of payment for the Stock
will not be, an investment company as defined in the Investment Company Act of
1940, as amended.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the federal laws of the United States of America,
the laws of the State of California and the General Corporation Law of the State
of Delaware. Such opinion shall also be to the
16.
effect that (x) such counsel has acted as counsel to the Company in connection
with the preparation of the Registration Statement and (y) based on the
foregoing, no facts have come to the attention of such counsel which lead them
to believe that the Registration Statement (except for the financial statements
and financial schedules and other financial and statistical data included
therein, as to which such counsel need express no belief) as of the Effective
Date, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus (except as stated
above) contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as set forth in clause
(viii) above).
(e) Law +, [a professional corporation], [Xxxxxxxx and Xxxxxxxx
and Crew] and [other patent counsel to the Company] shall have furnished to the
Representatives their written opinion, as counsel to the Company, addressed to
the Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) the statements in the Prospectus under the
captions "Risk Factors - we may not be able to protect our intellectual
property rights adequately," "-we could be harmed by litigation involving
patents and other intellectual property rights" and "Business - Technology -
Intellectual Property" insofar as such statements constitute matters of law,
legal conclusions or summaries of legal matters relating to patents, or
descriptions of the Company's patents, at the time it became effective,
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 therein not misleading in the light of the circumstances under
which they were made, not misleading;
(ii) To each counsel's knowledge, there is no material
action, suit, claim or proceeding relating to or affecting the Company's
Intellectual Property which is pending or threatened against the Company or
any of its officers or directors;
(iii) The Company is listed in the records of the United
States Patent and Trademark Office as the holder of record of the patents
listed on Schedule A to this opinion (the "Patents") and is the owner of each
of the applications listed on such schedule (the "Applications"). To the best
of such counsel's knowledge, there are no claims of third parties to any
ownership interest or lien with respect to any of the Patents or
Applications. Such counsel is not aware of any material defect in form in the
preparation or filing of the Applications on behalf of the Company. To the
best of such counsel's knowledge, the Applications are being pursued by the
Company. To the best of such counsel's knowledge, the Company owns as its
sole property the Patents and pending Applications;
(iv) The Company is listed in the records of the
appropriate foreign offices as the sole holder of record of the foreign
patents listed on Schedule B (the "Foreign Patents") and is the owner of each
of the applications listed on such schedule (the "Foreign Applications").
Such counsel is not aware of any claims of third parties to any ownership
interest or lien with
17.
respect to the Foreign Patents or Foreign Applications. Such counsel is not
aware of any material defect of form in the preparation or filing of the Foreign
Applications on behalf of the Company. To the best of such counsel's knowledge,
the Foreign Applications are being pursued by the Company. To the best of such
counsel's knowledge, the Company owns as its sole property the Foreign Patents
and pending Foreign Application;
(v) Such counsel is not aware of any reason why the
Patents or Foreign Patents are not valid and enforceable as issued. Such
counsel is not aware of any reason why any patent to be issued as a result of
any Application or Foreign Application would not be valid and enforceable; and
(vi) Such counsel has reviewed the patent license
agreements referred to in the Prospectus and has no reason to believe that
the Company infringes any of the patents referred to in these agreements.
(f) The Representatives shall have received from Xxxxxx Godward
LLP, counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(f) At the time of execution of this Agreement, the
Representatives shall have received from PriceWaterhouseCoopers, LLP a letter or
letters, in form and substance satisfactory to the Representatives, addressed to
the Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission and (ii)
stating, as of the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five days
prior to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily covered by
accountants comfort letters to underwriters in connection with registered public
offerings.
(g) With respect to the letter or letters of
PriceWaterhouseCoopers LLP referred to in the preceding paragraph and delivered
to the Representatives concurrently with the execution of this Agreement (the
"initial letters"), the Company shall have furnished to the Representatives a
letter (the `bring-down letter') of such accountants, addressed to the
Underwriters and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the date of the bring-down letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more than
five days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letters and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letters.
18.
(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date; the Company
has complied with all its agreements contained herein; and the conditions set
forth in Sections 7(a), 7(i) and 7 (j) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the Effective Date,
the Registration Statement and Prospectus did not include any untrue statement
of a material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(B) since the Effective Date no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statement or the
Prospectus.
(i) The Company shall not have sustained since the date of the
latest audited financial statements included in the Prospectus (A) any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth in the
Prospectus or (B) since such date there shall not have been any change in the
capital stock or long-term debt of the Company or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, prospects, stockholders' equity or results of operations of
the Company, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (A) or (B), is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement (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) of the Rules
and Regulations 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.
(k) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a
19.
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(l) The Nasdaq National Market shall have approved the Stock for
listing, subject only to official notice of issuance.
(m) You shall have received evidence satisfactory to you that each
of the Transactions (other than the offering of the Stock) shall have occurred
or will occur as of the Closing Date, including the concurrent closing of the
issuance and sale of Common Stock to NEC in connection with the Strategic
Alliance, as described in the Prospectus without modification, change or waiver,
except for such modifications, changes or waivers as have been specifically
identified to the Underwriters and which in the judgment of the Underwriters do
not make it impracticable or inadvisable to proceed with the offering and
delivery of the Stock on the Closing Date on the terms and in the manner
contemplated in the Prospectus.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which that Underwriter,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (B) in any materials or information provided to investors by, or
with the approval of, the Company in connection with the marketing of the
offering of the Stock ("Marketing Materials"), including any roadshow or
investor presentations made to investors by the Company (whether in person or
electronically), (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Marketing Materials, any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act or any alleged act or failure
to act by any Underwriter in connection with, or relating in any manner to, the
Stock or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that the
Company shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and
20.
shall reimburse each Underwriter and each such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by that Underwriter, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred;
(b) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, 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 claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section 8 if, in the reasonable judgment of the
Representatives, it is advisable for the Representatives and those Underwriters,
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company. Notwithstanding anything contained herein
to the contrary, if indemnity may be sought pursuant to Section 8(a) hereof in
respect of such claim or action, then in addition to such separate firm for the
indemnified parties, the indemnifying party shall be liable for the fees and
expenses of not more than one separate firm (in addition to any local counsel)
for the Xxxxxx Brothers Entities for the defense of any loss, claim, damage,
liability or action arising out of the Directed Stock Program. No indemnifying
party shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), 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,
or (ii) be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
21.
(c) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Stock or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Underwriters on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total underwriting discounts
and commissions received by the Underwriters with respect to the shares of the
Stock purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 8(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Stock underwritten by
it and distributed to the public was offered to the public exceeds the amount of
any damages which such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 8(d) are
several in proportion to their respective underwriting obligations and not
joint.
(d) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of and the concession and
reallowance figures appearing under the caption "Underwriting" in the Prospectus
are correct and constitute the only information concerning such Underwriters
22.
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the Prospectus.
9. DEFAULTING UNDERWRITERS.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 2. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Company to sell, the Option Stock) shall
terminate without liability on the part of any non-defaulting Underwriter or
the Company, except that the Company will continue to be liable for the payment
of expenses to the extent set forth in Sections 6 and 11. As used in this
Agreement, the term "UNDERWRITER" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule 1 hereto
who, pursuant to this Section 9, purchases Firm Stock which a defaulting
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Stock if, prior to that time, any
of the events described in Sections 7(i), 7(j) or 7(k), shall have occurred or
if the Underwriters shall decline to purchase the Stock for any reason permitted
under this Agreement.
23.
11. REIMBURSEMENT OF UNDERWRITERS' EXPENSE. If the Company shall fail to
tender the Stock for delivery to the Underwriters by reason of any failure,
refusal or inability on the part of the Company to perform any agreement on its
part to be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Company (including,
without limitation, with respect to the transactions) is not fulfilled, the
Company will reimburse the Underwriters for all reasonable out-of-pocket
expenses (including fees and disbursements of counsel) incurred by the
Underwriters in connection with this Agreement and the proposed purchase of the
Stock, and upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 10 by
reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
12. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate Department
(Fax: 000-000-0000), with a copy, in the case of any notice pursuant to
Section 9(c), to the Director of Litigation, Office of the General Counsel,
Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000;
(b) 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: Xxxxxxx Xxxxx (Fax: 408) 000-0000;
provided, however, that any notice to an Underwriter pursuant to
Section 9(c) shall be delivered or sent by mail, telex or facsimile transmission
to such Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure to
the benefit of and be binding upon the Underwriters, the Company, and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Underwriter within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Underwriters contained in
Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
24.
14. SURVIVAL. The respective indemnities, representations, warranties and
agreements of the Company and the Underwriters contained in this Agreement or
made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Stock and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
15. DEFINITION OF THE TERMS "BUSINESS DAY". For purposes of this Agreement,
(a) "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday or Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of New York.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. HEADINGS. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
Integrated Telecom Express, Inc.
By
---------------------------------
Name:
Title:
25.
Accepted:
XXXXXX BROTHERS INC.
BEAR XXXXXXX & CO. INC.
WIT SOUNDVIEW
FIDELITY CAPITAL MARKETS, a division of
National Financial Services Corporation
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
By
-------------------------------------
Authorized Representative
26.
SCHEDULE 1
NUMBER OF SHARES OF FIRM
STOCK TO BE PURCHASED
UNDERWRITERS
Xxxxxx Brothers Inc............................................
Bear Xxxxxxx & Co. Inc.........................................
Wit SoundView..................................................
FIDELITY CAPITAL MARKETS, a division of
National Financial Services Corporation ....................
[Names of other U.S. Underwriters]
Total..........................................................
27.
EXHIBIT A
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
BEAR STREANS
WIT SOUNDVIEW
As Representatives of the several Underwriters
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") providing
for the purchase by you and such other firms (the "UNDERWRITERS") of shares (the
"SHARES") of Common Stock, par value $.001 per share (the "COMMON STOCK"), of
INTEGRATED TELECOM EXPRESS, INC., a Delaware corporation (the "COMPANY"), and
that the Underwriters propose to reoffer the Shares to the public (the
"OFFERING").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
shares of Common Stock (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the Securities and Exchange Commission and
shares of Common Stock that may be issued upon exercise of any option or
warrant) or securities convertible into or exchangeable for Common Stock (other
than the Shares) owned by the undersigned on the date of execution of this
Lock-Up Letter Agreement or on the date of the completion of the Offering, or
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, for a period of 180 days after the date of the
final Prospectus relating to the Offering.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
1.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, we will be released from our obligations
under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By:
--------------------------------
Name:
Title:
Dated: ------------------
2.
