Exhibit 1.1: Form of Underwriting Agreement
UNDERWRITING AGREEMENT
September __, 2000
Xxxxxxxxx Xxxxxxxx, Inc.
Xxxxx Securities Inc.
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
First Union Securities, Inc.
as Representatives of the several Underwriters
c/x Xxxxxxxxx Xxxxxxxx, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. TTM Technologies, Inc., a Washington corporation
(the "Company"), proposes to issue and sell to the several underwriters named in
SCHEDULE A (the "Underwriters") an aggregate of 5,625,000 shares of its Common
Stock, no par value (the "Common Shares"); and Circuit Holdings LLC, a Delaware
limited liability company and a stockholder of the Company (the "Principal
Selling Stockholder"), and the other stockholders of the Company named in
SCHEDULE B ((the "Other Selling Stockholders" and, together with the Principal
Selling Stockholder, being referred to herein, collectively, as the "Selling
Stockholders") severally propose to sell to the Underwriters an aggregate of
1,875,000 Common Shares. The 5,625,000 Common Shares to be sold by the Company
and the 1,875,000 Common Shares to be sold by the Selling Stockholders are
collectively called the "Firm Shares." In addition, the Company has granted to
the Underwriters an option to purchase up to an additional 843,750 Common Shares
and the Selling Stockholders have severally granted to the Underwriters an
option to purchase up to an additional 281,250 Common Shares, each Selling
Stockholder selling up to the amount set forth opposite such Selling
Stockholder's name in SCHEDULE B, all as provided in Section 2. The additional
843,750 Common Shares to be sold by the Company and the additional 281,250
Common Shares to be sold by the Selling Stockholders pursuant to such option are
collectively called the "Option Shares." The Firm Shares and, if and to the
extent such option is exercised, the Option Shares are collectively called the
"Shares." Xxxxxxxxx Xxxxxxxx, Inc. ("Xxxxxxxxx Xxxxxxxx"), Xxxxx Securities
Inc., Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and First Union
Securities, Inc. have agreed to act as representatives of the several
Underwriters (in such capacity, the "Representatives") in connection with the
offering and sale of the Shares.
As a part of the offering contemplated by this Agreement,
Xxxxxxxxx Xxxxxxxx has agreed to reserve out of the Shares set forth opposite
its name on SCHEDULE A to this Agreement, up to 281,250 shares, for sale to the
Company's employees, officers, and directors and other parties associated with
the Company (collectively, "Participants"), as set forth in the
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Prospectus under the heading "Underwriting" (the "Directed Share Program"). The
Shares to be sold by Xxxxxxxxx Xxxxxxxx pursuant to the Directed Share Program
(the "Directed Shares") will be sold by Xxxxxxxxx Xxxxxxxx pursuant to this
Agreement at the public offering price. Any Directed Shares not orally confirmed
for purchase by any Participants as of 7:00 a.m. New York time on the first day
trading of the shares commences will be offered to the public by Xxxxxxxxx
Xxxxxxxx as set forth in the Prospectus.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(File No. 333-39906), which contains a form of prospectus, subject to
completion, to be used in connection with the public offering and sale of the
Shares. Each such prospectus, subject to completion, used in connection with
such public offering is called a "preliminary prospectus." Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (collectively, the "Securities Act"),
including any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430A under the Securities Act, is called the
"Registration Statement." Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the "Rule 462(b)
Registration Statement," and from and after the date and time of filing of the
Rule 462(b) Registration Statement the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. Such prospectus, in the form
first used by the Underwriters to confirm sales of the Shares, is called the
"Prospectus," which term shall be deemed to include the "electronic Prospectus"
provided by the Company for use in connection with the offering of the Shares as
contemplated by Section 3(e) of this Agreement. All references in this Agreement
to the Registration Statement, the Rule 462(b) Registration Statement, a
preliminary prospectus, the Prospectus, or any amendments or supplements to any
of the foregoing, shall include any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("XXXXX").
The Company and each of the Selling Stockholders hereby
confirm their respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
THE SELLING STOCKHOLDERS.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
PRINCIPAL SELLING STOCKHOLDER. The Company and the Principal Selling Stockholder
hereby jointly and severally represent, warrant and covenant to each Underwriter
as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has complied
to the Commission's satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the best knowledge of the Company, are contemplated or
threatened by the Commission. Each preliminary prospectus and the Prospectus
when filed complied in all material respects with the Securities Act and, if
filed by electronic transmission pursuant to XXXXX (except as may be permitted
by Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of
the Shares.
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(b) NO MATERIAL MISSTATEMENTS OR OMISSIONS IN REGISTRATION
STATEMENT OR PROSPECTUS. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto, at the time it
became effective and at all subsequent times, complied and will comply in all
material respects with the Securities Act and did not and will not contain any
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.
Each preliminary prospectus, as of its date, and the Prospectus, as amended or
supplemented, as of its date and at all subsequent times through the 30th day
after the date hereof, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by the
Representatives expressly for use therein. There are no agreements or contracts
or other documents required to be described in the Prospectus or to be filed as
exhibits to the Registration Statement which have not been described or filed as
required.
(c) OFFERING MATERIALS FURNISHED TO UNDERWRITERS. The Company has
delivered to the Representatives one complete conformed copy of the Registration
Statement and of each consent and certificate of experts filed as a part
thereof, and conformed copies of the Registration Statement (without exhibits)
and preliminary prospectuses and the Prospectus, as amended or supplemented, in
such quantities and at such places as the Representatives have reasonably
requested for each of the Underwriters.
(d) DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY. The Company
has not distributed and will not distribute, prior to the later of the Second
Closing Date (as defined below) and the completion of the Underwriters'
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than a preliminary prospectus, the
Prospectus or the Registration Statement.
(e) THE UNDERWRITING AGREEMENT. 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 and contribution hereunder may be limited by applicable law or
applicable public policy 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.
(f) AUTHORIZATION OF THE SHARES TO BE SOLD BY THE COMPANY. The
Shares to be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement, will be validly issued,
fully paid and nonassessable.
(g) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. There are
no persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, other than the Selling Stockholders
with respect to the Shares included in the Registration Statement and except for
such rights as have been duly waived.
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(h) NO MATERIAL ADVERSE CHANGE. Subsequent to the respective dates
as of which information is given in the Prospectus: (i) there has been no
material adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations, whether or not arising from
transactions in the ordinary course of business, of the Company and its
subsidiary, considered as one entity (any such change or effect, where the
context so requires, is called a "Material Adverse Change" or a "Material
Adverse Effect"); (ii) the Company and its subsidiary, considered as one entity,
have not incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into any material
transaction or agreement not in the ordinary course of business; and (iii) 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, its subsidiary on any
class of capital stock or repurchase or redemption by the Company or its
subsidiary of any class of capital stock.
(i) INDEPENDENT ACCOUNTANTS. Xxxxxx Xxxxxxxx LLP and Ernst & Young
LLP, who have expressed their opinion with respect to the financial statements
(which term as used in this Agreement includes the related notes thereto) and
supporting schedules filed with the Commission as a part of the Registration
Statement and included in the Prospectus, are independent public or certified
public accountants as required by the Securities Act.
(j) PREPARATION OF THE FINANCIAL STATEMENTS. The financial
statements filed with the Commission as a part of the Registration Statement and
included in the Prospectus present fairly the consolidated financial position of
the Company and its subsidiary as of and at the dates indicated and the results
of their operations and cash flows for the periods specified. The supporting
schedules included in the Registration Statement present fairly the information
required to be stated therein. Such financial statements and supporting
schedules have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved, except
as may be expressly stated in the related notes thereto. No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The financial data set forth in the Prospectus under the
captions "Prospectus Summary--Summary Historical Financial Data," "Selected
Financial Data" and "Capitalization" fairly present the information set forth
therein on a basis consistent with that of the audited financial statements
contained in the Registration Statement. Each of (i) The pro forma consolidated
financial information of the Company and its subsidiary included under the
captions "Prospectus Summary--Summary Pro Forma and Supplemental Pro Forma
Financial Data," and elsewhere in the Prospectus and in the Registration
Statement, (ii) the Unaudited Pro Forma Condensed Consolidated Financial Data
and related notes thereto included in the Prospectus and in the Registration
Statement and (iii) the Unaudited Supplemental Pro Forma Condensed Consolidated
Financial Data and related notes thereto included in the Prospectus and in the
Registration Statement present fairly the information contained therein, have
been prepared in all material respects in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and have been
properly presented on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein. No other pro forma financial information is required to be included in
the Registration Statement pursuant to Regulation S-X.
(k) COMPANY'S ACCOUNTING SYSTEM. The Company and its subsidiary
maintain a system of accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in
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conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(l) SUBSIDIARIES OF THE COMPANY. The Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than Power Circuits, Inc., a California corporation (its "subsidiary"),
which is listed in Exhibit 21 to the Registration Statement.
(m) INCORPORATION AND GOOD STANDING OF THE COMPANY AND ITS
SUBSIDIARY. Each of the Company and its subsidiary has been duly organized and
is validly existing as a corporation or limited liability company, as the case
may be, in good standing under the laws of the jurisdiction in which it is
organized with full corporate power and authority to own its properties and
conduct its business as described in the prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure to be
so qualified or in good standing, as applicable, would not have a Material
Adverse Effect.
(n) CAPITALIZATION OF THE SUBSIDIARY. All the outstanding shares
of capital stock of Power Circuits, Inc. have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except as otherwise set
forth in the Prospectus and except where the existence of a security interest,
claim, lien or encumbrance would not have a Material Adverse Effect, all
outstanding shares of capital stock of Power Circuits, Inc. are owned by the
Company directly free and clear of any security interests, claims, liens or
encumbrances.
(o) NO PROHIBITION ON SUBSIDIARY FROM PAYING DIVIDENDS OR MAKING
OTHER DISTRIBUTIONS. Power Circuits, Inc. is not currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on its capital stock, from repaying to the Company any loans or
advances to it from the Company or from transferring any of its property or
assets to the Company or any other future subsidiary of the Company, except as
described in or contemplated by the Prospectus.
(p) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectus or upon exercise of outstanding options or warrants described in the
Prospectus). The Common Shares (including the Shares) conform in all material
respects to the description thereof contained in the Prospectus. All of the
issued and outstanding Common Shares (including the Shares to be sold by the
Selling Stockholders) have been duly authorized and validly issued, are fully
paid and nonassessable and have been issued in compliance with federal and state
securities laws. None of the outstanding Common Shares were issued in violation
of any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or its
subsidiary other than those accurately described in the Prospectus. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set forth in
the Prospectus accurately and fairly describes such plans, arrangements, options
and rights.
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(q) STOCK EXCHANGE LISTING. The Shares have been approved for
inclusion in the Nasdaq National Market, subject only to official notice of
issuance.
(r) NO CONSENTS, APPROVALS OR AUTHORIZATIONS REQUIRED. No consent,
approval, authorization, filing with or order of any court or governmental
agency or regulatory body is required in connection with the transactions
contemplated herein, except such as have been obtained or made under the
Securities Act and the Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (collectively, the "Exchange Act") and such
as have been obtained under the rules of the Nasdaq National Market and such as
may be required (i) under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Shares by the Underwriters in the
manner contemplated here and in the Prospectus, (ii) by the National Association
of Securities Dealers, Inc. (together with its regulatory subsidiary, NASD
Regulation, Inc., the "NASD") and (iii) by the laws of any foreign jurisdiction.
(s) NON-CONTRAVENTION OF EXISTING INSTRUMENTS AGREEMENTS. Neither
the issue and sale of the Shares nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or its subsidiary
pursuant to, (i) the charter or by-laws of the Company or its subsidiary, (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or its subsidiary is a party or bound or to
which its or their property is subject or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or its
subsidiary of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or its
subsidiary or any of its or their properties, except for such conflicts,
breaches, violations or impositions that would not, singly or in the aggregate,
have a Material Adverse Effect on the Company and except as otherwise set forth
in the Prospectus.
(t) NO DEFAULTS OR VIOLATIONS. Neither the Company nor its
subsidiary is in violation or default of (i) any provision of its charter or
by-laws, (ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its property
is subject or (iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or such
subsidiary or any of its properties, as applicable, except any such violation or
default which would not, singly or in the aggregate, result in a Material
Adverse Change except as otherwise disclosed in the Prospectus.
(u) NO ACTIONS, SUITS OR PROCEEDINGS. Except as set forth in the
Prospectus, no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or its
subsidiary or its or their property is pending or, to the best knowledge of the
Company, threatened that (i) could reasonably be expected to have a Material
Adverse Effect on the performance of this Agreement or the consummation of any
of the transactions contemplated hereby or (ii) could reasonably be expected to
result in a Material Adverse Effect.
(v) ALL NECESSARY PERMITS, ETC. The Company and its subsidiary
possess such valid and current certificates, authorizations or permits issued by
the appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct their respective businesses, and
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neither the Company nor its subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could result in a
Material Adverse Change.
(w) TITLE TO PROPERTIES. The Company and its subsidiary have good
and marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 1(A)(i) above (or elsewhere in the
Prospectus), in each case free and clear of any security interests, mortgages,
liens, encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property by the
Company or its subsidiary. The real property, improvements, equipment and
personal property held under lease by the Company or its subsidiary are held
under valid and enforceable leases, with such exceptions as are not material and
do not materially interfere with the use made or proposed to be made of such
real property, improvements, equipment or personal property by the Company or
its subsidiary.
(x) TAX LAW COMPLIANCE. The Company and its subsidiary have filed
all necessary federal, state and foreign income and franchise tax returns or
have properly requested extensions thereof and have paid all taxes required to
be paid by any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them, except as may be being
contested in good faith and by appropriate proceedings. The Company has made
adequate charges, accruals and reserves in the applicable financial statements
referred to in Section 1(A)(i) above in respect of all federal, state and
foreign income and franchise taxes for all periods as to which the tax liability
of the Company or its subsidiary has not been finally determined. The Company is
not aware of any tax deficiency that has been or might be asserted or threatened
against the Company that could result in a Material Adverse Change.
(y) INTELLECTUAL PROPERTY RIGHTS. Each of the Company and its
subsidiary owns or possesses adequate rights to use all patents, patent rights
or licenses, inventions, collaborative research agreements, trade secrets,
know-how, trademarks, service marks, trade names and copyrights which are
necessary to conduct its businesses as described in the Registration Statement
and Prospectus; the expiration of any patents, patent rights, trade secrets,
trademarks, service marks, trade names or copyrights would not result in a
Material Adverse Change that is not otherwise disclosed in the Prospectus;
except as set forth in the Prospectus, the Company has not received any notice
of, and has no knowledge of, any infringement of or conflict with asserted
rights of the Company by others with respect to any patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names or
copyrights; and except as set forth in the Prospectus, the Company has not
received any notice of, and has no knowledge of, any infringement of or conflict
with asserted rights of others with respect to any patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names or
copyrights which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, might have a Material Adverse Change. Except as set
forth in the Prospectus, there is no claim being made against the Company
regarding patents, patent rights or licenses, inventions, collaborative
research, trade secrets, know-how, trademarks, service marks, trade names or
copyrights. The Company and its subsidiary do not in the conduct of their
business as now or proposed to be conducted as described in the Prospectus
infringe or conflict with any right or patent of any third party, or any
discovery, invention, product or process which is the subject of a patent
application filed by any third party, known to the Company or its subsidiary,
which such infringement or conflict is reasonably likely to result in a Material
Adverse Change.
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(z) NO TRANSFER TAXES OR OTHER FEES. There are no transfer taxes
or other similar fees or charges under Federal law or the laws of any state, or
any political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance and sale by the Company
of the shares.
(aa) COMPANY NOT AN "INVESTMENT COMPANY". The Company has been
advised of the rules and requirements under the Investment Company Act of 1940,
as amended (the "Investment Company Act"). The Company is not, and after receipt
of payment for the Shares will not be, an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act and will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(bb) INSURANCE. Each of the Company and its subsidiary is insured
by recognized, financially sound and reputable institutions with policies in
such amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not limited
to, policies covering real and personal property owned or leased by the Company
and its subsidiary against theft, damage, destruction, acts of vandalism and
earthquakes, general liability and Directors and Officers liability. The Company
has no reason to believe that it or its subsidiary will not be able (i) to renew
its existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would
not result in a Material Adverse Change. Neither of the Company nor its
subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.
(cc) LABOR MATTERS. To the best of Company's knowledge, no labor
disturbance by the employees of the Company or its subsidiary exists or is
imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers or its indirect
sales representatives, which in each case would reasonably be expected to result
in a Material Adverse Change.
(dd) NO PRICE STABILIZATION OR MANIPULATION. The Company has not
taken and will not take, directly or indirectly, any action designed to or that
might be reasonably expected to cause or result in stabilization or manipulation
of the price of the Common Stock to facilitate the sale or resale of the Shares.
(ee) LOCK-UP AGREEMENTS. Each officer and director of the company
and each beneficial owner of one or more percent of the outstanding issued share
capital of the Company has agreed to sign an agreement substantially in the form
attached hereto as EXHIBIT A (the "Lock-Up Agreements"). The Company has
provided to counsel for the Underwriters a complete and accurate list of all
securityholders of the Company and the number and type of securities held by
each securityholder. The Company has provided to counsel for the Underwriters
true, accurate and complete copies of all of the Lock-Up Agreements presently in
effect or effected hereby. The Company hereby represents and warrants and agrees
that during the 180 days following the date of the Prospectus (the "Lock-Up
Period"), the Company will not (i) release any of its officers, directors or
other securityholders from any market stand-off agreements currently existing or
hereafter effected or (ii) consent to or allow the removal of any
transfer-restrictive legends from any certificate representing any Common
Shares, in each case without the prior written consent of Xxxxxxxxx Xxxxxxxx.
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(ff) RELATED PARTY TRANSACTIONS. There are no business
relationships or related-party transactions involving the Company or any
subsidiary or any other person required to be described in the Prospectus which
have not been described as required.
(gg) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. Neither the
Company nor its subsidiary nor, to the best of the Company's knowledge, any
employee or agent of the Company or its subsidiary, has made any contribution or
other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus.
(hh) ENVIRONMENTAL LAWS. Except as otherwise disclosed in the
Prospectus, (i) the Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental Laws")
which are applicable to its business, except where the failure to comply
would not result in a Material Adverse Change, (ii) the Company has received
no notice from any governmental authority or third party of an asserted claim
under Environmental Laws, which claim is required to be disclosed in the
Registration Statement and the Prospectus, (iii) the Company is not currently
aware that it will be required to make future material capital expenditures
to comply with Environmental Laws and (iv) no property which is owned, leased
or occupied by the Company has been designated as a Superfund site pursuant
to the Comprehensive Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. Section 9601, ET SEQ.), or otherwise designated as a
contaminated site under applicable state or local law.
(ii) ERISA COMPLIANCE. Except as otherwise disclosed in the
Prospectus, the Company and its subsidiary and any "employee benefit plan" (as
defined under the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder (collectively,
"ERISA")) established or maintained by the Company, its subsidiary or their
"ERISA Affiliates" (as defined below) are in compliance in all material respects
with ERISA. "ERISA Affiliate" means, with respect to the Company or a
subsidiary, any member of any group of organizations described in Sections
414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and
the regulations and published interpretations thereunder (the "Code") of which
the Company or such subsidiary is a member. No "reportable event" (as defined
under ERISA) has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, its subsidiary
or any of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, its subsidiary or any of their ERISA Affiliates, if
such "employee benefit plan" were terminated, would have any "amount of unfunded
benefit liabilities" (as defined under ERISA). Neither the Company, its
subsidiary nor any of their ERISA Affiliates has incurred or reasonably expects
to incur any liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "employee benefit plan" or (ii) Sections 412, 4971,
4975 or 4980B of the Code. Each "employee benefit plan" established or
maintained by the Company, its subsidiary or any of their ERISA Affiliates that
is intended to be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or failure to act, which would cause the
loss of such qualification.
(jj) CONSENTS REQUIRED IN CONNECTION WITH THE DIRECTED SHARE
PROGRAM. No consent, approval, authorization or order of, or qualification with,
any governmental body or agency, other than those obtained, is required in
connection with the offering of the Directed Shares in any jurisdiction in the
United States where the Directed Shares are being offered.
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(kk) NO IMPROPER INFLUENCE IN CONNECTION WITH THE DIRECTED SHARE
PROGRAM. The Company has not offered, or caused Xxxxxxxxx Xxxxxxxx to offer,
Shares to any person pursuant to the Directed Share Program with the specific
intent to unlawfully influence (i) a customer or supplier of the Company to
alter the customer's or supplier's level or type of business with the Company or
(ii) a trade journalist or publication to write or publish favorable information
about the Company or its products.
Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be
a representation and warranty by the Company to each Underwriter as to the
matters set forth therein.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
Each Selling Stockholder hereby represents, warrants and covenants as regarding
itself only (and not as regarding any other Selling Stockholder) to each
Underwriter as follows:
(a) THE UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling Stockholder
and is a valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification and contribution
hereunder may be limited by applicable law or applicable public policy 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.
(b) THE CUSTODY AGREEMENT AND POWER OF ATTORNEY. Each of the (i)
Custody Agreement signed by such Selling Stockholder and ChaseMellon Shareholder
Services, L.L.C., a New Jersey limited liability company, as custodian (the
"Custodian"), relating to the deposit of the Shares to be sold by such Selling
Stockholder hereunder (the "Custody Agreement") and (ii) Power of Attorney
appointing certain individuals named therein as such Selling Stockholder's
attorneys-in-fact (each, an "Attorney-in-Fact") to the extent set forth therein
relating to the transactions contemplated hereby and by the Prospectus (the
"Power of Attorney"), of such Selling Stockholder has been duly authorized,
executed and delivered by such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder, enforceable in accordance with its terms,
except as rights to indemnification and contribution thereunder may be limited
by applicable law or applicable public policy and except as the enforcement
thereof 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. Each Selling Stockholder agrees that the
Shares to be sold by such Selling Stockholder on deposit with the Custodian are
subject to the interests of the Underwriters, that the arrangements made for
such custody are to that extent irrevocable, and that the obligations of such
Selling Stockholder hereunder shall not be terminated, except as provided in
this Agreement or in the Custody Agreement, by any act of the Selling
Stockholder, by operation of law (to the extent permitted by law), by death or
incapacity of such Selling Stockholder or by the occurrence of any other event.
If such Selling Stockholder should die or become incapacitated, or in any other
event should occur, before the delivery of the Shares to be sold by such Selling
Stockholder hereunder, the documents evidencing the Shares to be sold by such
Selling Stockholder then on deposit with the Custodian shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement and its
Custody Agreement (to the extent permitted by law) as if such death, incapacity
or other event had not occurred, regardless of whether or not the Custodian
shall have received notice thereof.
10
(c) TITLE TO SHARES TO BE SOLD. Such Selling Stockholder is the
lawful owner of the Shares to be sold by such Selling Stockholder hereunder, and
upon sale and delivery of, and payment for, such Shares, as provided herein,
such Selling Stockholder will convey good and marketable title to such Shares,
free and clear of all liens, encumbrances, equities and claims whatsoever.
(d) ALL AUTHORIZATIONS OBTAINED. Such Selling Stockholder has, and
on the First Closing Date and the Second Closing Date will have, good and valid
title to all of the Common Shares which may be sold by such Selling Stockholder
pursuant to this Agreement on such date and the legal right and power, and all
authorizations and approvals required by law and under its charter or by-laws,
partnership agreement, trust agreement or other organizational documents to
enter into this Agreement and its Custody Agreement and Power of Attorney, to
sell, transfer and deliver all of the Shares which may be sold by such Selling
Stockholder pursuant to this Agreement and to comply with its other obligations
hereunder and thereunder.
(e) NO FURTHER CONSENTS, AUTHORIZATION OR APPROVALS. No consent,
approval, authorization or order of any court or governmental agency or body is
required for the consummation by such Selling Stockholder of the transactions
contemplated herein, except such as may have been obtained under the Securities
Act, the Exchange Act and the rules of the Nasdaq National Market and such as
may be required (i) under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Shares by the Underwriters in the
manner contemplated herein and in the Prospectus, (ii) by the NASD, and (iii) by
the laws of any foreign jurisdiction.
(f) NON-CONTRAVENTION. Neither the sale of the Shares being sold
by such Selling Stockholder hereunder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder or the fulfillment
of the terms hereof by such Selling Stockholder will result in a breach or
violation of, or constitute a default under, any law applicable to such Selling
Stockholder, the terms of any indenture or other agreement or instrument to
which such Selling Stockholder is party or bound or any judgment, order or
decree applicable to such Selling Stockholder or any court or regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction over
such Selling Stockholder, except for such breaches, violations or defaults as
would not reasonably be expected to have a Material Adverse Effect on such
Selling Stockholder's performance of this Agreement or consummation of any
transactions contemplated hereby.
(g) NO REGISTRATION OR OTHER SIMILAR RIGHTS. Such Selling
Stockholder does not have any registration or other similar rights to have any
equity or debt securities registered for sale by the Company under the
Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as are described in the Prospectus under
"Shares Eligible for Future Sale."
(h) NO PREEMPTIVE, CO-SALE OR OTHER RIGHTS. Such Selling
Stockholder does not have, or has waived prior to the date hereof, any
preemptive right, co-sale right or right of first refusal or other similar right
to purchase any of the Shares that are to be sold by the Company or any of the
other Selling Stockholders to the Underwriters pursuant to this Agreement; and
such Selling Stockholder does not own any warrants, options or similar rights to
acquire, and does not have any right or arrangement to acquire, any capital
stock, right, warrants, options or other securities from the Company, other than
those described in the Registration Statement and the Prospectus.
11
(i) DISCLOSURE MADE BY SUCH SELLING STOCKHOLDER IN THE PROSPECTUS.
All information furnished by or on behalf of such Selling Stockholder in writing
expressly for use in the Registration Statement and Prospectus is, and on the
First Closing Date and the Second Closing Date will be, true, correct, and
complete in all material respects, and does not, and on the First Closing Date
and the Second Closing Date will not, contain any untrue statement of a material
fact or omit to state any material fact necessary to make such information not
misleading. Such Selling Stockholder confirms (i) as accurate the number of
Common Shares set forth opposite such Selling Stockholder's name in the
Prospectus in the table under the caption "Principal and Selling Stockholders"
(both prior to and after giving effect to the sale of the Shares), (ii) if
applicable, as accurate the description of the ultimate beneficial ownership of
other entities in such Selling Stockholder set forth in the paragraphs following
said table and (iii) as accurate in all material respects the description of any
transactions between the Company and such Selling Stockholder described under
the caption "Related Party Transactions."
(j) NO PRICE STABILIZATION OR MANIPULATION. Such Selling
Stockholder has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Shares to facilitate
the sale or resale of the Shares.
(k) NO TRANSFER TAXES OR OTHER FEES. There are no transfer taxes
or other similar fees or charges under Federal law or the laws of any state, or
any political subdivision thereof, required to be paid in connection with such
Selling Stockholder's execution and delivery of this Agreement or the sale by
such Selling Stockholder of the Shares.
(l) DISTRIBUTION OF OFFERING MATERIALS BY THE SELLING
STOCKHOLDERS. Such Selling Stockholder has not distributed and will not
distribute, prior to the later of the Second Closing Date (as defined below) and
the completion of the Underwriters' distribution of the Shares, any offering
material in connection with the offering and sale of the Shares other than a
preliminary prospectus, the Prospectus or the Registration Statement.
(m) NO MATERIAL UNDISCLOSED INSIDE INFORMATION. Such Selling
Stockholder is not prompted to sell the Shares to be sold by such Selling
Stockholder hereunder by any material information concerning the Company which
is not set forth in the Registration Statement and the Prospectus.
Any certificate signed by or on behalf of any Selling
Stockholder and delivered to the Representatives or to counsel for the
Underwriters shall be deemed to be a representation and warranty by such Selling
Stockholder (regarding itself only and not regarding any other Selling
Stockholder) to each Underwriter as to the matters covered thereby.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) THE FIRM SHARES. Upon the terms herein set forth, (i) the
Company agrees to issue and sell to the several Underwriters an aggregate of
5,625,000 Firm Shares and (ii) the Selling Stockholders agree to sell to the
several Underwriters an aggregate of 1,875,000 Firm Shares, each Selling
Stockholder selling the number of Firm Shares set forth opposite such Selling
Stockholder's name on SCHEDULE B. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Underwriters agree, severally and not
jointly, to purchase from the Company and the Selling Stockholders the
respective number of Firm Shares set forth opposite their names on
12
SCHEDULE A. The purchase price per Firm Share to be paid by the several
Underwriters to the Company and the Selling Stockholders shall be $[___] per
share.
(b) THE FIRST CLOSING DATE. Delivery of the Firm Shares to be
purchased by the Underwriters and payment therefor shall be made by the Company
and the Representatives at 6:00 a.m. San Francisco time, at the offices of
Shearman & Sterling, San Francisco, California (or at such other place and time
as may be agreed upon among the Representatives and the Company), (i) on the
third (3rd) full business day following the first day that Shares are traded,
(ii) if this Agreement is executed and delivered after 1:30 P.M., San Francisco
time, the fourth (4th) full business day following the day that this Agreement
is executed and delivered or (iii) at such other time and date not later than
seven (7) full business days following the first day that Shares are traded as
the Representatives and the Company may determine (or at such time and date to
which payment and delivery shall have been postponed pursuant to Section 8
hereof), such time and date of payment and delivery being herein called the
"First Closing Date"; PROVIDED, HOWEVER, that if the Company has not made
available to the Representatives copies of the Prospectus within the time
provided in Section 2(g) and 3(e) hereof, the Representatives may, in their sole
discretion, postpone the Closing Date until no later that two (2) full business
days following delivery of copies of the Prospectus to the Representatives.
(c) THE OPTION SHARES; THE SECOND CLOSING DATE. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
and the Selling Stockholders hereby grant an option to the several Underwriters
to purchase, severally and not jointly, up to an aggregate of 1,125,000 Option
Shares from the Company and the Selling Stockholders at the purchase price per
share to be paid by the Underwriters for the Firm Shares. The option granted
hereunder is for use by the Underwriters solely in covering any over-allotments
in connection with the sale and distribution of the Firm Shares. The option
granted hereunder may be exercised at any time upon notice by the
Representatives to the Company, which notice may be given at any time within 30
days from the date of this Agreement. The time and date of delivery of the
Option Shares, if subsequent to the First Closing Date, is called the "Second
Closing Date" and shall be determined by the Representatives and shall not be
earlier than three nor later than five full business days after delivery of such
notice of exercise. If any Option Shares are to be purchased, (i) each
Underwriter agrees, severally and not jointly, to purchase the number of Option
Shares (subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total
number of Option Shares to be purchased as the number of Firm Shares set forth
on SCHEDULE A opposite the name of such Underwriter bears to the total number of
Firm Shares and (ii) the Company and each Selling Stockholder agree, severally
and not jointly, to sell the number of Option Shares (subject to such
adjustments to eliminate fractional shares as the Representatives may determine)
that bears the same proportion to the total number of Option Shares to be sold
as the number of Option Shares set forth in SCHEDULE B opposite the name of such
Selling Stockholder (or, in the case of the Company, as the number of Option
Shares to be sold by the Company as set forth in the paragraph "Introductory" of
this Agreement) bears to the total number of Option Shares. The Representatives
may cancel the option at any time prior to its expiration by giving written
notice of such cancellation to the Company.
(d) PUBLIC OFFERING OF THE SHARES. The Representatives hereby
advise the Company and the Selling Stockholders that the Underwriters intend to
offer for sale to the public, as described in the Prospectus, their respective
portions of the Shares as soon after this Agreement has been executed and the
Registration Statement has been declared effective as the Representatives, in
their sole judgment, have determined is advisable and practicable.
13
(e) PAYMENT FOR THE SHARES. Payment for the Shares to be sold by
the Company shall be made at the First Closing Date (and, if applicable, at the
Second Closing Date) by wire transfer of immediately available funds to the
order of the Company. Payment for the Shares to be sold by the Selling
Stockholders shall be made at the First Closing Date (and, if applicable, at the
Second Closing Date) by wire transfer of immediately available funds to the
order of the Custodian.
It is understood that the Representatives have been
authorized, for their own accounts and the accounts of the several Underwriters,
to accept delivery of and receipt for, and make payment of the purchase price
for, the Firm Shares and any Option Shares the Underwriters have agreed to
purchase. Xxxxxxxxx Xxxxxxxx, individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Shares to
be purchased by any Underwriter whose funds shall not have been received by the
Representatives by the First Closing Date or the Second Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall not
relieve such Underwriter from any of its obligations under this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay
all stock transfer taxes, stamp duties and other similar taxes, if any, payable
upon the sale or delivery of the Shares to be sold by such Selling Stockholder
to the several Underwriters, or otherwise in connection with the performance of
such Selling Stockholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling Stockholder hereunder and to hold such amounts for the account of such
Selling Stockholder with the Custodian under the Custody Agreement.
(f) DELIVERY OF THE SHARES. The Company and the Selling
Stockholders shall deliver, or cause to be delivered a credit representing the
Firm Shares to an account or accounts at The Depository Trust Company as
designated by the Representatives for the accounts of the Representatives and
the several Underwriters at the First Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The Company and the Selling Stockholders shall also
deliver, or cause to be delivered a credit representing the Option Shares to an
account or accounts at The Depository Trust Company as designated by the
Representatives for the accounts of the Representatives and the several
Underwriters, at the First Closing Date or the Second Closing Date, as the case
may be, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. Time shall be of
the essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
(g) DELIVERY OF PROSPECTUS TO THE UNDERWRITERS. Not later than
12:00 noon on the second business day following the date the Shares are released
by the Underwriters for sale to the public, the Company shall deliver or cause
to be delivered copies of the Prospectus in such quantities and at such places
as the Representatives shall request.
14
SECTION 3. COVENANTS OF THE COMPANY AND THE SELLING
STOCKHOLDERS.
A. COVENANTS OF THE COMPANY AND THE PRINCIPAL SELLING
STOCKHOLDER. The Company and the Principal Selling Stockholder further jointly
and severally covenant and agree with each Underwriter as follows:
(a) REGISTRATION STATEMENT MATTERS. The Company will (i) use its
best efforts to cause a registration statement on Form 8-A (the "Form 8-A
Registration Statement") as required by the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), to become effective simultaneously with the
Registration Statement, (ii) use its best efforts to cause the Registration
Statement to become effective or, if the procedure in Rule 430A of the
Securities Act is followed, to prepare and timely file with the Commission under
Rule 424(b) under the Securities Act a Prospectus in a form approved by the
Representatives containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Securities Act and (iii) not file any amendment to the Registration Statement or
supplement to the Prospectus of which the Representatives shall not previously
have been advised and furnished with a copy or to which the Representatives
shall have reasonably objected in writing or which is not in compliance with the
Securities Act. If the Company elects to rely on Rule 462(b) under the
Securities Act, the Company shall file a Rule 462(b) Registration Statement with
the Commission in compliance with Rule 462(b) under the Securities Act prior to
the time confirmations are sent or given, as specified by Rule 462(b)(2) under
the Securities Act, and shall pay the applicable fees in accordance with Rule
111 under the Securities Act.
(b) SECURITIES ACT COMPLIANCE. The Company will advise the
Representatives promptly (i) when the Registration Statement or any
post-effective amendment thereto shall have become effective, (ii) of receipt of
any comments from the Commission, (iii) of any request of the Commission for
amendment of the Registration Statement or for supplement to the Prospectus or
for any additional information and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the use
of the Prospectus or of the institution of any proceedings for that purpose. The
Company will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.
(c) BLUE SKY COMPLIANCE. The Company will cooperate with the
Representatives and counsel for the Underwriters in endeavoring to qualify the
Shares for sale under the securities laws of such jurisdictions (both national
and foreign) as the Representatives may reasonably have designated in writing
and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, PROVIDED 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 where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports and other documents, as are or
may be required to continue such qualifications in effect for so long a period
as the Representatives may reasonably request for distribution of the Shares.
(d) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER
SECURITIES ACT MATTERS. The Company will comply with the Securities Act and the
Exchange Act, and the rules and regulations of the Commission thereunder, so as
to permit the completion of the distribution of the Shares as contemplated in
this Agreement and the Prospectus. If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, any event shall
occur as a result of which, in the judgment of the Company or in the reasonable
opinion of the Representatives or counsel for the Underwriters, it becomes
necessary to amend or
15
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances existing at the time the Prospectus is delivered
to a purchaser, not misleading, or, if it is necessary at any time to amend
or supplement the Prospectus to comply with any law, the Company promptly
will prepare and file with the Commission, and furnish at its own expense to
the Underwriters and to dealers, an appropriate amendment to the Registration
Statement or supplement to the Prospectus so that the Prospectus as so
amended or supplemented will not, in the light of the circumstances when it
is so delivered, be misleading, or so that the Prospectus will comply with
the law.
(e) COPIES OF THE PROSPECTUS AND ANY AMENDMENTS AND SUPPLEMENTS
THERETO; ELECTRONIC PROSPECTUS. The Company agrees to furnish the
Representatives, without charge, during the period beginning on the date hereof
and ending on the later of the First Closing Date or such date, as in the
opinion of counsel for the Underwriters, the Prospectus is no longer required by
law to be delivered in connection with sales by an Underwriter or dealer (the
"Prospectus Delivery Period"), as many copies of the Prospectus and any
amendments and supplements thereto as the Representatives may request. The
Company shall also cause to be prepared and delivered to any Underwriter upon
request, at the Company's expense, within one business day from the filing of
the Prospectus with the Commission (and again within one business day after the
filing of any amendment or supplement thereto with the Commission), an
"electronic Prospectus" to be used in connection with the offering and sale of
the Shares. As used herein, the term "electronic Prospectus" means a form of
Prospectus, and any amendment or supplement thereto, that meets each of the
following conditions: (i) it shall be encoded in a format, satisfactory to the
Representatives, that may be transmitted electronically over the internet or via
other online distribution to offerees and purchasers of the Shares; and (ii) it
shall disclose the same information as the paper Prospectus (or any amendment or
supplement thereto), except to the extent that graphic and image material
contained in the paper Prospectus (or such amendment or supplement) cannot be
presented in such electronic format, in which case such graphic and image
material shall be replaced in the electronic Prospectus with a fair and accurate
narrative description or tabular representation of such material, as
appropriate. The Company hereby consents to distribution of the electronic
Prospectus (including posting of the electronic Prospectus on the internet) by
any of the Underwriters or their affiliates.
(f) INSURANCE. The Company shall (i) obtain Directors and Officers
liability insurance in the minimum amount of $10 million which shall apply to
the offering contemplated hereby and (ii) cause Xxxxxxxxx Xxxxxxxx Inc. to be
added to such policy such that up to $500,000 of its expenses pursuant to
Section 7(a) shall be paid directly by such insurer.
(g) NOTICE OF SUBSEQUENT EVENTS. If at any time during the ninety
(90) day period after the Registration Statement becomes effective, any rumor,
publication or event relating to or affecting the Company shall occur as a
result of which in your opinion the market price of the Company Shares has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after written notice from you advising the
Company to the effect set forth above, forthwith prepare, consult with you
concerning the substance of and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(h) USE OF PROCEEDS. The Company shall apply the net proceeds from
the sale of the Shares sold by it in the manner described under the caption "Use
of Proceeds" in the Prospectus.
16
(i) TRANSFER AGENT. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Company Shares.
(j) EARNINGS STATEMENT. As soon as practicable, the Company will
make generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering a period of at least
twelve months beginning after the effective date of the Registration Statement
that satisfies the provisions of Section 11(a) of the Securities Act.
(k) PERIODIC REPORTING OBLIGATIONS. During the Prospectus Delivery
Period the Company shall file, on a timely basis, with the Commission and the
Nasdaq National Market all reports and documents required to be filed under the
Exchange Act within the time periods required by the Exchange Act and the rules
of the Nasdaq National Market.
(l) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES. Without
the prior written consent of Xxxxxxxxx Xxxxxxxx, the Company will not offer,
sell or contract to sell, or otherwise dispose of or enter into any transaction
which is designed to, or could be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise by the Company or any affiliate of the Company or any
person in privity with the Company or any affiliate of the Company) directly or
indirectly, or announce the offering of, any other Common Shares or any
securities convertible into, or exchangeable for, Common Shares; PROVIDED,
HOWEVER, that the Company may (i) issue and sell Common Shares pursuant to any
director or employee stock option plan, stock ownership plan or dividend
reinvestment plan of the Company in effect at the date of the Prospectus and
described in the Prospectus so long as none of those shares may be transferred
and the Company shall enter stop transfer instructions with its transfer agent
and registrar against the transfer of any such Common Shares, (ii) the Company
may issue Common Shares issuable upon the conversion of securities or the
exercise of warrants outstanding at the date of the Prospectus and described in
the Prospectus and (iii) the Company may issue Common Shares or other securities
as consideration for any acquisition by the Company or its subsidiary, or in
connection with any business transaction between the Company or its subsidiary
and a third party, PROVIDED that the above consent obligation is expressly
assumed in writing by the recipient of the Common Shares or other securities
(with a copy to Xxxxxxxxx Xxxxxxxx and its counsel) and that the certificates
for such Common Shares or other securities contain a transfer-restrictive legend
to such effect. These restrictions terminate after the close of trading of the
Shares on the final day of the Lock-Up Period.
(m) DIRECTED SHARE PROGRAM. The Company (i) will comply with all
applicable securities and other applicable laws, rules and regulations in each
jurisdiction in which the Directed Shares are offered in connection with the
Directed Share Program, provided that, with respect to jurisdictions outside the
United States, the Company was previously advised as to such laws, rules and
regulations, and (ii) will pay all reasonable fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program and
any stamp duties, similar taxes or duties or other taxes, if any, incurred by
the underwriters in connection with the Directed Share Program.
B. COVENANTS OF THE SELLING STOCKHOLDERS. The Principal Selling
Stockholder and each Other Selling Stockholder further covenants and agrees with
each Underwriter as follows:
(a) DELIVERY OF FORMS W-8 AND W-9. Such Selling Stockholder shall
deliver to the Representatives prior to the First Closing Date a properly
completed and executed United
17
States Treasury Department Form W-8 (if the Selling Stockholder is a non-United
States person) or Form W-9 (if the Selling Stockholder is a United States
Person).
(b) NOTIFICATION OF UNTRUE STATEMENTS, ETC. If, at any time prior
to the date on which the distribution of the Shares as contemplated herein and
in the Prospectus has been completed, as determined by the Representatives, such
Selling Stockholder has actual knowledge of the occurrence of any event as a
result of which the Prospectus or the Registration Statement, in each case as
then amended or supplemented, would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, such Selling Stockholder shall promptly notify the Company and the
Representatives in writing.
SECTION 4. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters to purchase and
pay for the Shares as provided herein on the First Closing Date and, with
respect to the Option Shares, the Second Closing Date, shall be subject to the
accuracy in all material respects of the representations and warranties on the
part of the Company and the Selling Stockholders set forth in Sections 1(A) and
1(B) hereof as of the date hereof and as of the First Closing Date as though
then made and, with respect to the Option Shares, as of the Second Closing Date
as though then made, to the timely performance by the Company and the Selling
Stockholders in all material respects of their respective covenants and other
obligations hereunder, and to each of the following additional conditions:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER; NO
OBJECTION FROM THE NASD. The Registration Statement shall have become effective
prior to the execution of this Agreement, or at such later date as shall be
consented to in writing by you; and no stop order suspending the effectiveness
thereof shall have been issued and no proceedings for that purpose shall have
been initiated or, to the knowledge of the Company, any Selling Stockholder or
any Underwriter, threatened by the Commission, and any request of the Commission
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
Underwriters' Counsel; and the NASD shall have decided to raise no, and shall
have raised no, objections to the fairness and reasonableness of the
underwriting terms and arrangements.
(b) CORPORATE PROCEEDINGS. All corporate proceedings and other
legal matters in connection with this Agreement, the form of Registration
Statement and the Prospectus, and the registration, authorization, issue, sale
and delivery of the Shares, shall have been reasonably satisfactory to
Underwriters' Counsel, and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable them to
pass upon the matters referred to in this Section.
(c) NO MATERIAL ADVERSE CHANGE. Subsequent to the execution and
delivery of this Agreement and prior to the First Closing Date, or the Second
Closing Date, as the case may be, there shall not have been any Material Adverse
Change in the condition (financial or otherwise), earnings, operations or
business of the Company and its subsidiary considered as one enterprise from
that set forth in the Registration Statement or Prospectus, which, in your sole
judgment, is material and adverse and that makes it, in your sole judgment,
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus.
18
(d) OPINION OF COUNSEL FOR THE COMPANY. You shall have received on
the First Closing Date, or the Second Closing Date, as the case may be, an
opinion letter of Shearman & Sterling, counsel for the Company, substantially in
the form of EXHIBIT B attached hereto, dated the First Closing Date, or the
Second Closing Date, addressed to the Underwriters and with reproduced copies or
signed counterparts thereof for each of the Underwriters.
Counsel rendering the opinion contained in EXHIBIT B may rely
as to questions of law not involving the laws of the United States or the States
of California and New York or the General Corporation Law of the State of
Delaware upon opinions of local counsel, and as to questions of fact upon
representations or certificates of officers of the Company, the Selling
Stockholders or officers of the Selling Stockholders, and of government
officials, in which case their opinion is to state that they are so relying and
that they have no knowledge of any material misstatement or inaccuracy in any
such opinion, representation or certificate. Copies of any opinion,
representation or certificate so relied upon shall be delivered to you, as
Representatives of the Underwriters, and to Underwriters' Counsel.
(e) OPINION OF COUNSEL FOR THE COMPANY. You shall have received on
the First Closing Date, or the Second Closing Date, as the case may be, an
opinion of Xxxx Xxxxxx Xxxxxxxx X.X., Washington counsel for the Company,
substantially in the form of EXHIBIT C attached hereto, dated the First Closing
Date, or the Second Closing Date, addressed .to the Underwriters and with
reproduced copies or signed counterparts thereof for each of the Underwriters.
Counsel rendering the opinion contained in EXHIBIT C may rely
as to questions of fact upon representations or certificates of officers of the
Company, the Selling Stockholders or officers of the Selling Stockholders, and
of government officials, in which case their opinion is to state that they are
so relying and that they have no knowledge of any material misstatement or
inaccuracy in any such representation or certificate. Copies of any
representation or certificate so relied upon shall be delivered to you, as
Representatives of the Underwriters, and to Underwriters' Counsel.
(f) OPINION OF COUNSEL FOR THE UNDERWRITERS. You shall have
received on the First Closing Date or the Second Closing Date, as the case may
be, an opinion of O'Melveny & Xxxxx LLP, counsel for the Underwriters, in form
and substance reasonably satisfactory to the Representatives, with respect to
the sufficiency of all corporate proceedings and other legal matters relating to
this Agreement and the transactions contemplated hereby as the Representatives
may reasonably require. The Company shall have furnished to such counsel such
documents as they may have requested for the purpose of enabling them to pass
upon such matters.
(g) ACCOUNTANTS' COMFORT LETTER. You shall have received on the
First Closing Date and on the Second Closing Date, as the case may be, a letter
from Xxxxxx Xxxxxxxx LLP addressed to the Underwriters, dated the First Closing
Date or the Second Closing Date, as the case may be, confirming that they are
independent certified public accountants with respect to the Company within the
meaning of the Act and the applicable published Rules and Regulations and based
upon the procedures described in such letter delivered to you concurrently with
the execution of this Agreement (herein called the "Original Letter"), but
carried out to a date not more than four (4) business days prior to the First
Closing Date or the Second Closing Date, as the case may be, (i) confirming, to
the extent true, that the statements and conclusions set forth in the Original
Letter are accurate as of the First Closing Date or the Second Closing Date, as
the case may be, and (ii) setting forth any revisions and additions to the
statements and
19
conclusions set forth in the Original Letter which are necessary to reflect any
changes in the facts described in the Original Letter since the date of such
letter, or to reflect the availability of more recent financial statements, data
or information. The letter shall not disclose any change in the condition
(financial or otherwise), earnings, operations or business of the Company and
its subsidiary considered as one enterprise from that set forth in the
Registration Statement or Prospectus, which, in your sole judgment, is material
and adverse and that makes it, in your sole judgment, impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated by
the Prospectus. The Original Letter from Xxxxxx Xxxxxxxx LLP shall be addressed
to or for the use of the Underwriters in form and substance satisfactory to the
Underwriters and shall (i) represent, to the extent true, that they are
independent certified public accountants with respect to the Company within the
meaning of the Act and the applicable published Rules and Regulations, (ii) set
forth their opinion with respect to their examination of the consolidated
balance sheet of the Company as of December 31, 1999 and related consolidated
statements of operations, shareholders' equity, and cash flows for the twelve
(12) months ended December 31, 1999, (iii) state that Xxxxxx Xxxxxxxx LLP has
performed the procedures set out in Statement on Auditing Standards ("SAS") No.
71 for a review of interim financial information and providing the report of
Xxxxxx Xxxxxxxx LLP as described in SAS No. 71 on the financial statements for
the two-quarter periods ended July 3, 2000 and July 4, 1999 (the "Quarterly
Financial Statements"), (iv) state that in the course of such review, nothing
came to their attention that leads them to believe that any material
modifications need to be made to any of the Quarterly Financial Statements in
order for them to be in compliance with generally accepted accounting principles
consistently applied across the periods presented, and (v) address other matters
agreed upon by Xxxxxx Xxxxxxxx LLP and you. In addition, you shall have received
from Xxxxxx Xxxxxxxx LLP a letter addressed to the Company and made available to
you for the use of the Underwriters stating that their review of the Company's
system of internal accounting controls, to the extent they deemed necessary in
establishing the scope of their examination of the Company's consolidated
financial statements as of December 31, 1999, did not disclose any weaknesses in
internal controls that they considered to be material weaknesses.
(h) OFFICERS' CERTIFICATE. You shall have received on the First
Closing Date and the Second Closing Date, as the case may be, a certificate of
the Company, dated the First Closing Date or the Second Closing Date, as the
case may be, signed by the Chief Executive Officer and Chief Financial Officer
of the Company, to the effect that, and you shall be satisfied that:
(i) The representations and warranties of the Company in
this Agreement are true and correct, in all material respects, as if
made on and as of the First Closing Date or the Second Closing Date, as
the case may be, and the Company has complied, in all material
respects, with all the agreements and satisfied, in all material
respects, all the conditions on its part to be performed or satisfied
at or prior to the First Closing Date or the Second Closing Date, as
the case may be;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the
Act;
(iii) When the Registration Statement became effective and
at all times subsequent thereto up to the delivery of such certificate,
(a) the Registration Statement and the Prospectus, and any amendments
or supplements thereto, contained all material information required to
be included therein by the Securities Act and in all material respects
conformed to the requirements of the Securities Act, (b) the
20
Registration Statement and the Prospectus, and any amendments or
supplements thereto, did not and does not include any 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; and (c) since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amended or supplemented Prospectus which has not been so set forth; and
(iv) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus,
there has not been (a) any material adverse change in the condition
(financial or otherwise), earnings, operations or business of the
Company and its subsidiary considered as one enterprise, (b) any
transaction that is material to the Company and its subsidiary
considered as one enterprise, except transactions entered into in the
ordinary course of business, (c) any obligation, direct or contingent,
that is material to the Company and its subsidiary considered as one
enterprise, incurred by the Company or its subsidiary, except
obligations incurred in the ordinary course of business, (d) any change
in the capital stock or outstanding indebtedness of the Company or its
subsidiary that is material to the Company and its subsidiary
considered as one enterprise, (e) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company or its
subsidiary, or (f) any loss or damage (whether or not insured) to the
property of the Company or its subsidiary which has been sustained or
will have been sustained which has a material adverse effect on the
condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiary considered as one
enterprise.
(i) LOCK-UP AGREEMENT FROM CERTAIN STOCKHOLDERS OF THE COMPANY.
The Company shall have obtained and delivered to you an agreement substantially
in the form of EXHIBIT A attached hereto from each officer and director of the
Company and each beneficial owner of one or more percent of the outstanding
issued share capital of the Company.
(j) OPINIONS OF COUNSEL FOR THE SELLING STOCKHOLDERS. You shall
have received on the First Closing Date and the Second Closing Date, as the case
may be: (i) an opinion of Shearman & Sterling, counsel for the Principal Selling
Stockholder (which opinion may be included in the letter referred to in Section
4(d) above), (ii) an opinion of Xxxxxxx Xxxxx & Xxxxx LLP, counsel for Xxxxx X.
Xxxxx III, and (iii) an opinion of Gardere & Xxxxx, L.L.P., counsel for the
Other Selling Stockholders associated with The TCW Group, each as to the matters
set forth in EXHIBIT D, dated the First Closing Date or the Second Closing Date,
addressed .to the Underwriters and with reproduced copies or signed counterparts
thereof for each of the Underwriters.
Counsel rendering the opinions contained in EXHIBIT D may rely
as to questions of law not involving the laws of the United States or the States
of California, Washington or New York or the General Corporation Law of the
State of Delaware upon opinions of local counsel, and as to questions of fact
upon representations or certificates of officers of the Company, the Selling
Stockholders or officers of the Selling Stockholders, and of government
officials, in which case their opinion is to state that they are so relying and
that they have no knowledge of any material misstatement or inaccuracy in any
such opinion, representation or certificate. Copies of any opinion,
representation or certificate so relied upon shall be delivered to you, as
Representatives of the Underwriters, and to Underwriters' Counsel.
(k) PRINCIPAL SELLING STOCKHOLDER'S CERTIFICATE. On each of the
First Closing Date and the Second Closing Date, as the case may be, the
Representatives shall have received a
21
written certificate executed by the Attorney-in-Fact of the Principal Selling
Stockholder, dated as of such Closing Date, to the effect that:
(i) the representations, warranties and covenants of such
Selling Stockholder set forth in Sections 1(A) and 1(B) of this
Agreement are true and correct, in all material respects, with the same
force and effect as though expressly made by such Selling Stockholder
on and as of such Closing Date; and
(ii) such Selling Stockholder has complied, in all
material respects, with all the agreements and satisfied, in all
material respects, all the conditions on its part to be performed or
satisfied at or prior to such Closing Date.
(l) OTHER SELLING STOCKHOLDERS' CERTIFICATE. On each of the First
Closing Date and the Second Closing Date, as the case may be, the
Representatives shall have received a written certificate executed by the
Attorney-in-Fact of the Other Selling Stockholders, dated as of such Closing
Date, to the effect that:
(i) the representations, warranties and covenants of such
Selling Stockholder set forth in Section 1(B) of this Agreement are
true and correct with the same force and effect as though expressly
made by such Selling Stockholder on and as of such Closing Date; and
(ii) such Selling Stockholder has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to such Closing Date.
(m) SELLING STOCKHOLDERS' DOCUMENTS. At least two business days
prior to the date hereof, the Company and the Selling Stockholders shall have
furnished for review by the Representatives copies of the Powers of Attorney and
Custody Agreements executed by each of the Selling Stockholders and such further
information, certificates and documents as the Representatives may reasonably
request.
(n) STOCK EXCHANGE LISTING. The Shares shall have been approved
for inclusion on the Nasdaq National Market, subject only to official notice of
issuance.
(o) COMPLIANCE WITH PROSPECTUS DELIVERY REQUIREMENTS. The Company
shall have complied with the provisions of Sections 2(g) and 3(e) hereof with
respect to the furnishing of Prospectuses.
(p) ADDITIONAL DOCUMENTS. On or before each of the First Closing
Date and the Second Closing Date, as the case may be, the Representatives and
counsel for the Underwriters shall have received such information, documents and
opinions as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Shares as contemplated herein, or in
order to evidence the accuracy of any of the representations and warranties, or
the satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 4 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Option Shares, at any time prior to the
Second Closing Date, which termination shall be without liability
22
on the part of any party to any other party, except that Section 5 (Payment of
Expenses), Section 6 (Reimbursement of Underwriters' Expenses), Section 7
(Indemnification and Contribution) and Section 10 (Representations and
Indemnities to Survive Delivery) shall at all times be effective and shall
survive such termination.
SECTION 5. PAYMENT OF EXPENSES.
The Company and the Selling Stockholders, jointly and
severally, agree to pay in such proportions as they may agree upon among
themselves all costs, fees and expenses incurred in connection with the
performance of their obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all expenses
incident to the issuance and delivery of the Shares (including all printing and
engraving costs), (ii) all fees and expenses of the registrar and transfer agent
of the Common Shares, (iii) all necessary issue, transfer and other stamp taxes
in connection with the issuance and sale of the Shares to the Underwriters, (iv)
all fees and expenses of the Company's counsel and independent public or
certified public accountants, (v) all costs and expenses incurred in connection
with the preparation, printing, filing, shipping and distribution of the
Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), each preliminary prospectus and the
Prospectus, and all amendments and supplements thereto, and this Agreement, (vi)
all costs and expenses incurred by Underwriters counsel in connection with the
Directed Share Program, (vii) all filing fees, attorneys' fees and expenses
incurred by the Company or the Underwriters in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Shares for offer and sale under the state securities or
blue sky laws or the provincial securities laws of Canada or any other country,
and, if requested by the Representatives, preparing and printing a "Blue Sky
Survey," an "International Blue Sky Survey" or other memorandum, and any
supplements thereto, advising the Underwriters of such qualifications,
registrations and exemptions, (viii) the filing fees incident to, and the
reasonable fees and expenses of counsel for the Underwriters in connection with,
the NASD review and approval of the Underwriters' participation in the offering
and distribution of the Common Shares, (ix) the fees and expenses associated
with including the Shares in the Nasdaq National Market, (x) all costs and
expenses incident to the travel and accommodation of the Company's employees on
the "roadshow," and (xi) all other fees, costs and expenses referred to in Item
13 of Part II of the Registration Statement. Except as provided in this Section
5, Section 6, and Section 7 hereof, the Underwriters shall pay their own
expenses, including the fees and disbursements of their counsel. The Selling
Stockholders further agree with each Underwriter to pay (directly or by
reimbursement) all fees and expenses incident to the performance of their
obligations under this Agreement which are not otherwise specifically provided
for herein, including but not limited to (a) fees and expenses of counsel for
such Selling Stockholders, (b) fees and expenses of the Custodian and (c)
expenses and taxes incident to the sale and delivery of the Common Shares to be
sold by such Selling Stockholders to the Underwriters hereunder (which taxes, if
any, may be deducted by the Custodian under the provisions of Section 2 of this
Agreement).
This Section 5 shall not affect or modify any separate, valid
agreement relating to the allocation of payment of expenses between the Company,
on the one hand, and the Selling Stockholders, on the other hand.
23
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.
If this Agreement is terminated by the Representatives
pursuant to Section 4, Section 8, Section 9 or Section 15, or if the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
of any refusal, inability or failure on the part of the Company or the Selling
Stockholders to perform any agreement herein or to comply with any provision
hereof, the Company agrees to reimburse the Representatives and the other
Underwriters (or such Underwriters as have terminated this Agreement with
respect to themselves), severally, upon demand for all out-of-pocket expenses
that shall have been reasonably incurred by the Representatives and the
Underwriters in connection with the proposed purchase and the offering and sale
of the Shares, including but not limited to fees and disbursements of counsel,
printing expenses, travel and accommodation expenses, postage, facsimile and
telephone charges.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION OF THE UNDERWRITERS.
(1) BY THE COMPANY AND THE PRINCIPAL SELLING STOCKHOLDER.
Each of the Company and the Principal Selling Stockholder, jointly and
severally, agrees to 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 and the Exchange
Act against any loss, claim, damage, liability or expense, as incurred,
to which such Underwriter or such controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is
effected with the written consent of the Company, which consent shall
not be unreasonably withheld), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430A under the
Securities Act, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) upon any untrue statement or
alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
or (iii) in whole or in part upon any inaccuracy in the representations
and warranties of the Company contained herein; or (iv) in whole or in
part upon any failure of the Company or the Principal Selling
Stockholder to perform their respective obligations hereunder or under
law; or (v) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials provided by
the Company or based upon written information furnished by or on behalf
of the Company including, without limitation, slides, videos, films or
tape recordings, used in connection with the marketing of the Shares,
including, without limitation, statements communicated to securities
analysts employed by the Underwriters; or (vi) 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 Shares 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 any matter covered
24
by clause (i), (ii), (iii) (iv) or (v) above, provided that the Company
and the Principal Selling Stockholder shall not be liable under this
clause (vi) to the extent that a court of competent jurisdiction shall
have determined by a final judgment 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
bad faith or willful misconduct; and to reimburse each Underwriter and
each such controlling person for any and all expenses (including the
fees and disbursements of counsel chosen by Xxxxxxxxx Xxxxxxxx) as such
expenses are reasonably incurred by such Underwriter or such
controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action; PROVIDED, HOWEVER, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, that such
loss, claim, damage, liability or expense arises out of or is based
upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Representatives expressly
for use in the Registration Statement, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto); and PROVIDED,
FURTHER, that with respect to any preliminary prospectus, the foregoing
indemnity agreement shall not inure to the benefit of any Underwriter
from whom the person asserting any loss, claim, damage, liability or
expense purchased Shares, or any person controlling such Underwriter,
if copies of the Prospectus were timely delivered to the Underwriter
pursuant to Section 2 and a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been
delivered, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage,
liability or expense; PROVIDED, FURTHER, that the liability of the
Principal Selling Stockholder under the foregoing indemnity agreement
shall not exceed an amount equal to the product of (a) the number of
Shares sold by the Principal Selling Stockholder, and (b) the initial
public offering price per Share, less the underwriting discounts and
commissions per Share, as set forth on the front cover page of the
Prospectus. The indemnity agreement set forth in this Section 7(a)(1)
shall be in addition to any liabilities that the Company and the
Principal Selling Stockholder may otherwise have.
(2) BY THE OTHER SELLING STOCKHOLDERS. Each of the Other
Selling Stockholders, jointly and severally, agrees to 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 and the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Underwriter or such
controlling person may become subject, under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation,
if such settlement is effected with the written consent of such Other
Selling Stockholder, which consent shall not be unreasonably withheld),
insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based (i)
upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule
430A under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any
25
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, in the case of subparagraphs (i) and (ii) of this
Section 7(a)(2) to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
furnished to the Company or such Underwriter by such Other Selling
Stockholder, directly or through such Other Selling Stockholder's
representatives, specifically for use in the preparation of the
Registration Statement, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto); or (iii) in whole or in part
upon any inaccuracy in the representations and warranties of the
Selling Stockholders contained herein; or (iv) in whole or in part upon
any failure of the Selling Stockholders to perform their respective
obligations hereunder or under law; or (v) 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 Shares 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 any matter covered by clause (i), (ii), (iii) or (iv) above,
provided that the Other Selling Stockholders shall not be liable under
this clause (v) to the extent that a court of competent jurisdiction
shall have determined by a final judgment 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 bad faith or willful misconduct; and to reimburse each
Underwriter and each such controlling person for any and all expenses
(including the fees and disbursements of counsel chosen by Xxxxxxxxx
Xxxxxxxx) as such expenses are reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage,
liability, expense or action; PROVIDED, HOWEVER, that with respect to
any preliminary prospectus, the foregoing indemnity agreement shall not
inure to the benefit of any Underwriter from whom the person asserting
any loss, claim, damage, liability or expense purchased Shares, or any
person controlling such Underwriter, if copies of the Prospectus were
timely delivered to the Underwriter pursuant to Section 2 and a copy of
the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, and if the Prospectus (as so amended
or supplemented) would have cured the defect giving rise to such loss,
claim, damage, liability or expense; and PROVIDED, FURTHER, that the
liability of each Selling Stockholder under the foregoing indemnity
agreement shall be limited to an amount equal to the product of (a) the
number of Shares sold by such Selling Stockholder, and (b) the initial
public offering price per Share, less the underwriting discounts and
commissions per Share, as set forth on the front cover page of the
Prospectus. The indemnity agreement set forth in this Section 7(a)(2)
shall be in addition to any liabilities that the Other Selling
Stockholders may otherwise have.
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS AND
SELLING STOCKHOLDERS. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, each of the Selling Stockholders
and each person, if any, who controls the Company or any Selling Stockholder
within the meaning of the Securities Act or the Exchange Act, against any loss,
claim, damage, liability or expense, as incurred, to which the Company, or any
such director, officer, Selling Stockholder or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected
26
with the written consent of such Underwriter), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue or alleged untrue statement of
a material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or arises
out of or is based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any preliminary prospectus, the
Prospectus (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company and the Selling
Stockholders by the Representatives expressly for use therein; and to reimburse
the Company, or any such director, officer, Selling Stockholder or controlling
person for any legal and other expense reasonably incurred by the Company, or
any such director, officer, Selling Stockholder or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action. The indemnity agreement
set forth in this Section 7(b) shall be in addition to any liabilities that each
Underwriter may otherwise have.
(c) INFORMATION PROVIDED BY THE UNDERWRITERS. Each of the Company,
each of the Selling Stockholders and each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Securities Act or
the Exchange Act, hereby acknowledges that the only information that the
Underwriters have furnished to the Company expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) are the statements set forth in the Prospectus under the
caption "Underwriting" as follows: (i) in the table in the first paragraph, (ii)
in the first, second and third sentences of the subsection titled "Dealers'
compensation," (iii) in the subsection titled "Discretionary accounts," (iv) in
the subsection titled "Directed share program," and (v) in the first sentence
and the second paragraph of the subsection titled "Online activities"; and the
Underwriters confirm that such statements are correct.
(d) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES. Promptly
after receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 7, 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
hereunder to the extent it is not materially prejudiced as a proximate result of
such failure and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. In case any such
action is brought against any indemnified party and such indemnified party seeks
or intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the
27
indemnifying party to such indemnified party of such indemnifying party's
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 7 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), approved by the indemnifying
party (Xxxxxxxxx Xxxxxxxx in the case of Section 7(b) and Section 8),
representing the indemnified parties who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party.
(e) SETTLEMENTS. The indemnifying party under this Section 7 shall
not be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 7(d) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 60 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes (i) an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding 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.
(f) CONTRIBUTION. If the indemnification provided for in this
Section 7 is unavailable to or insufficient to hold harmless an indemnified
party under Section 7(a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders, on the
one hand and the Underwriters 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 then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Stockholders, on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders, on the one hand, and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds (before deducting
expenses) received by the Company and the Selling
28
Stockholders, from the sale of the Shares sold by them in the offering bears to
the total underwriting discounts and commissions received by the Underwriters in
connection with the sale of such Shares, in each case as described in the
Prospectus. 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 or the Selling Stockholders on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, each Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 7(f) were 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 account of the equitable considerations referred
to above in this Section 7(f). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to above in this Section 7(f) 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. Notwithstanding the provisions of this subsection (f), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, (ii) no Selling Stockholder shall be required to contribute
any amount in excess of the net proceeds (I.E., gross proceeds less underwriting
discounts and commissions) received by such Selling Stockholder from its sale of
Shares hereunder, and (iii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 7(f) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(g) TIMING OF ANY PAYMENTS OF INDEMNIFICATION. Any losses, claims,
damages, liabilities or expenses for which an indemnified party is entitled to
indemnification or contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred, but in all cases, no later than forty-five
(45) days of invoice to the indemnifying party.
(h) SURVIVAL. The indemnity and contribution agreements contained
in this Section 7 and the representation and warranties set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers, any Selling
Stockholder or any persons controlling the Company or any Selling Stockholder,
and (ii) acceptance of any Shares and payment therefor hereunder. The indemnity
and contribution agreements contained in this Section 7 shall remain operative
and in full force and effect, regardless of any termination of this Agreement. A
successor to any Underwriter, or to the Company, its directors or officers, any
Selling Stockholder or any person controlling the Company or any Selling
Stockholder, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 7.
(i) INDEMNIFICATION OF QUALIFIED INDEPENDENT UNDERWRITER. Without
limitation and in addition to its obligations under the other subsections of
this Section 7, the Company agrees to indemnify and hold harmless Xxxxxxxxx
Xxxxxxxx and each person, if any, who controls Xxxxxxxxx Xxxxxxxx within the
meaning of the Securities Act or the Exchange Act from and against any loss,
claim, damage, liabilities or expense, as incurred, arising out of or based upon
Xxxxxxxxx Xxxxxxxx' acting as a "qualified independent underwriter" (within the
meaning of
29
Rule 2720 to the NASD's Conduct Rules) in connection with the offering
contemplated by this Agreement, and agree to reimburse each such indemnified
person for any legal or other expense reasonably incurred by them in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; PROVIDED, HOWEVER, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense results from the gross negligence or willful
misconduct of Xxxxxxxxx Xxxxxxxx. The indemnity agreement set forth in this
Section 7(i) shall be in addition to any liabilities that the Company may
otherwise have.
(j) INDEMNIFICATION FOR DIRECTED SHARE PROGRAM. The Company agrees
to indemnify and hold harmless Xxxxxxxxx Xxxxxxxx and its affiliates and each
person, if any, who controls Xxxxxxxxx Xxxxxxxx or its affiliates within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act ("Xxxxxxxxx Xxxxxxxx Entities"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) (i) caused by any untrue statement or alleged untrue
statement of a material fact contained in any material prepared by or with the
consent of the Company for distribution to participants in connection with the
Directed Share Program, or caused by 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) the failure of any participant to pay
for and accept delivery of Directed Shares that the participant has agreed to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program other than losses, claims, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or willful misconduct of Xxxxxxxxx Xxxxxxxx
Entities. The indemnity agreement set forth in this Section 7(j) shall be in
addition to any liabilities that the Company may otherwise have.
(k) ACKNOWLEDGEMENTS OF PARTIES. The parties to this Agreement
hereby acknowledge that they are sophisticated business persons who were
represented by counsel during the negotiations regarding the provisions hereof
including, without limitation, the provisions of this Section 7, and are fully
informed regarding said provisions. They further acknowledge that the provisions
of this Section 7 fairly allocate the risks in light of the ability of the
parties to investigate the Company and its business in order to assure that
adequate disclosure is made in the Registration Statement and Prospectus as
required by the Securities Act and the Exchange Act.
SECTION 8. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS.
If, on the First Closing Date or the Second Closing Date, as
the case may be, any one or more of the several Underwriters shall fail or
refuse to purchase Shares that it or they have agreed to purchase hereunder on
such date, and the aggregate number of Common Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase does not
exceed 10% of the aggregate number of the Shares to be purchased on such date,
the other Underwriters shall be obligated, severally, in the proportions that
the number of Firm Common Shares set forth opposite their respective names on
SCHEDULE A bears to the aggregate number of Firm Shares set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions as
may be specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Shares and the
aggregate number of Shares with
30
respect to which such default occurs exceeds 10% of the aggregate number of
Shares to be purchased on such date, and arrangements satisfactory to the
Representatives and the Company for the purchase of such Shares are not made
within 48 hours after such default, this Agreement shall terminate without
liability of any party to any other party except that the provisions of Section
5 and Section 7 shall at all times be effective and shall survive such
termination. In any such case either the Representatives or the Company shall
have the right to postpone the First Closing Date or the Second Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statement and the Prospectus or
any other documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be
deemed to include any person substituted for a defaulting Underwriter under this
Section 8. Any action taken under this Section 8 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 9. TERMINATION OF THIS AGREEMENT.
This Agreement may be terminated by the Representatives by
notice given to the Company if (a) at any time after the execution and delivery
of this Agreement and prior to the First Closing Date (i) trading or quotation
in any of the Company's securities shall have been suspended or limited by the
Commission or by the Nasdaq Stock Market, or trading in securities generally on
either the Nasdaq Stock Market or the New York Stock Exchange shall have been
suspended or limited, or minimum or maximum prices shall have been generally
established on any of such stock exchanges by the Commission or the NASD; (ii) a
general banking moratorium shall have been declared by any of federal, New York
or California authorities; (iii) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any
substantial change or development involving a prospective change in United
States' or international political, financial or economic conditions, as in the
judgment of the Representatives is material and adverse and makes it
impracticable or inadvisable to market the Common Shares in the manner and on
the terms contemplated in the Prospectus or to enforce contracts for the sale of
securities; (iv) in the judgment of the Representatives there shall have
occurred any Material Adverse Change; or (v) the Company shall have sustained a
loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Representatives may interfere materially
with the conduct of the business and operations of the Company regardless of
whether or not such loss shall have been insured; or (b) in the case of any of
the events specified 9(a)(i)-(v), such event singly or together with any other
event, makes it, in your judgment, impracticable or inadvisable to market the
Common Shares in the manner and on the terms contemplated in the Prospectus. Any
termination pursuant to this Section 9 shall be without liability on the part of
(x) the Company or the Selling Stockholders to any Underwriter, except that the
Company and the Selling Stockholders shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 5 and
6 hereof, (y) any Underwriter to the Company or the Selling Stockholders or any
person controlling the Company or the Selling Stockholders, or (z) of any party
hereto to any other party except that the provisions of Section 7 shall at all
times be effective and shall survive such termination.
31
SECTION 10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations,
warranties and other statements of the Company or its officers, of any Selling
Stockholder, or of any person controlling the company or any Selling Stockholder
and of the several Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person or any Selling Stockholder, as
the case may be, and will survive delivery of and payment for the Shares sold
hereunder and such indemnities and agreements shall survive any termination of
this Agreement.
SECTION 11. NOTICES.
All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
If to the Representatives:
Xxxxxxxxx Xxxxxxxx, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
O'Melveny & Xxxxx LLP
Embarcadero Center West
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
If to the Company:
TTM Technologies, Inc.
00000 X.X. 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: President
with a copy to:
Shearman & Sterling
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxx, Esq.
32
If to the Principal Selling Stockholder:
Circuit Holdings, LLC
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
with a copy to
Shearman & Sterling
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxx, Esq.
If to an Other Selling Stockholder, to such Other Selling Stockholder at its
address shown in SCHEDULE B,
and, if to Xxxxx X. Xxxxx III, with a copy to:
Xxxxxxx Xxxxx & Xxxxx XXX
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxxxxx, Esq.
and, if to any Other Selling Stockholder associated with The TCW Group, with a
copy to:
Gardere & Xxxxx, L.L.P.
0000 Xxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
and, during the term of the Custody Agreement, with a copy to:
ChaseMellon Shareholder Services, L.L.C.
000 Xxxxx Xxxx Xxxxxx
Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxx XxXxxxx
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
33
SECTION 12. SUCCESSORS.
This Agreement will inure to the benefit of and be binding
upon the parties hereto, including any substitute Underwriters pursuant to
Section 9 hereof, and to the benefit of the employees, officers and directors
and controlling persons referred to in Section 7, and to their respective
successors and personal representatives, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Shares as such from any of the Underwriters merely by reason of such
purchase.
SECTION 13. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph
or provision of this Agreement shall not affect the validity or enforceability
of any other Section, paragraph or provision hereof. If any Section, paragraph
or provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
SECTION 14. SECTION 14. GOVERNING LAW PROVISIONS.
(a) GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the internal laws of the state of New York
applicable to agreements made and to be performed in such state.
(b) CONSENT TO JURISDICTION. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the City and County of San Francisco or the
courts of the State of California in each case located in the City and County of
San Francisco (collectively, the "Specified Courts"), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
SECTION 15. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS
TO SELL AND DELIVER COMMON SHARES.
If one or more of the Selling Stockholders shall fail to sell
and deliver to the Underwriters the Shares to be sold and delivered by such
Selling Stockholders at the First Closing Date or the Second Closing Date
pursuant to this Agreement, then the Underwriters may at their option, by
written notice from the Representatives to the Company and the Selling
Stockholders, either (i) terminate this Agreement without any liability on the
part of any Underwriter or, except as provided in Sections 5, 6, and 7 hereof,
the Company or the Selling Stockholders, or (ii) purchase the shares which the
Company and other Selling Stockholders have agreed to sell and deliver in
accordance with the terms hereof, or (iii) purchase the shares mentioned in the
preceding clause (ii) and elect to purchase a number of additional Common
34
Shares from the Company equal to the number of Shares which the Selling
Stockholders failed to deliver, in which case the term "Shares" as used in this
Agreement shall be deemed to refer also to such additional Common Shares, and
the Company agrees to sell such Shares to the Underwriters upon such election.
If one or more of the Selling Stockholders shall fail to sell and deliver to the
Underwriters the Shares to be sold and delivered by such Selling Stockholders
pursuant to this Agreement at the First Closing Date or the Second Closing Date,
then the Underwriters shall have the right, by written notice from the
Representatives to the Company and the Custodian, to postpone the First Closing
Date or the Second Closing Date, as the case may be, but in no event for longer
than seven days in order that the required changes, if any, to the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected.
SECTION 16. GENERAL PROVISIONS.
This Agreement constitutes the entire agreement of the parties
to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in
writing by each party whom the condition is meant to benefit. Section headings
herein are for the convenience of the parties only and shall not affect the
construction or interpretation of this Agreement.
[The remainder of this page has been intentionally left blank.]
35
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
TTM TECHNOLOGIES, INC.
By:
-----------------------------------------
Xxxx Xxxxx
President
EACH AND EVERY SELLING STOCKHOLDER
By:
-----------------------------------------
ATTORNEY-IN-FACT
The foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representatives as of the date first above written.
XXXXXXXXX XXXXXXXX, INC.
XXXXX SECURITIES INC.
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
FIRST UNION SECURITIES, INC.
On their behalf and on behalf of each of the several underwriters named in
SCHEDULE A hereto.
By: XXXXXXXXX XXXXXXXX, INC.
By:
------------------------------------------------
AUTHORIZED SIGNATORY
S-1
SCHEDULE A
UNDERWRITERS
Number of Firm
Shares To be
Underwriter Purchased
----------------------------------------------------------------------------------------------- --------------------
Xxxxxxxxx Xxxxxxxx, Inc. ............................................................. [___]
Chase Securities Inc. ................................................................ [___]
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation .................................. [___]
First Union Securities, Inc. ......................................................... [___]
[___] ................................................................................ [___]
[___] ................................................................................ [___]
[___] ................................................................................ [___]
[___] ................................................................................ [___]
[___] ................................................................................ [___]
[___] ................................................................................ [___]
[___] ................................................................................ [___]
[___] ................................................................................ [___]
[___] ................................................................................ [___]
[___] ................................................................................ [___]
[___] ................................................................................ [___]
----------------------------------------------------------------------------------------------- --------------------
Total........................................................................ 7,500,000
--------------------
Schedule A
SCHEDULE B
SELLING STOCKHOLDERS
Maximum Number
Number of Firm Shares of Option Shares
Selling Stockholder to be Sold to be Sold
----------------------------------------------------------- ----------------------- ------------------------
Circuit Holdings LLC
0000 Xxxxxxxxxxxx Xxx. XX
Xxxxx 000
Xxxxxxxxxx, XX 22004..................................... 1,699,083 254,863
Xxxxx X. Xxxxx, III
0000 X. Xxxxxxxxxx Xx. X.X.
Xxxxxxxx, XX 98029....................................... 101,576 15,236
TCW/Crescent Mezzanine Partners II, L.P.
00000 Xxxxx Xxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxx, XX 90025.................................... 53,853 8,078
TCW/Crescent Mezzanine Trust II
00000 Xxxxx Xxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxx, XX 90025.................................... 13,054 1,957
TCW Leveraged Income Trust, L.P.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 90017.................................... 3,717 558
TCW Leveraged Income Trust II, L.P.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 90017.................................... 3,717 558
----------------------------------------------------------- ---------------------- ------------------------
Total............................................ 1,875,000 281,250
======================= ========================
Schedule B
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
______________, 2000
Xxxxxxxxx Xxxxxxxx Inc.
As Representative of the Several Underwriters
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: TTM TECHNOLOGIES, INC. (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares
of common stock of the Company ("Common Stock") or securities convertible into
or exchangeable or exercisable for Common Stock. The Company proposes to carry
out a public offering of Common Stock (the "Offering") for which you will act as
a representative (the "Representative") of the underwriters. The undersigned
recognizes that the Offering will be of benefit to the undersigned and will
benefit the Company by, among other things, raising additional capital for its
operations. The undersigned acknowledges that you and the other underwriters are
relying on the representations and agreements of the undersigned contained in
this letter in carrying out the Offering and in entering into underwriting
arrangements with the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that
the undersigned will not offer to sell, contract to sell, or otherwise sell,
dispose of, loan, pledge or grant any rights with respect to (collectively, a
"Disposition") any shares of Common Stock, any options or warrants to purchase
any shares of Common Stock or any securities convertible into or exchangeable
for shares of Common Stock (collectively, "Securities") now owned or hereafter
acquired directly by such person or with respect to which such person has or
hereafter acquires the power of disposition, otherwise than (i) as a bona fide
gift or gifts, provided the donee or donees thereof agree in writing to be bound
by this restriction, (ii) as a distribution to partners or shareholders of such
person, provided that the distributees thereof agree in writing to be bound by
the terms of this restriction, (iii) with respect to sales or purchases of
Securities acquired on the open market, (iv) with respect to the sale of any
shares of Common Stock to the Underwriters pursuant to the Underwriting
Agreement, or (v) with the prior written consent of Xxxxxxxxx Xxxxxxxx, Inc. In
addition, notwithstanding the foregoing, if the undersigned is a corporation,
the corporation may transfer Securities to any affiliate of such corporation,
and if the undersigned is an individual, such individual may transfer such
Securities by gift, will or intestacy to a member of members of his or her
immediate family, or to a trust, the beneficiaries of which are exclusively the
undersigned and/or a member or members of his or her immediate family; PROVIDED,
HOWEVER, that in such case it shall be a condition to the transfer that the
transferee execute an agreement stating that the transferee is receiving and
holding such Securities subject to the provisions of this Lock-Up Agreement, and
provided further that such transfer not involve a disposition for value. For
purposes of this Lock-Up Agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousins.
The foregoing restrictions will terminate after the close of trading of the
A-1
Common Stock on the 180th day of (and including) the day the Common Stock
commenced trading on the Nasdaq National Market (the "Lock-Up" Period). The
foregoing restriction has been expressly agreed to preclude the holder of the
Securities from engaging in any hedging or other transaction which is designed
to or reasonably expected to lead to or result in a Disposition of Securities
during the Lock-up Period, even if such Securities would be disposed of by
someone other than such holder. Such prohibited hedging or other transactions
would include, without limitation, any short sale (whether or not against the
box) or any purchase, sale or grant of any right (including, without limitation,
any put or call option) with respect to any Securities or with respect to any
security (other than a broad-based market basket or index) that included,
relates to or derives any significant part of its value from Securities. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of shares
of Common Stock or Securities held by the undersigned except in compliance with
the foregoing restrictions.
This agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representatives, and assigns of
the undersigned. Nothing in this Lock-Up Agreement shall constitute an offer by
the Company to sell, or create any right or obligation for the undersigned to
purchase, Common Stock or Securities of the Company. In the event the Offering
has not occurred on or before November 30, 2000 this Lock-Up Agreement shall be
of no further force or effect.
Dated:
---------------------------------
---------------------------------------
Printed Name of Holder
By:
------------------------------------
Signature
---------------------------------------
Printed Name of Person Signing (and
indicate capacity of person signing if
signing as custodian, trustee, or on
behalf of an entity)
A-2
EXHIBIT B
MATTERS TO BE COVERED IN THE OPINION OF COMPANY COUNSEL
(i) Each of the Company and Power Circuits, Inc. (its
"Subsidiary") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation.
(ii) Each of the Company and its Subsidiary has the
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus.
(iii) Each of the Company and its Subsidiary is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction, if any, in which the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or be in
good standing would not have a Material Adverse Effect. To such
counsel's knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
Power Circuits, Inc.
(iv) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus under the caption
"Capitalization" as of the dates stated therein, the issued and
outstanding shares of capital stock of the Company (including the
Shares to be sold by the Selling Stockholders) outstanding prior to the
issuance of the Shares to be issued by the Company have been duly and
validly issued and are fully paid and nonassessable, and will not have
been issued in violation of or subject to any preemptive right arising
under the certificate of incorporation or Washington General
Corporation Law or, to such counsel's knowledge, any co-sale right,
right of first refusal or other similar right, other than any
registration rights described in Opinion (xx) hereof.
(v) All issued and outstanding shares of capital stock of
the Subsidiary of the Company have been duly authorized and validly
issued and are fully paid and nonassessable, and have not been issued
in violation of or subject to any preemptive right arising under its
articles of incorporation or California General Corporation Law, or, to
such counsel's knowledge, any co-sale right, right of first refusal or
other similar right, other than any registration rights described in
Opinion (xx) hereof and are owned by the Company free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable
interest.
(vi) The Firm Shares or the Option Shares, as the case may
be, to be issued by the Company pursuant to the terms of this Agreement
have been duly authorized and, upon issuance and delivery against
payment therefor in accordance with the terms hereof, will be duly and
validly issued and fully paid and nonassessable, and will not have been
issued in violation of or subject to any preemptive right arising under
the certificate of incorporation or Washington General Corporation Law,
or, to such counsel's knowledge any co-sale right, right of first
refusal or other similar right, other than any registration rights
described in Opinion (xx) hereof.
B-1
(vii) The Company has the corporate power and authority to
enter into this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by it hereunder.
(viii) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company and all necessary
partnership action or limited liability company action, as applicable,
by the Funds and has been duly executed and delivered by the Company
and the Funds and (assuming due authorization, execution and delivery
by you) is a valid and binding agreement of the Company and the Funds,
enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except
as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally or by general equitable principles (whether
relief is sought in a proceeding at law or in equity).
(ix) The Registration Statement has become effective under
the Securities Act and the Shares have been validly registered under
the Securities Act and the applicable rules and regulations of the
Commission thereunder and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Securities Act.
(x) The 8-A Registration Statement complied as to form in
all material respects with the requirements of the Exchange Act; the
8-A Registration Statement has become effective under the Exchange Act;
and the Common Shares have been validly registered under the Exchange
Act and the applicable rules and regulations of the Commission
thereunder and, to such counsel's knowledge, no stop order suspending
the effectiveness of the Form 8-A Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Exchange Act.
(xi) The Registration Statement and the Prospectus, and
each amendment or supplement thereto (other than the financial
statements (including supporting schedules) and financial data derived
therefrom as to which such counsel need express no opinion), as of the
effective date of the Registration Statement, complied as to form in
all material respects with the requirements of the Securities Act and
the applicable Rules and Regulations.
(xii) The information in the Prospectus under the captions
"Management--Incentive Plans," "--Employment Agreements and Change of
Control Agreements," "--Limitations on Directors' Liability and
Indemnification," "Related Party Transactions," "Description of
Indebtedness" and "Description of Capital Stock" and in Part II of the
Registration Statement under the caption "Indemnification of Directors
and Officers" to the extent that it constitutes matters of law or legal
conclusions, has been reviewed by such counsel and is an accurate and
fair summary of such matters and conclusions.
(xiii) The forms of certificates evidencing the Common Stock
and filed as exhibits to the Registration Statement comply with
Washington law.
(xiv) The descriptions in the Registration Statement and
the Prospectus relating to the charter and bylaws of the Company and of
statutes are accurate and fairly present the information required to be
presented by the Securities Act.
B-2
(xv) To such counsel's knowledge, there are no agreements,
contracts, leases or documents to which the Company is a party of a
character required to be described or referred to in the Registration
Statement or Prospectus or to be filed as an exhibit to the
Registration Statement which are not described or referred to therein
or filed as required.
(xvi) The performance of this Agreement and the
consummation of the transactions herein contemplated (other than
performance of the Company's indemnification obligations hereunder,
concerning which no opinion need be expressed) will not (a) result in
any violation of the Company's charter or bylaws or (b) to such
counsel's knowledge, result in a material breach or violation of any of
the terms and provisions of, or constitute a default under, any bond,
debenture, note or other evidence of indebtedness, or any lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument known to such counsel to which
the Company is a party or by which its properties are bound, or any
applicable statute, rule or regulation known to such counsel or, to
such counsel's knowledge, any order, writ or decree of any court,
government or governmental agency or body having jurisdiction over the
Company or its subsidiary, or over any of their properties or
operations.
(xvii) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or body
having jurisdiction over the Company or its subsidiary, or over any of
their properties or operations is necessary in connection with the
consummation by the Company of the transactions herein contemplated,
except (i) such as have been obtained under the Securities Act, (ii)
such as may be required under state or other securities or Blue Sky
laws in connection with the purchase and the distribution of the Shares
by the Underwriters, (iii) such as may be required by the NASD and (iv)
such as may be required under the federal or provincial laws of Canada.
(xviii) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company or
its subsidiary of a character required to be disclosed in the
Registration Statement or the Prospectus by the Securities Act, other
than those described therein.
(xix) To such counsel's knowledge, neither the Company nor
its subsidiary is presently (a) in material violation of its respective
charter or bylaws, or (b) in material breach of any applicable statute,
rule or regulation known to such counsel or, to such counsel's
knowledge, any order, writ or decree of any court or governmental
agency or body having jurisdiction over the Company or its subsidiary,
or over any of their properties or operations.
(xx) To such counsel's knowledge, except as set forth in
the Registration Statement and Prospectus, no holders of Common Shares
or other securities of the Company have registration rights with
respect to securities of the Company and, except as set forth in the
Registration Statement and Prospectus, all holders of securities of the
Company having rights known to such counsel to registration of Common
Shares or other securities, because of the filing of the Registration
Statement by the Company, have, with respect to the offering
contemplated thereby, waived such rights or such rights have expired by
reason of lapse of time following notification of the Company's intent
to file the Registration Statement or have included securities in the
Registration Statement pursuant to the exercise of and in full
satisfaction of such rights.
B-3
(xxi) The Company is not and, after giving effect to the
offering and the sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(xxii) To such counsel's knowledge, the Company and its
subsidiary own or possess sufficient trademarks, trade names, patent
rights, copyrights, licenses, approvals, trade secrets and other
similar rights (collectively, "Intellectual Property Rights")
reasonably necessary to conduct their business as now conducted; and
the expected expiration of any such Intellectual Property Rights would
not result in a Material Adverse Effect. 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
Effect. To such counsel's knowledge, the Company's discoveries,
inventions, products, or processes referred to in the Registration
Statement or Prospectus do not infringe or conflict with any right or
patent which is the subject of a patent application known to the
Company.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, Underwriters' Counsel and the independent
certified public accountants of the Company, at which such conferences the
contents of the Registration Statement and Prospectus and related matters were
discussed, and although they have not verified the accuracy or completeness of
the statements contained in the Registration Statement or the Prospectus,
nothing has come to the attention of such counsel which leads them to believe
that, at the time the Registration Statement became effective and at all times
subsequent thereto up to and on the First Closing Date or Second Closing Date,
as the case may be, the Registration Statement and any amendment or supplement
thereto (other than the financial statements including supporting schedules and
other financial and statistical information derived therefrom, as to which such
counsel need express no comment) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or at the First Closing
Date or the Second Closing Date, as the case may be, the Registration Statement,
the Prospectus and any amendment or supplement thereto (except as aforesaid)
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
B-4
EXHIBIT C
MATTERS TO BE COVERED IN THE OPINION OF WASHINGTON COMPANY COUNSEL
[conform to final negotiated opinion,
which will consist of the Washington law elements currently
contained in Exhibit B]
C-1
EXHIBIT D
MATTERS TO BE COVERED IN THE OPINION OF SELLING STOCKHOLDER COUNSEL
(i) The Underwriting Agreement has been duly authorized,
executed and delivered by or on behalf of, and is a valid and binding
agreement of, such Selling Stockholder, enforceable in accordance with
its terms, except as rights to indemnification thereunder may be
limited by applicable law and except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles.
(ii) The execution and delivery by such Selling
Stockholder of, and the performance by such Selling Stockholder of its
obligations under, the Underwriting Agreement and its Custody Agreement
and its Power of Attorney will not contravene or conflict with, result
in a breach of, or constitute a default under, the charter or by-laws,
partnership agreement, trust agreement or other organization documents,
as the case may be, of such Selling Stockholder, or, to the best of
such counsel's knowledge, violate, result in a breach of or constitute
a default under the terms of any other agreement or instrument to which
such Selling Stockholder is a party or by which it is bound, or any
judgment, order or decree applicable to such Selling Stockholder of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over such Selling Stockholder.
(iii) Such Selling Stockholder has good and valid title to
all of the Common Shares which may be sold by such Selling Stockholder
under the Underwriting Agreement and has the legal right and power, and
all authorization and approvals required under its charter and by-laws,
partnership agreement, trust agreement or other organizational
documents, as the case may be, to enter into the Underwriting Agreement
and its Custody Agreement and its Power of Attorney, to sell, transfer
and deliver all of the Common Shares which may be sold by such Selling
Stockholder under the Underwriting Agreement and to comply with its
other obligations under the Underwriting Agreement, its Custody
Agreement and its Power of Attorney.
(iv) Each of the Custody Agreement and Power of Attorney
of such Selling Stockholder has been duly authorized, executed and
delivered by such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder, enforceable in accordance with
its terms, except as rights to indemnification thereunder may be
limited by applicable law and except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles.
(v) Assuming that the Underwriters purchase the Shares
which are sold by such Selling Stockholder pursuant to the Underwriting
Agreement for value, in good faith and without notice of any adverse
claims, the delivery of such Shares pursuant to the Underwriting
Agreement will pass good and valid title to such Shares, free and clear
of any security interest, mortgage, pledge, lieu encumbrance or other
claim.
(vi) To the best of such counsel's knowledge, no consent,
approval, authorization or other order of, or registration or filing
with, any court or governmental
D-1
authority or agency, is required for the consummation by such Selling
Stockholder of the transactions contemplated in the Underwriting
Agreement, except as required under the Securities Act, applicable
state securities or blue sky laws, and from the NASD.
D-2
