3,200,000 SHARES
SILICON LABORATORIES INC.
COMMON STOCK, PAR VALUE $0.0001 PER SHARE
UNDERWRITING AGREEMENT
March [23], 2000
March [23], 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx Brothers Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Silicon Laboratories Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters named in Schedule II
hereto (the "UNDERWRITERS"), and certain shareholders of the Company (the
"SELLING SHAREHOLDERS") named in Schedule I hereto severally propose to sell
to the several Underwriters, an aggregate of 3,200,000 shares of common
stock, par value $0.0001 per share, of the Company (the "FIRM SHARES"), of
which 2,720,000 shares are to be sold by the Company and 480,000 shares are
to be sold by the Selling Shareholders, each Selling Shareholder selling the
amount set forth opposite such Selling Shareholder's name in Schedule I
hereto. Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX XXXXXXX"), Xxxxxx
Brothers Inc. and Xxxxxxx Xxxxx Barney Inc. shall act as representatives (the
"REPRESENTATIVES") of the several Underwriters.
The Company also proposes to issue and sell to the several Underwriters
not more than an additional 480,000 shares of its common stock, par value
$0.0001 per share (the "ADDITIONAL SHARES"), if and to the extent that the
Representatives shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to
the Underwriters in Section 3 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "SHARES." The shares
of common stock, $0.0001 par value per share, of the Company to be outstanding
after giving effect to the sales contemplated hereby are hereinafter referred
to as the "COMMON STOCK." The Company and the Selling Shareholders are
hereinafter sometimes collectively referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended or supplemented at the time it
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becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement.
Xxxxxx Xxxxxxx has agreed to reserve a portion of the Shares to be
purchased by it under this Agreement for sale to the Company's directors,
officers, employees and business associates and other parties related to the
Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus under
the heading "Underwriters" (the "DIRECTED SHARE PROGRAM"). The Shares to be
sold by Xxxxxx Xxxxxxx pursuant to the Directed Share Program are referred to
hereinafter as the "DIRECTED SHARES." Any Directed Shares not orally
confirmed for purchase by any Participants by the end of the business day on
which this Agreement is executed will be offered to the public by the
Underwriters as set forth in the Prospectus.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the Company's
knowledge threatened by the Commission.
(b) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, 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, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to
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statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representatives
expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware,
has the corporate power and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material adverse
effect on the Company.
(d) The Company has only one subsidiary, Silicon Laboratories UK
Limited, which has only nominal assets and is used solely for marketing
purposes.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock (including the Shares to be sold by
the Selling Shareholders) outstanding prior to the issuance of the
Shares to be sold by the Company have been duly authorized and are
validly issued, fully paid and non-assessable.
(h) The shares of Common Stock of the Company to be issued upon
conversion of the Company's Series A Preferred Stock and Series B
Preferred Stock (collectively, the "CONVERTIBLE PREFERRED STOCK") have
been duly authorized and, when issued and delivered pursuant to the
terms of the Company's Fourth Amended and Restated Certificate of
Incorporation, will be validly issued, fully paid and non-assessable.
(i) The Shares to be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive or
similar rights.
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(j) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene
any provision of applicable law or the certificate of incorporation or
by-laws of the Company or any agreement or other instrument binding upon
the Company that is material to the Company, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Company, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
(l) There are no legal or governmental proceedings pending, or to
the Company's knowledge threatened, to which the Company is a party or
to which any of the properties of the Company is subject that are
required to be described in the Registration Statement or the Prospectus
and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(m) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.
(n) The Company is not, and after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as
described in the Prospectus will not be, required to register as an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(o) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
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protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), (ii) has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its
business and (iii) is in compliance with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company.
(p) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties) which would, singly or in the aggregate, have a material
adverse effect on the Company.
(q) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
(r) The Company has not sold, issued or distributed any shares of
Common Stock during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A under, or Regulation D or S
of, the Securities Act, other than shares issued pursuant to employee
benefit plans, stock option plans or other compensation plans for the
benefit of employees, directors and consultants of the Company or
pursuant to outstanding options, rights or warrants.
(s) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as
described in the Registration Statement and the Prospectus, (i) the
Company has not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction which, in either
case, was not in the ordinary course of business; (ii) the Company has
not purchased any of its outstanding capital stock, nor declared, paid
or otherwise made any dividend or distribution of any kind on its
capital stock other than ordinary and customary dividends and the
two-for-one
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stock effected on November 3, 1999; and (iii) there has not been any
material change in the capital stock, short-term debt or long-term debt
of the Company.
(t) The Company has good and marketable title in fee simple to all
real property and good and marketable title to all personal property
owned by it which is material to the business of the Company, in each
case free and clear of all liens, encumbrances and defects, except such
as are described in the Prospectus or such as do not materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company; and any real
property and buildings held under lease by the Company are held by it
under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to
be made of such property and buildings by the Company, in each case
except such as described in the Prospectus.
(u) The Company owns or possesses, or has no reason to believe it
cannot acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names currently employed by it in connection with its business, and the
Company has not received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the Company.
(v) No material labor dispute with the employees of the Company
exists, except as described in the Prospectus, or, to the knowledge of
the Company, is imminent; and the Company is not aware of any existing,
threatened or imminent labor disturbance by the employees of any of its
principal suppliers, manufacturers or contractors that could have a
material adverse effect on the Company.
(w) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the business in which it is engaged; the
Company has not been refused any insurance coverage sought or applied
for; and the Company has no reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to
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continue its business at a cost that would not have a material adverse
effect on the Company, except as described in the Prospectus.
(x) The Company possesses all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct its businesses and the Company has not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the Company,
except as described in the Prospectus.
(y) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(z) The Registration Statement, the Prospectus and any preliminary
prospectus comply, and any amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign jurisdictions
in which the Prospectus or any preliminary prospectus, as amended or
supplemented, if applicable, are distributed in connection with the
Directed Share Program.
(aa) 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 where the Directed Shares are being offered.
(bb) The Company has not offered, or caused Xxxxxx Xxxxxxx to offer,
Shares to any person pursuant to the Directed Share Program with the
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.
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(cc) The Company has reviewed its operations to evaluate the extent
to which the business or operations of the Company have been or could be
affected by the Year 2000 Problem (that is, any significant risk that
computer hardware or software applications used by the Company will not,
in the case of dates or time periods occurring after December 31, 1999,
function at least as effectively as in the case of dates or time periods
occurring prior to January 1, 2000); as a result of such review, the
Company has no reason to believe, and does not believe, that the Year
2000 Problem will have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business or operations of
the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. Each of
the Selling Shareholders, severally and not jointly, represents and warrants to
and agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered
by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of, and
the performance by such Selling Shareholder of its obligations under,
this Agreement and the Irrevocable Power of Attorney and Custody
Agreement signed by such Selling Shareholder appointing certain
individuals as such Selling Shareholder's attorneys-in-fact to the
extent set forth therein, relating to the transactions contemplated
hereby and by the Registration Statement, and [EquiServe Trust Company],
as Custodian, relating to the deposit of the Shares to be sold by such
Selling Shareholder (the "POWER OF ATTORNEY AND CUSTODY AGREEMENT") will
not contravene any provision of applicable law, or any agreement or
other instrument binding upon such Selling Shareholder or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required for the performance by such Selling Shareholder of
its obligations under this Agreement or the Power of Attorney and
Custody Agreement of such Selling Shareholder, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(c) Such Selling Shareholder has, and on the Closing Date will have,
valid title to the Shares to be sold by such Selling Shareholder and the
legal right and power, and all authorization and approval required by
law, to enter into this Agreement, the Power of Attorney and Custody
8
Agreement and to sell, transfer and deliver the Shares to be sold by
such Selling Shareholder.
(d) The Shares to be sold by such Selling Shareholder pursuant to
this Agreement have been duly authorized and are validly issued, fully
paid and non-assessable.
(e) The Power of Attorney and Custody Agreement has been duly
authorized, executed and delivered by such Selling Shareholder and is a
valid and binding agreement of such Selling Shareholder.
(f) Delivery of the Shares to be sold by such Selling Shareholder
pursuant to this Agreement will pass title to such Shares free and clear
of any security interests, claims, liens, equities and other encumbrances.
(g) (i)The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, 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, and (ii) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties set forth in this paragraph 2(g) do not apply to
statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representatives
expressly for use therein.
3. AGREEMENTS TO SELL AND PURCHASE. Each Seller, severally and
not jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees,
severally and not jointly, to purchase from such Seller at $- a share (the
"PURCHASE PRICE") the number of Firm Shares (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that bears
the same proportion to the number of Firm Shares to be sold by such Seller as
the number of Firm Shares set forth in Schedule II hereto opposite the name
of such Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Shares, and the Underwriters shall have a
9
one-time right to purchase, severally and not jointly, up to 480,000 Additional
Shares at the Purchase Price. If the Representatives, on behalf of the
Underwriters, elect to exercise such option, the Representatives shall so notify
the Company in writing not later than 30 days after the date of this Agreement,
which notice shall specify the number of Additional Shares to be purchased by
the Underwriters and the date on which such shares are to be purchased. Such
date may be the same as the Closing Date (as defined below) but not earlier than
the Closing Date nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total
number of Additional Shares to be purchased as the number of Firm Shares set
forth in Schedule II hereto opposite the name of such Underwriter bears to the
total number of Firm Shares.
Each Seller hereby agrees that, without the prior written consent
of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the
period ending 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
Notwithstanding the foregoing, the last reported sale price of the Common
Stock per share on the NASDAQ National Market is at least twice the Public
Offering Price (as defined in Section 5 below) per share of the Common Stock
sold in the offering for the 20 consecutive trading days ending on the
trading day immediately preceding the 120th day after the date of the
Prospectus, then 30% of the shares of Common Stock and Common Stock
equivalents held by each Selling Shareholder on the date of the Prospectus
shall be released from the 180 day restrictions. This early release shall
occur on: (a) the 120th day after the date of the Prospectus if the Company
makes a public release of its quarterly or annual results during the period
beginning on the eleventh trading day after the date of the Prospectus and
ending on the day prior to the 120th day after the date of the Prospectus, or
(b) the second trading day after the first public release of the Company's
quarterly or annual results occurring on or after the 120th day after the
date of the Prospectus, otherwise.
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The restrictions in the preceding paragraph shall not apply to (A)
the Shares to be sold hereunder, (B) the issuance by the Company of shares of
Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof of which the Underwriters have been
advised in writing or (C) transactions by any person other than the Company
relating to shares of Common Stock or other securities acquired in open
market transactions after the completion of the offering of the Shares. In
addition, each Selling Shareholder, agrees that, without the prior written
consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during
the period ending 180 days after the date of the Prospectus, make any demand
for, or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock.
4. TERMS OF PUBLIC OFFERING. The Sellers are advised by the
Representatives that the Underwriters propose to make a public offering of their
respective portions of the Shares as soon after the Registration Statement and
this Agreement have become effective as in the judgment of the Representatives
is advisable. The Sellers are further advised by the Representatives that the
Shares are to be offered to the public initially at $- a share (the "PUBLIC
OFFERING PRICE") and to certain dealers selected by the Representatives at a
price that represents a concession not in excess of $- a share under the Public
Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $- a share, to any Underwriter or to
certain other dealers.
5. PAYMENT AND DELIVERY. Payment for the Firm Shares to be sold
by each Seller shall be made to such Seller in Federal or other funds
immediately available in New York City against delivery of such Firm Shares
for the respective accounts of the several Underwriters at 10:00 a.m., New
York City time, on [March 28], 2000, or at such other time on the same or
such other date, not later than [April 4], 2000, as shall be designated in
writing by the Representatives. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 3 or at such other time on the same or on such
other date, in any event not later than [May 4], 2000, as shall be designated
in writing by the Representatives. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE."
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Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as the
Representatives shall request in writing not later than one full business day
prior to the Closing Date or the Option Closing Date, as the case may be.
The certificates evidencing the Firm Shares and Additional Shares shall be
delivered to the Representatives on the Closing Date or the Option Closing
Date, as the case may be, for the respective accounts of the several
Underwriters, with any transfer taxes payable in connection with the transfer
of the Shares to the Underwriters duly paid, against payment of the Purchase
Price therefor.
6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations
of the Sellers to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement
shall have become effective not later than [5:00 pm] (New York City time) on
the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in the judgment of the Representatives, is
material and adverse and that makes it, in the judgment of the
Representatives, impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of
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the Company, to the effect set forth in Section 6(a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing
Date and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, outside counsel for the
Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power
and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to
transact business and is in good standing in the States of
Texas, California, Georgia, Colorado, New Jersey and
Massachusetts;
(ii) the authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in
the Prospectus under the captions "Capitalization" and
"Description of Capital Stock";
(iii) the shares of Common Stock (including the Shares to
be sold by the Selling Shareholders) outstanding prior to the
issuance of the Shares to be sold by the Company have been
duly authorized and are validly issued and, to our knowledge,
are fully paid and non-assessable;
(iv) the shares of Common Stock of the Company to be
issued upon conversion of the Convertible Preferred Stock have
been duly authorized and, when issued and delivered pursuant
to the terms of the Company's Fourth Amended and Restated
Certificate of Incorporation, will be validly issued, fully
paid and non-assessable;
(v) the Shares to be sold by the Company have been duly
authorized and, when issued and delivered to the Underwriters
against payment therefor in accordance with the terms of this
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Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive rights arising under the Company's
Fourth Amended and Restated Certificate of Incorporation or
the Delaware General Corporation Law, or to its knowledge, any
similar rights that entitle or will entitle any person to
acquire any shares of capital stock of the Company upon the
issuance and sale of the Shares;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement (A) will not result in any violation of any existing
law, (B) will not violate the certificate of incorporation or
by-laws of the Company or, (C) will not constitute a breach of,
or a default under any agreement or other instrument binding
upon the Company that is an exhibit to the Registration
Statement, or (D) will not constitute a breach of, or a
default under any judgment, order or decree known to us and
applicable to the Company of any governmental body, agency or
court having jurisdiction over the Company, and no consent,
approval, authorization or order of, or qualification with,
any governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the
offer and sale of the Shares;
(viii) the statements (A) in the Prospectus under the
captions "Certain Transactions", "Description of Capital
Stock", "Business - Legal Proceedings" and, to the extent of
the description of this Agreement, "Underwriters" and (B) in
the Registration Statement in Items 14 and 15, in each case
insofar as such statements constitute summaries of the legal
matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal
matters, documents and proceedings and fairly summarize the
matters referred to therein;
(ix) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Company is a party or to which any of the properties
of the Company is subject that are required to be described in
the
14
Registration Statement or the Prospectus and are not so
described or of any contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(x) the Company is not, and after giving effect to the
offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus will not be,
required to register as an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
In addition, such counsel shall also state in its opinion
that (A) the Registration Statement and Prospectus (except for
financial statements and schedules and other financial and
statistical data included therein as to which such counsel need not
express any opinion), as of the date of the Registration Statement
complied, and of the Closing Date will comply, as to form in all
material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder, (B) it has no reason
to believe that (except for financial statements and schedules and
other financial and statistical data as to which such counsel need
not express any belief) the Registration Statement and the
prospectus included therein at the time the Registration Statement
became effective 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 and (C)
it has no reason to believe that (except for financial statements
and schedules and other financial and statistical data as to which
such counsel need not express any belief) the Prospectus, as of the
date hereof, contains any untrue statement of a material fact or
omits 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.
(d) The Underwriters shall have received on the Closing
Date an opinion of Fish & Neave, outside intellectual property
counsel for the Company, dated the Closing Date, covering such
matters as the Underwriters may reasonably request.
(e) The Underwriters shall have received on the Closing
Date an opinion of X'Xxxxx, Xxxx & Xxxxxxxx, L.L.P., outside
intellectual property counsel for the Company, dated the Closing
Date, covering such matters as the Underwriters may reasonably
request.
15
(f) The Underwriters shall have received on the Closing
Date an opinion of Xxxxxxx, Phleger & Xxxxxxxx LLP, special
transaction counsel for the Selling Shareholders, dated the Closing
Date, to the effect that:
(i) this Agreement has been duly executed and
delivered by or on behalf of each of the Selling
Shareholders;
(ii) the execution and delivery by each Selling
Shareholder of, and the performance by such Selling
Shareholder of its obligations under, this Agreement and
the Power of Attorney and Custody Agreement of such
Selling Shareholder will not contravene any provision of
applicable law, or to such counsel's knowledge, any
agreement or other instrument binding upon such Selling
Shareholder or, to such counsel's knowledge, any
judgment, order or decree of any governmental body,
agency or court having jurisdiction over such Selling
Shareholder, and no consent, approval, authorization or
order of, or qualification with, any governmental body or
agency is required for the performance by such Selling
Shareholder of his obligations under this Agreement or
the Power of Attorney and Custody Agreement of such
Selling Shareholder, except such as may be required by
the securities or Blue Sky laws of the various states in
connection with offer and sale of the Shares (as to which
such counsel need not render an opinion);
(iii) each of the Selling Shareholders is the sole
registered owner of the Shares to be sold by such Selling
Shareholder and has the legal right and power to enter
into this Agreement and the Power of Attorney and Custody
Agreement of such Selling Shareholder and to sell,
transfer and deliver the Shares to be sold by such
Selling Shareholder;
(iv) the Power of Attorney and Custody Agreement
of each Selling Shareholder has been duly executed and
delivered by such Selling Shareholder and is a valid and
binding agreement of such Selling Shareholder; and
(v) upon the delivery and payment for the Shares
to be sold by such Selling Shareholder as contemplated in
this Agreement, each of the Underwriters will receive
valid title to the Shares purchased by it from such
Selling Shareholder, free of any adverse claim, assuming
the Underwriters purchase such Shares for value, in good
faith and without notice of any adverse claim, as
16
such terms are defined by the Uniform Commercial Code in effect in
the State of Texas.
(g) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in Sections 6(c)(iv),
6(c)(v), 6(c)(vii) (but only as to the statements in the Prospectus
under "Underwriters") and 6(c)(xi) above.
With respect to Section 6(c)(xi) above, Xxxxxxx, Phleger & Xxxxxxxx
LLP and Xxxxx Xxxx & Xxxxxxxx may state that their opinion and belief are
based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and review
and discussion of the contents thereof, but are without independent check or
verification, except as specified. With respect to Section 6(e) above,
Xxxxxxx, Phleger & Xxxxxxxx LLP may rely upon an opinion or opinions of
counsel for any Selling Shareholders and, with respect to factual matters and
to the extent such counsel deems appropriate, upon the representations of
each Selling Shareholder contained herein and in the Power of Attorney and
Custody Agreement of such Selling Shareholder and in other documents and
instruments; PROVIDED that (A) each such counsel for the Selling Shareholders
is satisfactory to counsel for the Underwriters, (B) a copy of each opinion
so relied upon is delivered to the Representatives and is in form and
substance satisfactory to the Representatives, (C) copies of such Power of
Attorney and Custody Agreement and of any such other documents and
instruments shall be delivered to the Representatives and shall be in form
and substance satisfactory to the Representatives and (D) Xxxxxxx, Phleger &
Xxxxxxxx LLP shall state in their opinion that they are justified in relying
on each such other opinion.
The opinions of Xxxxxxx, Phleger & Xxxxxxxx LLP, Fish & Neave, and
X'Xxxxx, Xxxx & Xxxxxxxx, L.L.P., described in Sections 6(c), 6(d), 6(e) and
6(f) above (and any opinions of counsel for any Selling Shareholder referred
to in the immediately preceding paragraph) shall be rendered to the
Underwriters at the request of the Company or one or more of the Selling
Shareholders, as the case may be, and shall so state therein.
(h) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Ernst & Young LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration
17
Statement and the Prospectus; PROVIDED that the letter delivered on the
Closing Date shall use a "cut-off date" not earlier than the date
hereof.
(i) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between the Representatives and certain shareholders,
officers and directors of the Company relating to sales and certain
other dispositions of shares of Common Stock or certain other
securities, delivered to the Representatives on or before the date
hereof, shall be in full force and effect on the Closing Date.
(j) The Nasdaq National Market shall have approved the Common
Stock for listing, subject only to official notice of issuance.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to the Representatives on the
Option Closing Date of such documents as the Representatives may reasonably
request with respect to the good standing of the Company, the due
authorization and issuance of the Additional Shares and other matters related
to the issuance of the Additional Shares.
7. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to the Representatives, without charge, four
signed copies of the Registration Statement (including exhibits
thereto) and for delivery to each other Underwriter a conformed copy of
the Registration Statement (without exhibits thereto) and to furnish to
the Representatives in New York City, without charge, prior to 10:00
a.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 7(c) below, as
many copies of the Prospectus and any supplements and amendments thereto
or to the Registration Statement as the Representatives may reasonably
request.
(b) Before amending or supplementing the Registration Statement
or the Prospectus, to furnish to the Representatives a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which the Representatives reasonably object,
and to file with the Commission within the applicable period specified
in Rule 424(b) under the Securities Act any prospectus required to be
filed pursuant to such Rule.
18
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with
sales by an Underwriter or dealer, any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with
applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers
(whose names and addresses the Representatives will furnish to the
Company) to which Shares may have been sold by the Representatives on
behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request; provided however, that the
Company will not be required to qualify in any jurisdiction where it
would be required to (i) give a general consent to the service of
process or submit to general personal jurisdiction or (ii) assume any
ongoing reporting obligation to the authorities in such jurisdiction.
(e) To make generally available to the Company's security
holders and to the Representatives as soon as practicable an earning
statement covering the three-month period ending March 31, 2000 that
satisfies the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder.
(f) To place stop transfer orders on any Directed Shares that
have been sold to Participants subject to the three month restriction on
sale, transfer, assignment, pledge or hypothecation imposed by NASD
Regulation, Inc. under its Interpretative Material 2110-1 on free-riding
and withholding to the extent necessary to ensure compliance with the
three month restrictions.
(g) To 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.
19
8. EXPENSES.
(a) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company
agrees to pay or cause to be paid all expenses incident to the
performance of the obligations of the Sellers under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's
counsel, the Company's accountants and counsel for the Selling
Shareholders in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all
printing costs associated therewith, and the mailing and delivering
of copies thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or Legal Investment memorandum in connection with
the offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer
and sale under state securities laws as provided in Section 7(d) hereof,
including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and
in connection with the Blue Sky or Legal Investment memorandum, (iv) all
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of
the offering of the Shares by the National Association of Securities
Dealers, Inc., (v) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A
relating to the Common Stock and all costs and expenses incident to
listing the Shares on the Nasdaq National Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the
costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the
offering of the Shares, including, without limitation, expenses
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and
any such consultants, and the cost of any aircraft chartered in
connection with the road show, (ix) all fees and disbursements of
counsel incurred by the Underwriters in connection with the Directed
Share Program and
20
stamp duties, similar taxes or duties or other taxes, if any, incurred
by the Underwriters in connection with the Directed Share Program, and
(x) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except
as provided in this Section, Section 9 and the last paragraph of Section
12 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes
payable on resale of any of the Shares by them and any advertising
expenses connected with any offers they may make. The provisions of this
Section shall not supersede or otherwise affect any agreement that the
Sellers may otherwise have for the allocation of such expenses among
themselves.
(b) Each Selling Shareholder, severally and not jointly, agrees
to pay or cause to be paid (i) all taxes, if any, on the transfer and
sale of the Shares being sold by such Selling Shareholder and (ii) such
Selling Shareholder's fees, disbursements and expenses of its own
counsel (which counsel is separate from the Company's counsel).
9. INDEMNITY AND CONTRIBUTION.(a) Sellers, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), 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) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), 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, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if 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
21
delivered, at or prior to the written confirmation of the sale of the Shares
to such person, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such losses, claims, damages or
liabilities, unless such failure is the result of noncompliance by the
Company with Section 7(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Shareholders, the
directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the Company or
any Selling Shareholder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act 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) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), 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, but only with
reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through the Representatives expressly
for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 9(a) or 9(b), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related
to such proceeding. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for (i) the fees and expenses of
22
more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, (ii) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers
who sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section and (iii) the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all Selling Shareholders and all persons, if any, who control any Selling
Shareholder within the meaning of either such Section, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Underwriters and such control persons of any
Underwriters, such firm shall be designated in writing by Xxxxxx Xxxxxxx. In
the case of any such separate firm for the Company, and such directors,
officers and control persons of the Company, such firm shall be designated in
writing by the Company. In the case of any such separate firm for the
Selling Shareholders and such control persons of any Selling Shareholders,
such firm shall be designated in writing by the persons named as
attorneys-in-fact for the Selling Shareholders under the Power of Attorney
and Custody Agreement. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, 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 from and
against any loss or liability 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 the second and third
sentences of this paragraph, 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 30 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 of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(d) To the extent the indemnification provided for in Section
9(a) or 9(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a
23
result of such losses, claims, damages or liabilities (i) in such proportion
as is appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party or
parties on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause 9(d)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 9(d)(i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Sellers on the one hand and the Underwriters on the other
hand in connection with the offering of the Shares shall be deemed to be in
the same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by each Seller and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the
Sellers on the one hand and the Underwriters on the other hand 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 Sellers or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this
Section 9 are several in proportion to the respective number of Shares they
have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 9 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 that does not take
account of the equitable considerations referred to in Section 9(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
24
guilty of such fraudulent misrepresentation. The remedies provided for in
this Section 9 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 9 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement,(ii) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, any Selling Shareholder or any person
controlling any Selling Shareholder, or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.
(g) The obligation of each Selling Shareholder to indemnify or
provide contribution to any person or party under this Section 9 shall be
limited to an amount equal to the aggregate net proceeds to such Selling
Shareholder from the sale of such Shares sold by such Selling Shareholder
hereunder.
10. DIRECTED SHARE PROGRAM INDEMNIFICATION.(a) The Company
agrees to indemnify and hold harmless Xxxxxx Xxxxxxx and each person, if any,
who controls Xxxxxx Xxxxxxx within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act ("Xxxxxx Xxxxxxx 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) caused by 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 gross negligence
of Xxxxxx Xxxxxxx Entities.
(b) In case any proceeding (including any governmental
investigation) shall be instituted involving any Xxxxxx Xxxxxxx Entity in
respect of which indemnity may be sought pursuant to Section 10(a), the
Xxxxxx Xxxxxxx Entity seeking indemnity shall promptly notify the Company in
writing and the Company, upon request of the Xxxxxx Xxxxxxx Entity, shall
retain counsel reasonably satisfactory to the Xxxxxx Xxxxxxx Entity to
represent the Xxxxxx Xxxxxxx Entity and any others the Company may designate
in such proceeding and
25
shall pay the reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any Xxxxxx Xxxxxxx Entity shall have
the right to retain its own counsel, but the reasonable fees and expenses of
such counsel shall be at the expense of such Xxxxxx Xxxxxxx Entity unless (i)
the Company shall have agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties)
include both the Company and the Xxxxxx Xxxxxxx Entity and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The Company shall not, in respect
of the legal expenses of the Xxxxxx Xxxxxxx Entities in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Xxxxxx Xxxxxxx Entities. Any such firm for the Xxxxxx
Xxxxxxx Entities shall be designated in writing by Xxxxxx Xxxxxxx. The
Company shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be
a final judgment for the plaintiff, the Company agrees to indemnify the
Xxxxxx Xxxxxxx Entities from and against any loss or liability by reason of
such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time a Xxxxxx Xxxxxxx Entity shall have requested the Company to
reimburse it for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the Company 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 30 days after
receipt by the Company of the aforesaid request and (ii) the Company shall
not have reimbursed the Xxxxxx Xxxxxxx Entity in accordance with such request
prior to the date of such settlement. The Company shall not, without the
prior written consent of Xxxxxx Xxxxxxx, effect any settlement of any pending
or threatened proceeding in respect of which any Xxxxxx Xxxxxxx Entity is or
could have been a party and indemnity could have been sought hereunder by
such Xxxxxx Xxxxxxx Entity, unless such settlement includes an unconditional
release of the Xxxxxx Xxxxxxx Entities from all liability on claims that are
the subject matter of such proceeding.
(c) To the extent the indemnification provided for in Section
10(a) is unavailable to a Xxxxxx Xxxxxxx Entity or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then the
Company in lieu of indemnifying the Xxxxxx Xxxxxxx Entity thereunder, shall
contribute to the amount paid or payable by the Xxxxxx Xxxxxxx Entity as a
result of such losses, claims, damages or liabilities (i)in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Xxxxxx Xxxxxxx Entities on the other hand from the
offering of the Directed Shares or (ii) if the allocation provided by clause
10(c)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
10(c)(i) above but also the relative fault of the Company on
26
the one hand and of the Xxxxxx Xxxxxxx Entities on the other hand in
connection with any statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Xxxxxx Xxxxxxx Entities on the other hand in connection with the
offering of the Directed Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Directed Shares
(before deducting expenses) and the total underwriting discounts and
commissions received by the Xxxxxx Xxxxxxx Entities for the Directed Shares,
bear to the aggregate Public Offering Price of the Directed Shares. If the
loss, claim, damage or liability is caused by an untrue or alleged untrue
statement of a material fact, the relative fault of the Company on the one
hand and the Xxxxxx Xxxxxxx Entities on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement or the omission or alleged omission relates to information supplied
by the Company or by the Xxxxxx Xxxxxxx Entities and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(d) The Company and the Xxxxxx Xxxxxxx Entities agree that it
would not be just or equitable if contribution pursuant to this Section 10
were determined by PRO RATA allocation (even if the Xxxxxx Xxxxxxx Entities
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in Section 10(c). The amount paid or payable by the Xxxxxx
Xxxxxxx Entities as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by the Xxxxxx Xxxxxxx Entities in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10, no Xxxxxx Xxxxxxx Entity shall be required to
contribute any amount in excess of the amount by which the total price at
which the Directed Shares distributed to the public were offered to the
public exceeds the amount of any damages that such Xxxxxx Xxxxxxx Entity has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The remedies provided for in this
Section 10 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any Xxxxxx Xxxxxxx Entity at law or in equity.
(e) The indemnity and contribution provisions contained in this
Section 10 shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Xxxxxx Xxxxxxx Entity or the Company, its officers or directors
or any person controlling the Company and (iii) acceptance of and payment for
any of the Directed Shares.
27
11. TERMINATION. This Agreement shall be subject to termination
by notice given by the Representatives to the Company, if (a) after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by,
as the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago
Board of Trade,(ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market,(iii) a general
moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Representatives, is material and adverse and (b) in the case of any of the
events specified in clauses 11(a)(i) through 11(a)(iv), such event, singly or
together with any other such event, makes it, in the judgment of the
Representatives, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
12. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date or the Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
Shares that it has or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth 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 Shares set forth opposite their respective names in
Schedule II 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 the Representatives may specify, to purchase the Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; PROVIDED that in no event shall the number of Shares
that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If,
on the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Firm Shares to be purchased, and arrangements satisfactory to the
Representatives, the Company and the Selling Shareholders for the purchase of
such Firm Shares are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter, the Company or the Selling
28
Shareholders. In any such case either the Representatives or the relevant
Sellers shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in
the Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional
Shares and the aggregate number of Additional Shares with respect to which
such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase Additional
Shares or (ii) purchase not less than the number of Additional Shares that
such non-defaulting Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of any Seller to
comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason any Seller shall be unable to perform its obligations
under this Agreement, the Sellers will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
13. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
14. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
15. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed
a part of this Agreement.
29
Very truly yours,
SILICON LABORATORIES INC.
By:
-------------------------------------
Name:
Title:
The Selling Shareholders named in Schedule
I hereto, acting severally
By:
-------------------------------------
Attorney-in-Fact
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx Brothers Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
------------------------------------------
Name:
Title:
30
SCHEDULE I
NUMBER OF FIRM
SELLING SHAREHOLDER SHARES TO BE SOLD
----------------------------------------------- -------------------
Xxxxxxx X. Xxxxx........................... 160,000
Xxxxxxx X. Xxxxx........................... 160,000
Xxxxx X. Xxxxxxx........................... 160,000
-------------------
Total 480,000
===================
I-1
SCHEDULE II
NUMBER OF FIRM
SHARES TO BE
UNDERWRITER PURCHASED
--------------------------------------------------- -----------------
Xxxxxx Xxxxxxx & Co. Incorporated.............. -
Xxxxxx Brothers Inc............................ -
Xxxxxxx Xxxxx Xxxxxx Inc....................... -
-----------------
Total 2,720,000
=================
II-1
EXHIBIT A
FORM OF LOCK-UP LETTER
- , 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx Brothers Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co.
Incorporated ("Xxxxxx Xxxxxxx") proposes to enter into an Underwriting
Agreement (the "Underwriting Agreement") with Silicon Laboratories Inc., a
Delaware corporation (the "Company"), providing for the public offering (the
"Public Offering") by the several Underwriters, including Xxxxxx Xxxxxxx (the
"Underwriters"), of - shares (the "Shares") of Common Stock ($0.0001 par
value) of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering,
the undersigned hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the final
prospectus relating to the Public Offering (the "Prospectus"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. If the last
reported sale price of the Common Stock per share on the NASDAQ National
Market is at least twice the initial public offering price per share of the
Common Stock sold in
A-1
the Public Offering for the 20 consecutive trading days ending on the trading
day immediately preceding the 120th day after the date of the Prospectus,
then 30% of the shares of Common Stock and Common Stock equivalents held by
the undersigned on the date of the Prospectus shall be released from the 180
day restrictions. This early release shall occur on: (a) the 120th day after
the date of the Prospectus if the Company makes a public release of its
quarterly or annual results during the period beginning on the eleventh
trading day after the date of the Prospectus and ending on the day prior to
the 120th day after the date of the Prospectus, or (b) the second trading day
after the first public release of the Company's quarterly or annual results
occurring on or after the 120th day after the date of the Prospectus,
otherwise.
The restrictions in the preceding paragraph shall not apply to
(a) the sale of any Shares to the Underwriters pursuant to the Underwriting
Agreement or (b) transactions relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
Public Offering. In addition, the undersigned agrees that, without the prior
written consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not,
during the period commencing on the date hereof and ending 180 days after the
date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a
number of factors, including market conditions. Any Public Offering will
only be made pursuant to an Underwriting Agreement, the terms of which are
subject to negotiation between the Company and the Underwriters.
Very truly yours,
--------------------------------------
(Name)
--------------------------------------
(Address)
A-2