1
Exhibit 1.2
$100,000,000(1)
HADCO CORPORATION
__% CONVERTIBLE SUBORDINATED NOTES DUE 2004
UNDERWRITING AGREEMENT
_____________, 1997
XXXXXXXXX, XXXXXXXX & COMPANY LLC
XXXXXXX XXXXX & CO.
As Representatives of the several Underwriters
c/x Xxxxxxxxx, Xxxxxxxx & Company LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies/Gentlemen:
Hadco Corporation, a Massachusetts corporation (the "Company"), addresses
you as the Representatives of each of the persons, firms and corporations listed
in Schedule A hereto (herein collectively called the "Underwriters") and hereby
confirms its agreement with the several Underwriters as follows:
1. Description of Notes. The Company proposes to issue and sell to the
several Underwriters an aggregate of 100,000,000 principal amount of __%
Convertible Subordinated Notes due 2004 (the "Firm Notes"). The Company also
proposes to grant to the Underwriters an option to purchase up to an aggregate
of an additional $15,000,000 principal amount of __% Convertible Subordinated
Notes due 2004 (the "Option Notes"), as provided in Section 7 hereof. As used in
this Agreement, the term "Notes" shall include the Firm Notes and the Option
Notes. The Notes are to be issued under an Indenture to be dated as of ________,
1997 (the "Indenture"), by and between the Company and State Street Bank and
Trust Company, as trustee (the "Trustee"), pursuant to which the Notes will be
convertible at the option of the holders into the Company's Common Stock, par
value $0.05 per share (the "Common Stock"). The Notes and the shares of Common
Stock into which the Notes are convertible are herein collectively called the
"Securities."
--------
(1) Plus an option to purchase up to an aggregate of an additional
$15,000,000 principal amount of ___% Convertible Subordinated Notes due 2004
from the Company to cover over-allotments, if any.
1
2
2. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to and agrees with each Underwriter that:
(a) A registration statement on Form S-3 (File No. 333-21977) with
respect to the Securities, including a prospectus subject to completion,
has been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the applicable
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") under the Act and has been filed
with the Commission; such amendments to such registration statement, such
amended prospectuses subject to completion and such abbreviated
registration statements pursuant to Rule 462(b) of the Rules and
Regulations as may have been required prior to the date hereof have been
similarly prepared and filed with the Commission; and the Company will
file such additional amendments to such registration statement, such
amended prospectuses subject to completion and such abbreviated
registration statements as may hereafter be required. Copies of such
registration statement and amendments, of each related prospectus subject
to completion (the "Preliminary Prospectuses"), including all documents
incorporated by reference therein, and of any abbreviated registration
statement pursuant to Rule 462(b) of the Rules and Regulations have been
delivered to you. The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act.
If the registration statement relating to the Securities has
been declared effective under the Act by the Commission, the Company will
prepare and promptly file with the Commission the information omitted from
the registration statement pursuant to Rule 430A(a) pursuant to
subparagraph (1) or (4) of Rule 424(b) of the Rules and Regulations or, if
Xxxxxxxxx, Xxxxxxxx & Company LLC, on behalf of the several Underwriters,
shall agree to the utilization of Rule 434 of the Rules and Regulations,
the information required to be included in any term sheet filed pursuant
to Rule 434(b) or (c), as applicable, of the Rules and Regulations
pursuant to subparagraph (7) of Rule 424(b) of the Rules and Regulations
or as part of a post-effective amendment to the registration statement
(including a final form of prospectus). If the registration statement
relating to the Securities has not been declared effective under the Act
by the Commission, the Company will prepare and promptly file an amendment
to the registration statement, including a final form of prospectus, or,
if Xxxxxxxxx, Xxxxxxxx & Company LLC, on behalf of the several
Underwriters, shall agree to the utilization of Rule 434 of the Rules and
Regulations, the information required to be included in any term sheet
filed pursuant to Rule 434(b) or (c), as applicable, of the Rules and
Regulations. The term "Registration Statement" as used in this Agreement
shall mean such registration statement, including financial statements,
schedules and exhibits (other than in the Statement of Eligibility and
Qualification of the Trustee on Form T-1), in the form in which it became
or becomes, as the case may be, effective (including, if the Company
omitted information from the registration statement pursuant to Rule
430A(a) or files a term sheet pursuant to Rule 434 of the Rules and
Regulations, the information deemed to be a part of the registration
statement at the time it became effective pursuant to Rule 430A(b) or Rule
434(d) of the Rules and Regulations) and, in the event of any amendment
thereto or the filing of any abbreviated registration statement pursuant
to Rule
2
3
462(b) of the Rules and Regulations relating thereto after the effective
date of such registration statement, shall also mean (from and after the
effectiveness of such amendment or the filing of such abbreviated
registration statement) such registration statement as so amended,
together with any such abbreviated registration statement. The term
"Prospectus" as used in this Agreement shall mean the prospectus relating
to the Securities as included in such Registration Statement at the time
it becomes effective (including, if the Company omitted information from
the Registration Statement pursuant to Rule 430A(a) of the Rules and
Regulations, the information deemed to be a part of the Registration
Statement at the time it became effective pursuant to Rule 430A(b) of the
Rules and Regulations or, if an abbreviated registration statement is
filed pursuant to Rule 462(b) of the Rules and Regulations, at the time
such abbreviated registration statement becomes effective); provided,
however, that if in reliance on Rule 434 of the Rules and Regulations and
with the consent of Xxxxxxxxx, Xxxxxxxx & Company LLC, on behalf of the
several Underwriters, the Company shall have provided to the Underwriters
a term sheet pursuant to Rule 434(b) or (c), as applicable, prior to the
time that a confirmation is sent or given for purposes of Section 2(10)(a)
of the Act, the term "Prospectus" shall mean the "prospectus subject to
completion" (as defined in Rule 434(g) of the Rules and Regulations) last
provided to the Underwriters by the Company and circulated by the
Underwriters to all prospective purchasers of the Securities (including
the information deemed to be a part of the Registration Statement at the
time it became effective pursuant to Rule 434(d) of the Rules and
Regulations). Notwithstanding the foregoing, if any revised prospectus
shall be provided to the Underwriters by the Company for use in connection
with the offering of the Securities that differs from the prospectus
referred to in the immediately preceding sentence (whether or not such
revised prospectus is required to be filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations), the term "Prospectus" shall
refer to such revised prospectus from and after the time it is first
provided to the Underwriters for such use. If in reliance on Rule 434 of
the Rules and Regulations and with the consent of Xxxxxxxxx, Xxxxxxxx &
Company LLC, on behalf of the several Underwriters, the Company shall
have provided to the Underwriters a term sheet pursuant to Rule 434(b) or
(c), as applicable, prior to the time that a confirmation is sent or given
for purposes of Section 2(10)(a) of the Act, the Prospectus and the term
sheet, together, will not be materially different from the prospectus in
the Registration Statement. Any reference to the Registration Statement or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Act, as of the date of the Registration Statement or the Prospectus,
as the case may be, and any reference to any amendment or supplement to
the Registration Statement or the Prospectus shall be deemed to refer to
and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which, upon filing,
are incorporated by reference therein, as required by paragraph (b) of
Item 12 of Form S-3. As used in this Agreement, the term "Incorporated
Documents" means the documents which at the time are incorporated by
reference in the Registration Statement, the Prospectus or any amendment
or supplement thereto.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or instituted proceedings for that
purpose, and each such
3
4
Preliminary Prospectus has conformed in all material respects to the
requirements of the Act and the Rules and Regulations and, as of its date,
has not included 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; and
at the time the Registration Statement became or becomes, as the case may
be, effective and at all times subsequent thereto up to and on the Closing
Date (hereinafter defined) and on any later date on which Option Notes are
to be purchased, (i) the Registration Statement and the Prospectus, and
any amendments or supplements thereto, contained and will contain all
material information required to be included therein by the Act and the
Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, (ii) the
Registration Statement, and any amendments or supplements thereto, did not
and will 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 (iii) the Prospectus, and any
amendments or supplements thereto, did not and will not include 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; provided, however, that none of the
representations and warranties contained in this subparagraph (b) shall
apply to information contained in or omitted from the Registration
Statement or Prospectus, or any amendment or supplement thereto, in
reliance upon, and in conformity with, written information relating to any
Underwriter furnished to the Company by such Underwriter specifically for
use in the preparation thereof.
The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with
the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; any further Incorporated Documents so filed will,
when they are filed, conform in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; no such document when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment
was filed), 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 no such further amendment
will 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. The Indenture complies as to form in
all material respects with the requirements of the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and
regulations thereunder, and, on the effective date of the Registration
Statement, will be duly qualified under the Trust Indenture Act.
(c) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation with full power
and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Prospectus; the
Company owns all of the outstanding capital stock of its subsidiaries free
and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest (other than any appraisal rights resulting
4
5
from the Company's recent acquisition of Zycon Corporation); each of the
Company and its subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction 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 on the
condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries considered as one
enterprise; no proceeding has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or curtail,
such power and authority or qualification; each of the Company and its
subsidiaries is in possession of and operating in compliance with all
authorizations, licenses, certificates, consents, orders and permits from
state, federal and other regulatory authorities which are material to the
conduct of its business, all of which are valid and in full force and
effect; neither the Company nor any of its subsidiaries is in violation of
its respective charter or bylaws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any material bond, debenture, note or other evidence of
indebtedness, or in any material lease, contract, indenture, mortgage,
deed of trust, loan agreement, joint venture or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which it or any of its subsidiaries or their respective properties may
be bound; and neither the Company nor any of its subsidiaries is in
material violation of any law, order, rule, regulation, writ, injunction,
judgment or decree of any court, government or governmental agency or
body, domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or over their respective properties of which it has
knowledge. The Company does not own or control, directly or indirectly,
any corporation, association or other entity other than Hadco Foreign
Sales Corporation, Zycon Corporation, Zycon Acquisition Corporation and
Zycon Corporation SDN.BHV.
(d) The Company has full legal right, power and authority to enter
into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company
and is a valid and binding agreement on the part of the Company,
enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as
the enforcement hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by general equitable
principles; the performance of this Agreement, the Indenture and the Notes
and the consummation of the transactions herein or therein contemplated
will not result in a material breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any bond, debenture,
note or other evidence of indebtedness, or under any lease, contract,
indenture, mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of its subsidiaries or their respective
properties may be bound (except for such agreement or instrument for which
a waiver or consent has been obtained), (ii) the charter or bylaws of the
Company or any of its subsidiaries, or (iii) any law, order, rule,
regulation, writ, injunction, judgment or decree of any court, government
or governmental agency or body, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or over their
5
6
respective properties. No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or over their respective properties is required for the
execution and delivery of this Agreement, the Indenture or the Notes, and
the consummation by the Company or any of its subsidiaries of the
transactions herein or therein contemplated, except such as may be
required under the Act, the Exchange Act (if applicable), or under state
or other securities or Blue Sky laws, or under the rules and regulations
of the National Association of Securities Dealers, Inc. ("NASD") with
respect to the clearance of the underwriting arrangements, or under the
Trust Indenture Act, all of which requirements have been satisfied in all
material respects.
(e) Except as set forth in the Registration Statement and
Prospectus and any Incorporated Document, there is not any pending or, to
the best of the Company's knowledge, threatened action, suit, claim or
proceeding against the Company, any of its subsidiaries or any of their
respective officers or any of their respective properties, assets or
rights before any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or over their respective officers or properties or otherwise
which (i) might result in any material adverse change in the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries considered as one enterprise
or might materially and adversely affect their properties, assets or
rights, (ii) might prevent consummation of the transactions contemplated
hereby or (iii) is required to be disclosed in the Registration Statement
or Prospectus and is not so disclosed. There are no agreements, contracts,
leases or documents of the Company or any of its subsidiaries of a
character required to be described or referred to in the Registration
Statement or Prospectus or any Incorporated Document or to be filed as an
exhibit to the Registration Statement or any Incorporated Document by the
Act or the Rules and Regulations or by the Exchange Act or the rules and
regulations of the Commission thereunder which have not been accurately
described in all material respects in the Registration Statement or
Prospectus or any Incorporated Document or filed as exhibits to the
Registration Statement or any Incorporated Document.
(f) All outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities,
and the authorized and outstanding capital stock of the Company is as set
forth in the Prospectus under the caption "Capitalization" and conforms in
all material respects to the statements relating thereto contained in the
Registration Statement and the Prospectus and any Incorporated Document
(and such statements correctly state the substance of the instruments
defining the capitalization of the Company); the shares of Common Stock
issuable upon conversion of the Notes have been duly authorized and
reserved for issuance upon conversion of the Notes and, when issued and
delivered by the Company upon such conversion, will be duly and validly
issued and fully paid and nonassessable; and no preemptive right, co-sale
right, registration right, right of first refusal or other similar right
of shareholders exists with
6
7
respect to any of such shares of Common Stock or the issuance and sale
thereof. No further approval or authorization of any shareholder, the
Board of Directors of the Company or others is required for the issuance
and sale or transfer of the Securities except as may be required under the
Act, the Exchange Act, under state or other securities or Blue Sky laws or
rules and regulations of the NASD. All issued and outstanding shares of
capital stock of each subsidiary of the Company have been duly authorized
and validly issued and are fully paid and nonassessable, and were not
issued in violation of or subject to any preemptive right, or other rights
to subscribe for or purchase shares. Except as disclosed in the Prospectus
and the financial statements of the Company, and the related notes
thereto, included or incorporated by reference in the Prospectus, neither
the Company nor any subsidiary has outstanding any options to purchase, or
any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations. The description of
the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted and exercised
thereunder, set forth or incorporated by reference in the Prospectus
accurately and fairly presents the information required to be shown with
respect to such plans, arrangements, options and rights.
(g) The Company has all legal right, power and authority to enter
into the Indenture and the Notes and to perform its obligations
thereunder. The Indenture has been duly authorized by all necessary
corporate action on the part of the Company and, when executed and
delivered by the Company in accordance with its terms (assuming due
authorization, execution and delivery thereof by the Trustee), will be a
legal, valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except to the extent that a
waiver of rights under any usury laws may be unenforceable and except as
the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar laws, now or
hereafter in effect, relating to or affecting creditors' rights and
remedies generally, or by general equitable principles. The Notes have
been duly authorized by all necessary corporate action on the part of the
Company and on the Closing Date, the Indenture and the Notes will have
been duly executed by the Company and will conform in all material
respects to the descriptions thereof in the Prospectus. When the Notes
are issued, executed and authenticated in accordance with the Indenture
and paid for in accordance with the terms of this Agreement, the Notes
will be legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture, except to the extent that a waiver of rights
under any usury laws may be unenforceable and except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in
effect, relating to or affecting creditors' rights and remedies
generally, or by general equitable principles.
(h) Xxxxxx Xxxxxxxx LLP, which has examined (i) the consolidated
financial statements of the Company, together with the related schedules
and notes, as of October 26, 1996 and for each of the years in the three
(3) years ended October 26, 1996 and (ii) the consolidated financial
statements of Zycon Corporation ("Zycon"), together with the related
7
8
schedules and notes as of December 31, 1996 and for the year ended
December 31, 1996 filed with the Commission as a part of or incorporated
by reference into the Registration Statement, which are included or
incorporated by reference in the Prospectus, and KPMG Peat Marwick LLP,
which has examined the consolidated financial statements of Zycon
together with the related schedules and notes, as of December 31, 1995 and
for each of the years in the two (2) years ended December 31, 1995 filed
with the Commission as part of or incorporated by reference into the
Registration Statement, which are included or incorporated by reference in
the Report of our independent accountants within the meaning of the Act
and the Rules and Regulations, are independent accountants within the
meaning of the Act and the Rules and Regulations; the audited consolidated
financial statements of the Company and Zycon, together with the related
schedules and notes, and the unaudited consolidated financial information,
forming part of the Registration Statement and Prospectus, fairly present
the financial position and the results of operations of the Company and
its subsidiaries and Zycon and its subsidiaries at the respective dates
and for the respective periods to which they apply; and all audited
consolidated financial statements of the Company and Zycon, together with
the related schedules and notes, and the unaudited consolidated financial
information, filed with the Commission as part of or incorporated by
reference into the Registration Statement, have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved except as may be otherwise stated
therein. The selected and summary financial and statistical data included
or incorporated by reference in the Registration Statement present fairly
the information shown therein and have been compiled on a basis consistent
with the audited financial statements presented therein. No other
financial statements or schedules are required to be included or
incorporated by reference in the Registration Statement.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been (i)
any material adverse change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and
its subsidiaries considered as one enterprise, (ii) any transaction that
is material to the Company and its subsidiaries considered as one
enterprise, except transactions entered into in the ordinary course of
business, (iii) any obligation, direct or contingent, that is material to
the Company and its subsidiaries considered as one enterprise, incurred by
the Company or its subsidiaries, except obligations incurred in the
ordinary course of business, (iv) any change in the capital stock or
outstanding indebtedness of the Company or any of its subsidiaries that is
material to the Company and its subsidiaries considered as one enterprise,
(v) any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company or any of its subsidiaries, or (vi) any loss
or damage (whether or not insured) to the property of the Company or any
of its subsidiaries 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 subsidiaries considered as one enterprise.
(j) Except as set forth in the Registration Statement and
Prospectus and any Incorporated Document, (i) each of the Company and its
subsidiaries has good and
8
9
marketable title to all properties and assets described in the
Registration Statement and Prospectus and any Incorporated Document as
owned by it, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest, other than such as would not
have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and
its subsidiaries considered as one enterprise, (ii) the agreements to
which the Company or any of its subsidiaries is a party described in the
Registration Statement and Prospectus and any Incorporated Document are
valid agreements, enforceable by the Company and its subsidiaries (as
applicable), except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles and, to the best of the Company's knowledge,
the other contracting party or parties thereto are not in material breach
or material default under any of such agreements, and (iii) each of the
Company and its subsidiaries has valid and enforceable leases for all
properties described in the Registration Statement and Prospectus and any
Incorporated Document as leased by it, except as the enforcement thereof
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles. Except as set forth
in the Registration Statement and Prospectus and any Incorporated
Document, the Company owns or leases all such properties as are necessary
to its operations as now conducted or as proposed to be conducted.
(k) The Company and its subsidiaries have timely filed all
necessary federal, state and foreign income and franchise tax returns and
have paid all taxes shown thereon as due, and there is no tax deficiency
that has been or, to the best of the Company's knowledge, might be
asserted against the Company or any of its subsidiaries that might have a
material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and
its subsidiaries considered as one enterprise; and all tax liabilities are
adequately provided for on the books of the Company and its subsidiaries.
(l) The Company and its subsidiaries maintain insurance with
insurers of recognized financial responsibility of the types and in the
amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in
similar businesses, including, but not limited to, insurance covering real
and personal property owned or leased by the Company or its subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and
effect; neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any
such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries
considered as one enterprise.
9
10
(m) To the best of Company's knowledge, no labor disturbance by
the employees of the Company or any of its subsidiaries 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,
subassemblers, value added resellers, subcontractors, original equipment
manufacturers, authorized dealers or international distributors that might
be expected to result in a material adverse change in the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries considered as one
enterprise. No collective bargaining agreement exists with any of the
Company's employees and, to the best of the Company's knowledge, no such
agreement is imminent.
(n) Each of the Company and its subsidiaries owns or possesses
adequate rights to use all patents, patent rights, inventions, 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 and any Incorporated Document; the
expiration of any patents, patent rights, trade secrets, trademarks,
service marks, trade names or copyrights would not have a material adverse
effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries
considered as one enterprise; 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 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 effect on the
condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(o) The Common Stock is registered pursuant to Section 12(g) of
the Exchange Act and is listed on The Nasdaq National Market, and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from The Nasdaq National Market, nor has the
Company received any notification that the Commission or the NASD is
contemplating terminating such registration or listing.
(p) The Company has been advised concerning the Investment Company
Act of 1940, as amended (the "1940 Act"), and the rules and regulations
thereunder, and has in the past conducted, and intends in the future to
conduct, its affairs in such a manner as to ensure that it will not become
an "investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act and such rules and
regulations.
(q) The Company has not distributed and will not distribute prior
to the later of (i) the Closing Date, or any date on which Option Notes
are to be purchased, as the case may be, and (ii) completion of the
distribution of the Securities, any offering material in connection
10
11
with the offering and sale of the Securities other than any Preliminary
Prospectuses, the Prospectus, the Registration Statement and other
materials, if any, permitted by the Act.
(r) Neither the Company nor any of its subsidiaries has at any
time during the last five (5) years (i) made any unlawful contribution to
any candidate for foreign office or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any federal
or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
(s) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the
Securities to facilitate the sale or resale of the Notes.
(t) Each officer and director of the Company and each of the
beneficial owners of shares of Common Stock identified on Schedule B (the
"Selling Shareholders") attached to that certain Underwriting Agreement,
dated as of ________, 1997, among the Company, Xxxxxxxxx, Xxxxxxxx &
Company LLC, Xxxxxxx Xxxxx & Co. and Xxxxx, Xxxxxxxx & Xxxx, Inc., has
agreed in writing that such person will not, directly or indirectly,
without prior written consent of Xxxxxxxxx, Xxxxxxxx & Company LLC,
offer, sell, contract to sell, grant any option to purchase, pledge or
otherwise dispose of or transfer (collectively, a "Disposition") any
shares of Common Stock or any securities convertible into or exchangeable
for, or any rights to purchase or acquire, shares of Common Stock held by
such officer, director or Selling Shareholder, acquired by such officer,
director or Selling Shareholder after the date of the Prospectus or which
may be deemed to be beneficially owned by such officer, director or
Selling Shareholder pursuant to the Rules and Regulations promulgated
under the Act (the "Lock-up Shares") other than pursuant to this
Agreement, for a period ending 90 days after the date that the
Registration Statement is declared effective (the "Lock-up Period"). The
foregoing restriction has been expressly agreed to preclude the holder of
Lockup Shares from engaging in any hedging or other transaction which is
designed to or reasonably expected to lead to or result in a Disposition
of Lock-up Shares during the Lockup Period, even if such Lock-up Shares
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 Lock-up Shares or with respect to any security (other than
a broad-based market basket or index) that includes, relates to or derives
any significant part of its value from Lock-up Shares. Notwithstanding the
foregoing, the holder may transfer any or all of the Lock-up Shares (i) as
a bona fide gift or gifts, provided the donee or donees thereof agrees in
writing as a condition precedent to such gift or gifts to be bound by this
restriction, or (ii) as a distribution to partners or shareholders of the
holder, provided that the distributees thereof agree in writing to be
bound by this restriction. The transferor shall notify Xxxxxxxxx, Xxxxxxxx
& Company LLC in writing prior to the transfer, and there shall be no
further transfer of such Lock-up Shares except in accordance with this
restriction. Furthermore, such person has also agreed and
11
12
consented to the entry of stop transfer instructions with the Company's
transfer agent against the transfer of the Lock-up Shares held by such
person except in compliance with this restriction. The Company has
provided to counsel for the Underwriters true, accurate and complete
copies of all of the agreements pursuant to which its officers, directors
and shareholders have agreed to such or similar restrictions (the "Lock-up
Agreements") presently in effect or effected hereby. The Company hereby
represents and warrants that it will not release any of its officers,
directors or other shareholders from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of
Xxxxxxxxx, Xxxxxxxx & Company LLC.
(u) Except as set forth in the Registration Statement and
Prospectus and any Incorporated Document, (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 in effect as of the date hereof ("Environmental Laws") which
are applicable to its business, (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 and any Incorporated Document,
(iii) the Company will not 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.
(v) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances
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 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.
(w) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company to or for the benefit of any of
the executive officers or directors of the Company or any of the members
of the families of any of them, except as disclosed in the Registration
Statement and the Prospectus and any Incorporated Document.
(x) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government
of Cuba or with any person or affiliate located in Cuba.
12
13
3. Purchase, Sale and Delivery of Firm Notes. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
the Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at a purchase price of ___% of the principal amount
thereof, Firm Notes in the respective principal amount as hereinafter set forth.
The obligation of each Underwriter to the Company shall be to purchase from the
Company that number of Firm Notes which is set forth opposite the name of such
Underwriter in Schedule A hereto (subject to adjustment as provided in Section
10).
Delivery of the Firm Notes to be purchased by the Underwriters
pursuant to this Section 3 shall be made against receipt of a wire transfer
reference number issued by the Federal Reserve System evidencing payment of the
purchase price therefor by the several Underwriters by wire transfer of
immediately available funds, to an account specified in writing by the Company,
at the offices of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxxx, XX
00000 (or at such other place as may be agreed upon among the Representatives
and the Company), at 7:00 A.M., San Francisco time (a) on the third (3rd) full
business day following the first day that Firm Notes are traded, (b) 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 (c) at such other time and date not later than seven (7) full
business days following the first day that Firm Notes 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 10 hereof),
such time and date of payment and delivery being herein called the "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
4(d) hereof, the Representatives may, in their sole discretion, postpone the
Closing Date until no later than two (2) full business days following delivery
of copies of the Prospectus to the Representatives. The Firm Notes to be so
delivered will be made available to you at such office or such other location
including, without limitation, in New York City, as you may reasonably request
for checking at least one (1) full business day prior to the Closing Date and
will be in such names and denominations as you may request, such request to be
made at least two (2) full business days prior to the Closing Date. If the
Representatives so elect, delivery of the Firm Notes may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment of the purchase price on behalf of any Underwriter or Underwriters
whose check or checks shall not have been received by you prior to the Closing
Date for the Firm Notes to be purchased by such Underwriter or Underwriters. Any
such payment by you shall not relieve any such Underwriter or Underwriters of
any of its or their obligations hereunder.
After the Registration Statement becomes effective, the several
Underwriters intend to make a public offering (as such term is described in
Section 11 hereof) of the Firm Notes as set forth in the Prospectus. After the
public offering, the several Underwriters may, in their discretion, vary the
public offering price.
13
14
The information set forth in the last paragraph on the front cover
page (insofar as such information relates to the Underwriters), on the inside
front cover concerning stabilization by the Underwriters, and in the penultimate
paragraph under the caption "Underwriting" in any Preliminary Prospectus and in
the Prospectus constitutes the only information furnished by the Underwriters to
the Company for inclusion in any Preliminary Prospectus, the Prospectus or the
Registration Statement or any Incorporated Document, and you, on behalf of the
respective Underwriters, represent and warrant to the Company that the
statements made therein do 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, in the light of the circumstances under which they
were made, not misleading.
4. Further Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the
time and date that this Agreement is executed and delivered by the parties
hereto, to become effective as promptly as possible; the Company will use
its best efforts to cause any abbreviated registration statement pursuant
to Rule 462(b) of the Rules and Regulations as may be required subsequent
to the date the Registration Statement is declared effective to become
effective as promptly as possible; the Company will notify you, promptly
after it shall receive notice thereof, of the time when the Registration
Statement, any subsequent amendment to the Registration Statement or any
abbreviated registration statement has become effective or any supplement
to the Prospectus has been filed; if the Company omitted information from
the Registration Statement at the time it was originally declared
effective in reliance upon Rule 430A(a) of the Rules and Regulations, the
Company will provide evidence satisfactory to you that the Prospectus
contains such information and has been filed, within the time period
prescribed, with the Commission pursuant to subparagraph (1) or (4) of
Rule 424(b) of the Rules and Regulations or as part of a post-effective
amendment to such Registration Statement as originally declared effective
which is declared effective by the Commission or as part of an abbreviated
registration statement filed pursuant to Rule 462(b) which is declared
effective by the Commission; if the Company files a term sheet pursuant to
Rule 434 of the Rules and Regulations, the Company will provide evidence
satisfactory to you that the Prospectus and term sheet meeting the
requirements of Rule 434(b) or (c), as applicable, of the Rules and
Regulations, have been filed, within the time period prescribed, with the
Commission pursuant to subparagraph (7) of Rule 424(b) of the Rules and
Regulations; if for any reason the filing of the final form of Prospectus
is required under Rule 424(b)(3) of the Rules and Regulations, it will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed with the Commission within the time period
prescribed; it will notify you promptly of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; promptly upon your request, it
will prepare and file with the Commission any amendments or supplements to
the Registration Statement or Prospectus which, in the opinion of counsel
for the several Underwriters ("Underwriters' Counsel"), may be necessary
or advisable in connection with the
14
15
distribution of the Notes by the Underwriters; it will promptly prepare
and file with the Commission, and promptly notify you of the filing of,
any amendments or supplements to the Registration Statement or Prospectus
which may be necessary to correct any statements or omissions, if, at any
time when a prospectus relating to the Notes is required to be delivered
under the Act, any event shall have occurred as a result of which the
Prospectus or any other prospectus relating to the Notes as then in effect
would include 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; in case any
Underwriter is required to deliver a prospectus nine (9) months or more
after the effective date of the Registration Statement in connection with
the sale of the Notes, it will prepare promptly upon request, but at the
expense of such Underwriter, such amendment or amendments to the
Registration Statement and such prospectus or prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3)
of the Act; and it will file no amendment or supplement to the
Registration Statement or Prospectus or the Incorporated Documents, or,
prior to the end of the period of time in which a prospectus relating to
the Notes is required to be delivered under the Act, file any document
which upon filing becomes an Incorporated Document, which shall not
previously have been submitted to you a reasonable time prior to the
proposed filing thereof or to which you shall reasonably object in
writing, subject, however, to compliance with the Act and the Rules and
Regulations, the Exchange Act and the rules and regulations of the
Commission thereunder and the provisions of this Agreement.
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge, of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or
of the initiation or threat of any proceeding for that purpose; and it
will promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal at the earliest possible moment if such
stop order should be issued.
(c) The Company will use its best efforts to qualify the Notes for
offering and sale under the securities laws of such jurisdictions as you
may designate and to continue such qualifications in effect for so long as
may be required for purposes of the distribution of the Notes, except that
the Company shall not be required in connection therewith or as a
condition thereof to qualify as a foreign corporation or to execute a
general consent to service of process in any jurisdiction in which it is
not otherwise required to be so qualified or to so execute a general
consent to service of process. In each jurisdiction in which the Notes
shall have been qualified as above provided, the Company will make and
file such statements and reports in each year as are or may be required by
the laws of such jurisdiction.
(d) The Company will furnish to you, as soon as available, and, in
the case of the Prospectus and any term sheet or abbreviated term sheet
under Rule 434, in no event later than the first (1st) full business day
following the first day that Notes are traded, copies of the Registration
Statement (three of which will be signed and which will include all
exhibits), each Preliminary Prospectus, the Prospectus and any amendments
or supplements to such documents, including any prospectus prepared to
permit compliance with Section 10(a)(3) of
15
16
the Act, and the Incorporated Documents (three of which will include all
exhibits,) all in such quantities as you may from time to time reasonably
request. Notwithstanding the foregoing, if Xxxxxxxxx, Xxxxxxxx & Company
LLC, on behalf of the several Underwriters, shall agree to the
utilization of Rule 434 of the Rules and Regulations, the Company shall
provide to you copies of a Preliminary Prospectus updated in all respects
through the date specified by you in such quantities as you may from time
to time reasonably request.
(e) The Company will make generally available to its
securityholders as soon as practicable, but in any event not later than
the forty-fifth (45th) day following the end of the fiscal quarter first
occurring after the first anniversary of the effective date of the
Registration Statement, an earnings statement (which will be in reasonable
detail but need not be audited) complying with the provisions of Section
11(a) of the Act and covering a twelve (12) month period beginning after
the effective date of the Registration Statement.
(f) During a period of five (5) years after the date hereof, the
Company will furnish to its shareholders as soon as practicable after the
end of each respective period, annual reports (including financial
statements audited by independent certified public accountants) and
unaudited quarterly reports of operations for each of the first three
quarters of the fiscal year, and will furnish to you and the other several
Underwriters hereunder, upon request (i) concurrently with furnishing such
reports to its shareholders, statements of operations of the Company for
each of the first three (3) quarters in the form furnished to the
Company's shareholders, (ii) concurrently with furnishing to its
shareholders, a balance sheet of the Company as of the end of such fiscal
year, together with statements of operations, of shareholders' equity, and
of cash flows of the Company for such fiscal year, accompanied by a copy
of the certificate or report thereon of independent certified public
accountants, (iii) as soon as they are available, copies of all reports
(financial or other) mailed to shareholders, (iv) as soon as they are
available, copies of all reports and financial statements furnished to or
filed with the Commission, any securities exchange or the NASD, (v) every
material press release and every material news item or article in respect
of the Company or its affairs which was generally released to shareholders
or prepared by the Company or any of its subsidiaries, and (vi) any
additional information of a public nature concerning the Company or its
subsidiaries, or its business which you may reasonably request. During
such five (5) year period, if the Company shall have active subsidiaries,
the foregoing financial statements shall be on a consolidated basis to the
extent that the accounts of the Company and its subsidiaries are
consolidated, and shall be accompanied by similar financial statements for
any significant subsidiary which is not so consolidated.
(g) The Company will apply the net proceeds from the sale of the
Notes being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar (which
may be the same entity as the transfer agent) for its Common Stock.
16
17
(i) If the transactions contemplated hereby are not consummated by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed hereunder or to fulfill
any condition of the Underwriters' obligations hereunder, or if the
Company shall terminate this Agreement pursuant to Section 11(a) hereof,
or if the Underwriters shall terminate this Agreement pursuant to Section
11(b)(i), the Company will reimburse the several Underwriters for all
reasonable out-of-pocket expenses (including reasonable fees and
disbursements of Underwriters' Counsel) incurred by the Underwriters in
investigating or preparing to market or marketing the Notes.
(j) 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 Common Stock 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.
(k) During the Lock-up Period, the Company will not, without the
prior written consent of Xxxxxxxxx Xxxxxxxx & Company LLC, effect the
Disposition of, directly or indirectly, any Lock-up Shares other than the
issuance of shares of Common Stock upon conversion of the Notes, the sale
of certain shares of Common Stock by the Company contemplated by the
Registration Statement and the Prospectus and the Company's issuance of
options or Common Stock under the Company's presently authorized December
1985 Option Plan, December 1986 Option Plan, December 1987 Option Plan,
September 1990 Plan, December 1991 Director Option Plan and November 1995
Stock Option Plan (collectively, the "Option Plans").
5. Expenses.
(a) The Company agrees with each Underwriter that:
(i) The Company will pay and bear all costs and expenses in
connection with the preparation, printing and filing of the
Registration Statement (including financial statements, schedules
and exhibits), Preliminary Prospectuses and the Prospectus and the
Incorporated Documents and any amendments or supplements thereto;
the photocopying of this Agreement, the Agreement Among
Underwriters, the Selected Dealer Agreement, the Preliminary Blue
Sky Survey and any Supplemental Blue Sky Survey, the Underwriters'
Questionnaire and Power of Attorney, and any instruments related to
any of the foregoing; the issuance and delivery of the Notes
hereunder to the several Underwriters, including transfer taxes, if
any, the cost of printing and engraving the Notes and Trustees'
fees, note registrar's fees and similar fees; the fees and
disbursements of counsel for the Company; all fees and other
17
18
charges of the Company's independent certified public accountants;
the cost of furnishing to the several Underwriters copies of the
Registration Statement (including appropriate exhibits), Preliminary
Prospectus and the Prospectus and the Incorporated Documents, and
any amendments or supplements to any of the foregoing; NASD filing
fees and the cost of qualifying the Notes under the laws of such
jurisdictions as you may designate (including filing fees and fees
and disbursements of Underwriters' Counsel in connection with such
NASD filings and Blue Sky qualifications); and all other expenses
directly incurred by the Company in connection with the performance
of its obligations hereunder.
(ii) In addition to its other obligations under Section 8(a)
hereof, the Company agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other
proceeding described in Section 8(a) hereof, it will reimburse the
Underwriters on a monthly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the Company's obligation to
reimburse the Underwriters for such expenses and the possibility
that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the
Underwriters shall promptly return such payment to the Company
together with interest, compounded daily, determined on the basis of
the prime rate (or other commercial lending rate for borrowers of
the highest credit standing) listed from time to time in The Wall
Street Journal which represents the base rate on corporate loans
posted by a substantial majority of the nation's thirty (30) largest
banks (the "Prime Rate"). Any such interim reimbursement payments
which are not made to the Underwriters within thirty (30) days of a
request for reimbursement shall bear interest at the Prime Rate from
the date of such request.
(b) In addition to their other obligations under Section 8(b)
hereof, the Underwriters severally and not jointly agree that, as an
interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding described in Section 8(b) hereof, they will
reimburse the Company on a monthly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the Company
for such expenses and the possibility that such payments might later be
held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, the Company shall promptly return such payment to the
Underwriters together with interest, compounded daily, determined on the
basis of the Prime Rate. Any such interim reimbursement payments which are
not made to the Company within thirty (30) days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request.
18
19
(c) It is agreed that any controversy arising out of the operation
of the interim reimbursement arrangements set forth in Sections 5(a)(ii)
and 5(b) hereof, including the amounts of any requested reimbursement
payments, the method of determining such amounts and the basis on which
such amounts shall be apportioned among the reimbursing parties, shall be
settled by arbitration conducted under the provisions of the Constitution
and Rules of the Board of Governors of the New York Stock Exchange, Inc.
or pursuant to the Code of Arbitration Procedure of the NASD. Any such
arbitration must be commenced by service of a written demand for
arbitration or a written notice of intention to arbitrate, therein
electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in
such demand or notice, then the party responding to said demand or notice
is authorized to do so. Any such arbitration will be limited to the
operation of the interim reimbursement provisions contained in Sections
5(a)(ii) and 5(b) hereof and will not resolve the ultimate propriety or
enforceability of the obligation to indemnify for expenses which is
created by the provisions of Sections 8(a) and 8(b) hereof or the
obligation to contribute to expenses which is created by the provisions of
Section 8(d) hereof.
6. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Notes as provided herein shall
be subject to the accuracy, as of the date hereof and the Closing Date and any
later date on which Option Notes are to be purchased, as the case may be, of the
representations and warranties of the Company herein, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 2:00 P.M., San Francisco time, on the date following the date of this
Agreement, or 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 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 any
Incorporated Document or otherwise) shall have been complied with to the
satisfaction of Underwriters' Counsel.
(b) All corporate proceedings and other legal matters in connection
with this Agreement, the Indenture, the form of Registration Statement and
the Prospectus, and the registration, authorization, issue, sale and
delivery of the Notes, 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) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, or any later date on which Option Notes are to
be purchased, as the case may be,
19
20
(i) there shall not have been any change in the condition
(financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries 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 Notes as
contemplated by the Prospectus; and
(ii) 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 Act.
(d) You shall have received on the Closing Date and on any later
date on which Option Notes are to be purchased, as the case may be, the
following opinion of Berlin, Xxxxxxxx & Xxxxx LLP, general counsel for
the Company, dated the Closing Date or such later date on which Option
Notes are to be purchased addressed to the Underwriters and with
reproduced copies or signed counterparts thereof for each of the
Underwriters, to the effect that:
(i) The Company and each 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) The Company and each 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) The Company and each 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 on the
condition (financial or otherwise), earnings, operations or business
of the Company and its subsidiaries considered as one enterprise. To
such counsel's knowledge, the Company does not own or control,
directly or indirectly, any corporation, association or other entity
other than Hadco Foreign Sales Corporation, Zycon Corporation, Zycon
Acquisition Corporation and Zycon Corporation SDN.BHV.
(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 have been duly
and validly issued and are fully paid and nonassessable, and, to
such counsel's
20
21
knowledge, will not have been issued in violation of or subject to
any preemptive right, co-sale right, registration right, right of
first refusal or other similar right;
(v) All issued and outstanding shares of capital stock of
each subsidiary of the Company have been duly authorized and validly
issued and are fully paid and nonassessable, and, to such counsel's
knowledge, have not been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of first
refusal or other similar right and are owned by the Company free and
clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest;
(vi) The shares of Common Stock issuable upon conversion of
the Notes have been duly authorized and reserved for issuance upon
conversion of the Notes and will be, when issued and delivered upon
conversion, validly issued and fully paid and nonassessable, and not
subject to any preemptive or other similar right;
(vii) The Company has the corporate power and authority to
enter into this Agreement and to issue, sell and deliver to the
Underwriters the Notes to be issued and sold by it hereunder and to
issue the Common Stock upon conversion of the Notes;
(viii) This Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has been
duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by you, is a valid and binding
agreement of the Company.
(ix) The information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such
counsel and is a fair summary of such matters and conclusions; and
the forms of certificates evidencing the Common Stock comply with
Massachusetts law;
(x) The description in the Registration Statement and the
Prospectus of the charter and bylaws of the Company and of statutes
are accurate and fairly present the information required to be
presented by the Act and the applicable Rules and Regulations;
(xi) The performance of this Agreement, the Indenture and
the Notes 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
21
22
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 (other than the Bank
Credit Agreement, dated as of January 8, 1997, by and among the
Company, the lenders from time to time that are party thereto and
The First National Bank of Boston, as agent (the "Bank Credit
Agreement"), to which such counsel need not opine) 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 any of its subsidiaries, or over any of their
properties or operations;
(xii) No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or
body having jurisdiction over the Company or any of its
subsidiaries, or over any of their properties or operations is
necessary in connection with the consummation by the Company of the
transactions herein contemplated, except such as have been obtained
under the Act, the Exchange Act or such as may be required under
state or other securities or Blue Sky laws in connection with the
purchase and the distribution of the Notes by the Underwriters;
(xiii) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus and any Incorporated Document,
no holders of Common Stock 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 such shares of Common Stock 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.
Counsel rendering the foregoing opinion may rely as to
questions of law not involving the laws of the United States or the
Commonwealth of Massachusetts upon opinions of local counsel and with
regard to New York law can assume that the laws of the State of New York
are identical to the laws of the Commonwealth of Massachusetts, and as to
questions of fact upon representations or certificates of officers of the
Company 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.
22
23
(e) You shall have received on the Closing Date and on any later
date on which Option Notes are to be purchased, as the case may be, (i) an
opinion of Xxxx and Xxxx LLP, in form and substance satisfactory to you,
with respect to the sufficiency of all such corporate proceedings and
other legal matters relating to this Agreement and the transactions
contemplated hereby as you may reasonably require, and (ii) an opinion of
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, in the form
and substance satisfactory to you, with respect to the validity of the
Notes, and the Company shall have furnished to each such counsel such
documents as they may have requested for the purpose of enabling them to
pass upon such matters.
(f) You shall have received on the Closing Date and on any later
date on which Option Notes are to be purchased, as the case may be, a
letter from Xxxxxx Xxxxxxxx LLP and KPMG Peat Marwick LLP addressed to
the Underwriters, dated the Closing Date or such later date on which
Option Notes are to be purchased, as the case may be, confirming, in each
case, that they are independent certified public accountants with respect
to Zycon and the Company within the meaning of the Act and the applicable
published Rules and Regulations and based upon the procedures described in
each such letter delivered to you concurrently with the execution of this
Agreement (each such letter being herein called the "Original Letter"),
but carried out to a date not more than five (5) business days prior to
the Closing Date or such later date on which Option Notes are to be
purchased, 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 Closing Date or such later date on which Option Notes
are to be purchased, as the case may be, and (ii) setting forth any
revisions and additions to the statements and 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, business or business
prospects of the Company and its subsidiaries 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 Notes 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 Zycon and 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 October 26, 1996 and
related consolidated statements of operations, shareholders' equity, and
cash flows for the twelve (12) months ended October 26, 1996, (iii) set
forth in their opinion with respect to their examination of the
consolidated balance sheet of Zycon as of December 31, 1996 and related
consolidated statement of operations of shareholders' equity and cash flow
for the twelve (12) months ended December 31, 1996, (iv) state that Xxxxxx
Xxxxxxxx LLP has performed the procedures set out in Statement on Auditing
Standards No. 71 ("SAS 71") for a review of interim financial information
and providing the report of Xxxxxx Xxxxxxxx LLP as described in SAS 71 on
the financial
23
24
statements for the quarter ended January 25, 1997 (the "Quarterly
Financial Statements"), (v) 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 (vi) address other matters agreed upon by Xxxxxx Xxxxxxxx
LLP and you. The Original Letter from KPMG Peat Marwick LLP shall be
addressed to or for the use of the underwriters in for and substance
satisfactory to the underwriters and shall (i) represent to the extent
true, that they are independent certified public accounts with respect to
Zycon and the Company within the meaning of the Act and applicable
published Rules and Regulations and (ii) set forth in their opinion with
respect to their examination of the consolidated balance sheet of Zycon
at December 31, 1995 and related consolidated statements of operations of
shareholders' equity and cash flow for the twelve (12) months ended
December 31, 1995. 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 October 26, 1996, did not disclose
any weaknesses in internal controls that they considered to be material
weaknesses.
(g) You shall have received on the Closing Date and on any later
date on which Option Notes are to be purchased, as the case may be, a
certificate of the Company, dated the Closing Date or such later date on
which Option Notes are to be purchased, 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, as if made on and as of the
Closing Date or any later date on which Option Notes are to be
purchased, as the case may be, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date or any later
date on which Option Notes are to be purchased, 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,
the Registration Statement and the Prospectus, and any amendments or
supplements thereto and the Incorporated Documents, when such
Incorporated Documents became effective or were filed with the
Commission, contained all material information required to be
included therein by the Act and the Rules and Regulations or the
Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be, and in all material
24
25
respects conformed to the requirements of the Act and the Rules and
Regulations or the Exchange Act and the applicable rules and
regulations of the Commission thereunder, as the case may be, the
Registration Statement, and any amendment or supplement 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, the
Prospectus, and any amendment or supplement thereto, did not and
does not include 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, and, 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, business or business
prospects of the Company and its subsidiaries considered as one
enterprise, (b) any transaction that is material to the Company and
its subsidiaries 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
subsidiaries considered as one enterprise, incurred by the Company
or its subsidiaries, except obligations incurred in the ordinary
course of business, (d) any change in the capital stock or
outstanding indebtedness of the Company or any of its subsidiaries
that is material to the Company and its subsidiaries considered as
one enterprise, (e) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any of
its subsidiaries, or (f) any loss or damage (whether or not insured)
to the property of the Company or any of its subsidiaries 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
subsidiaries considered as one enterprise.
(h) The Company shall have obtained and delivered to you an
agreement from each officer and director of the Company and each Selling
Shareholder in writing prior to the date hereof that such person will not,
during the Lock-up Period, effect the Disposition of any Lock-up Shares
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, or (iii) with the prior written consent of Xxxxxxxxx,
Xxxxxxxx & Company LLC. The foregoing restriction shall have been
expressly agreed to preclude the holder of the Lock-up Shares from
engaging in any hedging or other transaction which is designed to or
reasonably expected to lead to or result in a Disposition of Lock-up
Shares during the Lock-up Period, even if such Lock-up Shares would be
disposed of by someone other than the such holder. Such
25
26
prohibited hedging or other transactions would including, 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 Lock-up Shares or with respect to
any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from
Lock-up Shares. Furthermore, such person will have also agreed and
consented to the entry of stop transfer instructions with the Company's
transfer agent against the transfer of the Lock-up Shares held by such
person except in compliance with this restriction.
(i) You shall have received on the Closing Date and on any later
date on which Option Notes are to be purchased, as the case may be, the
following opinion of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, special securities
counsel to the Company, dated the Closing Date or such later date on which
Option Notes are to be purchased addressed to the Underwriters and with
reproduced copies or signed counterparts thereof for each of the
Underwriters, to the effect that:
(i) The Company has full legal right, power and authority to
enter into the Indenture and the Notes and to perform its
obligations thereunder;
(ii) The Indenture has been duly authorized by all necessary
corporate action on the part of the Company and has been duly
executed and delivered by the Company;
(iii) The Indenture, assuming due authorization, execution and
delivery by the Trustee, is a legal, valid and binding agreement of
the Company, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar laws, now
or hereafter in effect, relating to or affecting creditors' rights
and remedies generally, or by general equitable principles;
(iv) The Notes have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and, when
issued, executed and authenticated in accordance with the terms of
the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will constitute legal,
valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms and entitled to the
benefits of the Indenture, except as the enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws, now or hereafter in effect, relating to
or affecting creditors' rights generally or by general equitable
principles (provided that such counsel need not opine as to the
enforceability of the waiver of rights or defenses contained in
Section 5.8 of the Indenture);
(v) The Indenture complies as to form in all material
respects with the Trust Indenture Act and the rules and regulations
thereunder and, on the effective date of the Registration Statement,
will be duly qualified under the Trust Indenture Act;
26
27
(vi) The terms and provisions of the Notes and the Indenture
conform in all material respects to the descriptions thereof
contained in the Registration Statement and Prospectus;
(vii) The performance of the Indenture and the Notes and the
consummation of the transactions therein contemplated (other than
performance of the Company's indemnification obligations hereunder,
concerning which no opinion need be expressed) will not 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 the
Bank Credit Agreement;
(viii) The Registration Statement has become effective under
the Act 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 Act;
(ix) 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 Act and
the applicable Rules and Regulations; and each of the Incorporated
Documents (other than the financial statements (including supporting
schedules) and the financial data derived therefrom as to which such
counsel need express no opinion) complied when filed pursuant to the
Exchange Act as to form in all material respects with the
requirements of the Act and the Rules and Regulations and the
Exchange Act and the applicable rules and regulations of the
Commission thereunder;
(x) 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 any Incorporated Document or
to be filed as an exhibit to the Registration Statement or any
Incorporated Document which are not described or referred to therein
or filed as required;
(xi) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company
or any of its subsidiaries of a character required to be disclosed
in the Registration Statement or the Prospectus or any Incorporated
Document by the Act or the Rules and Regulations or by the Exchange
Act or the applicable rules and regulations of the Commission
thereunder, other than those described therein;
(xii) The information in the Prospectus under the caption
"Description of Notes" and "Certain Federal Income Tax
Considerations", to the extent that it
27
28
constitutes matters or law or legal conclusions, has been reviewed
by such counsel and is a fair summary of such matters and
conclusions.
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 of the Registration Statement and Prospectus and
related matters were discussed and although they have not been
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 Closing Date and on any
later day on which the Option Notes are to be purchased, the
Registration Statement and any amendment or supplement thereto and
any Incorporated Document, when such documents became effective or
were filed with the Commission (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
Closing Date or any later date on which the Option Notes are to be
purchased, as the case may be, the Registration Statement, the
Prospectus and any amendment or supplement thereto and any
Incorporated Document (except as aforesaid) contained any untrue
statement of 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. Such
counsel shall also state that the conditions for the use of Form S-3
set forth in the General Instructions thereto have been satisfied.
Counsel rendering the foregoing opinion may rely as to
questions of law not involving the laws of the United States or the
Commonwealth of Massachusetts upon opinions of local counsel, and as
to questions of fact upon representations or certificates of
officers of the Company and of government officials, in which case
their opinion is to state that they are so relying and that they
have no knowledge or 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.
All such opinions, certificates, letters and documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory to Underwriter's Counsel. The Company will furnish you
with such number of conformed copies of such opinions, certificates,
letters and documents as you shall reasonably request.
(j) The Company shall have furnished to you such further
certificates and documents as you shall reasonably request (including
certificates of officers of the Company
28
29
as to the accuracy of the representations and warranties of the Company
herein, as to the performance by the Company of its their respective
obligations hereunder and as to the other conditions concurrent and
precedent to the obligations of the Underwriters hereunder.
All such opinions, certificates, letters and documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory to Underwriters' Counsel. The Company and the Selling
Shareholders will furnish you with such number of conformed copies of such
opinions, certificates, letters and documents as you shall reasonably
request.
7. Option Notes.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants to the several Underwriters, for the
purpose of covering over-allotments in connection with the distribution
and sale of the Firm Notes only, a nontransferable option to purchase, at
the purchase price per Note for the Firm Notes set forth in Section 3
hereof, $15,000,000 aggregate principal amount of Option Notes. Such
option may be exercised by the Representatives on behalf of the several
Underwriters on one (1) or more occasions in whole or in part during the
period of thirty (30) days after the date on which the Firm Notes are
initially offered to the public, by giving written notice to the Company.
The principal amount of Option Notes to be purchased by each Underwriter
upon the exercise of such option shall be the same proportion of the total
principal amount of Option Notes to be purchased by the several
Underwriters pursuant to the exercise of such option as the principal
amount of Firm Notes purchased by such Underwriter (set forth in Schedule
A hereto) bears to the total principal amount of Firm Notes purchased by
the several Underwriters (set forth in Schedule A hereto), adjusted by the
Representatives in such manner as to avoid Notes of less than $1,000 in
principal amount.
Delivery of the Option Notes to be purchased by the several
Underwriters pursuant to the exercise of the option granted by this
Section 7 shall be made against payment of the purchase price therefor by
the several Underwriters by wire transfer of same-day funds paid to an
account designated by the Company. Such delivery and payment shall take
place at the offices of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, 000 Xxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 or at such other place as may be agreed upon
among the Representatives and the Company (i) on the Closing Date, if
written notice of the exercise of such option is received by the Company
at least two (2) full business days prior to the Closing Date, or (ii) on
a date which shall not be later than the third (3rd) full business day
following the date the Company receives written notice of the exercise of
such option, if such notice is received by the Company less than two (2)
full business days prior to the Closing Date.
The Option Notes to be so delivered will be made available to
you at such office or such other location including, without limitation,
in New York City, as you may reasonably request for checking at least one
(1) full business day prior to the date of payment
29
30
and delivery and will be in such names and denominations as you may
request, such request to be made at least two (2) full business days prior
to such date of payment and delivery. If the Representatives so elect,
delivery of the Option Notes may be made by credit through full fast
transfer to the accounts at The Depository Trust Company designated by the
Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be
obligated to) make payment of the purchase price on behalf of any
Underwriter or Underwriters whose check or checks shall not have been
received by you prior to the date of payment and delivery for the Option
Notes to be purchased by such Underwriter or Underwriters. Any such
payment by you shall not relieve any such Underwriter or Underwriters of
any of its or their obligations hereunder.
(b) Upon exercise of any option provided for in Section 7(a)
hereof, the obligations of the several Underwriters to purchase such
Option Notes will be subject (as of the date hereof and as of the date of
payment and delivery for such Option Notes) to the accuracy of and
compliance with the representations, warranties and agreements of the
Company herein, to the accuracy of the statements of the Company, and
officers of the Company made pursuant to the provisions hereof, to the
performance by the Company obligations hereunder, to the conditions set
forth in Section 6 hereof, and to the condition that all proceedings taken
at or prior to the payment date in connection with the sale and transfer
of such Option Notes shall be satisfactory in form and substance to you
and to Underwriters' Counsel, and you shall have been furnished with all
such documents, certificates and opinions as you may request in order to
evidence the accuracy and completeness of any of the representations,
warranties or statements, the performance of any of the covenants or
agreements of the Company or the satisfaction of any of the conditions
herein contained.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject (including, without
limitation, in its capacity as an Underwriter or as a "qualified
independent underwriter" within the meaning of Section 2720 of the Conduct
Rules of the NASD), under the Act, the Exchange Act or otherwise,
specifically including, but not limited to, losses, claims, damages or
liabilities (or actions in respect thereof) arising out of or based upon
(i) any breach of any representation, warranty, agreement or covenant of
the Company herein contained, (ii) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or
any amendment or supplement thereto, including any Incorporated Document,
or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or (iii) any untrue statement or alleged untrue statement
of any material fact contained in any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each
30
31
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability 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 action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, such Preliminary Prospectus or the Prospectus, or
any such amendment or supplement thereto, in reliance upon, and in
conformity with, written information relating to any Underwriter furnished
to the Company by such Underwriter, directly or through you, specifically
for use in the preparation thereof and, provided further, that the
indemnity agreement provided in this Section 8(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any losses, claims, damages, liabilities or
actions based upon any untrue statement or alleged untrue statement of
material fact or omission or alleged omission to state therein a material
fact purchased Notes, if a copy of the Prospectus in which such untrue
statement or alleged untrue statement or omission or alleged omission was
corrected had not been sent or given to such person within the time
required by the Act and the Rules and Regulations, unless such failure is
the result of noncompliance by the Company with Section 4(d) hereof.
The indemnity agreement in this Section 8(a) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the Act
or the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which the Company may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company against any losses, claims,
damages or liabilities, joint or several, to which the Company may become
subject under the Act, the Exchange Act or otherwise, specifically
including, but not limited to, losses, claims, damages or liabilities (or
actions in respect thereof) arising out of or based upon (i) any breach of
any representation, warranty, agreement or covenant of such Underwriter
herein contained, (ii) any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement or any amendment
or supplement thereto, including any Incorporated Document, or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or (iii) any untrue statement or alleged untrue statement of
any material fact contained in any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, in the case of subparagraphs (ii) and (iii) of
this Section 8(b) 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 by such Underwriter, directly or through you, specifically
for use in the preparation thereof, and agrees to reimburse the Company
for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action.
31
32
The indemnity agreement in this Section 8(b) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
officer of the Company who signed the Registration Statement and each
director of the Company and each person, if any, who controls the Company
within the meaning of the Act or the Exchange Act. This indemnity
agreement shall be in addition to any liabilities which each Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section 8. In case
any such action is brought against any indemnified party, and it notified
the indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it shall
elect 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, that 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 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 indemnifying party to such indemnified
party of the 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 8 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 appropriate local counsel)
approved by the indemnifying party representing all the indemnified
parties under Section 8(a) or 8(b) hereof 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 no event
shall any indemnifying party be liable in respect of any amounts paid in
settlement of any action unless the indemnifying party shall have approved
the terms of such settlement; provided that such consent shall not be
unreasonably withheld. 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 indemnification could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on all
claims that are the subject matter of such proceeding.
32
33
(d) In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this
Section 8 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact
that this Section 8 provides for indemnification in such case, all the
parties hereto shall contribute to the aggregate losses, claims, damages
or liabilities to which they may be subject (after contribution from
others) in such proportion so that the Underwriters severally and not
jointly are responsible pro rata for the portion represented by the
percentage that the underwriting discount bears to the initial public
offering price, and the Company is responsible for the remaining portion,
provided, however, that (i) no Underwriter shall be required to contribute
any amount in excess of the amount by which the underwriting discount
applicable to the Notes purchased by such Underwriter exceeds the amount
of damages which such Underwriter has otherwise required to pay and (ii)
no person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation. The
contribution agreement in this Section 8(d) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each person,
if any, who controls any Underwriter, the Company within the meaning of
the Act or the Exchange Act and each officer of the Company who signed the
Registration Statement and each director of the Company.
(e) 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 8, and are fully informed
regarding said provisions. They further acknowledge that the provisions of
this Section 8 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 Act and the Exchange Act.
9. Representations, Warranties, Covenants and Agreements to Survive
Delivery. All representations, warranties, covenants and agreements of the
Company and the Underwriters herein or in certificates delivered pursuant
hereto, and the indemnity and contribution agreements contained in Section 8
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter within the meaning of the Act or the Exchange Act, or by or on
behalf of the Company or any of its officers, directors or controlling persons
within the meaning of the Act or the Exchange Act, and shall survive the
delivery of the Notes to the several Underwriters hereunder or termination of
this Agreement.
10. Substitution of Underwriters. If any Underwriter or Underwriters
shall fail to take up and pay for the principal amount of Firm Notes agreed by
such Underwriter or Underwriters to be purchased hereunder upon tender of such
Firm Notes in accordance with the terms hereof, and if the aggregate principal
amount of Firm Notes which such defaulting Underwriter or Underwriters so agreed
but failed to purchase does not exceed 10% of the Firm Notes, the remaining
Underwriters
33
34
shall be obligated, severally in proportion to their respective commitments
hereunder, to take up and pay for the Firm Notes of such defaulting Underwriter
or Underwriters.
If any Underwriter or Underwriters so defaults and the aggregate
principal amount of Firm Notes which such defaulting Underwriter or Underwriters
agreed but failed to take up and pay for exceeds 10% of the Firm Notes, the
remaining Underwriters shall have the right, but shall not be obligated, to take
up and pay for (in such proportions as may be agreed upon among them) the Firm
Notes which the defaulting Underwriter or Underwriters so agreed but failed to
purchase. If such remaining Underwriters do not, at the Closing Date, take up
and pay for the Firm Notes which the defaulting Underwriter or Underwriters so
agreed but failed to purchase, the Closing Date shall be postponed for
twenty-four (24) hours to allow the several Underwriters the privilege of
substituting within twenty-four (24) hours (including non-business hours)
another underwriter or underwriters (which may include any nondefaulting
Underwriter) satisfactory to the Company. If no such underwriter or
underwriters shall have been substituted as aforesaid by such postponed Closing
Date, the Closing Date may, at the option of the Company, be postponed for a
further twenty-four (24) hours, if necessary, to allow the Company the privilege
of finding another underwriter or underwriters, satisfactory to you, to purchase
the Firm Notes which the defaulting Underwriter or Underwriters so agreed but
failed to purchase. If it shall be arranged for the remaining Underwriters or
substituted underwriter or underwriters to take up the Firm Notes of the
defaulting Underwriter or Underwriters as provided in this Section 10, (i) the
Company shall have the right to postpone the time of delivery for a period of
not more than seven (7) full business days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and the Company agrees promptly to
file any amendments to the Registration Statement, supplements to the Prospectus
or other such documents which may thereby be made necessary, and (ii) the
respective principal amount of Firm Notes to be purchased by the remaining
Underwriters and substituted underwriter or underwriters shall be taken as the
basis of their underwriting obligation. If the remaining Underwriters shall not
take up and pay for all such Firm Notes so agreed to be purchased by the
defaulting Underwriter or Underwriters or substitute another underwriter or
underwriters as aforesaid and the Company shall not find or shall not elect to
seek another underwriter or underwriters for such Firm Notes as aforesaid, then
this Agreement shall terminate.
In the event of any termination of this Agreement pursuant to the
preceding paragraph of this Section 10, the Company shall not be liable to any
Underwriter (except as provided in Sections 5 and 8 hereof) nor shall any
Underwriter (other than an Underwriter who shall have failed, otherwise than for
some reason permitted under this Agreement, to purchase the principal amount of
Firm Notes agreed by such Underwriter to be purchased hereunder, which
Underwriter shall remain liable to the Company and the other Underwriters for
damages, if any, resulting from such default) be liable to the Company (except
to the extent provided in Sections 5 and 8 hereof).
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section 10.
34
35
11. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at the earlier of (i)
6:30 A.M., San Francisco time, on the first full business day following the
effective date of the Registration Statement, or (ii) the time of the initial
public offering of any of the Notes by the Underwriters after the Registration
Statement becomes effective. The time of the initial public offering shall mean
the time of the release by you, for publication, of the first newspaper
advertisement relating to the Notes, or the time at which the Notes are first
generally offered by the Underwriters to the public by letter, telephone,
telegram or telecopy, whichever shall first occur. By giving notice as set forth
in Section 12 before the time this Agreement becomes effective, you, as
Representatives of the several Underwriters, or the Company, may prevent this
Agreement from becoming effective without liability of any party to any other
party, except as provided in Sections 4(i), 5 and 8 hereof.
(b) You, as Representatives of the several Underwriters, shall
have the right to terminate this Agreement by giving notice as hereinafter
specified at any time on or prior to the Closing Date or on or prior to any
later date on which Option Notes are to be purchased, as the case may be, (i) if
the Company shall have failed, refused or been unable to perform any agreement
on its part to be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled is not fulfilled, including,
without limitation, any change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise from that set forth in the
Registration Statement or Prospectus, which, in your sole judgment, is material
and adverse, or (ii) if additional material governmental restrictions, not in
force and effect on the date hereof, shall have been imposed upon trading in
securities generally or minimum or maximum prices shall have been generally
established on the New York Stock Exchange or on the American Stock Exchange or
in the over the counter market by the NASD, or trading in securities generally
shall have been suspended on either such exchange or in the over the counter
market by the NASD, or if a banking moratorium shall have been declared by
federal, New York or California authorities, or (iii) if the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as to 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 (iv) if there shall have been a material adverse change in the
general political or economic conditions or financial markets as in your
reasonable judgment makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Notes, or (v) if there shall have been an
outbreak or escalation of hostilities or of any other insurrection or armed
conflict or the declaration by the United States of a national emergency which,
in the reasonable opinion of the Representatives, makes it impracticable or
inadvisable to proceed with the public offering of the Notes as contemplated by
the Prospectus. In the event of termination pursuant to subparagraph (i) above,
the Company shall remain obligated to pay costs and expenses pursuant to
Sections 4(i), 5 and 8 hereof. Any termination pursuant to any of subparagraphs
(ii) through (v) above shall be without liability of any party to any other
party except as provided in Sections 5 and 8 hereof.
If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section 11, you shall promptly
notify the Company by telephone,
35
36
telecopy or telegram, in each case confirmed by letter. If the Company shall
elect to prevent this Agreement from becoming effective, the Company shall
promptly notify you by telephone, telecopy or telegram, in each case, confirmed
by letter.
12. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall be
mailed, delivered, telegraphed (and confirmed by letter) or telecopied (and
confirmed by letter) to you c/x Xxxxxxxxx, Xxxxxxxx & Company LLC, 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, telecopier
number (000) 000-0000, Attention: General Counsel; if sent to the Company, such
notice shall be mailed, delivered, telegraphed (and confirmed by letter) or
telecopied (and confirmed by letter) to Hadco Corporation, 00X Xxxxx Xxxxxxx,
Xxxxx, Xxx Xxxxxxxxx 00000, telecopier number (000) 000-0000, Attention: Xxxxxx
X. Xxxxx, Chief Executive Officer.
13. Parties. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters and the Company and their respective executors,
administrators, successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person or entity, other
than the parties hereto and their respective executors, administrators,
successors and assigns, and the controlling persons within the meaning of the
Act or the Exchange Act, officers and directors referred to in Section 8 hereof,
any legal or equitable right, remedy or claim in respect of this Agreement or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective executors, administrators,
successors and assigns and said controlling persons and said officers and
directors, and for the benefit of no other person or entity. No purchaser of any
of the Notes from any Underwriter shall be construed a successor or assign by
reason merely of such purchase.
In all dealings with the Company under this Agreement, you shall act
on behalf of each of the several Underwriters, and the Company shall be entitled
to act and rely upon any statement, request, notice or agreement made or given
by you jointly or by Xxxxxxxxx, Xxxxxxxx & Company LLC on behalf of you.
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York.
15. Counterparts. This Agreement may be signed in several counterparts,
each of which will constitute an original.
36
37
If the foregoing correctly sets forth the understanding among the
Company and the several Underwriters, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among the Company and the several Underwriters.
Very truly yours,
HADCO CORPORATION
By: _______________________________
Accepted as of the date first above written:
XXXXXXXXX, XXXXXXXX & COMPANY LLC
XXXXXXX XXXXX & CO.
On their behalf and on behalf of each of the several Underwriters named in
Schedule A hereto.
By XXXXXXXXX, XXXXXXXX & COMPANY LLC
By XXXXXXXXX, XXXXXXXX & COMPANY GROUP, L.L.C.
By: _______________________________
Authorized Signatory
37
38
SCHEDULE A
PRINCIPAL AMOUNT OF FIRM
NOTES TO BE
UNDERWRITERS PURCHASED
--------------------------------------------------- --------------------------
Xxxxxxxxx, Xxxxxxxx & Company LLC.................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
--------------
TOTAL....................................... $100,000,000
