DRAFT OF 4/23/98
STRICTLY PRIVATE
AND CONFIDENTIAL EXHIBIT 1.1
Dated _________, 1998
MIPS TECHNOLOGIES, INC.
5,500,000 shares
COMMON STOCK
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UNDERWRITING AGREEMENT
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MIPS TECHNOLOGIES, INC.
5,500,000 SHARES
PLUS AN OPTION TO PURCHASE UP TO
825,000 ADDITIONAL SHARES TO COVER OVER-ALLOTMENTS
COMMON STOCK
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UNDERWRITING AGREEMENT
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____________, 1998
DEUTSCHE XXXXXX XXXXXXXX INC.
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXXXXX & XXXXX, LLC
As Representatives of the several Underwriters
c/o Deutsche Xxxxxx Xxxxxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
MIPS Technologies, Inc., a Delaware corporation (the "Company"), and
Silicon Graphics, Inc., a Delaware corporation (the "Selling Stockholder"),
hereby confirm their agreement with the several underwriters named in Schedule 1
hereto (the "Underwriters"), for whom you have been duly authorized to act as
representatives (the one or more firms acting in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be references to the
Underwriters.
Underwriting. Subject to the terms and conditions contained herein:
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The Company proposes to issue and sell 1,250,000 shares of common
stock, par value $0.01 per share (the "Common Stock"), of the
Company, and the Selling Stockholder proposes to sell 4,250,000
shares of Common Stock (said shares to be issued and sold by the
Company and shares to be sold by the Selling Stockholder
collectively, the "Firm Shares") to the several Underwriters. The
Selling Stockholder also proposes to sell not more than 825,000
additional shares of Common Stock (collectively, the "Option
Shares" and, together with the Firm Shares, the "Shares") to the
several Underwriters if requested by the Representatives as
provided in Section 2(b) hereof.
Upon your authorization of the release of the Firm Shares, the
Underwriters propose to make a public offering (the "Offering")
of the Firm Shares upon the terms set forth in the Prospectus (as
defined below) as soon after the Registration Statement (as
defined below) and this Agreement have become effective as in the
Representatives' sole judgment is advisable. As used in this
Agreement, the term "Original Registration Statement" means the
registration statement (File No. 333-____) initially filed with
the Securities and Exchange Commission (the "Commission")
relating to the Shares, as amended at the time when it was or is
declared effective, including all financial schedules and
exhibits thereto and including any information omitted therefrom
pursuant to Rule 430A under the Securities Act of 1933, as
amended (the "Securities Act"), and included in the Prospectus;
the term "Rule 462(b) Registration Statement" means any
registration statement filed with the Commission pursuant to Rule
462(b) under the Securities Act (including the Registration
Statement and any Preliminary Prospectus (as defined below) or
Prospectus incorporated therein at the time such Registration
Statement becomes effective); the term "Registration Statement"
includes both the Original Registration Statement and any Rule
462(b) Registration Statement; the term "Preliminary Prospectus"
means each prospectus subject to completion filed with the
Original Registration Statement or any amendment thereto
(including the prospectus subject to completion, if any, included
in the Original Registration Statement or any amendment thereto
at the time it was or is declared effective); the term
"Prospectus" means:
if the Company relies on Rule 434 under the Securities
Act, the Term Sheet (as defined below) relating to the
Shares that is first filed pursuant to Rule 424(b)(7)
under the Securities Act, together with the Preliminary
Prospectus identified therein that such Term Sheet
supplements;
if the Company does not rely on Rule 434 under the
Securities Act, the prospectus first filed with the
Commission pursuant to Rule 424(b) under the Securities
Act;
if the Company does not rely on Rule 434 under the
Securities Act and if no prospectus is required to be
filed pursuant to Rule 424(b) under the Securities Act,
the prospectus included in the Registration Statement; or
for purposes of the representations and warranties
contained in Section 5 hereof, if the prospectus is not
in existence, the most recent Preliminary Prospectus;
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and the term "Term Sheet" means any term sheet that satisfies the
requirements of Rule 434 under the Securities Act. Any reference herein to
the "date" of a Prospectus that includes a Term Sheet shall mean the date
of such Term Sheet.
Purchase and Closing.
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On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions
herein set forth, the Company agrees to issue and sell, and the
Selling Stockholder proposes to sell, to each of the Underwriters, and
each of the Underwriters, severally and not jointly, agrees to
purchase from the Company and the Selling Stockholder, at a purchase
price of $___ per Share (the "Purchase Price"), the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule 1
hereto. One or more certificates in definitive form for the Firm
Shares that the several Underwriters have agreed to purchase
hereunder, and in such denomination or denominations and registered in
such name or names as the Representatives shall request, upon notice
to the Company and the Selling Stockholder at least 48 hours prior to
the First Closing Date (as defined below), shall be delivered by or on
behalf of the Company and the Selling Stockholder to the
Representatives for the respective accounts of the Underwriters Firm
Shares shall be registered by [_________] in the name of the nominee
of the Depository Trust Company ("DTC"), Cede & Co. ("Cede & Co."),
and credited to the accounts of such of its participants as the
Representatives shall request, upon notice to the Company and the
Selling Stockholder at least 48 hours prior to the First Closing Date
(as defined below), with any transfer taxes payable in connection with
the transfer of the Firm Shares to the Underwriters duly paid, against
payment by or on behalf of the Underwriters to the account of the
Company and the Selling Stockholder of the aggregate Purchase Price
therefor by wire transfer in immediately available funds. The Company
and the Selling Stockholder will make the certificate or certificates
for the Firm Shares available for checking and packaging by the
Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of the Representatives at least 24
hours prior to the First Closing Date. Delivery or registry of and
payment for the Firm Shares shall be made at the offices of Venture
Law Group, A Professional Corporation, 0000 Xxxx Xxxx Xxxx, Xxxxx
Xxxx, Xxxxxxxxxx 00000, at 9:30 A.M., New York City time, on the
fourth full business day following the date of this Agreement, or at
such other place, time or date as the Representatives, the Company and
the Selling Stockholder may agree upon. Such time and date of
delivery against payment are herein referred to as the "First Closing
Date", and the implementation of all the actions described in this
Section 2(a) is herein referred to as the "First Closing".
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Shares as contemplated by the
Prospectus, the Selling Stockholder hereby grants to the several
Underwriters an option to purchase, severally and not jointly, the
Option Shares. The purchase price to be paid for any Option Shares
shall be the same as the Purchase Price for the Firm Shares set forth
above in paragraph (a) of this Section 2. The option granted
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hereby may be exercised as to all or any part of the Option Shares
from time to time within thirty days after the date of the Prospectus
(or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange and
the Nasdaq Stock Market's National Market (the "Nasdaq National
Market") is open for trading). The Underwriters shall not be under any
obligation to purchase any of the Option Shares prior to the exercise
of such option. The Representatives may from time to time exercise the
option granted hereby by giving notice in writing or by telephone
(confirmed in writing) to the Company and the Selling Stockholder
setting forth the aggregate number of Option Shares as to which the
several Underwriters are then exercising the option and the date and
time for delivery or registry of and payment for such Option Shares.
Any such date of delivery or registry shall be determined by the
Representatives but shall not be earlier than two business days or
later than five business days after such exercise of the option and,
in any event, shall not be earlier than the First Closing Date. The
time and date set forth in such notice, or such other time or date as
the Representatives and the Selling Stockholder may agree upon or as
the Representatives may determine pursuant to Section 2(a) hereof, is
herein called an "Option Closing Date" with respect to such Option
Shares, and the implementation of all the actions described in this
Section 2(b) is herein referred to as the "Option Closing". As used in
this Agreement, the term "Closing Date" means either the First Closing
Date or any Option Closing Date, as applicable, and the term "Closing"
means either the First Closing or any Option Closing, as applicable.
If the option is exercised as to all or any portion of the Option
Shares, then either one or more certificates in definitive form for
such Option Shares shall be delivered or, if such Option Shares are to
be held through DTC, such Option Shares shall be registered and
credited, on the related Option Closing Date in the same manner, and
upon the same terms and conditions, set forth in paragraph (a) of this
Section 2, except that reference therein to the Firm Shares and the
First Closing Date shall be deemed, for purposes of this paragraph
(b), to refer to such Option Shares and Option Closing Date,
respectively. Upon exercise of the option as provided herein, the
Selling Stockholder shall become obligated to sell to each of the
several Underwriters, and, on the basis of the representations,
warranties, agreements and covenants herein contained and subject to
the terms and conditions herein set forth, each of the Underwriters
(severally and not jointly) shall become obligated to purchase from
the Selling Stockholder, the same percentage of the total number of
the Option Shares as to which the several Underwriters are then
exercising the option as such Underwriter is obligated to purchase of
the aggregate number of Firm Shares, as adjusted by the
Representatives in such manner as they deem advisable to avoid
fractional shares.
The Company and the Selling Stockholder hereby acknowledge that the
payment of monies pursuant to Section 2(a) hereof (a "Payment") by or
on behalf of the Underwriters of the aggregate Purchase Price for any
Shares does not constitute closing of a purchase and sale of the
Shares. Only execution and delivery, by facsimile or otherwise, of a
receipt for Shares by the Underwriters indicates
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completion of the closing of a purchase of the Shares from the Company
and the Selling Stockholder. Furthermore, in the event that the
Underwriters make a Payment to the Company and the Selling Stockholder
prior to the completion of the closing of a purchase of Shares, the
Company and the Selling Stockholder hereby acknowledge that until the
Underwriters execute and deliver such receipt for the Shares, the
Company and the Selling Stockholder will not be entitled to the
Payment and shall return the Payment to the Underwriters as soon as
practicable (by wire transfer of same-day funds) upon demand. In the
event that the closing of a purchase of Shares is not completed and
the Payment is not returned by the Company and the Selling Stockholder
to the Underwriters on the same day the Payment was received by the
Company and the Selling Stockholder, the Company and the Selling
Stockholder agree to pay to the Underwriters in respect of each day
the Payment is not returned by them, in same-day funds, interest on
the amount of such Payment in an amount representing the Underwriters'
cost of financing as reasonably determined by the Representatives,
pro rata in proportion to the percentage of such Payment received by
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each. It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make Payment
on behalf of any Underwriter or Underwriters for any of the Shares to
be purchased by such Underwriter or Underwriters. No such Payment
shall relieve such Underwriter or Underwriters from any of its or
their obligations hereunder.
Covenants.
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Each of the Company and the Selling Stockholder, as applicable,
covenants and agrees with the several Underwriters that:
The Company will, and the Selling Stockholder will use its best
efforts to cause the Company to:
(x) use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto to become effective as
promptly as possible. If required, the Company will file
the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the
Commission in the manner and within the time period required
by Rules 434 and 424(b) under the Securities Act. During
any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act, the
Company (I) will comply with all requirements imposed upon
it by the Securities Act and the rules and regulations of
the Commission thereunder to the extent necessary to permit
the continuance of sales of or dealings in the Shares in
accordance with the provisions hereof and of the Prospectus,
as then amended or supplemented, and (II) will not file with
the Commission the Prospectus, Term Sheet, any amendment or
supplement to such Prospectus or Term Sheet, any amendment
to the Registration Statement (including the amendment
referred to in the second sentence of Section 5(a)(i)
hereof) or any Rule 462(b) Registration Statement unless the
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Representatives previously have been advised of, and
furnished with a copy within a reasonable period of time
prior to, the proposed filing and the Representatives shall
have given their consent to such filing. The Company will
prepare and file with the Commission, in accordance with the
rules and regulations of the Commission, promptly upon
request by the Representatives or counsel for the
Underwriters, any amendments to the Registration Statement
or amendments or supplements to the Prospectus that may be
necessary or advisable in connection with the distribution
of the Shares by the several Underwriters. The Company will
advise the Representatives, promptly after receiving notice
thereof, of the time when the Registration Statement or any
amendment thereto has been filed or declared effective or
the Prospectus or Term Sheet or any amendment or supplement
thereto has been filed and will provide evidence
satisfactory to the Representatives of each such filing or
effectiveness.
(y) without charge, provide (I) to the Representatives and
to counsel for the Underwriters, an executed and a conformed
copy of the Original Registration Statement and each
amendment thereto or any Rule 462(b) Registration Statement
(in each case including exhibits thereto), (II) to each
other Underwriter, a conformed copy of the Original
Registration Statement and each amendment thereto or any
Rule 462(b) Registration Statement (in each case without
exhibits thereto), and (III) so long as a prospectus
relating to the Shares is required to be delivered under the
Securities Act, as many copies of each Preliminary
Prospectus or the Prospectus or any amendment or supplement
thereto as the Representatives may reasonably request.
Without limiting the application of clause (III) of the
preceding sentence, the Company, not later than (A) 9:00
A.M., New York City time, on the business day following the
date of determination of the public offering price, if such
determination occurred at or prior to 12:00 noon, New York
City time, on such date or (B) 6:00 P.M., New York City
time, on the business day following the date of
determination of the public offering price, if such
determination occurred after 12:00 noon, New York City time,
on such date, will deliver to the Underwriters, without
charge, as many copies of the Prospectus and any amendment
or supplement thereto as the Representatives may reasonably
request for purposes of confirming orders that are expected
to settle on the First Closing Date.
(z) advise the Representatives, promptly after receiving
notice or obtaining knowledge thereof, of (I) the issuance
by the Commission of any stop order suspending the
effectiveness of the
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Original Registration Statement or any amendment thereto or
any Rule 462(b) Registration Statement or any order
preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or any amendment or supplement
thereto, (II) the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, (III) the
institution, threatening or contemplation of any proceeding
for any purpose identified in the preceding clause (I) or
(II), or (IV) any request made by the Commission for
amending the Original Registration Statement or any Rule
462(b) Registration Statement, for amending or supplementing
the Prospectus or for additional information. The Company
will use its best efforts to prevent the issuance of any
such stop order and, if any such stop order is issued, to
obtain the withdrawal thereof as promptly as possible.
The Company will, and the Selling Stockholder will use its best
efforts to cause the Company to, arrange for the qualification of
the Shares for offering and sale in each jurisdiction as the
Representatives shall designate including, but not limited to,
pursuant to applicable state securities ("Blue Sky") laws of
certain states of the United States of America or other U.S.
jurisdictions, and the Company shall, and the Selling Stockholder
will use its best efforts to cause the Company to, maintain such
qualifications in effect for so long as may be necessary in order
to complete the placement of the Shares; provided, however, that
the Company shall not be obliged to file any general consent to
service of process or to qualify as a foreign corporation or as a
securities dealer in any jurisdiction or to subject itself to
taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject.
If, at any time prior to the final date when a prospectus
relating to the Shares is required to be delivered under the
Securities Act, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, or if for any other reason it shall be necessary at
any time to amend the Registration Statement or amend or
supplement the Prospectus to comply with the Securities Act or
the rules or regulations of the Commission thereunder or
applicable law, the Company will, and the Selling Stockholder
will use its best efforts to cause the Company to, promptly
notify the Representatives thereof and will promptly, at its own
expense, but subject to the second sentence of Section 3(a)(i)(x)
hereof: (x) prepare and file with the Commission an amendment to
the Registration Statement or amendment or supplement to the
Prospectus which will correct such statement or omission or
effect such compliance; and (y) supply any amended Registration
Statement or amended or
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supplemented Prospectus to the Underwriters in such quantities as
the Underwriters may reasonably request.
The Company will, and the Selling Stockholder will use its best
efforts to cause the Company to, make generally available to the
Company's securityholders and to the Representatives as soon as
practicable an earnings statement that satisfies the provisions
of Section 11(a) of the Securities Act, including Rule 158
thereunder.
The Company will, and the Selling Stockholder will use its best
efforts to cause the Company to, apply the net proceeds from the
sale of the Shares as set forth under "Use of Proceeds" in the
Prospectus.
The Company will not publicly announce any intention to, and will
not itself, and the Selling Stockholder will use its best efforts
to cause the Company not to, without the prior written consent of
the Representatives, on behalf of the Underwriters, (x) offer,
pledge, sell, offer to sell, contract to sell, sell any option or
contract to purchase, purchase any option to sell, grant any
option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into, or exercisable or exchangeable
for, Common Stock, or (y) enter into any swap or other agreement
that transfers, in whole or in part, any of the economic
consequences of ownership of the shares of Common Stock or
securities convertible into, or exercisable or exchangeable for,
shares of Common Stock (whether any such transaction described in
clause (x) or (y) above is to be settled by delivery of shares of
Common Stock or such other securities, in cash or otherwise), for
a period beginning from the date hereof and continuing to and
including the date 365 days after the date hereof, except
pursuant to this Agreement and other than with respect to shares
of Common Stock (or any securities convertible into or
exchangeable for shares of Common Stock) issued pursuant to any
employee benefit plans, qualified stock option plans or other
employee compensation plans which are disclosed in the
Prospectus.
Neither the Company nor any of its affiliates, nor any person
acting on behalf of any of them will, directly or indirectly, and
the Selling Stockholder will use its best efforts to cause the
Company and such persons not to, (x) take any action designed to
cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or (y) (I) sell, bid
for, purchase, or pay anyone any compensation for soliciting
purchases of, the Shares or (II) pay or agree to pay to any
person any compensation for soliciting another to purchase any
other securities of the Company.
The Company will, and the Selling Stockholder will use its best
efforts to cause the Company to, obtain the agreements described
in Section 7(h) hereof prior to the First Closing Date.
If at any time during the 25-day period after the Registration
Statement becomes effective or during the period prior to any
Closing Date, any
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rumor, publication or event relating to or affecting the Company
shall occur as a result of which in the Representatives' sole
judgment the market price of the Shares has been or is likely to
be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of
the Prospectus), the Company will, and the Selling Stockholder
will use its best efforts to cause the Company to, after notice
from the Representatives advising the Company to the effect set
forth above, forthwith prepare, consult with the Representatives
concerning the substance of, and disseminate a press release or
other public statement reasonably satisfactory to the
Representatives, responding to or commenting on such rumor,
publication or event.
If the Company elects to rely on Rule 462(b), the Company shall,
and the Selling Stockholder will use its best efforts to cause
the Company to, both file the Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) and pay the
applicable fees in accordance with Rule 111 promulgated under the
Securities Act by the earlier of (x) 10:00 P.M. New York City
time on the date of this Agreement and (y) the time confirmations
are sent or given, as specified by Rule 462(b)(2) under the
Securities Act.
The Company will, and the Selling Stockholder will use its best
efforts to cause the Company to, cause the Shares to be duly
included for quotation on the Nasdaq National Market prior to the
First Closing Date. The Company will, and the Selling
Stockholder will use its best efforts to cause the Company to,
ensure that the Shares remain included for quotation on the
Nasdaq National Market following the First Closing Date.
The Selling Stockholder agrees that:
It will not, and no person acting on behalf of the Selling
Stockholder will, directly or indirectly, (x) take any action
designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or (y) (I)
sell, bid for, purchase, or pay anyone any compensation for
soliciting purchases of, the Shares or (II) pay or agree to pay
to any person any compensation for soliciting another to purchase
any other securities of the Company (except for the sale of
Shares by the Selling Stockholder under this Agreement).
It will not, and will not allow any subsidiary to, publicly
announce any intention to, and will not itself, and will not
allow any subsidiary to, without the prior written consent of the
Representatives on behalf of the Underwriters, (x) offer, pledge,
sell, offer to sell, contract to sell, sell any option or
contract to purchase, purchase any option to sell, grant any
option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any of the shares of Common
Stock or any securities convertible into, or exercisable or
exchangeable for, Common Stock, or (y) enter into any swap or
other agreement that transfers, in whole or in
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part, any of the economic consequences of ownership of the shares
of Common Stock or any securities convertible into, or
exercisable or exchangeable for, shares of Common Stock (whether
any such transaction described in clause (x) or (y) above is to
be settled by delivery of shares of Common Stock or such other
securities, in cash or otherwise), in each case, beneficially
owned (within the meaning of Rule 13d-3 under the Exchange Act)
or otherwise controlled by such person on the date hereof or
hereafter acquired, for a period beginning from the date hereof
and continuing to and including the date 365 days after the date
hereof.
Expenses.
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The Company shall bear and pay all costs and expenses incurred
incident to the performance of its obligations under this Agreement,
whether or not the transactions contemplated herein are consummated or
this Agreement is terminated pursuant to Section 9 hereof, including:
(i) fees and expenses of preparation, issuance and delivery of this
Agreement to the Underwriters; (ii) the fees and expenses of its
counsel, accountants and any other experts or advisors retained by the
Company; (iii) the costs of delivering and distributing the Power of
Attorney (as defined below) and the Custody Agreement (as defined
below) and the fees and expenses of the Custodian (as defined below)
(and any other Attorney-in-Fact (as defined below)); (iv) fees and
expenses incurred in connection with the registration of the Shares
under the Securities Act and the preparation and filing of the
Registration Statement, the Prospectus and all amendments and
supplements thereto; (v) the printing and distribution of the
Prospectus and any Preliminary Prospectus and the printing and
production of all other documents connected with the Offering
(including this Agreement and any other related agreements); (vi)
expenses related to the qualification of the Shares under the state
securities or Blue Sky laws, including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of any Blue Sky memoranda;
(vii) the filing fees and expenses, if any, incurred with respect to
any filing with the National Association of Securities Dealers, Inc.,
including the fees and disbursements of counsel for the Underwriters
in connection therewith; [(viii) fees and expenses of an independent
underwriter;] (ix) all expenses arising from the quoting of the Shares
on the Nasdaq National Market; (x) all arrangements relating to the
preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Shares, including transfer agent's and
registrar's fees; (xi) the costs and expenses of the "roadshow" and
any other meetings with prospective investors in the Shares (other
than as shall have been specifically approved by the Representatives
to be paid for by the Underwriters); and (xii) the costs and expenses
of advertising relating to the Offering (other than as shall have been
specifically approved by the Representatives to be paid for by the
Underwriters). The Selling Stockholder shall bear and pay all costs
and expenses incurred incident to the performance of its obligations
under this Agreement, whether or not the transactions contemplated
herein are consummated or this Agreement is terminated pursuant to
Section 9 hereof, including: (i) any stamp duties, capital
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duties and stock transfer taxes, if any, payable upon the sale of the
Shares of the Selling Stockholder to the Underwriters and (ii) the
fees and disbursements of its counsel, accountants and other advisors.
The Selling Stockholder hereby guarantees the payment of all amounts
required to be paid by the Company pursuant to Section 4(a) hereof.
Representations and Warranties.
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As a condition of the obligation of the Underwriters to underwrite and
pay for the Shares, the Company and the Selling Stockholder jointly
and severally represent and warrant to, and agree with, each of the
several Underwriters as follows:
Registration Statement and Prospectus
The Original Registration Statement, including the Preliminary
Prospectus, has been filed by the Company with the Commission under
the Securities Act, and one or more amendments to such Registration
Statement may have been so filed. After the execution of this
Agreement, the Company will, and the Selling Stockholder will use its
best efforts to cause the Company to, file with the Commission either
(x) if such Registration Statement, as it may have been amended, has
been declared by the Commission to be effective under the Securities
Act, either (I) if the Company relies on Rule 434 under the Securities
Act, a Term Sheet relating to the Shares that shall identify the
Preliminary Prospectus that it supplements containing such information
as is required or permitted by Rules 434, 430A and 424(b) under the
Securities Act or (II) if the Company does not rely on Rule 434 under
the Securities Act, a prospectus in the form most recently included in
an amendment to such Registration Statement (or, if no such amendment
shall have been filed, in such Registration Statement), with such
changes or insertions as are required by Rule 430A under the
Securities Act or permitted by Rule 424(b) under the Securities Act,
and in the case of either clause (I) or (II) of this sentence, as have
been provided to and approved by the Representatives prior to the
execution of this Agreement, or (y) if such Registration Statement, as
it may have been amended, has not been declared by the Commission to
be effective under the Securities Act, an amendment to such
Registration Statement, including a form of prospectus, a copy of
which amendment has been furnished to and approved by the
Representatives prior to the execution of this Agreement. The Company
may also file a Rule 462(b) Registration Statement with the Commission
for the purpose of registering certain additional Shares which
registration shall be effective upon filing with the Commission.
The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus. When any Preliminary
Prospectus was filed with the Commission, it (x) contained all
statements required to be stated therein in accordance with, and
complied in all material respects with the requirements of, the
Securities Act and the rules and regulations of the Commission
thereunder and (y) did not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. When the
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Registration Statement or any amendment thereto was or is declared
effective, it (I) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in
all material respects with the requirements of, the Securities Act and
the rules and regulations of the Commission thereunder and (II) did
not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. When the
Prospectus or any Term Sheet that is a part thereof or any amendment
or supplement to the Prospectus is filed with the Commission pursuant
to Rule 424(b) (or, if the Prospectus or such amendment or supplement
is not required to be so filed, when the Registration Statement or the
amendment thereto containing the Prospectus or such amendment or
supplement to the Prospectus was or is declared effective) and on the
Closing Date, the Prospectus, as amended or supplemented at any such
time, (A) contained or will contain all statements required to be
stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Securities Act and the
rules and regulations of the Commission thereunder and (B) did not or
will not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The foregoing provisions of this paragraph (ii) do not
apply to statements or omissions made in any Preliminary Prospectus,
the Registration Statement or any amendment thereto or the Prospectus
or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein.
If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement is not effective, (x) the Company will,
and the Selling Stockholder will use its best efforts to cause the
Company to, file a Rule 462(b) Registration Statement in compliance
with, and that is effective upon filing pursuant to, Rule 462(b) and
(y) the Company has given irrevocable instructions for transmission of
the applicable filing fee in connection with the filing of the Rule
462(b) Registration Statement, in compliance with Rule 111 under the
Securities Act, or the Commission has received payment of such filing
fee.
If the Company has elected to rely on Rule 434 under the
Securities Act, the Prospectus is not "materially different", as such
term is used in Rule 434, from the prospectus included in the
Registration Statement at the time of its effectiveness or an
effective post-effective amendment thereto (including such information
that is permitted to be omitted pursuant to Rule 430A under the
Securities Act);
The Company and the Selling Stockholder have not distributed and,
prior to the later of (x) any Closing Date and (y) the completion of
the distribution of the Shares, will not distribute any offering
material in connection with the Offering other than the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto.
-12-
Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (x) the
Company has not incurred any material liability or obligation, direct
or contingent, nor entered into any material transaction not in the
ordinary course of business; (y) the Company has not purchased any of
its outstanding capital stock, nor declared, paid or otherwise made
any dividend or distribution of any kind on its capital stock; and (z)
there has not been any material change in the capital stock, short-
term or long-term debt of the Company, except in each case as
described in or contemplated by the Prospectus. The Company has no
subsidiaries.
The Shares
The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus. All of the issued
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 applicable federal and state securities laws
and were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase such securities.
The Shares have been duly authorized by all necessary corporate action
of the Company and, after payment therefor in accordance herewith,
will be validly issued, fully paid and nonassessable at the Closing
Date. No holders of outstanding shares of capital stock of the
Company are entitled as such to any preemptive or other rights to
subscribe for any of the Shares, and no holder of securities of the
Company has any right which has not been fully exercised or waived to
require the Company to register the offer or sale of any securities
owned by such holder under the Securities Act in the Offering
contemplated by this Agreement.
Except as disclosed in the Prospectus, there are no outstanding
(x) securities or obligations of the Company convertible into or
exchangeable for any capital stock of the Company, (y) warrants,
rights or options to subscribe for or purchase from the Company any
such capital stock or any such convertible or exchangeable securities
or obligations, or (z) obligations of the Company to issue any shares
of capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
The Company does not own any shares of stock or any other equity
securities of any corporation and does not have any equity interest in
any firm, partnership, association or other entity, except as
described in or contemplated by the Prospectus.
Listing
All of the Shares have been duly authorized and accepted for
quotation on the Nasdaq National Market, subject to official notice of
issuance.
Market manipulation
None of the Company, the Selling Stockholder or any of their
affiliates, or any person acting on behalf of any of them has,
directly or indirectly, (x) taken
-13-
any action designed to cause or to result in, or that has constituted
or which might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares, or (y) since the filing
of the Original Registration Statement (I) sold, bid for, purchased,
or paid anyone any compensation for soliciting purchases of, the
Shares or (II) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the
Company.
Corporate power and authority
The Company has been duly incorporated and is validly existing as
a corporation in good standing under the law of its jurisdiction of
incorporation with full power and authority to own, lease and operate
its properties and assets and conduct its business as described in the
Prospectus, is duly qualified to transact business and is in good
standing in each jurisdiction in which its ownership, leasing or
operation of its properties or assets or the conduct of its business
requires such qualification, except where the failure to be so
qualified does not amount to a material liability or disability to the
Company, and has full power and authority to execute and perform its
obligations under this Agreement.
The execution and delivery of this Agreement and the issuance and
sale of the Shares have been duly authorized by all necessary
corporate action of the Company, and this Agreement has been duly
executed and delivered by the Company and is the valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms.
The issuance, offering and sale of the Shares to the Underwriters
by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (x)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained or made or such as may be required by the state
securities or Blue Sky laws of the various states of the United States
of America or other U.S. jurisdictions in connection with the offer
and sale of the Shares by the Underwriters, or (y) conflict with or
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which the Company is a party
or by which the Company or any of its properties are bound, or the
charter documents or by-laws of the Company, or any statute or any
judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to the Company.
The Company is not, and will conduct its operations in a manner
so that it continues not to be, an "investment company" and, after
giving effect to the Offering and the application of the proceeds
therefrom, will not be an "investment company", as such term is
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
Title, licenses and consents
-14-
The Company has good and marketable title in fee simple to all
items of real property and marketable title to all personal property
owned by the Company, in each case free and clear of any security
interests, liens, encumbrances, equities, claims and other defects,
except such as do not materially and adversely affect the value of
such property and do not interfere with the use made or proposed to be
made of such property by the Company, and any real property and
buildings held under lease by the Company are held under valid,
subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made or proposed to be made
of such property and buildings by the Company, in each case except as
described in or contemplated by the Prospectus.
The Company owns or possesses, or can acquire on reasonable
terms, all material patents, patent applications, trademarks, service
marks, trade names, licenses, know-how, copyrights, trade secrets and
proprietary or other confidential information necessary to operate the
business now operated by the Company, and the Company has not received
any notice of infringement of or conflict with asserted rights of any
third party with respect to any of the foregoing which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a materially adverse effect on or constitute a
materially adverse change in, or constitute a development involving a
prospective materially adverse effect on or change in, the condition
(financial or otherwise), earnings, properties, business affairs or
business prospects, stockholders' equity, net worth or results of
operations of the Company, except as described in or contemplated by
the Prospectus.
The Company possesses all consents, licenses, certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct its businesses,
and the Company has not received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a materially
adverse effect on or constitute a materially adverse change in, or
constitute a development involving a prospective materially adverse
effect on or change in, the condition (financial or otherwise),
earnings, properties, business affairs or business prospects, net
worth or results of operations of the Company, except as described in
or contemplated by the Prospectus.
Financial statements
Ernst & Young LLP, who have certified certain financial
statements of the Company and delivered their report with respect to
the audited consolidated financial statements and schedules included
in the Registration Statement and the Prospectus, are independent
public accountants as required by the Securities Act and the
applicable rules and regulations thereunder.
The financial statements and schedules of the Company included in
the Registration Statement and the Prospectus were prepared in
accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout the periods involved (except as
otherwise noted therein) and they
-15-
present fairly the financial condition of the Company as at the dates
at which they were prepared and the results of operations of the
Company in respect of the periods for which they were prepared.
Internal Accounting Controls
The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (w) transactions are
executed in accordance with management's general or specific
authorizations; (x) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (y) access to assets is permitted only
in accordance with management's general or specific authorization; and
(z) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
Litigation
No legal or governmental proceedings are pending or threatened to
which the Company is a party or to which the property of the Company
is subject that are required to be described in the Registration
Statement or the Prospectus and are not described therein; and no
statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not
described therein or filed as required.
Dividends and Distributions
The Company is not currently prohibited, directly or indirectly,
from paying any dividends or making any other distribution on its
capital stock, except as described in or contemplated by the
Prospectus.
Taxes
The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not
have a materially adverse effect on the Company) and has paid all
taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is
due and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as described in or
contemplated by the Prospectus.
Insurance
The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which it is engaged;
the Company has not been refused any insurance coverage sought or
applied for; and the Company has no reason to believe that it will not
be able to renew its existing insurance coverage as and
-16-
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, properties, business affairs or business
prospects, net worth or results of operations of the Company, except
as described in or contemplated by the Prospectus.
Pension and Labor
The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any liability;
the Company has not incurred and does not expect to incur liability
under (x) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (y) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
No labor dispute with the employees of the Company exists or is
threatened or imminent that could have a materially adverse effect on
or constitute a materially adverse change in, or constitute a
development involving a prospective materially adverse effect on or
change in, the condition (financial or otherwise), properties,
management, earnings, business affairs or business prospects, net
worth or results of operations of the Company, except as described in
or contemplated by the Prospectus.
Environmental
The Company is not in violation of any federal or state law or
regulation relating to occupational safety and health or to the
storage, handling or transportation of hazardous or toxic materials
and the Company has received all permits, licenses or other approvals
required of it under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct their
respective businesses, and the Company is in compliance with all terms
and conditions of any such permit, license or approval, except any
such violation of law or regulation, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which
would not, singly or in the aggregate, have a materially adverse
effect on or constitute a materially adverse change in, or constitute
a development involving a prospective materially adverse effect on or
change in, the condition (financial or otherwise), earnings,
properties, business affairs or business prospects, net worth or
results of operations of the Company, except as described in or
contemplated by the Prospectus.
-17-
Other Agreements
No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company is a party or by which the Company or
any of its properties is bound.
Absence of Materially Adverse Change
Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company
has not sustained any material loss or interference with its
businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has been no
materially adverse change (including, without limitation, a change in
management or control), or development involving a prospective
materially adverse change, in the condition (financial or otherwise),
management, earnings, property, business affairs or business
prospects, stockholders' equity, net worth or results of operations of
the Company, other than as described in or contemplated by the
Prospectus (exclusive of any amendments or supplements thereto).
No receiver or liquidator (or similar person) has been appointed
in respect of the Company or in respect of any part of the assets of
the Company; no resolution, order of any court, regulatory body,
governmental body or otherwise, or petition or application for an
order, has been passed, made or presented for the winding up of the
Company or for the protection of the Company from its creditors; and
the Company has not stopped or suspended payments of its debts, become
unable to pay its debts or otherwise become insolvent.
As a further condition of the obligation of the Underwriters to
underwrite and pay for the Shares, the Selling Stockholder represents
and warrants to, and agrees with, each of the several Underwriters
that:
The Selling Stockholder has full power (corporate and other) to
enter into this Agreement and to sell, assign, transfer and deliver to
the Underwriters the Shares to be sold by the Selling Stockholder
hereunder in accordance with the terms of this Agreement; the
execution and delivery of this Agreement have been duly authorized by
all necessary corporate action of the Selling Stockholder; and this
Agreement has been duly executed and delivered by the Selling
Stockholder.
The Selling Stockholder has duly executed and delivered a power
of attorney and custody agreement (the "Power-of-Attorney" and the
"Custody Agreement", respectively), each in the form heretofore
delivered to the Representatives, appointing [__________] as the
Selling Stockholder's attorney-in-fact (the "Attorney-in-Fact") with
authority to execute, deliver and perform this Agreement on behalf of
the Selling Stockholder and appointing [__________], as custodian
thereunder (the "Custodian"). Certificates in negotiable form,
endorsed in blank or accompanied by blank stock powers duly executed,
with signatures appropriately guaranteed, representing the Shares to
be sold by the Selling
-18-
Stockholder hereunder have been deposited with the Custodian pursuant
to the Custody Agreement for the purpose of delivery pursuant to this
Agreement. The Selling Stockholder has full power (corporate and
other) to enter into the Custody Agreement and the Power-of-Attorney
and to perform its obligations under the Custody Agreement. The
execution and delivery of the Custody Agreement and the Power-of-
Attorney have been duly authorized by all necessary corporate action
of the Selling Stockholder; the Custody Agreement and the Power-of-
Attorney have been duly executed and delivered by the Selling
Stockholder and, assuming due authorization, execution and delivery by
the Custodian, are the legal, valid, binding and enforceable
instruments of the Selling Stockholder. The Selling Stockholder agrees
that each of the Shares represented by the certificates on deposit
with the Custodian is subject to the interests of the Underwriters
hereunder, that the arrangements made for such custody, the
appointment of the Attorney-in-Fact and the right, power and authority
of the Attorney-in-Fact to execute and deliver this Agreement, to
agree on the price at which the Shares (including the Selling
Stockholder's Shares) are to be sold to the Underwriters, and to carry
out the terms of this Agreement, are to that extent irrevocable and
that the obligations of the Selling Stockholder hereunder shall not be
terminated, except as provided in this Agreement or the Custody
Agreement, by any act of the Selling Stockholder, by operation of law
or otherwise, by liquidation or dissolution of the Selling Stockholder
or by the occurrence of any other event. If the Selling Stockholder
shall liquidate or dissolve, or if any other similar event should
occur, before the delivery of such Shares hereunder, the certificates
for such Shares deposited with the Custodian shall be delivered by the
Custodian in accordance with the respective terms and conditions of
this Agreement as if such liquidation or dissolution or other event
had not occurred, regardless of whether or not the Custodian or the
Attorney-in-Fact shall have received notice thereof.
The Selling Stockholder is the lawful owner of the Shares to be
sold by the Selling Stockholder hereunder and upon sale and delivery
of, and payment for, the Shares, as provided herein, such Selling
Stockholder will convey good and marketable title to such Shares, free
and clear of any security interests, liens, encumbrances, equities,
claims or other defects.
Neither the Selling Stockholder nor any person acting on behalf
of it has, directly or indirectly, (x) taken any action designed to
cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares or (y) since the filing of the
Original Registration Statement (I) sold, bid for, purchased, or paid
anyone any compensation for soliciting purchases of, the Shares or
(II) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company
(except for the sale of Shares by the Selling Stockholder under this
Agreement).
The sale by the Selling Stockholder of Shares pursuant hereto is
not prompted by any adverse information concerning the Company that is
not set forth in the Registration Statement or the Prospectus.
-19-
The sale of the Shares to the Underwriters by the Selling
Stockholder pursuant to this Agreement, the compliance by the Selling
Stockholder with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained, such as may be required under state
securities or blue sky laws and, if the registration statement filed
with respect to the Shares (as amended) is not effective under the
Securities Act as of the time of execution hereof, such as may be
required (and shall be obtained as provided in this Agreement) under
the Securities Act, or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which such Selling Stockholder or any of
its subsidiaries is a party or by which such Selling Stockholder or
any of its subsidiaries or any of their respective properties are
bound, or the charter documents or by-laws of such Selling Stockholder
or any of its subsidiaries or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority
or any arbitrator applicable to such Selling Stockholder or any of its
subsidiaries.
The above representations and warranties shall be deemed to be
repeated at each Closing, and all references therein to the Shares and
the Closing Date shall be deemed to refer to the Firm Shares or the
Option Shares and the First Closing Date or the applicable Option
Closing Date, each as applicable.
Indemnity.
---------
The Company and the Selling Stockholder jointly and severally agree to
indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), against any and all losses, claims,
damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
any untrue statement or alleged untrue statement made by the
Company or the Selling Stockholder in Section 5 hereof,
any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or
the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto a material
fact required to be stated therein or necessary to make the
statements therein not misleading,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other costs or expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in
-20-
connection with any such loss, claim, damage, liability or action; provided,
however, that the Company and the Selling Stockholder will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein. The indemnity provided for in this Section 6 shall
be in addition to any liability which the Company and the Selling Stockholder
may otherwise have. Neither the Company nor the Selling Stockholder will,
without the prior written consent of the Representatives, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not any such Representatives or any person who controls
any such Representatives is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an unconditional release
of all of the Underwriters and such controlling persons from all liability
arising out of such claim, action, suit or proceeding.
The Selling Stockholder hereby guarantees the performance of the
Company's obligations under Section 6(a) and agrees to indemnify each
Underwriter and controlling person against any and all loses, damages
or liabilities (including legal or other costs or expenses), joint or
several, which such Underwriter or controlling person may suffer as a
result of the Company's failure to perform its obligations in Section
6(a).
Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, the Selling Stockholder and each
person, if any, who controls the Company or the Selling Stockholder
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities
to which the Company or any such director or officer of the Company,
such Selling Stockholder or any such controlling person of the Company
or such Selling Stockholder may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto or (ii) the omission or the alleged omission to
state in the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to
the Company by such Underwriter through the Representatives
specifically for use therein, and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any
legal or other
-21-
expenses reasonably incurred by the Company or any such director,
officer or controlling person or the Selling Stockholder or
controlling person of the Selling Stockholder in connection with
investigating, defending against or appearing as a third-party witness
in connection with any such loss, claim, damage, liability or any
action in respect thereof. The remedies provided for in this Section 6
are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity
may be sought pursuant to paragraph (a), (b) or (c) of this Section 6,
such person (for purposes of this paragraph (d), the "indemnified
party") shall, promptly after receipt by such party of notice of the
commencement of such action, notify the person against whom such
indemnity may be sought (for purposes of this paragraph (d), the
"indemnifying party"), 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 6. In case any
such action is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that
it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel 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 one or more legal defenses available to it
and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of
such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense of any such action and
approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified
party under this Section 6 for any legal or other expenses, other than
reasonable costs of investigation, 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 in connection with such action the
indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to local counsel) in any one action
or separate but substantially similar actions in the same jurisdiction
arising out of the same general allegations or circumstances,
designated in writing by the Representatives in the case of paragraph
5(a) and (b) of this Section 6, representing the indemnified parties
under such paragraph (a) who are parties to such action or actions),
or (ii) the indemnifying party does not promptly retain counsel
satisfactory to the indemnified party, or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified
-22-
party at the expense of the indemnifying party. All fees and expenses
reimbursed pursuant to this paragraph (d) shall be reimbursed as they
are incurred. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the
costs and expenses of any settlement of such action effected by such
indemnified party without the consent of the indemnifying party. In
circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 6 is unavailable or insufficient,
for any reason, to hold harmless an indemnified party in respect of
any losses, claims, damages or liabilities (or actions in respect
thereof), each indemnifying party, in order to provide for just and
equitable contribution, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such proportion as
is appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified
party on the other from the Offering or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified
party on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholder on the one hand
and the Underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the Offering (before deducting
expenses) received by the Company and the Selling Stockholder bear to
the total underwriting discounts and commissions received by the
Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company,
the Selling Stockholder or the Underwriters, the parties' relative
intents, knowledge, access to information and opportunity to correct
or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances. The Company, the
Selling Stockholder and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro
rata or per capita allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred
to above in this paragraph (e). Notwithstanding any other provision of
this paragraph (e), no Underwriter shall be obligated to make
contributions hereunder that in the aggregate exceed the total public
offering price of the Shares purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same
or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute hereunder are several in proportion to their
respective underwriting
-23-
obligations and not joint, and contributions among Underwriters shall
be governed by the provisions of the Deutsche Xxxxxx Xxxxxxxx Inc.
Master Agreement Among Underwriters. For purposes of this paragraph
(e), each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the
Company who signed the Registration Statement and each person, if any,
who controls the Company or the Selling Stockholder within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company or the
Selling Stockholder, as the case may be.
Conditions Precedent. The obligations of the several Underwriters to purchase
--------------------
and pay for the Shares shall be subject, in the Representatives' sole
discretion, to the accuracy of the representations and warranties of the Company
and the Selling Stockholder contained herein as of the date hereof and as of
each Closing Date, as if made on and as of each Closing Date, to the accuracy of
the statements of the Company's officers and the officers of the Selling
Stockholder made pursuant to the provisions hereof, to the performance by the
Company and the Selling Stockholder of their respective covenants and agreements
hereunder and to the following additional conditions:
(i) If the Original Registration Statement or any amendment thereto
filed prior to the First Closing Date has not been declared effective
as of the time of execution hereof, the Original Registration
Statement or such amendment shall have been declared effective not
later than 6:00 P.M. New York City time on the date of determination
of the public offering price, if such determination occurred at or
prior to 4:30 P.M. New York City time on such date, or 12:00 Noon New
York City time on the business day following the day on which the
public offering price was determined, if such determination occurred
after 4:30 P.M. New York City time on such date, and (ii) if the
Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later
than the time confirmations are sent or given as specified by Rule
462(b)(2), or such later time and date as shall have been consented to
by the Representatives; if required, the Prospectus or any Term Sheet
that constitutes a part thereof and any amendment or supplement
thereto shall have been filed with the Commission in the manner and
within the time period required by Rules 434 and 424(b) under the
Securities Act; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been
issued, and no proceedings for that purpose shall have been instituted
or threatened or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission; and the
Company shall have complied with any request of the Commission for
additional information (to be included in the Registration Statement
or the Prospectus or otherwise).
The Representatives shall have received a legal opinion from Shearman
& Sterling, counsel for the Company, dated the Closing Date, to the
effect that:
the Registration Statement is effective under the Securities Act;
any required filing of the Prospectus, or any Term Sheet that
constitutes a part
-24-
thereof, pursuant to Rules 434 and 424(b) has been made in the
manner and within the time period required by Rules 434 and
424(b); and no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued
and, to the best knowledge of such counsel, no proceedings for
that purpose are pending or threatened by the Commission;
the Original Registration Statement and each amendment thereto,
any Rule 462(b) Registration Statement and the Prospectus (in
each case, other than the financial statements and other
financial information contained therein, as to which such counsel
need express no opinion) comply as to form in all material
respects with the applicable requirements of the Securities Act
and the rules and regulations of the Commission thereunder;
such counsel has no reason to believe that (in each case, other
than the financial statements and other financial information
contained therein, as to which such counsel need express no
opinion) (x) the Registration Statement, as of its effective
date, 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 (y)
the Prospectus, as of its date or the date of such opinion,
included or includes any untrue statement of a material fact or
omitted or omits to state any material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
if the Company elects to rely on Rule 434 under the Securities
Act, the Prospectus is not "materially different", as such term
is used in Rule 434, from the prospectus included in the
Registration Statement at the time of its effectiveness or an
effective post-effective amendment thereto (including such
information that is permitted to be omitted pursuant to Rule 430A
under the Securities Act);
the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus; all of the issued
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 applicable federal and state
securities laws and were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or
purchase securities; the Shares have been duly authorized by all
necessary corporate action of the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued, fully paid and nonassessable;
no holders of outstanding shares of capital stock of the Company
are entitled as such to any preemptive or other rights to
subscribe for any of the Shares; and no holder of securities of
the Company has any right which has not been fully exercised or
waived to require the Company to register the offer or sale of
any securities owned by such holder under the Securities Act in
the Offering contemplated by this Agreement;
-25-
all of the Shares have been duly authorized and accepted for
quotation on the Nasdaq National Market, subject to official
notice of issuance; the Company has been duly organized and is
validly existing as a corporation in good standing under the laws
of the jurisdiction of incorporation and is duly qualified to
transact business as a foreign corporation and is in good
standing under the laws of all other jurisdictions where the
ownership, leasing or operation of its properties or assets or
the conduct of its respective businesses requires such
qualification, except where the failure to be so qualified does
not amount to a material liability or disability to the Company;
the Company has full power and authority to own, lease and
operate its properties and assets and conduct its businesses as
described in the Registration Statement and the Prospectus, and
the Company has corporate power to enter into this Agreement and
to carry out all the terms and provisions hereof to be carried
out by it;
the statements set forth under the heading "Description of
Capital Stock" in the Prospectus, insofar as such statements
purport to summarize certain provisions of the capital stock of
the Company, provide a fair summary of such provisions; and the
statements set forth under the headings "Summary--Relationship
with Silicon Graphics," "Arrangements Between the Company and
Silicon Graphics" and "Description of Capital Stock--Corporate
Opportunities" in the Prospectus, insofar as such statements
constitute a summary of the legal matters, documents or
proceedings referred to therein, have been reviewed by such
counsel and fairly present the information called for with
respect to such legal matters, documents and proceedings in all
material respects as required by the Securities Act and the rules
and regulations thereunder;
the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and
this Agreement has been duly executed and delivered by the
Company;
the issuance, offering and sale of the Shares to the Underwriters
by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not
(x) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such
as have been obtained or made (and specified in such opinion) or
such as may be required by the securities or Blue Sky laws of the
various states of the United States of America and other U.S.
jurisdictions in connection with the offer and sale of the Shares
by the Underwriters, or (y) conflict with or result in a breach
or violation of any of the terms and provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, lease or
other agreement or instrument, known to such counsel, to which
the Company is a party or by which the Company or any of its
properties are bound, or the charter documents or by-laws of the
Company, or any statute or any judgment, decree, order,
-26-
rule or regulation of any court or other governmental authority
or any arbitrator known to such counsel and applicable to the
Company; the Company is not an "investment company" and, after
giving effect to the Offering and the application of the proceeds
therefrom, will not be an "investment company", as such term is
defined in the 1940 Act; and such counsel does not know of any
legal or governmental proceedings pending or threatened to which
the Company or to which the property of the Company is subject
that are required to be described in the Registration Statement
or the Prospectus and are not described therein or any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not
described therein or filed as required.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion. The opinions of issuer's counsel described herein shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
The Representatives shall have received a legal opinion from Shearman
& Sterling, counsel for the Selling Stockholder, dated the Closing
Date, to the effect that:
the Selling Stockholder has full power (corporate and other) to
enter into this Agreement, the Custody Agreement and the Power-
of-Attorney and to sell, assign, transfer and deliver the Shares
being sold by the Selling Stockholder hereunder in the manner
provided in this Agreement and to perform its obligations under
the Custody Agreement; the execution and delivery of this
Agreement, the Custody Agreement and the Power-of-Attorney have
been duly authorized by all necessary corporate action of the
Selling Stockholder; this Agreement, the Custody Agreement and
the Power-of-Attorney have been duly executed and delivered by
the Selling Stockholder; assuming due authorization, execution
and delivery by the Custodian, the Custody Agreement and the
Power-of-Attorney are the legal, valid, binding and enforceable
instruments of the Selling Stockholder, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law);
the delivery by the Selling Stockholder to the several
Underwriters of certificates for the Shares being sold hereunder
by the Selling Stockholder against payment therefor as provided
herein, will convey good and marketable title to such Shares to
the several Underwriters, free and clear
-27-
of all security interests, liens, encumbrances, equities, claims
or other defects;
the sale of the Shares to the Underwriters by the Selling
Stockholder pursuant to this Agreement, the compliance by the
Selling Stockholder with the other provisions of this Agreement
and the Custody Agreement and the consummation of the other
transactions herein contemplated do not (x) require the consent,
approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained and
such as may be required under state securities or blue sky laws,
or (y) conflict with or result in a breach or violation of any of
the terms and provisions of, or constitute a default under any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Selling Stockholder or any of its
subsidiaries is a party or by which the Selling Stockholder or
any of its subsidiaries or any of their respective properties are
bound, or the charter documents or by-laws of the Selling
Stockholder or any of its subsidiaries or any statute or any
judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to the
Selling Stockholder or any of its subsidiaries.
In rendering such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Selling Stockholder and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (c) shall include any amendment or supplement thereto at the date of
such opinion.
-28-
The Representatives shall have received a legal opinion from Venture
Law Group, A Professional Corporation, counsel for the Underwriters,
dated the Closing Date, covering the issuance and sale of the Shares,
the Registration Statement and the Prospectus, and such other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
The Representatives shall have received from Ernst & Young LLP a
letter or letters dated, respectively, the date hereof and the Closing
Date, in form and substance satisfactory to the Representatives, to
the effect that:
they are independent accountants with respect to the Company
within the meaning of the Securities Act and the applicable rules
and regulations thereunder;
in their opinion, the audited consolidated financial statements
and schedules and pro forma financial statements examined by them
and included in the Registration Statement and the Prospectus
comply in form in all material respects with the applicable
accounting requirements of the Securities Act and the related
published rules and regulations;
on the basis of their limited review in accordance with standards
established by the American Institute of Certified Public
Accountants of any interim unaudited condensed financial
statements of the Company as indicated in their report included
in the Registration Statement and the Prospectus [a reading of
the latest available interim unaudited condensed financial
statements of the Company] [a reading of the unaudited amounts
for sales, net revenues and total and per share amounts of net
income for the nine-month periods ended March 31, 1997 and March
31, 1998 and of the unaudited consolidated financial statements
of the Company for the periods from which such amounts are
derived, carrying out certain specified procedures (which do not
constitute an examination made in accordance with generally
accepted auditing standards) that would not necessarily reveal
matters of significance with respect to the comments set forth in
this paragraph (iii), a reading of the minute books of the
stockholders, the board of directors and any committees thereof,
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters, nothing came
to their attention that caused them to believe that:
[(x) the unaudited condensed financial statements of the
Company included in the Registration Statement and the
Prospectus do not comply in form in all material respects
with the applicable accounting requirements of the
Securities Act and the related published rules and
regulations thereunder or are not in conformity with GAAP
applied on a basis substantially consistent with that of the
audited financial statements included in the Registration
Statement and the Prospectus;]
-29-
[(y) the unaudited amounts for sales, net revenues and
total and per share amounts of net income included in the
Registration Statement and the Prospectus do not agree with
the amounts set forth in any unaudited financial statements
for those same periods or [are not in conformity with GAAP
accounting principles applied] [were not determined] on a
basis substantially consistent with that of the
corresponding amounts in the audited financial statements
included in the Registration Statement and the Prospectus;]
and
(z) at a specific date not more than five business days
prior to the date of such letter, there were any changes in
the capital stock or long-term debt of the Company or any
decreases in net current assets or stockholders' equity of
the Company, in each case compared with amounts shown on the
March 31, 1998 unaudited balance sheet included in the
Registration Statement and the Prospectus, or for the period
from April 1, 1998 to such specified date there were any
decreases, as compared with [__________], in sales, net
revenues, net income before income taxes or total or per
share amounts of net income of the Company, except in all
instances for changes, decreases or increases set forth in
such letter.
they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts,
percentages and financial information that are derived from the
general accounting records of the Company and are included in the
Registration Statement and the Prospectus under the captions
[__________] and in Exhibit 11 to the Registration Statement, and
have compared such amounts, percentages and financial information
with such records of the Company and with information derived
from such records and have found them to be in agreement,
excluding any questions of legal interpretation; and
on the basis of a reading of the unaudited pro forma condensed
financial statements included in the Registration Statement and
the Prospectus, carrying out certain specified procedures that
would not necessarily reveal matters of significance with respect
to the comments set forth in this paragraph (v), inquiries of
certain officials of the Company and who have responsibility for
financial and accounting matters and proving the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the unaudited pro forma condensed financial
statements, nothing came to their attention that caused them to
believe that the unaudited pro forma condensed financial
statements do not comply in form in all material respects with
the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have
-30-
not been properly applied to the historical amounts in the
compilation of such statements.
For purposes of the letters referred to above, all references to the
Company and its officials, and to the Company's records, shall be deemed to
include the Selling Stockholder, its officials, and the records of the Selling
Stockholder to the extent required for a review of the Company's financial
statements as required by this paragraph 7(e).
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (I) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (II) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Shares as contemplated by the Registration Statement, as amended as of the date
hereof. References to the Registration Statement and the Prospectus in this
paragraph (e) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
The Company shall have furnished or caused to be furnished to the
Underwriters at the Closing a certificate of its Chief Executive
Officer and its Chief Financial Officer satisfactory to the
Underwriters to the effect that:
the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the
Closing Date; the Registration Statement, as amended as of the
Closing Date, does not include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein not misleading, and the Prospectus, as amended
or supplemented as of the Closing Date, does not include any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and the Company has performed all covenants and
agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Date;
no stop order suspending the effectiveness of the Registration
Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened
or, to the best of the Company's knowledge, are contemplated by
the Commission; and
subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the
Company has not sustained any material loss or interference with
its businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance,
or from any labor dispute or any legal or governmental
proceeding, and there has not been any materially adverse change
(including, without limitation, a change in management or
control), or development involving a prospective materially
adverse change, in the condition (financial or otherwise),
management, earnings, properties,
-31-
business affairs or business prospects, stockholders' equity, net
worth or results of operations of the Company, except in each
case as described in or contemplated by the Prospectus (exclusive
of any amendment or supplement thereto).
The Representatives shall have received from the Selling Stockholder a
certificate, signed by the Chief Executive Officer and the Chief
Financial Officer of the Selling Stockholder, dated the Closing Date,
to the effect that:
the representations and warranties of the Selling Stockholder in
this Agreement are true and correct as if made on and as of the
Closing Date;
the Registration Statement, as amended as of the Closing Date,
does not include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as amended or
supplemented as of the Closing Date, does not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
and the Selling Stockholder has performed all covenants and
agreements on its part to be performed or satisfied at or prior
to the Closing Date.
The Representatives shall have received from each person who is a
director or officer of the Company and each other securityholder of
the Company an agreement dated on or before the date of this Agreement
to the effect that such person will not publicly announce any
intention to and will not, without the prior written consent of the
Representatives on behalf of the Underwriters, (i) offer, pledge,
sell, offer to sell, contract to sell, sell any option or contract to
purchase, purchase any option to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any of the shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, Common Stock, or
(ii) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of the
shares of Common Stock or any securities convertible into, or
exercisable or exchangeable for, shares of Common Stock (whether any
such transaction described in clause (i) or (ii) above is to be
settled by delivery of shares of Common Stock or such other
securities, in cash or otherwise), in each case, beneficially owned
(within the meaning of Rule 13d-3 under the Exchange Act) or otherwise
controlled by such person on the date hereof or hereafter acquired,
for a period beginning from the date hereof and continuing to and
including the date 365 days after the date hereof.
Prior to the commencement of the Offering, the Company shall have made
an application for the quotation of the Shares on the Nasdaq National
Market and the Shares shall have been included for trading on the
Nasdaq National Market, subject to official notice of issuance.
Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, 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
-32-
rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization", as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
On or before the Closing Date, the Representatives and counsel for the
Underwriters shall have received such further certificates, documents
or other information as they may have reasonably requested from the
Company and the Selling Stockholder.
The Company and the Selling Stockholder shall have executed and
delivered the Separation Agreement, Corporate Agreement, Technology
Transfer Agreement, Tax Sharing Agreement and Management Services
Agreement described in the Prospectus, each such agreement shall be in
full force and effect in the exact form provided to the Underwriters
and all covenants and agreements required under such agreements to be
taken by the Company and the Selling Stockholder on or before the
Closing Date shall have been performed.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
satisfactory in all material respects to the Representatives and counsel for the
Underwriters. The Company and the Selling Stockholder shall furnish to the
Representatives such conformed copies of such opinions, certificates, letters
and documents in such quantities as the Representatives and counsel for the
Underwriters shall reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Shares shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Shares, except that all references therein
to the Shares and the Closing Date shall be deemed to refer to the Firm Shares
or the Option Shares and the First Closing Date or the related Option Closing
Date, each as applicable.
Default of Underwriters. If, at the First Closing, any one or more of the
-----------------------
Underwriters shall fail or refuse to purchase Shares that it has or they have
agreed to purchase hereunder on such date, and the aggregate number of Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is ten percent or less of the aggregate number of the Shares to be
purchased on such date, the other Underwriters may make arrangements
satisfactory to the Representatives for the purchase of such Shares by other
persons (who may include one or more of the non-defaulting Underwriters,
including the Representatives), but if no such arrangements are made by the
First Closing Date, the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite their respective
names in Schedule 1 hereto bears to the aggregate number of Firm Shares set
forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as the Representatives may specify, to purchase the Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date. If, at the First Closing, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than ten
per cent of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to the Representatives, the Company and the Selling
Stockholder for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting
-33-
Underwriter, the Company or the Selling Stockholder. In any such case either the
Representatives or the Company shall have the right to postpone the Closing, but
in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, at any Option Closing, any
Underwriter or Underwriters shall fail or refuse to purchase Option Shares, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase Option Shares or (ii) purchase not less than
the number of Option Shares that such non-defaulting Underwriters would have
been obligated to purchase in the absence of such default. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 8. Any action taken under this Section 8 shall
not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
Termination. This Agreement shall be subject to termination in the sole
-----------
discretion of the Representatives by notice to the Company and the Selling
Stockholder given prior to any Closing Date in the event that the Company or
Selling Stockholder shall have failed, refused or been unable to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to any Closing Date, (a)
trading in securities generally on the New York Stock Exchange or the Nasdaq
National Market shall have been suspended or materially limited or minimum or
maximum prices shall have been established by or on, as the case may be, the
Commission or the New York Stock Exchange or the Nasdaq National Market; (b)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market; (c) a general moratorium on
commercial banking activities shall have been declared by either Federal or New
York State authorities; (d) there shall have occurred (i) an outbreak or
escalation of hostilities between the United States and any foreign power, (ii)
an outbreak or escalation of any other insurrection or armed conflict involving
the United States, or (iii) any other calamity or crisis or materially adverse
change in general economic, political or financial conditions having an effect
on the U.S. financial markets that, in the sole judgment of the Representatives,
makes it impractical or inadvisable to proceed with the public offering or the
delivery of the Shares as contemplated by the Registration Statement, as amended
as of the date hereof; or (e) the Company shall have, in the sole judgment of
the Representatives, sustained any material loss or interference with its
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, or there shall have been any materially
adverse change (including, without limitation, a change in management or
control), or constitute a development involving a prospective materially adverse
change, in the condition (financial or otherwise), management, earnings,
properties, business affairs or business prospects, stockholders' equity, net
worth or results of operations of the Company, except in each case as described
in or contemplated by the Prospectus (exclusive of any amendment or supplement
thereto). Termination of this Agreement pursuant to this Section 9 shall be
without liability of any party to any other party except for the liability of
the Company in relation to expenses as provided in Sections 4 and 10 hereof, the
liability of the Selling Stockholder in relation to expenses as provided in
Sections 4 and 10 hereof, the indemnity provided in Section 6 hereof and any
liability arising before or in relation to such termination.
Reimbursement of Expenses. If the sale of the Shares provided for herein is not
-------------------------
consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not
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satisfied or because of any termination pursuant to Section 9 hereof (other than
by reason of a default by any of the Underwriters), the Company shall reimburse
the Underwriters, severally upon demand, for all out-of-pocket expenses
(including fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Shares. If the
Company is required to make any payments to the Underwriters under this Section
10 because of the Selling Stockholder's refusal, inability or failure to satisfy
any condition to the obligations of the Underwriters set forth in Section 7
hereof, the Selling Stockholder shall reimburse the Company on demand for all
amounts so paid.
Information Supplied by Underwriters. The statements set forth in the last
------------------------------------
paragraph on the front cover page and under the heading "Underwriting" in any
Preliminary Prospectus or the Prospectus (to the extent such statements relate
to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Section 5(a)(ii) and Section 6 hereof. The Underwriters confirm that such
statements (to such extent) are correct.
Notices. In all dealings hereunder, you shall act on behalf of each of the
-------
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by the Representatives. Any notice or notification in any form to be
given under this Agreement may be delivered in person or sent by telex,
facsimile or telephone (subject in the case of a communication by telephone to
confirmation by telex or facsimile) addressed to:
in the case of the Company:
MIPS Technologies, Inc.
[Address]
Facsimile:
Telex:
Attention:
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in the case of the Underwriters:
Deutsche Xxxxxx Xxxxxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Telex:
Attention: Xxxxxx Xxxxxx, Esq.
in the case of the Selling Shareholder:
Silicon Graphics, Inc.
0000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
Facsimile:
Telex:
Attention:
Any notice under this Section 12 shall take effect, in the case of delivery, at
the time of delivery and, in the case of telex or facsimile, at the time of
dispatch.
Miscellaneous.
-------------
Time shall be of the essence of this Agreement.
The headings herein are inserted for convenience of reference only and
are not intended to be part of, or to affect, the meaning or
interpretation of this Agreement.
For purposes of this Agreement, (a) "business day" means any day on
which the New York Stock Exchange is open for trading, and (b)
"subsidiary" has the meaning set forth in Rule 405 under the
Securities Act.
This Agreement may be executed in any number of counterparts, all of
which, taken together, shall constitute one and the same Agreement and
any party may enter into this Agreement by executing a counterpart.
This Agreement shall inure to the benefit of and shall be binding upon
the several Underwriters, the Company, the Selling Stockholder and
their respective successors and legal representatives, and nothing
expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right,
remedy or claim under or 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 such persons and for the benefit of no other
person, except that (i) the indemnities of the Company and the Selling
Stockholder contained in Section 6 hereof shall also be for the
benefit of any person or persons who control any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act
-36-
and (ii) the indemnities of the Underwriters contained in Section 6
hereof shall also be for the benefit of the directors of the Company,
the officers of the Company who have signed the Registration
Statement, the Selling Stockholder and any person or persons who
control the Company or the Selling Stockholder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act. No
purchaser of Shares from any Underwriter shall be deemed a successor
because of such purchase.
The respective representations, warranties, agreements, covenants,
indemnities and other statements of the Company, its officers, the
Selling Stockholder and the several Underwriters set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement shall remain in full force and effect, regardless of
(i) any investigation made by or on behalf of the Company, any of its
officers or directors, the Selling Stockholder, any Underwriter or any
controlling person referred to in Section 6 hereof and (ii) delivery
of and payment for the Shares. The respective agreements, covenants,
indemnities and other statements set forth in Sections 4, 6 and 10
hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
Severability. It is the desire and intent of the parties that the provisions of
------------
this Agreement be enforced to the fullest extent permissible under the law and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, in the event that any provision of this Agreement would be held in
any jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
Governing Law. The validity and interpretation of this Agreement, and the terms
-------------
and conditions set forth herein, shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
provisions relating to conflicts of laws.
-37-
If the foregoing is in accordance with your understanding, please sign
and return to us six (6) counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in the Deutsche
Xxxxxx Xxxxxxxx Inc. Master Agreement Among Underwriters, the form of which
shall be submitted to the Company for examination upon request, but without
warranty on your part as to the authority of the signers thereof.
Very truly yours,
MIPS TECHNOLOGIES, INC.
By
-----------------------------
[Title]
SILICON GRAPHICS, INC.
By
-----------------------------
[Title]
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
DEUTSCHE XXXXXX XXXXXXXX
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXXXXX & XXXXX, LLC
By: DEUTSCHE XXXXXX XXXXXXXX
By
------------------------------
Name:
Title:
By
------------------------------
Name:
Title:
For itself and on behalf of the Representatives.
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SCHEDULE 1
----------
The Underwriters
Underwriter Underwriting commitment
---------------------------------------------- -----------------------------------------------
Deutsche Xxxxxx Xxxxxxxx......................
BancAmerica Xxxxxxxxx Xxxxxxxx................
Xxxxxxxxx & Xxxxx, LLC........................
____________________
Total........................................ 5,500,000 shares
