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EXHIBIT 1.1
EFTC Corporation
5,000,000 Shares*
Common Stock
($0.01 par value)
Form of Underwriting Agreement
New York, New York
June ___, 1998
Xxxxxxx Xxxxx Xxxxxx
X.X. Xxxxxxxx & Co.
BancAmerica Xxxxxxxxx Xxxxxxxx
Xxxxxxx and Company, Inc.
As Representatives of the several Underwriters,
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
EFTC Corporation, a Colorado corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, 3,200,000 shares of Common Stock, $0.01 par value ("Common
Stock"), of the Company and the persons named in Schedule II hereto (the
"Selling Shareholders") propose to sell to the several Underwriters 1,800,000
shares of Common Stock (said shares to be issued and sold by the Company and
shares to be sold by the Selling Shareholders collectively being hereinafter
called the "Underwritten Securities"). The Company also proposes to grant to
the Underwriters an option to purchase up to 750,000 additional shares of
Common Stock (the "Option Securities"; the Option Securities, together with the
Underwritten Securities, being hereinafter called the "Securities"). To the
extent there are no additional Underwriters listed on Schedule I other than
you, the term Representatives as used herein shall mean you, as Underwriters,
and the terms Representatives and Underwriters shall mean either the singular
or plural as the context requires. Any reference herein to the Registration
Statement, a Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any reference
herein to the terms "amend," "amendment" or "supplement" with respect to
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* Plus an option to purchase from EFTC Corporation up to 750,000
additional shares to cover over-allotments.
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the Registration Statement, any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange
Act after the Effective Date of the Registration Statement, or the issue date
of any Preliminary Prospectus or the Prospectus, as the case may be, deemed to
be incorporated therein by reference. Certain terms used herein are defined in
Section 17 hereof.
It is understood that a form of prospectus is to be used in
connection with the offering and sale of the Securities to United States and
Canadian Persons (as defined herein) which, for purposes of distribution to
Canadian Persons, shall have a Canadian "wrap-around" (the "Canadian Offering
Memorandum"). Insofar as they relate to offers or sales of Securities in
Canada, all references herein to the Preliminary Prospectus and the Prospectus
shall include the Canadian Offering Memorandum.
1. Representations and Warranties.
(a) The Company and the Joint Selling Shareholders
jointly and severally represent and warrant to, and agree with, each
Underwriter as set forth below in this Section 1(a).
(i) The Company meets the requirements for use of
Form S-3 under the Act and has prepared and filed with the
Commission a registration statement (file number 333-52137)
on Form S-3, including a related preliminary prospectus, for
the registration under the Act of the offering and sale of the
Securities. The Company may have filed one or more amendments
thereto, including a related preliminary prospectus, each of
which has previously been furnished to you. The Company will
next file with the Commission one of the following: either
(A) prior to the Effective Date of such registration
statement, a further amendment to such registration statement
(including the form of final prospectus) or (B) after the
Effective Date of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b). In the
case of clause (B), the Company has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the
Act and the rules thereunder to be included in such
registration statement and the Prospectus. As filed, such
amendment and form of final prospectus, or such final
prospectus, shall contain all Rule 430A Information, together
with all other such required information, and, except to the
extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company
has advised you, prior to the Execution Time, will be included
or made therein.
(ii) On the Effective Date, the Registration
Statement did or will, and when the Prospectus is first filed
(if required) in accordance with Rule 424(b) and on the
Closing Date (as defined herein) and on any date on which
Option Securities are purchased, if such date is not the
Closing Date (a "settlement date"), the Prospectus (and any
supplements thereto) will, comply in all material respects
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with the applicable requirements of the Act and the Exchange
Act and the respective rules thereunder; on the Effective Date
and at the Execution Time, the Registration Statement 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 in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), will not, and on the date of
any filing pursuant to Rule 424(b) and on the Closing Date and
any settlement date, the Prospectus (together with any
supplement thereto) will not, include any untrue statement of
a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that the Company and the Joint Selling
Shareholders make no representations or warranties as to the
information contained in or omitted from the Registration
Statement, or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished
herein or in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Prospectus (or
any supplement thereto).
(iii) The subsidiaries listed on Schedule III
hereto are the only subsidiaries of the Company.
(iv) Each of the Company and its subsidiaries has
been duly organized and is validly existing as a corporation
or limited liability company, as the case may be, in good
standing under the laws of the jurisdiction in which it is
organized with full corporate power and authority to own its
properties and conduct its business as described in the
prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification.
(v) All the outstanding shares of capital stock
of each subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Prospectus, all outstanding shares
of capital stock of the subsidiaries are owned by the Company
either directly or through wholly owned subsidiaries free and
clear of any security interests, claims, liens or
encumbrances.
(vi) The Company's authorized equity
capitalization is as set forth in the Prospectus; the capital
stock of the Company conforms in all material respects to the
description thereof contained in the Prospectus; the
outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and nonassessable;
the Securities being sold hereunder by the Company have been
duly and validly authorized and, when issued and delivered to
and paid for by the Underwriters pursuant to this Agreement,
will be fully paid and nonassessable; the Company has taken
the actions required by the published rules of the Nasdaq
Stock Market to qualify the Securities for inclusion in the
Xxxxxx
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Xxxxx Xxxxxx; the certificates for the Securities are in valid
and sufficient form; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Securities and, except as
set forth in the Prospectus, no options, warrants or other
rights to purchase, agreements or other obligations to issue,
or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership
interests in the Company are outstanding.
(vii) There is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required;
and the statements in each of (A) the Prospectus under the
headings "Risk Factors -- Protection of Know-how and Trade
Secrets; -- Environmental Compliance; -- Shares Eligible for
Future Sales; and -- Anti-Takeover Provisions" and
"Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Acquisitions", (B) the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1997, under the headings "Item 1. Business --Patents and
Trademarks," "Item 2. Description of Property" and "Item 3.
Legal Proceedings" and (C) the Company's Proxy Statement dated
April 21, 1998, under the heading "Certain Relationships and
Related Transactions," fairly summarize the matters therein
described.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid
and binding obligation of the Company enforceable in
accordance with its terms.
(ix) The Company is not and, after giving effect
to the offering and sale of the Securities and the application
of the proceeds thereof as described in the Prospectus, will
not be an "investment company" as defined in the Investment
Company Act of 1940, as amended.
(x) No consent, approval, authorization, filing
with or order of any court or governmental agency or body is
required in connection with the transactions contemplated
herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus.
(xi) Neither the issue and sale of the Securities
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation or imposition
of any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to, (A) the
charter or by-laws of the Company or any of its subsidiaries,
(B) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to
which the Company or any of its subsidiaries is a party
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or bound or to which its or their property is subject or (C)
any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over
the Company or any of its subsidiaries or any of its or their
properties.
(xii) No holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement except for such rights of the persons
and entities listed on Schedule IV hereto (the "Registration
Rights Shareholders") as have been effectively waived.
(xiii) The consolidated financial statements and
schedules of the Company and its consolidated subsidiaries
included in the Prospectus and the Registration Statement
present fairly in all material respects the financial
condition, results of operations and cash flows of the Company
as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act,
the Exchange Act and the respective rules and regulations
thereunder and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the
captions "Selected Consolidated Historical and Financial Data"
and "Prospectus Summary -- Summary Consolidated Historical
Financial Information" in the Prospectus and the Registration
Statement, fairly present, on the basis stated in the
Prospectus and the Registration Statement the information
included therein.
(xiv) No action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or
its or their property is pending or, to the best knowledge of
the Company, threatened that (A) could reasonably be expected
to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions
contemplated hereby or (B) could reasonably be expected to
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(xv) Each of the Company and each of its
subsidiaries, owns or leases all such properties as are
necessary to the conduct of its operations as currently
conducted; neither the Company nor any subsidiary is in
violation of any law, rule or regulation of any Federal, state
or local governmental or regulatory authority applicable to it
or is in non-compliance with any term or condition of, or has
failed to obtain and maintain in effect, any license,
certificate, permit or other governmental authorization
required for the ownership or lease of its property or the
conduct of its business, which violation, non-compliance or
failure would individually or in the aggregate have a material
adverse effect on the condition
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(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto); and the Company has not received notice of any
proceedings relating to the revocation or material
modification of any such license, certificate, permit or other
authorization.
(xvi) Neither the Company nor any subsidiary is in
violation or default of (A) any provision of its charter or
bylaws, (B) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument
to which it is a party or bound or to which its property is
subject or (C) any statute, law, rule, regulation, judgment,
order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or such subsidiary or any
of its properties, as applicable, except any such violation or
default which would not, singly or in the aggregate, result in
a material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(xvii) KPMG Peat Marwick LLP which has certified
certain financial statements of the Company or its
subsidiaries and delivered its report with respect to the
audited consolidated financial statements and schedules
included in the Prospectus, is an independent public
accountant with respect to the Company within the meaning of
the Act and the applicable published rules and regulations
thereunder.
(xviii) There are no transfer taxes or other similar
fees or charges under Federal law or the laws of any state, or
any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement
or the issuance by the Company, the sale by the Company or the
resale by the Joint Selling Shareholders of the Securities.
(xix) 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 material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto) 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
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faith or as would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto).
(xx) No labor disturbance by or dispute with the
employees of the Company or any of its subsidiaries exists or
is threatened or imminent that could reasonably be expected to
have a material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(xxi) The Company and each of its subsidiaries are
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 the Company
and its subsidiaries are engaged; neither the Company nor any
such subsidiary has been refused any insurance coverage sought
or applied for; and neither the Company nor any such
subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a
currently anticipated cost that would not have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto).
(xxii) No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends
to the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any
loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to
the Company or any other subsidiary of the Company, except as
described in or contemplated by the Prospectus (exclusive of
any amendment thereto).
(xxiii) Except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto), the Company
and its subsidiaries (A) possess all certificates,
authorizations and permits, whether from federal, state or
foreign regulatory authorities, necessary to conduct their
respective businesses, except where the failure to possess
such certificates, authorizations and permits would not,
singly or in the aggregate, result in a material adverse
change in the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business and (B) have
not received any notice of proceedings relating to the
revocation or modification of any such
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certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling
or finding, would result in a material adverse change in the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in
the ordinary course of business.
(xxiv) The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (A) transactions are
executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (C) access to assets is permitted only in
accordance with management's general or specific
authorization; and (D) the recorded accountability for assets
is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any
differences.
(xxv) The Company owns or has obtained licenses or
other rights for all patents, patent applications, trade and
service marks, trade names, copyrights, inventions, trade
secrets, technology, know-how and other intellectual
properties, including without limitation the rights to the AES
software described in the Prospectus (collectively, the
"Intellectual Property"), necessary for the conduct of the
Company's business as now conducted or as proposed to be
conducted in the Prospectus, except where the failure to so
own or obtain licenses or other rights would not singly or in
the aggregate have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a
whole. Except as set forth in the Prospectus under the
caption "Risk Factors -- Protection of Know-how and Trade
Secrets," (A) there are no rights of third parties to any such
Intellectual Property that would materially impair the rights
of the Company therein; (B) to the Company's knowledge there
is no material infringement by third parties of any such
Intellectual Property; (C) there is no pending or to the
Company's knowledge threatened action, suit, proceeding or
claim by others challenging the Company's rights in or to any
such Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such claim;
(D) there is no pending or to the Company's knowledge
threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual
Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (E) there is no
pending or to the Company's knowledge threatened action, suit,
proceeding or claim by others that the Company infringes or
otherwise violates any patent, trademark, copyright, trade
secret or other proprietary rights of others, and the Company
is unaware of any other fact which would form a reasonable
basis for any such claim; (F) there is no U.S. patent or
published U.S. patent application which contains claims that
dominate or may dominate any Intellectual Property described
in the Prospectus
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as being owned or used by or licensed to the Company or that
interferes with the issued or pending claims of any such
Intellectual Property; and (G) there is no prior art of which
the Company is aware that may render any U.S. patent held by
the Company invalid or any U.S. patent application held by the
Company unpatentable which has not been disclosed to the U.S.
Patent and Trademark Office.
(xxvi) Except as disclosed in the Registered
Statement and the Prospectus, the Company (A) does not have
any material lending or other relationship with any bank
affiliate or lending affiliate of Xxxxx Xxxxxx Inc., X.X.
Xxxxxxxx & Co., BancAmerica Xxxxxxxxx Xxxxxxxx or Xxxxxxx and
Company, Inc., and (B) does not intend to use any of the
proceeds from the sale of the Securities hereunder to repay
any outstanding debt owed to any affiliate of any of the
Underwriters.
(xxvii) The Indemnification Agreement, dated February
24, 1997, among Xxxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxx
Xxxxxxxx, Xxxxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx and Xxxxx
Xxxxxxxx (collectively, the "Current Electronics Indemnitors")
and the Company, has been duly authorized, executed and
delivered by the Company, has been duly executed and delivered
by the Current Electronics Indemnitors and constitutes a valid
and binding obligation of the Company and the Current
Electronics Indemnitors enforceable in accordance with its
terms.
(xxviii) The Indemnification Agreement, dated
September 30, 1997, among Xxxxx X. Xxxxxxxx, Xx. Grantor
Retained Income Trust u/a/d 12/31/89, Xxxxx X. Xxxxxxxx, Xx.,
Xxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xx. Revocable Living
Trust and Circuit Test International Limited Partnership, a
Florida limited partnership (collectively, the "Circuit Test
Indemnitors"; and Xxxxx X. Xxxxxxxx Xx. and Xxxx X. Xxxxxxxx,
together, are the "Circuit Test Individual Indemnitors") and
the Company, has been duly authorized, executed and delivered
by the Company and the Circuit Test Indemnitors (other than
the Circuit Test Individual Indemnitors), has been duly
executed and delivered by the Circuit Test Individual
Indemnitors and constitutes a valid and binding obligation of
the Company and the Circuit Test Indemnitors enforceable in
accordance with its terms.
(xxix) The Indemnification Agreement, dated March
31, 1998, among Xxxxxxx Xxxxxxxx and Xxxxxx Xxxxxx
(collectively, the "Personal Electronics Indemnitors") and the
Company, has been duly authorized, executed and delivered by
the Company, has been duly executed and delivered by the
Personal Electronics Indemnitors and constitutes a valid and
binding obligation of the Company and the Personal Electronics
Indemnitors enforceable in accordance with its terms.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the
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Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
(b) Each Selling Shareholder represents and warrants to,
and agrees with, each Underwriter as set forth below in this Section 1(b).
(i) Such Selling Shareholder is the lawful owner
of the Securities to be sold by such Selling Shareholder
hereunder and upon delivery of such Securities to the several
Underwriters and the payment by the several Underwriters of
the purchase price therefor as provided herein, assuming that
the several Underwriters have taken delivery of such
Securities in good faith and without notice of any "adverse
claim" (as defined in Section 8-102 of the Uniform Commercial
Code--Investment Securities in XxXxxxxx'x Consolidated Laws of
New York as it exists on the date hereof), the several
Underwriters will acquire such Securities free of any "adverse
claim."
(ii) Such Selling Shareholder has not taken and
will not take, directly or indirectly, any action designed to
or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities
and has not effected any sales of shares of Common Stock
which, if effected by the issuer, would be required to be
disclosed in response to Item 701 of Regulation S-K.
(iii) Certificates in negotiable form for such
Selling Shareholder's Securities other than, in the case of an
Exercising Selling Shareholder, the Exercise Securities have
been placed in custody or, in the case of Exercise Securities,
will be placed in custody no later than the first business day
following the Execution Time for delivery pursuant to the
terms of this Agreement, under a Custody Agreement executed
and delivered by such Selling Shareholders, in the form
heretofore furnished to you (the "Custody Agreement"), with
American Securities Transfer & Trust, Inc., as Custodian (the
"Custodian"); the Securities represented by the certificates
to be held in custody for each Selling Shareholder are subject
to the interests hereunder of the Underwriters, the Company
and the other Selling Shareholders; the arrangements for
custody and delivery of such certificates (including
certificates representing Exercise Securities), made by such
Selling Shareholder hereunder and under the Custody Agreement,
are not subject to termination or modification by any acts of
such Selling Shareholder, or by operation of law, whether by
the death or incapacity of such Selling Shareholder or the
occurrence of any other event; and if any such death,
incapacity or any other such event shall occur before the
delivery of such Securities hereunder, certificates for the
Securities will be delivered by the Custodian in accordance
with the terms and conditions of this Agreement and the
Custody Agreement as if such death, incapacity or other event
had not occurred, regardless of whether or not the Custodian
shall have received notice of such death, incapacity or other
event.
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(iv) No consent, approval, authorization or order
of any court or governmental agency or body is required for
the consummation by such Selling Shareholder of the
transactions contemplated herein, except such as may have been
obtained under the Act and such as may be required under the
federal and provincial securities laws of Canada or the blue
sky laws of any jurisdiction in connection with the purchase
and distribution of the Securities by the Underwriters and
such other approvals as have been obtained.
(v) Neither the sale of the Securities being sold
by such Selling Shareholder nor the consummation of any other
of the transactions herein contemplated by such Selling
Shareholder or the fulfillment of the terms hereof by such
Selling Shareholder will conflict with, result in a breach or
violation of, or constitute a default under any law or the
terms of any indenture or other agreement or instrument to
which such Selling Shareholder is a party or bound, or any
judgment, order or decree applicable to such Selling
Shareholder of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction
over such Selling Shareholder.
Any certificate signed by any Selling Shareholder or a
representative of a Selling Shareholder and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the Securities
shall be deemed a representation and warranty by such Selling Shareholder, as
to the matters covered thereby, to each Underwriter.
(c) Each Several Selling Shareholder represents and
warrants to, and agrees with, each Underwriter that such Several Selling
Shareholder has no reason to believe that the representations and warranties of
the Company and the Joint Selling Shareholders contained in Section 1(a) are
not true and correct, is familiar with the Registration Statement and has no
knowledge of any material fact, condition or information not disclosed in the
Prospectus or any supplement thereto which has adversely affected or may
adversely affect the business of the Company or any of its subsidiaries; and
the sale of Securities by such Several Selling Shareholder pursuant hereto is
not prompted by any information concerning the Company or any of its
subsidiaries which is not set forth in the Prospectus or any supplement
thereto.
In respect of any statements in or omissions from the
Registration Statement or the Prospectus or any supplements thereto made in
reliance upon and in conformity with information furnished in writing to the
Company by any Several Selling Shareholder specifically for use in connection
with the preparation thereof, such Several Selling Shareholder hereby makes the
same representations and warranties to each Underwriter as the Company makes to
such Underwriter under Section 1(a).
(d) Each Exercising Selling Shareholder represents and
warrants to, and agrees with, each Underwriter that it has delivered to the
Company (A) notice in the form attached hereto as Exhibit C of an irrevocable
election, effective as of the Execution Time, to exercise options for the
purchase of the number of shares of Common Stock shown opposite its name on
Schedule VI hereto and (B) irrevocable instructions to deliver the Exercise
Securities to the Custodian to be held by the Custodian pursuant to the Custody
Agreement; each such election
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and each such set of instructions is irrevocable and is not subject to
termination or modification by any acts of such Exercising Selling Shareholder,
or by operation of law, whether by the death or incapacity of such Exercising
Selling Shareholder or the occurrence of any other event; and if any such
death, incapacity or any other such event shall occur before the delivery of
such Exercise Securities pursuant to such instructions, certificates for the
Exercise Securities will be delivered by the Company to the Custodian in
accordance with the terms and conditions of such election and such instructions
as if such death, incapacity or other event had not occurred, regardless of
whether or not the Company shall have received notice of such death, incapacity
or other event.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees,
severally and not jointly, to sell 3,200,000 of the Underwritten Securities,
and each of the Selling Shareholders agree, severally and not jointly, to sell
the number of Underwritten Securities set forth opposite such Selling
Shareholder's name in Schedule II hereto to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Shareholders, at a purchase price of $ per share, the amount of
the Underwritten Securities set forth opposite such Underwriter's name in
Schedule I hereto.
(b) Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company hereby
grants an option to the several Underwriters to purchase, severally and not
jointly, up to 750,000 Option Securities at the same purchase price per share
as the Underwriters shall pay for the Underwritten Securities. Said option may
be exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in
part at any time (but not more than once) on or before the 30th day after the
date of the Prospectus upon written or telegraphic notice by the
Representatives to the Company setting forth the number of shares of the Option
Securities as to which the several Underwriters are exercising the option and
the settlement date. In the event that the Underwriters exercise less than
their full over- allotment option, the number of Option Securities to be
purchased by each Underwriter shall be the same percentage of the total number
of shares of the Option Securities to be purchased by the several Underwriters
as such Underwriter is purchasing of the Underwritten Securities, subject to
such adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for
the Underwritten Securities and the Option Securities (if the option provided
for in Section 2(b) hereof shall have been exercised on or before the third
Business Day prior to the Closing Date) shall be made at 10:00 AM, New York
City time, on , 1998, or at such time on such later date not more
than three Business Days after the foregoing date as the Representatives shall
designate, which date and time may be postponed by agreement among the
Representatives, the Company and the Selling Shareholders or as provided in
Section 9 hereof (such date and time of delivery and payment for the Securities
being herein called the "Closing Date"). Except as provided in the immediately
following paragraph, delivery of the Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several
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Underwriters through the Representatives of the respective aggregate purchase
prices of the Securities being sold by the Company and each of the Selling
Shareholders to or upon the order of the Company and the Custodian on behalf of
such Selling Shareholders, respectively, by wire transfer payable in same-day
funds to the accounts specified by the Company and an Attorney-in-Fact (as
defined in Exhibit B hereto) on behalf of the Selling Shareholders. Delivery
of the Underwritten Securities and the Option Securities shall be made through
the facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
Delivery of the Exercise Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives (A) to the
Company of the aggregate exercise price of the options described in Schedule VI
hereto as to which such Exercise Securities relate and (B) to the Custodian on
behalf of each of the Exercising Selling Shareholders of the excess, if any, of
the aggregate purchase price of the Exercise Securities being sold by such
Exercising Selling Shareholder over the amount paid with respect to such
Exercise Securities pursuant to clause (A) of this sentence, in each case, by
wire transfer payable in same day funds to the account specified pursuant to
the preceding paragraph.
Each Selling Shareholder will pay all applicable state
transfer taxes, if any, involved in the transfer to the several Underwriters of
the Securities to be purchased by them from such Selling Shareholder and the
respective Underwriters will pay any additional stock transfer taxes involved
in further transfers.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will
deliver the Option Securities (at the expense of the Company) to the
Representatives on the date specified by the Representatives (which shall be
within three Business Days after exercise of said option) for the respective
accounts of the several Underwriters, against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Company by wire transfer payable in same-day funds to the
accounts specified by the Company. If settlement for the Option Securities
occurs after the Closing Date, the Company will deliver to the Representatives
on the settlement date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon
receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the
several Underwriters propose to offer the Securities for sale to the public as
set forth in the Prospectus.
5. Agreements.
(a) The Company agrees with the several Underwriters
that:
(i) The Company will use its best efforts to
cause the Registration Statement, if not effective at the
Execution Time, and any amendment thereof, to become
effective. Prior to the termination of the offering of the
Securities, the
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Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any
such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause
the Prospectus, properly completed, and any supplement thereto
to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of
such timely filing. The Company will promptly advise the
Representatives (A) when the Registration Statement, if not
effective at the Execution Time, shall have become effective,
(B) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to
Rule 424(b) or when any Rule 462(b) Registration Statement
shall have been filed with the Commission, (C) when, prior to
termination of the offering of the Securities, any amendment
to the Registration Statement shall have been filed or become
effective, (D) of any request by the Commission or its staff
for any amendment of the Registration Statement, or any Rule
462(b) Registration Statement, or for any supplement to the
Prospectus or of any additional information, (E) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution
or threatening of any proceeding for that purpose and (F) of
the receipt by the Company of any notification with respect to
the suspension of the qualification of the Securities for sale
in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if issued, to obtain
as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to
the Securities is required to be delivered under the Act, any
event occurs as a result of which the Prospectus as then
supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be
necessary to amend the Registration Statement or supplement
the Prospectus to comply with the Act or the Exchange Act or
the respective rules thereunder, the Company promptly will (A)
prepare and file with the Commission, subject to the second
sentence of Section 5(a)(i) hereof, an amendment or supplement
which will correct such statement or omission or effect such
compliance and (B) supply any supplemented Prospectus to you
in such quantities as you may reasonably request.
(iii) As soon as practicable, the Company will make
generally available to its security holders and to the
Representatives an earnings statement or
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statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(iv) The Company will furnish to the
Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long
as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and any supplement thereto as
the Representatives may reasonably request. The Company will
pay the expenses of printing or other production of all
documents relating to the offering.
(v) The Company will in good faith seek to
arrange, if necessary and with the cooperation of the
Underwriters, for the qualification of the Securities for sale
under the laws of such jurisdictions as the Representatives
may designate, will maintain such qualifications in effect so
long as required for the distribution of the Securities and
will pay any fee of the National Association of Securities
Dealers, Inc. (the "NASD"), in connection with its review of
the offering; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where
it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(vi) The Company will not, without the prior
written consent of Xxxxx Xxxxxx Inc., for a period of 120 days
following the Execution Time, offer, sell or contract to sell,
or otherwise dispose of (or enter into any transaction which
is designed to, or could be expected to, result in the
disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by
the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company)
directly or indirectly, or announce the offering of, any other
shares of Common Stock or any securities convertible into, or
exchangeable for, shares of Common Stock; provided, however,
that the Company may issue and sell Common Stock pursuant to
any director or employee stock option plan, stock ownership
plan or dividend reinvestment plan of the Company in effect at
the Execution Time and the Company may issue Common Stock
issuable upon the conversion of securities or the exercise of
warrants outstanding at the Execution Time.
(b) Each Selling Shareholder agrees with the several
Underwriters that it will, at the Execution Time, furnish to the
Representatives through the Company the letter specified in Section 6(i)
hereof.
(c) Such Selling Stockholder will advise you promptly,
and if requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Securities by an underwriter or dealer
may be required under the Act, of any material change in the
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information in the Registration Statement or the Prospectus relating to such
Selling Stockholder that comes to the attention of such Selling Stockholder.
6. Conditions to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Underwritten Securities and
the Option Securities, as the case may be, shall be subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Shareholders contained herein as of the Execution Time, the Closing Date and
any settlement date pursuant to Section 3 hereof, to the accuracy of the
statements of the Company and the Selling Shareholders made in any certificates
pursuant to the provisions hereof, to the performance by the Company and the
Selling Shareholders of their respective obligations hereunder and to the
following additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the Representatives
agree in writing to a later time, the Registration Statement will
become effective not later than (A) 6:00 PM New York City time on the
date of determination of the public offering price, if such
determination occurred at or prior to 3:00 PM New York City time on
such date or (B) 9:30 AM on the Business Day following the day on
which the public offering price was determined, if such determination
occurred after 3:00 PM New York City time on such date; if filing of
the Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have caused Holme Xxxxxxx & Xxxx
LLP, counsel for the Company, to have furnished to the Representatives
their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) the Company and each of its subsidiaries has
been duly incorporated or organized, as applicable, and is
validly existing as a corporation or limited liability company
in good standing under the laws of the jurisdiction in which
it is incorporated or organized, with full corporate power and
authority to own its properties and conduct its business as
described in the Prospectus;
(ii) all the outstanding shares of capital stock
of each subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Prospectus, all outstanding shares
of capital stock or membership interests, as applicable, of
the subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests,
claims, liens or encumbrances;
(iii) the Company's authorized equity
capitalization is as set forth in the Prospectus; the capital
stock of the Company conforms in all material respects to the
description thereof contained in the Prospectus; the
outstanding shares of
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Common Stock other than the Securities being issued by the
Company have been duly and validly authorized and issued and
are fully paid and nonassessable; the Securities being sold
hereunder by the Company have been duly and validly
authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; the Company has taken the actions
required by the published rules of the Nasdaq Stock Market to
qualify the Securities for inclusion in the Nasdaq Stock
Market; the certificates for the Securities are in valid and
sufficient form; the holders of outstanding shares of capital
stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities; and, to our knowledge
after due inquiry, except as set forth in the Prospectus, no
options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are
outstanding;
(iv) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or
its or their property of a character required to be disclosed
in the Registration Statement that is not adequately disclosed
in the Prospectus, and there is no franchise, contract or
other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit thereto, that is not described or filed as required;
and the statements in each of (A) the Prospectus under the
headings "Risk Factors -- Protection of Know-how and Trade
Secrets; -- Environmental Compliance; -- Shares Eligible for
Future Sales; and -- Anti-Takeover Provisions" and
"Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Acquisitions", (B) the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1996, under the headings "Item 1. Business --Patents and
Trademarks," "Item 2. Description of Property" and "Item 3.
Legal Proceedings" and (C) the Company's Proxy Statement dated
April 21, 1998, under the heading "Certain Relationships and
Related Transactions," to the extent that such statements
purport to describe certain provisions of federal laws, laws
of the State of Colorado, rules or regulations, the Company's
charter and by-laws, or contracts to which the Company is a
party, have been reviewed by such counsel and fairly summarize
the matters therein described;
(v) the Registration Statement has become
effective under the Act; any required filing of the
Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose
have been instituted or threatened and the Registration
Statement and the Prospectus (other than the financial
statements and other financial information contained therein,
as to which such counsel need express no opinion) comply as to
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form in all material respects with the applicable requirements
of the Act and the Exchange Act and the respective rules
thereunder;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the Company is not and, after giving effect
to the offering and sale of the Securities and the application
of the proceeds thereof as described in the Prospectus, will
not be an "investment company" as defined in the Investment
Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing
with or order of any court or governmental agency or body is
required for the consummation by the Company of the
transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this Agreement and
in the Prospectus;
(ix) neither the issue and sale of the Securities,
nor the consummation by the Company of any other of the
transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach or
violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or its subsidiaries
pursuant to, (A) the articles of incorporation, by-laws or
other charter documents of the Company or its subsidiaries or
(B) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument known
to such counsel after due inquiry to which the Company or its
subsidiaries is a party or bound or to which its property is
subject, or (C) any statute, law, rule, regulation, judgment,
order or decree known to such counsel after due inquiry to be
applicable to the Company or its subsidiaries of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the
Company or its subsidiaries or any of its or their properties;
and
(x) to such Counsel's knowledge after due inquiry
no holders of securities of the Company have rights to the
registration of such securities under the Registration
Statement except for such rights of the Registration Rights
Shareholders as have been effectively waived.
In addition, such counsel shall state that nothing has come to
such counsel's attention that leads such counsel to believe that on
the Effective Date or at the Execution Time the Registration Statement
(other than the financial statements, including the notes thereto, and
supporting schedules or other financial data contained therein, as to
which such counsel need not comment) contains or contained any untrue
statement of a material fact or omitted or omits to state any material
fact required to be stated therein or
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necessary in order to make the statements therein not misleading, or
that the Prospectus (other than the financial statements, including
the notes thereto, and supporting schedules or other financial data
contained therein, as to which such counsel need not comment)
contained or contains, as of its date or as of the Closing Date, any
untrue statement of a material fact or omitted or omits, as of such
dates, to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of Colorado, the State of New York or the Federal laws
of the United States, to the extent they deem proper and specified in
such opinion, upon the opinion of other counsel of good standing whom
they believe to be reliable and who are satisfactory to counsel for
the Underwriters and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company
and public officials. References to the Prospectus in this paragraph
(b) include any supplements thereto at the Closing Date.
(c) The Selling Shareholders shall have caused Holme
Xxxxxxx & Xxxx LLP to have furnished to the Representatives their
opinion, dated the Closing Date, and addressed to the Representatives,
to the effect that:
(i) each Selling Shareholder has duly executed
and delivered this Agreement, the Custody Agreement and the
Power-of-Attorney, the Custody Agreement is valid and binding
on the Selling Shareholders and each Selling Shareholder has
full legal right and authority to sell, transfer and deliver
in the manner provided in this Agreement and the Custody
Agreement the Securities being sold by such Selling
Shareholder hereunder;
(ii) the delivery by each Selling Shareholder to
the several Underwriters of certificates for the Securities
being sold hereunder by such Selling Shareholder against
payment therefor as provided herein, will pass good and
marketable title to such Securities to the several
Underwriters, free and clear of all liens, encumbrances,
equities and claims whatsoever;
(iii) no consent, approval, authorization, or order
of any court or governmental agency or body is required for
the consummation by any Selling Shareholder of the
transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in such
opinion) as have been obtained; and
(iv) neither the sale of the Securities being sold
by any Selling Shareholder, nor the consummation by any
Selling Shareholder of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof by any
Selling Shareholder will conflict with, result in a breach or
violation of, or
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constitute a default under (A) any law or the terms of any
indenture or other agreement or instrument known to such
counsel and to which any Selling Shareholder is a party or
bound, or any judgment, order or decree known to such counsel
to be applicable to any Selling Shareholder of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over any Selling Shareholder
[or (B) in the case of a Selling Shareholder that is a
partnership or trust, the partnership agreement, trust
agreement or other organizational documents of such Selling
Shareholder.]
In rendering such opinion, such counsel may rely (a) as to matters
involving the application of laws of any jurisdiction other than the
State of Colorado, the State of New York or the Federal laws of the
United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the
Underwriters, and (b) as to matters of fact, to the extent they deem
proper, on certificates of the Selling Shareholders and public
officials.
(d) The Representatives shall have received from Cleary,
Gottlieb, Xxxxx and Xxxxxxxx, counsel for the Underwriters, such
opinion or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectus (together with
any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the
Representatives a certificate of the Company, signed by the Chairman
of the Board or the President and the principal financial or
accounting officer of the Company, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined
the Registration Statement, the Prospectus, any supplements to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus (exclusive of any supplement thereto), there has
been no material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the
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ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto).
(f) Each Selling Shareholder shall have furnished to the
Representatives a certificate, signed, in the case of a Selling
Shareholder that is other than a natural person, by a representative
of such Selling Shareholder satisfactory to the Representatives and,
in any other case, by such Selling Shareholder, dated the Closing
Date, to the effect that the signer of such certificate has carefully
examined the Registration Statement, the Prospectus, any supplement to
the Prospectus and this Agreement and that the representations and
warranties of such Selling Shareholder in this Agreement are true and
correct in all material respects on and as of the Closing Date to the
same effect as if made on the Closing Date.
(g) The Company shall have caused KPMG Peat Marwick LLP
to have furnished to the Representatives, at the Execution Time and at
the Closing Date, letters, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable published rules and regulations thereunder and that they
have performed a review of the unaudited interim financial information
of the Company for the three-month period ended March 31, 1998, and as
of March 31, 1998 in accordance with Statement on Auditing Standards
No. 71 and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included or
incorporated by reference in the Registration Statement and
the Prospectus and reported on by them comply as to form in
all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related
published rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review, in accordance with
standards established under Statement on Auditing Standards
No. 71, of the unaudited interim financial information for the
three-month period ended March 31, 1998, and as of March 31,
1998 , incorporated by reference in the Registration Statement
and the Prospectus; carrying out certain specified procedures
(but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
Shareholders, the Board of Directors of the Company and its
compensation and audit committees, and minutes of the meetings
of the shareholders and Boards of Directors of the Company's
subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions
and events subsequent to December 31, 1997, nothing came to
their attention which caused them to believe that:
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(1) any unaudited financial statements
included or incorporated by
reference in the Registration
Statement and the Prospectus do not
comply as to form in all material
respects with applicable accounting
requirements of the Act and with the
published rules and regulations of
the Commission with respect to
financial statements included or
incorporated by reference in
quarterly reports on Form 10-Q under
the Exchange Act; and said unaudited
financial statements are not in
conformity with generally accepted
accounting principles applied on a
basis substantially consistent with
that of the audited financial
statements included or incorporated
by reference in the Registration
Statement and the Prospectus;
(2) with respect to the period
subsequent to March 31, 1998, there
were any changes, at a specified
date not more than three days prior
to the date of the letter, in the
long-term debt of the Company and
its subsidiaries or capital stock of
the Company or decreases in the
shareholders' equity of the Company
or decreases in working capital of
the Company and its subsidiaries as
compared with the amounts shown on
the March 31, 1998, consolidated
balance sheet included or
incorporated by reference 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 the corresponding
period in the preceding quarter in
net revenues or income before income
taxes or in total or per share
amounts of net income of the Company
and its subsidiaries and operating
income, except in all instances for
changes or decreases set forth in
such letter, in which case the
letter shall be accompanied by an
explanation by the Company as to the
significance thereof unless said
explanation is not deemed necessary
by the Representatives; or
(3) the information included or
incorporated by reference in the
Registration Statement and
Prospectus in response to Regulation
S-K, Item 301 (Selected Financial
Data), Item 402 (Executive
Compensation), and, to the extent
required to be disclosed, Item 302
(Supplementary Financial
Information) is not in conformity
with the applicable disclosure
requirements of Regulation S-K; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or
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statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting
records of the Company and its subsidiaries) set forth in the
Registration Statement and the Prospectus, including the
information set forth under the captions "Summary Financial
Data," "Capitalization," "Selected Consolidated Financial
Data" and "Management's Discussion and Analysis of Financial
Conditions and Results of Operations" in the Prospectus, the
information included or incorporated from Items 1, 2, 6, 7 and
11 of the Company's Annual Report on Form 10-K, incorporated
in the Registration Statement and the Prospectus, the
information included in the "Management's Discussion and
Analysis of Results of Operations and Financial Condition"
included or incorporated in the Company's Quarterly Reports on
Form 10-Q incorporated in the Registration Statement and the
Prospectus and the financial statements included or
incorporated in the Form 8-K and Form 8-K/A incorporated in
the Registration Statement and the Prospectus, agrees with the
accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (g) includes any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (A) any change or
decrease specified in the letter or letters referred to in Section
6(g) hereof or (B) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Prospectus (exclusive of any supplement
thereto) the effect of which, in any case referred to in clause (A) or
(B) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Prospectus (exclusive of any supplement thereto).
(i) At the Execution Time, the Company shall have
furnished to the Representatives a letter substantially in the form of
Exhibit A hereto from (A) each officer and director of the Company,
(B) each Selling Shareholder and (C) each other shareholder, in each
case listed in Schedule V hereto, addressed to the Representatives, in
which each such person agrees not to offer, sell, contract to sell,
pledge or otherwise dispose of, or file a registration statement with
the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act with
respect to, any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such
capital stock, or publicly announce an intention to effect any such
transaction, for a period of 120 days, in each case as specified in
Schedule V hereto, after
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the date of this Agreement, other than (x) any shares of Common Stock
to be sold hereunder, (y) any option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the
Prospectus to which this Agreement relates and (z) other than shares
of Common Stock disposed of as bona fide gifts approved by Xxxxx
Xxxxxx Inc.
(j) The Securities shall be qualified for inclusion on
the Nasdaq Stock Market upon issuance, and satisfactory evidence of
such actions shall have been provided to the Representative.
(k) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company and
each Selling Shareholder in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for
the Underwriters, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If the sale
of the Securities provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because
of any refusal, inability or failure on the part of the Company or any Selling
Shareholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through Xxxxx Xxxxxx Inc. on demand for
all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities. If the Company is required to make any
payments to the Underwriters under this Section 7 because of any Selling
Shareholder's refusal, inability or failure to satisfy any condition to the
obligations of the Underwriters set forth in Section 6, the Selling
Shareholders pro rata in proportion to the percentage of Securities to be sold
by each shall reimburse the Company on demand for all amounts so paid.
8. Indemnification and Contribution.
(a) (i) The Company and the Joint Selling
Shareholders jointly and severally agree to indemnify and hold
harmless each Underwriter, the directors, officers,
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employees and agents of each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Exchange
Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the
Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law 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 of a material fact contained in the registration statement
for the registration of the Securities as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or the Prospectus,
or in any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company and the Joint Selling Shareholders 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 such untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion
therein. This indemnity agreement will be in addition to any
liability which the Company or the Joint Selling Shareholders may
otherwise have.
(ii) Each Several Selling Shareholder severally agrees to
indemnify and hold harmless the Company, each of its directors, each
of its officers who signs the Registration Statement, each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls the Company or any
Underwriter within the meaning of either the Act or the Exchange Act
to the same extent as the foregoing indemnity from the Company and the
Joint Selling Shareholders to each Underwriter, but only with
reference to written information furnished to the Company by or on
behalf of such Several Selling Shareholder specifically for inclusion
in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any
Several Selling Shareholder may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each
of its officers who signs the Registration Statement, and each person
who controls the Company within the meaning of either the Act or the
Exchange Act and each Selling Shareholder, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only
with reference to written information relating to such Underwriter
furnished to the Company by or on behalf of such Underwriter through
the Representatives specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise
have. The Company and each Selling Shareholder acknowledge that the
statements set forth in the last paragraph of the cover page regarding
delivery of the Securities, the legend in block capital letters
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on page 2 related to stabilization, syndicate covering transactions
and penalty bids and, under the heading "Underwriting," (A) the
sentences related to concessions and reallowances and (B) the
paragraph related to stabilization, syndicate covering transactions
and penalty bids in any Preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf
of the several Underwriters for inclusion in any Preliminary
Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (A) will not relieve it
from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial
rights and defenses and (B) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except
as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the
right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (A) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, (B) the actual or potential
defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (C)
the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action or (D)
the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim,
action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph
(a) or (b) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any
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reason, the Company and the Selling Shareholders, jointly and
severally, and the Underwriters severally agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company, one or
more of the Selling Shareholders and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Shareholders
on the one hand and by the Underwriters on the other from the offering
of the Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or
commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Selling
Shareholders, jointly and severally, and the Underwriters severally
shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company
and the Selling Shareholders on the one hand and of the Underwriters
on the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Selling
Shareholders shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) received by them, and
benefits received by the Underwriters shall be deemed to be equal to
the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or
any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
provided by the Company or the Selling Shareholders on the one hand or
the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Company, the
Selling Shareholders and the Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights
to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
(e) Notwithstanding any other provision of this agreement
to the contrary:
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(i) the liability of each Selling Shareholder
under such Selling Shareholder's representations and
warranties contained in Section 1 hereof and under the
indemnity and contribution agreements contained in this
Section 8 shall be limited to an amount equal to the initial
public offering price of the Securities sold by such Selling
Shareholder to the Underwriters;
(ii) none of the Joint Selling Shareholders shall
have any liability with respect to the representations and
warranties contained in Section 1(a) hereof, except to the
extent that an Underwriter, or a director, officer or agent of
an Underwriter or any person who controls any Underwriter
within the meaning of either the Act or the Exchange Act is
unable to satisfy a claim against the Company in respect of a
breach or alleged breach of such representations and
warranties; none of the Several Selling Shareholders shall
have any liability with respect to the representations and
warranties contained in Section 1(c), except to the extent
that an Underwriter, or a director, officer or agent of an
Underwriter or any person who controls any Underwriter is
unable to satisfy a claim against the Company in respect of a
breach of the representations and warranties of the Company
and the Joint Selling Shareholders referred to therein; and
(iii) none of the Selling Shareholders shall have
any liability under the indemnity and contribution agreements
contained in this Section 8, except to the extent that the
indemnification and contribution obligations of the Company
provided for in this Section 8 are unavailable or insufficient
by reason of a Payment Default to hold an Underwriter, or a
director, officer or agent of an Underwriter or any person who
controls any Underwriter within the meaning of either the Act
or the Exchange Act harmless in respect of any losses, claims,
damages or liabilities (or actions in respect thereof)
referred to in such sections to which such Underwriter or such
other person may be subject;
provided, however, that nothing in this paragraph (f) shall prohibit
the Underwriters from joining any Selling Shareholder as a party in
any claim (including without limitation any counterclaim or
cross-claim) against the Company for breach of the representations and
warranties contained in Section 1 hereof or for payment under the
indemnity and contribution agreements contained in this Section 8.
The Company and the Selling Shareholders may agree, as among
themselves and without limiting the rights of the Underwriters under
this Agreement, as to the respective amounts of such liability for
which they each shall be responsible.
9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
amount of Securities set forth opposite their names in Schedule I hereto bears
to the aggregate amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the
event
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that the aggregate amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Underwriter, the Selling Shareholders or the Company. In the
event of a default by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Representatives shall determine in order that the required changes
in the Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company,
the Selling Shareholders and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on either of such Exchange or National Market, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war,
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the sole judgment of the Representatives, impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers, of each Selling Shareholder and of
the Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter, any Selling Shareholder or the Company or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections
7 and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Representatives,
will be mailed, delivered or telefaxed to the Xxxxxxx Xxxxx Xxxxxx General
Counsel (fax no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx
Xxxxx Barney, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
General Counsel; or, if sent to the Company, will be mailed, delivered or
telefaxed with confirmation to EFTC Corporation (fax no.: (000) 000-0000) and
confirmed to it at EFTC Corporation, 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxxxx, Chief Financial Officer, or
if sent to the Selling Shareholders, will be mailed,
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delivered or telefaxed with confirmation to Xxxxxx X. Xxxxxxxxxx (fax no.:
(000) 000-0000) and confirmed to them at the addresses set forth in Schedule II
hereto.
13. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in
this Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New
York City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission
promulgated thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Exercise Securities" shall mean the numbers of shares listed
on Schedule VI to be issued upon exercise of outstanding options
listed in Schedule VI and to be delivered by the Exercising
Shareholders to the several Underwriters on the Closing Date.
"Exercising Selling Shareholders" shall mean the Selling
Shareholders appearing on Schedule VI hereto.
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"Joint Selling Shareholders" shall mean the Selling
Shareholders other than Xxxxxx Xxxxx, Xxxxx Xxxxxx and August X.
Xxxxxxxxx.
"Payment Default" means the occurrence of each of the
following events:
(1) the Underwriters have given written notice (in accordance
with Section 12 hereof) to the Company of a claim under the
indemnification or contribution provisions contained in
Section 8 hereof; and
(2) the Company shall have failed to satisfy such claim
within 30 days of receipt of such notice.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in Section 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that
omits Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in Section 1(a) above, including incorporated documents,
exhibits and financial statements, as amended at the Execution Time
(or, if not effective at the Execution Time, in the form in which it
shall become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes effective
prior to the Closing Date, shall also mean such registration statement
as so amended or such Rule 462(b) Registration Statement, as the case
may be. Such term shall include any Rule 430A Information deemed to
be included therein at the Effective Date as provided by Rule 430A.
"Rule 424," "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement
referred to in Section 1(a) hereof.
"Xxxxxxx Xxxxx Xxxxxx" shall mean Xxxxx Xxxxxx Inc. or Salomon
Brothers Inc, to the extent that either such party is a signatory to
this Agreement.
"Several Selling Shareholders" shall mean the Selling
Shareholders other than the Joint Shareholders.
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"United States or Canadian Person" shall mean any person who
is a national or resident of the United States or Canada, any
corporation, partnership, or other entity created or organized in or
under the laws of the United States or Canada or of any political
subdivision thereof, or any estate or trust the income of which is
subject to United States or Canadian Federal income taxation,
regardless of its source (other than any non- United States or
non-Canadian branch of any United States or Canadian Person), and
shall include any United States or Canadian branch of a person other
than a United States or Canadian Person.
"U.S." or "United States" shall mean the United States of
America (including the states thereof and the District of Columbia),
its territories, its possessions and other areas subject to its
jurisdiction.
18. Canada. Each of the Underwriters hereby covenants
and agrees that it will not distribute the Securities in such a manner as to
require the filing of a prospectus or similar document (excluding a private
placement offering memorandum) with respect to the Securities under the laws of
any Province or Territory in Canada.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Shareholders and the several Underwriters.
Very truly yours,
EFTC Corporation
By:
-------------------------------------
Name:
Title:
Xxxxxx Xxxxxx
Xxx Xxxxxxxx
Xxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Xxxxx X. XxXxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxx Xxxxxxxx
August X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx
By:
--------------------------------------
Name:
Title: Attorney-in-Fact
for each of the Selling
Shareholders
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The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxx Xxxxxx Inc.
X.X. Xxxxxxxx & Co.
BancAmerica Xxxxxxxxx Xxxxxxxx
Xxxxxxx and Company, Inc.
By: Xxxxx Xxxxxx Inc.
By:
-----------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
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EXHIBIT A
Letterhead of officer, director or major shareholder of
EFTC Corporation
EFTC Corporation
Public Offering of Common Stock
May __, 1998
Xxxxxxx Xxxxx Xxxxxx
X.X. Xxxxxxxx & Co.
BancAmerica Xxxxxxxxx Xxxxxxxx
Xxxxxxx and Company, Inc.
As Representatives of the several Underwriters,
c/o Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between EFTC
Corporation, a Colorado corporation (the "Company"), the Selling Shareholders
(as specified in the Underwriting Agreement) and each of you as representatives
of a group of Underwriters named therein, relating to an underwritten public
offering of Common Stock, $0.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge or
otherwise dispose of, or file (or participate in the filing of) a registration
statement with the Securities and Exchange Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder with respect to, any shares of
capital stock of the Company or any securities convertible into or exercisable
or exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, for a period of 120 days after the date of this
Agreement, other than (i) any shares of Common Stock to be sold pursuant to the
Underwriting Agreement, (ii) any option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the prospectus to
which the Underwriting Agreement relates and (iii) shares of Common Stock
disposed of as bona fide gifts approved by Xxxxx Xxxxxx Inc.
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If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting
Agreement), the agreement set forth above shall likewise be terminated.
Yours very truly,
Signature of officer, director or major
shareholder
Name and address of officer, director or
major shareholder
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EXHIBIT B
(Name of Selling Stockholder)
CUSTODY AGREEMENT AND POWER OF ATTORNEY
for Sale of Common Stock of
EFTC CORPORATION
Xxxxxx X. Xxxxxxxxxx
August X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxxx
(each as Attorney-in-Fact as provided hereunder)
c/o
American Securities Transfer & Trust, Inc.
(as Custodian as provided hereunder)
Ladies and Gentlemen:
The undersigned (a "Selling Stockholder"; one of the several
"Selling Shareholders" named in the Underwriting Agreement referred to below)
proposes to sell certain shares of common stock, $.01 par value per share (the
"Common Stock"), of EFTC Corporation, a Colorado corporation (the "Company"),
to the Underwriters (the "Underwriters") for whom Xxxxx Xxxxxx Inc., X.X.
Xxxxxxxx & Co., BankAmerica Xxxxxxxxx Xxxxxxxx and Xxxxxxx and Company, Inc.
will act as representatives (the "Representatives") for distribution under a
Registration Statement on Form S-3 (the "Registration Statement") to the public
at a price and on terms to be hereafter determined. It is understood that at
this time there is no commitment on the part of the Underwriters to purchase
any shares of Common Stock and no assurance that an offering of Common Stock
will take place.
1. Appointment and Powers of Attorney-in-Fact.
A. The undersigned hereby irrevocably constitutes and
appoints Xxxxxx X. Xxxxxxxxxx, August X. Xxxxxxxxx and Xxxxx X. Xxxxxxxxxx as
the undersigned's agent and attorney-in-fact (each, the "Attorney-in-Fact"),
each with full power and authority to act without the other and with full power
of substitution to each, with respect to all matters arising in connection with
the public offering and sale by the undersigned of the Securities (as defined
in the Underwriting Agreement), including, but not limited to, the power and
authority on behalf of the undersigned to do or cause to be done any of the
following things:
38
(i) execute and deliver on behalf of the undersigned an
underwriting agreement (the "Underwriting Agreement"), substantially in the
form of the draft dated May __, 1998, delivered to the undersigned herewith,
receipt of which is acknowledged, but with such insertions, changes, additions
(including the price at which the Securities will be initially offered to the
public by the Underwriters and the underwriting discount to be received by the
Underwriters) or deletions as the Attorney-in-Fact, acting in his sole
discretion, shall approve, which approval shall be conclusively evidenced by
his execution of the Underwriting Agreement, including the exercise of all
authority thereunder vested in the undersigned;
(ii) sell, assign, transfer and deliver the Securities
to the Underwriters pursuant to the Underwriting Agreement and deliver to the
Underwriters certificates for the Securities so sold (the price for such shares
to be the price specified in Section 2 of the Underwriting Agreement);
(iii) endorse (in blank or otherwise) on behalf of the
undersigned the certificate or certificates for the Securities to be sold by
the undersigned pursuant to the Underwriting Agreement or to execute and
deliver a stock power or powers with respect to such certificates;
(iv) take any and all steps deemed necessary or
desirable by the Attorney-in-Fact in connection with the registration of the
Securities under the Securities Act of 1933, as amended (the "Securities Act"
), the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
under the securities or "blue sky" laws of various states and jurisdictions,
including, without limitation, the giving or making of such undertakings,
representations and agreements and the taking of such other steps as the
Attorney-in-Fact may deem necessary or advisable;
(v) instruct the Company and the Custodian, as
hereinafter defined, on all matters pertaining to the sale of the Securities
and delivery of certificates therefor;
(vi) make any assurances, communications and reports
(including in the form of a signed certificate pursuant to Section 6(f). of the
Underwriting Agreement) for and on behalf of the undersigned to the
Underwriters, which may be necessary or advisable for facilitating the sale of
the Securities, or to appropriate state or governmental authorities, which may
be necessary or advisable for effecting the registration of the Securities
under the state securities or blue sky laws;
(vii) provide, in accordance with the Underwriting
Agreement, for the payment of certain expenses of the offering and sale of the
Common Stock covered by the Registration Statement;
(viii) to exercise any power conferred upon, and to
take any action authorized to be taken by, the undersigned pursuant to the
Underwriting Agreement, in the sole discretion of the Attorney-in-Fact;
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39
(ix) certify on behalf of the undersigned to any
transfer agent or registrar such instruction and such assurance of the
genuineness of any document as may be reasonably required in connection with
the consummation of the proposed sale of the Option Securities; and
(x) otherwise take all actions and do all things
necessary or proper, required, contemplated or deemed advisable or desirable by
the Attorney-in-Fact in his discretion, including the execution and delivery of
any documents, and generally act for and in the name of the undersigned with
respect to the sale of the Option Securities to the Underwriters and the
reoffering of the Option Securities by the Underwriters as fully as could the
undersigned if then personally present and acting.
B. Each Attorney-in-Fact may act alone in exercising the
rights and powers conferred on the Attorney- in-Fact by this Custody Agreement
and Power of Attorney (the "Agreement"). Each Attorney-in-Fact is hereby
empowered to determine individually, in his sole and absolute discretion, the
time or times when, the purposes for which, and the manner in which, any power
herein conferred upon the Attorney-in-Fact shall be exercised.
C. The Custodian (as defined below), the Underwriters, the
Company and all other persons dealing with the Attorney-in-Fact as such may
rely and act upon any writing believed in good faith to be signed by the
Attorney-in-Fact.
D. The Attorney-in-Fact shall not receive any compensation for
his services rendered hereunder, except that he shall be entitled to cause the
Custodian to pay, from the proceeds payable to the undersigned, the
undersigned's proportionate share of any out-of-pocket expenses incurred under
this Agreement.
2. Appointment of Custodian; Deposit of Shares.
A. In connection with and to facilitate the sale of the
Securities to the Underwriters, the undersigned hereby appoints American
Securities Transfer & Trust, Inc. as custodian (the "Custodian") and herewith
deposits with the Custodian one or more certificates for Common Stock that in
the aggregate represent not less than the excess, if any, of (a) the total
number of Securities to be sold by the undersigned to the Underwriters, the
number of such securities being set forth on Schedule II to the Underwriting
Agreement over (b) the total number of Securities to be delivered by the
Company to the Custodian pursuant to the Irrevocable Instructions (as defined
below). Each such certificate so deposited on the date hereof is in negotiable
and proper deliverable form, endorsed in blank with the signature of the
undersigned or the Attorney-in-Fact thereon guaranteed by a commercial bank or
trust company in the United States or by a member firm of the New York Stock
Exchange, or is accompanied by a duly executed stock power or powers in blank,
bearing the signature of the undersigned or the Attorney-in-Fact so guaranteed.
The undersigned irrevocably exercises, effective at the Execution Time (as
defined in the Underwriting Agreement), the option to purchase the Exercise
Securities (as defined in the Underwriting Agreement) and will deliver
irrevocable instructions to the Company directing the Company, upon
effectiveness of the undersigned's election, to promptly issue the
undersigned's Exercise Securities and deposit the same with the Custodian
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40
(the "Irrevocable Instructions"). Each such certificate to be deposited by the
Company pursuant to the Irrevocable Instructions will be, at the time of
deposit with the Custodian, in negotiable and proper deliverable form, endorsed
in blank with the signature of the undersigned or the Attorney-in-Fact thereon
guaranteed by a commercial bank or trust company in the United States or by a
member firm of the New York Stock Exchange, or will be accompanied by a duly
executed stock power or powers in blank, bearing the signature of the
undersigned or the Attorney-in-Fact so guaranteed. Upon reasonable request of
the Custodian, the undersigned agrees to furnish, or cause to be furnished, any
other documentation reasonably necessary to assure the sale and transfer of
deposited Securities to the Underwriters pursuant to the Underwriting
Agreement. The Custodian is hereby authorized and directed, subject to the
instructions of the Attorney-in-Fact, (a) to hold in custody the certificate or
certificates deposited herewith (or deposited hereafter by the Company pursuant
to the Irrevocable Instructions), (b) to deliver (or to authorize the Company's
transfer agent to deliver) the certificate or certificates deposited hereunder
(or deposited hereafter by the Company pursuant to the Irrevocable
Instructions) (or replacement certificate(s) for the Securities) to or at the
direction of the Attorney-in-Fact in accordance with the terms of the
Underwriting Agreement and (c) to return (or cause the Company's transfer agent
to return) to the undersigned new certificate(s) for the shares of Common Stock
represented by any certificate deposited hereunder (or deposited hereafter by
the Company pursuant to the Irrevocable Instructions) which are not sold
pursuant to the Underwriting Agreement. The Custodian shall be entitled to
customary compensation for the services to be rendered hereunder as set forth
in Schedule II attached hereto. Such compensation shall be paid to the
Custodian by the Company.
B. Until the Securities have been delivered to the
Underwriters against payment therefor in accordance with the Underwriting
Agreement, the undersigned shall retain all rights of ownership with respect to
the Securities deposited hereunder, including the right to vote and to receive
all dividends and payment thereon, except the right to retain custody of or
dispose of such Securities, which right is subject to this Agreement, a lock-up
agreement among the undersigned and the Underwriters, the Irrevocable
Instructions and the Underwriting Agreement.
3. Sale of Shares; Remitting Net Proceeds.
A. The Attorney-in-Fact is hereby authorized and directed to
deliver or cause the Custodian or the Company's transfer agent to deliver
certificates for the Securities to the Representatives, as provided in the
Underwriting Agreement, against delivery to the Attorney-in-Fact for the
accounts of the undersigned of the purchase price of the Securities (or, in the
case of the delivery of the Exercise Securities, the excess, if any, of the
aggregate purchase price of the Exercise Securities being sold by the
undersigned over the aggregate exercise price of the related options listed in
Schedule VI to the Underwriting Agreement), at the time and in the funds
specified in the Underwriting Agreement. The Attorney-in-Fact is authorized,
on behalf of the undersigned, to accept and acknowledge receipt of the payment
of the purchase price for the Securities (or, in the case of Exercise
Securities, the excess, if any, of the aggregate purchase price of the Exercise
Securities being sold by the undersigned over the aggregate exercise price of
the related options listed in Schedule VI to the Underwriting Agreement) and
shall promptly deposit such proceeds with the Custodian. After reserving an
amount of such proceeds as
4
41
provided below, the Custodian shall promptly remit to the undersigned the
undersigned's proportionate share of the proceeds.
B. Before any proceeds of the sale of the Securities are
remitted to the undersigned, the Attorney-in-Fact is authorized and empowered
to direct the Custodian to reserve from the proceeds an amount determined by
the Attorney-in-Fact to be sufficient to pay the expenses of the Selling
Stockholder, including those items of expense of the offering and sale of the
Common Stock to be borne by it as provided in the Underwriting Agreement. The
Custodian is authorized to pay such amount to discharge in full such expenses
from the amount reserved for that purpose pursuant to the written direction of
the Attorney-in-Fact. After payment of expenses from this reserve, the
Custodian will remit to the undersigned any balance. To the extent expenses
exceed the amount reserved, the Selling Stockholder shall remain liable for
such expenses. In no event will the Custodian be liable for any payments in
excess of the proceeds from the sale of the Securities.
4. Representations, Warranties and Agreements. The undersigned
represents and warrants to, and agrees with, the Company, the Attorney-in-Fact,
the Custodian, and the Underwriters as follows:
A. The undersigned has full legal right, capacity, power and
authority to enter into and perform this Agreement and the Underwriting
Agreement and to give the Irrevocable Instructions, and to sell, transfer,
assign and deliver the Securities to be sold by it pursuant to the Underwriting
Agreement, free and clear of all liens, encumbrances, equities and claims
whatsoever. If the undersigned is acting as a fiduciary, officer, partner, or
agent of a Selling Stockholder, the undersigned is enclosing with this
Agreement certified copies of the appropriate instruments pursuant to which the
undersigned is authorized to act hereunder.
B. The undersigned has reviewed the representations and
warranties to be made by the undersigned as a Selling Stockholder contained in
the Underwriting Agreement, and hereby represents, warrants and covenants that
each of such representations and warranties is true and correct as of the date
hereof and, except as the undersigned shall have notified the Attorney-in-Fact
and Xxxxx Xxxxxx Inc. pursuant to paragraph F of the attached instructions,
will be true and correct at all times from the date hereof through and
including the time of the closing of the sale of the Securities to the
Underwriters pursuant to the exercise by the Underwriters of the over-allotment
option described in the Underwriting Agreement. The undersigned will promptly
notify the Attorney-in-Fact of any development that would make any such
representation or warranty untrue.
C. The undersigned has no reason to believe that the
representations and warranties of the Company contained in the Underwriting
Agreement are not true and correct, is familiar with the Registration Statement
and has no knowledge of any material fact, condition or information not
disclosed in the Prospectus or any supplement thereto which has adversely
affected or may adversely affect the business of the Company or any of its
subsidiaries; and the sale of the Securities by the Selling Stockholder
pursuant to the Underwriting Agreement is not
5
42
prompted by any information concerning the Company or any of its subsidiaries
that is not set forth in the Prospectus or any supplement thereto.
D. The undersigned is not directly or indirectly an affiliate
of or associated with any member of the National Association of Securities
Dealers, Inc.
E. Upon execution and delivery of the Underwriting Agreement by
the undersigned, the undersigned agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration
Statement, each Underwriter and each person who controls the Company or any
Underwriter, and to contribute to amounts paid as a result of losses, claims,
damages, liabilities and expenses, as provided in Section 8 of the Underwriting
Agreement.
F. Upon execution and delivery of the Underwriting Agreement by
the undersigned, (or the Attorney-in-Fact), the undersigned agrees that it
will be bound by, and will perform each of the covenants and agreements made by
the undersigned as a Selling Stockholder in the Underwriting Agreement.
G. The undersigned agrees to deliver to the Attorney-in-Fact
such documentation as the Attorney-in-Fact, the Company or the Underwriters or
any of their respective counsel may reasonably request in order to effectuate
any of the provisions hereof or of the Underwriting Agreement, all of the
foregoing to be in form and substance satisfactory in all respects to the
requesting party.
The foregoing representations, warranties and agreements are made for the
benefit of, and may be relied upon by, the Attorney-in-Fact, the Company, the
Custodian, the Underwriters and their respective representatives, agents and
counsel and are in addition to, and not in limitation of, the representations,
warranties and agreements of the Selling Stockholder in the Underwriting
Agreement.
5. Irrevocability of Instruments; Termination of this Agreement.
A. This Agreement, the deposit of the Securities pursuant
hereto and all authority hereby conferred, is granted, made and conferred
subject to and in consideration of (i) the interests of the Attorney-in-Fact,
the Underwriters and the Company in and for the purpose of completing the
transactions contemplated hereunder and by the Irrevocable Instructions and the
Underwriting Agreement and (ii) the completion of the registration of Common
Stock pursuant to the Registration Statement and the other acts of the
above-mentioned parties from the date hereof to and including the execution and
delivery of the Underwriting Agreement in anticipation of the sale of Common
Stock, including the Securities, to the Underwriters; and the Attorney-in-Fact
is hereby further vested with an estate, right, title and interest in and to
the Securities deposited herewith for the purpose of irrevocably empowering and
securing to him authority sufficient to consummate said transactions.
Accordingly, this Agreement shall be irrevocable prior to the Closing Date (as
defined in the Underwriting Agreement), and shall remain in full force and
effect until that date. The undersigned further agrees that this Agreement
shall not be
6
43
terminated by operation of law or upon the occurrence of any event whatsoever,
including the death, disability or incompetence of any of the undersigned; or
if this Agreement is executed on behalf of a trust, corporation, partnership or
other entity, it shall not be terminated by liquidation, dissolution,
winding-up, or any other event affecting the legal life of such entity, or by
the occurrence of any other event or events. If any event referred to in the
preceding sentence shall occur, whether with or without notice thereof to the
Attorney-in-Fact, the Company, the Custodian, the Underwriters or any other
person, the Attorney-in-Fact and the Custodian shall nevertheless be authorized
and empowered to deliver and deal with the Securities deposited under the
Agreement by the undersigned in accordance with the terms and provisions of the
Underwriting Agreement and this Agreement as if such event had not occurred.
B. If the sale of the Securities contemplated by this Agreement
is not completed by the 30th day after the date of the Prospectus, this
Agreement shall terminate (without affecting any lawful action of the
Attorney-in-Fact or the Custodian prior to such termination or the agreement
hereunder of the undersigned to indemnify the Attorney-in- Fact and the
Custodian), and the Attorney-in-Fact shall cause the Custodian to return to the
undersigned all certificates for the Securities deposited hereunder, but only
after having received payment of any expenses to be paid or borne by the
Selling Stockholder. The undersigned hereby covenants with the
Attorney-in-Fact that if for any reason the sale of the Securities contemplated
hereby shall not be consummated, the undersigned shall pay all expenses payable
by such Selling Stockholder hereunder or under the Underwriting Agreement.
6. Liability and Indemnification of the Attorney-in-Fact and
Custodian. The Attorney-in-Fact and the Custodian assume no responsibility or
liability to the undersigned or to any other person, other than to deal with
the Securities, the proceeds from the sale of the Securities and any other
shares of Common Stock deposited with the Custodian pursuant to the terms of
this Agreement in accordance with the provisions hereof. The duties and
obligations of the Custodian shall be limited to and determined solely by the
express provisions of this Agreement, and no implied duties or obligations
shall be read into this Agreement against the Custodian. The undersigned
hereby agrees to indemnify and hold harmless the Attorney-in-Fact and the
Custodian, and their respective officers, agents, successors, assigns and
personal representatives with respect to any act or omission of or by any of
them in good faith in connection with any and all matters within the scope of
this Agreement or the Underwriting Agreement; provided, however, that the
Attorney- in-Fact and the Custodian may be liable to the undersigned for any
such act or omission to the extent attributable to gross negligence or fraud.
The Custodian may consult with counsel of its own choice and shall have full
and complete authorization and protection for any action taken or suffered by
it hereunder in good faith and in accordance with the opinion of such counsel.
7. Interpretation.
A. The representations, warranties and agreements of the
undersigned contained herein and in the Underwriting Agreement shall survive
the sale and delivery of the Securities and the termination of this Agreement.
7
44
B. The validity, enforceability, interpretation and
construction of this Agreement shall be determined in accordance with the laws
of the State of New York applicable to contracts made and to be performed
within the State of New York, and this Agreement shall inure to the benefit of,
and be binding upon, the undersigned and the undersigned's heirs, executors,
administrators, successors and assigns, as the case may be.
C. Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any such provision shall be prohibited by or invalid under applicable
law, it shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
D. The use of the masculine gender in this Agreement includes
the feminine and neuter, and the use of the singular includes the plural,
wherever appropriate.
E. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered, shall constitute an
original and all together shall constitute one instrument.
F. This Agreement shall be binding upon, inure to the benefit
of, and be enforceable by and against, the respective successors, heirs,
personal representatives and assigns of the parties hereto.
8
45
IN WITNESS WHEREOF, the undersigned has executed this Custody Agreement
and Power of Attorney this ___ day of May, 1998.
Selling Stockholder Guaranteed by:*
---------------------------------- -----------------------------------------
Name: Name:
(Please sign exactly as your
Stockholder name appear on your
stock certificate(s).)
Name and address to which notices
and funds shall be sent.
----------------------------------
(NAME)
----------------------------------
(STREET)
----------------------------------
(CITY) (STATE) (ZIP)
*(NOTE: The signature of the Selling Stockholder must be guaranteed by a
commercial bank or trust company in the United States or by a member of the New
York Stock Exchange.)
ACCEPTED by the Attorney-in-Fact ACCEPTED by the Custodian
as of the date above set forth: as of the date above set forth:
---------------------------------- -----------------------------------------
By:
---------------------------------- -------------------------------------
SEE THE ATTACHED INSTRUCTIONS
46
INSTRUCTIONS
(For completing the Custody Agreement and Power of Attorney)
A. You have been sent five copies of the Custody Agreement and Power
of Attorney (the "Agreement"). Please complete and return four copies of the
Agreement and stock certificate(s) as set forth in paragraph D below. A fully
executed copy of the Agreement will be returned to you; a fully executed copy
of the Agreement and your stock certificate(s) will be retained by the
Custodian; and a fully executed copy of the Agreement will be delivered to the
Attorney-in-Fact and to counsel for the Underwriters.
B. Complete Schedule I attached hereto.
C. Unless such stock certificate(s) are endorsed or the stock power(s)
attached thereto are executed by the Attorney-in-Fact as provided in the
Agreement, each stock certificate or stock power deposited hereunder must be
executed by you with your signature on the stock certificate(s) or the
accompanying stock power(s) guaranteed by a commercial bank or trust company in
the United States or by any member of the New York Stock Exchange. Please sign
the stock certificate(s) or stock power(s) and the Agreement exactly as your
name appears on your stock certificate(s).
D. Endorsed stock certificate(s) or stock certificate(s) with stock
powers attached along with all four executed copies of the completed Agreement
should be promptly returned by you (or the Attorney-in-Fact as provided in the
Agreement) by hand delivery or by certified mail appropriately insured to:
American Securities Transfer & Trust, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
If sent through the mail, it is recommended that the certificate(s) not be
endorsed, but an executed stock power be sent under separate cover from the
certificate(s).
E. If any certificate that you submit represents a greater number of
Securities than the aggregate number of Securities that you agree to sell
pursuant to the Underwriting Agreement, the Custodian will cause to be
delivered to you in due course, but not earlier than ten days after the final
closing for the purchase of Securities by the Underwriters pursuant to the
exercise by the Underwriters of the over-allotment option described in the
Underwriting Agreement, a certificate for the excess number of shares.
F. For purposes of discharging your obligations under Section 6(f) of
the Underwriting Agreement and Section 4B of the Custody Agreement and Power of
Attorney please contact Xxxxx Xxxxxxx of Xxxxx Xxxxxx Inc. by phone at (212)
000-0000 or by facsimile at (000) 000-0000 if any information or
representation included in the foregoing Agreement or the
47
Underwriting Agreement should change, or if you become aware of any new
information, at any time prior to termination of the period applicable to you
referred to in Section 6(i) of the Underwriting Agreement.
2
48
(Name of Selling Stockholder)
------------------------
SCHEDULE I
Certificate(s) for Shares of Common Stock of
EFTC CORPORATION
deposited under the
Custody Agreement and Power of Attorney
and by the Company pursuant to the Irrevocable Instructions
Number of Shares of Number of Shares of
Common Stock Common Stock
Number of Shares of Deposited under the Deposited by the Number of Shares of
Common Stock Custody Agreement Company Pursuant to Common Stock from
Represented by and Power of the Irrevocable This Certificate To
Certificate Number Certificate Attorney Instructions Be Sold
------------------ ------------------- ------------------- ------------------- -------------------
*If fewer than all shares represented by a certificate are to be sold, indicate
below, if desired for income tax purposes, the date of purchase or purchase
price of the particular shares to be sold.
49
SCHEDULE II
Fees of Custodian
Custodial Fees . . . . . . . . . . . . . . . . $2,000
Selling Stockholder Processing Fees . . . . . . $10 per Selling Stockholder
Wire Transfer Fees . . . . . . . . . . . . . . $10 per transfer
Check Payment Fees . . . . . . . . . . . . . . $25 ($15 for Federal Express;
$10 for check issuance)
2
50
EXHIBIT C
Irrevocable Stock Option Exercise Notice
EFTC Corporation
0000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxxxxx Xxxxx Xxxxxx
X.X. Xxxxxxxx & Co.
BankAmerica Xxxxxxxxx Xxxxxxxx
Xxxxxxx and Company, Inc.
As Representatives of the several Underwriters
under the Underwriting Agreement,
c/o Xxxxx Xxxxxx, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
With respect to the options described on Exhibit A hereto, the
undersigned hereby irrevocably exercises, effective at such time (if any) as
the Underwriting Agreement mentioned below is executed and delivered by the
undersigned, the company and the Underwriters named therein the option to
purchase an aggregate number of shares of EFTC Corporation ("EFTC") common
stock, $0.01 par value, equal to the number of options set forth in Exhibit A
hereto. Further, the undersigned irrevocably instructs EFTC, upon
effectiveness of the undersigned's election, to promptly issue such shares and
to deliver such shares to American Securities Transfer & Trust, Inc. ("AST"),
acting as Custodian pursuant to the Custody Agreement and Power of Attorney
between AST and the undersigned (the "Custody Agreement"). Such shares shall
be held by AST, as Custodian, pursuant to the Custody Agreement. I hereby
irrevocably authorize the Underwriters at the Closing Date (as defined in the
Underwriting Agreement) to tender payment to EFTC, from the proceeds from the
sale of such shares, in an amount equal to the exercise price of these options
and all applicable taxes due. I hereby acknowledge that the Underwriters have
an interest in the exercise of these options and delivery of the shares issued
thereunder to AST, acting as Custodian, and are relying on such exercise and
this instruction for delivery in executing the Underwriting Agreement dated May
__, 1998 between EFTC, the Selling Shareholders named therein and the
Underwriters.
51
Date: May __, 1998
-----------------------------------------
Signature
Please print:
-----------------------------------------
Name
-----------------------------------------
-----------------------------------------
-----------------------------------------
Address
-----------------------------------------
Social Security Number
2
52
Exhibit A
Date of Grant Type of Grant Number of Shares Exercise Price
------------- ------------- ---------------- --------------
3
