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EXHIBIT 1.1
5,000,000 Shares
INTERNATIONAL MANUFACTURING SERVICES, INC.
Common Stock
Underwriting Agreement
dated September ___, 1997
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TABLE OF CONTENTS
SECTION 1. REPRESENTATIONS AND WARRANTIES........................................... 2
Effectiveness of the Registration Statement; No Stop Order..................... 2
Compliance with Registration Requirements...................................... 2
Quantities Furnished to Underwriters........................................... 3
Distribution of the Offering Materials......................................... 4
The Underwriting Agreement..................................................... 4
Authorization of the Common Shares............................................. 4
No Applicable Registration or Other Similar Rights............................. 4
No Material Adverse Change..................................................... 4
Independent Accountants........................................................ 5
Preparation of the Financial Statements........................................ 5
Incorporation and Good Standing of the Company and its
Subsidiaries............................................................. 5
Capitalization and Other Capital Stock Matters................................. 6
Stock Exchange Listing......................................................... 6
Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required..................................... 7
No Material Actions or Proceedings............................................. 7
Intellectual Property Rights................................................... 8
All Necessary Permits, etc..................................................... 8
Title to Properties............................................................ 8
Tax Law Compliance............................................................. 9
Company Not an "Investment Company."........................................... 9
Insurance...................................................................... 9
No Price Stabilization or Manipulation......................................... 9
Related Party Transactions..................................................... 10
No Unlawful Contributions or Other Payments.................................... 10
Company's Accounting System.................................................... 10
SECTION 2. PURCHASE, SALE AND DELIVERY OF COMMON
SHARES......................................................................... 10
The Firm Common Shares......................................................... 10
The First Closing Date......................................................... 11
The Optional Common Shares; The Second Closing Date............................ 11
Public Offering of the Common Shares........................................... 12
Payment for the Common Shares.................................................. 12
Delivery of the Common Shares.................................................. 12
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SECTION 3. ADDITIONAL COVENANTS..................................................... 13
Representatives' Review of Proposed Amendments and
Supplements.............................................................. 13
Securities Act Compliance...................................................... 13
Amendments and Supplements to the Prospectus and Other
Securities Act Matters................................................... 14
Copies of any Amendments and Supplements to the Prospectus..................... 14
Blue Sky Compliance............................................................ 14
Use of Proceeds................................................................ 15
Transfer Agent................................................................. 15
Earnings Statement............................................................. 15
Periodic Reporting Obligations................................................. 15
Company Agreement Not To Offer or Sell Additional Securities................... 15
SECTION 4. PAYMENT OF EXPENSES...................................................... 16
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE
UNDERWRITERS................................................................... 16
Effectiveness of Registration Statement........................................ 17
Accountants' Comfort Letter.................................................... 17
Compliance with Registration Requirements; No Stop Order; No
Objection from NASD...................................................... 17
No Material Adverse Change..................................................... 18
Opinion of Counsel for the Company............................................. 18
Opinion of Counsel for the Underwriters........................................ 18
Officers' Certificate.......................................................... 18
Bring-down Comfort Letter...................................................... 18
Lock-Up Agreement from Stockholders of the Company............................. 19
Additional Documents........................................................... 19
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.................................. 19
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.......................................... 20
SECTION 8. INDEMNIFICATION.......................................................... 20
Indemnification of the Underwriters............................................ 20
Indemnification of the Company, Its Directors and Officers..................... 21
Notifications and Other Indemnification Procedures............................. 22
Settlements.................................................................... 23
SECTION 9. CONTRIBUTION............................................................. 24
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL
UNDERWRITERS............................................................. 25
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SECTION 11. TERMINATION OF THIS AGREEMENT........................................... 26
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE
DELIVERY................................................................ 27
SECTION 13. NOTICES................................................................. 27
SECTION 14. SUCCESSORS.............................................................. 28
SECTION 15. PARTIAL UNENFORCEABILITY................................................ 28
SECTION 16. GOVERNING LAW PROVISIONS................................................ 29
SECTION 17. GENERAL PROVISIONS...................................................... 29
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UNDERWRITING AGREEMENT
September ___, 1997
XXXXXXXXXX SECURITIES
ALEX. XXXXX & SONS INCORPORATED
UBS SECURITIES LLC
As Representatives of the several Underwriters
c/x XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Introductory. International Manufacturing Services, Inc., a Delaware
corporation (the "Company), proposes to issue and sell to the several
underwriters named in Schedule A hereto (the "Underwriters") an aggregate of
5,000,000 shares (the "Firm Common Shares") of its Common Stock, par value
$0.001 per share (the "Common Stock"). In addition, the Company has granted to
the Underwriters an option to purchase up to an additional 750,000 shares (the
"Optional Common Shares") of Common Stock, as provided in Section 2 hereof. The
Firm Common Shares and, if and to the extent such option is exercised, the
Optional Common Shares are herein collectively called the "Common Shares."
Xxxxxxxxxx Securities, Alex. Xxxxx & Sons Incorporated and UBS Securities LLC
have agreed to act as representatives of the several Underwriters (in such
capacity, the "Representatives") in connection with the offering and sale of the
Common Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
333-[___]), which registration statement contains a form of prospectus to be
used in connection with the public offering and sale of the Common Shares. Such
registration statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933 and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), including any
information deemed to be a part thereof at the time of such effectiveness
pursuant to Rule 430A or Rule 434 under the Securities Act, is herein called the
"Registration Statement." Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is herein called the "Rule
462(b) Registration Statement," and from and after the date and time of such
filing of a Rule 462(b) Registration Statement the term "Registration Statement"
shall include
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the Rule 462(b) Registration Statement. Such prospectus, in the form first used
by the Underwriters to confirm sales of the Common Shares, is herein called the
"Prospectus;" provided, however, if the Company, with the consent of Xxxxxxxxxx
Securities, has elected to rely upon Rule 434 under the Securities Act, the term
"Prospectus" shall mean the Company's prospectus subject to completion (each, a
"preliminary prospectus") dated [___], 1997 (such preliminary prospectus herein
called the "Rule 434 preliminary prospectus") together with the applicable term
sheet (the "Term Sheet") prepared and filed by the Company with the Commission
under Rules 434 and 424(b) under the Securities Act and provided, further, that
all references in this Agreement to the date of the Prospectus shall mean the
date of such applicable Term Sheet. All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, a preliminary
prospectus, the Prospectus and the Term Sheet, or any amendments or supplements
to any of the foregoing, shall be deemed to include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX").
The Representatives have advised the Company that the Underwriters
propose to make a public offering of their respective portions of the Common
Shares as soon as the Representatives deem advisable after this Agreement has
been executed and delivered.
The Company hereby confirms its agreement with the Underwriters as
follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants to, and covenants with, each
Underwriter as follows:
(a) Effectiveness of the Registration Statement; No Stop Order. The
Registration Statement has been declared effective by the Commission under
the Securities Act. The Company has complied, to the Commission's
satisfaction, with all requests of the Commission for providing additional
or supplemental information. No stop order suspending the effectiveness of
either of the Registration Statement or the Rule 462(b) Registration
Statement, if any, is in effect and no proceedings for such purpose have
been instituted or are pending or, to the best knowledge of the Company,
are contemplated or threatened by the Commission.
(b) Compliance with Registration Requirements. Each preliminary
prospectus and Prospectus filed as part of the Registration Statement, as
part of any amendment thereto or pursuant to Rule 424 under the Securities
Act, complied when so filed in all material respects with the Securities
Act
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and, if so filed by electronic transmission pursuant to XXXXX (except as
may be permitted by Regulation S-T under the Securities Act), was
identical to the copy thereof delivered to the Underwriters for use in
connection with the offer and sales of the Common Shares. At the
respective times that the Registration Statement, the Rule 462(b)
Registration Statement, if any, and any post-effective amendments thereto
became effective, and at all times subsequent thereto up to and including
each Closing Date referred to below, the Registration Statement, such Rule
462(b) Registration Statement and each such post-effective amendment
thereto complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, as amended or supplemented, as of its date and at all times
subsequent thereto up to and including each Closing Date referred to
below, did not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. If the Company has elected to rely upon Rule
434 under the Securities Act, and has obtained Xxxxxxxxxx Securities'
consent thereto, the Company confirms that the Rule 434 preliminary
prospectus is not materially different from the Company's prospectus
contained in the Registration Statement at the time it was declared
effective, and the Company agrees that it shall comply with the
requirements of Rule 434. Notwithstanding the foregoing, the
representations and warranties set forth in the second and third sentences
of this Section 1(b) do not apply to statements in or omissions from the
Registration Statement, the Rule 462(b) Registration Statement, if any,
and any post-effective amendments thereto, or the Prospectus, or any
amendments or supplements thereto, made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in
writing by the Representatives expressly for use therein. There are no
contracts or other documents required to be described in the Prospectus or
to be filed as exhibits to the Registration Statement under the Securities
Act which have not been described or filed as required.
(c) Quantities Furnished to Underwriters. The Company has delivered
to the Representatives three complete manually signed copies of the
Registration Statement and of each consent and certificate of experts
filed as a part thereof, and such quantities of conformed copies of the
Registration Statement (without exhibits) and preliminary prospectuses and
the Prospectus, as amended or supplemented, as the Representatives have
reasonably requested for each of the Underwriters.
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(d) Distribution of the Offering Materials. The Company has not
distributed and will not distribute, prior to the later of the Second
Closing Date (as defined below) and the completion of the Underwriters'
distribution of the Common Shares, any offering material in connection
with the offering and sale of the Common Shares other than a preliminary
prospectus, the Prospectus, the Registration Statement and the other
offering materials permitted under the Securities Act.
(e) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms,
except as rights to indemnification hereunder may be limited by applicable
law and except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting the rights and remedies of creditors or by general equitable
principles.
(f) Authorization of the Common Shares. The Common Shares to be
purchased by the Underwriters from the Company have been duly authorized
for issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued, fully paid and
non-assessable.
(g) No Applicable Registration or Other Similar Rights. Except as
disclosed in the Prospectus under the caption "Shares Eligible for Future
Sale," there are no persons with registration or other similar rights to
have any equity or debt securities registered for sale under the
Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as have been duly waived.
(h) No Material Adverse Change. Except as otherwise may be stated in
the Prospectus, subsequent to the respective dates as of which information
is given in the Prospectus: (i) with respect to the Company and its
subsidiaries, considered as one entity, there has been no material adverse
change, or any development that would reasonably be expected to result in
a material adverse change, in the condition, financial or otherwise, or in
the earnings, business or operations, whether or not arising from
transactions in the ordinary course of business (any such change referred
to herein as a "Material Adverse Change"); (ii) the Company and its
subsidiaries, considered as one entity, have not incurred any material
liability or obligation, direct or contingent, not in the ordinary course
of business nor entered into any material transaction not in the ordinary
course of business; and (iii) except for dividends paid pursuant to the
terms of the Company's outstanding Preferred Stock, there has been no
dividend or distribution of
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any kind declared, paid or made by the Company or, except for dividends
paid to the Company or other subsidiaries, any of its subsidiaries on any
class of capital stock or repurchase or redemption by the Company or any
of its subsidiaries of any class of capital stock.
(i) Independent Accountants. Price Waterhouse LLP and Ernst & Young
LLP, who have expressed their respective opinions with respect to the
financial statements (which term as used in this Agreement includes the
related notes thereto) and supporting schedules filed with the Commission
as a part of the Registration Statement and included in the Prospectus and
in the Registration Statement, are independent public accountants as
required by the Securities Act.
(j) Preparation of the Financial Statements. The financial
statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus and in the Registration Statement
present fairly the consolidated financial position of the Company and its
subsidiaries as of and at the dates indicated and the results of their
operations and changes in financial position for the periods specified.
The supporting schedules included in the Registration Statement present
fairly the information required to be stated therein. Such financial
statements and supporting schedules have been prepared in conformity with
generally accepted accounting principles in the United States applied on a
consistent basis throughout the periods involved, except as may be stated
in the related notes thereto. No other financial statements or supporting
schedules are required to be included in the Registration Statement. The
financial data set forth in the Prospectus under the captions "Prospectus
Summary-Summary Consolidated Financial Information," "Selected
Consolidated Financial Data" and "Capitalization" fairly present the
information set forth therein on a basis consistent with that of the
audited financial statements contained in the Registration Statement.
(k) Incorporation and Good Standing of the Company and its
Subsidiaries. Each of the Company, IMS Industries Inc., a Delaware
corporation, INS Holdro, Inc., a Delaware corporation, IMS International
Manufacturing Services (Hong Kong) Limited, a [Hong Kong/China]
corporation, IMS International Manufacturing Services, Limited, a Cayman
Islands corporation, IMS International Manufacturing Services (Thailand)
Limited, a Thailand corporation, and Dongguan IMS Electronics Ltd., a
China corporation, and each other subsidiary of the Company, if any, which
is a "significant subsidiary" as defined in Rule 405 under the Securities
Act (each, a "Subsidiary" and, collectively, the "Subsidiaries"), has been
duly incorporated and is validly existing as a corporation in good
standing, where applicable, under the laws of the jurisdiction of its
organization and has the
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requisite power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and, in the case of
the Company, to enter into and perform its obligations under this
Agreement. Each of the Company and each Subsidiary is duly qualified as a
foreign corporation to transact business and is in good standing in the
State of California and each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except for such jurisdictions
(other than the State of California with respect to the Company) where the
failure to so qualify or to be in good standing would not, individually or
in the aggregate, result in a Material Adverse Change. All of the issued
and outstanding capital stock of each Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim, except as
disclosed in the Prospectus. The subsidiaries listed in Exhibit 21 to the
Registration Statement are the only subsidiaries, direct or indirect, of
the Company.
(l) Capitalization and Other Capital Stock Matters. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectus or upon exercise of outstanding options described in the
Prospectus). The Common Stock (including the Common Shares) conforms in
all material respects to the description thereof contained in the
Prospectus. All of the shares of Common Stock have been duly authorized
and validly issued, are fully paid and non-assessable and have been issued
in compliance with the federal and state securities laws. None of the
shares of Common Stock were issued in violation of or subject to any
preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants or rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable
for, any capital stock of the Company or any of its subsidiaries other
than those accurately described in the Prospectus. The description of the
Company's stock option, stock bonus and other stock plans or arrangements,
and the options or other rights granted and exercised thereunder, set
forth in the Prospectus accurately presents the information required to be
shown with respect to such plans, arrangements, options and rights in all
material respects.
(m) Stock Exchange Listing. The Common Shares have been approved for
listing on the Nasdaq National Market, subject to official notice of
issuance.
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(n) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or is in default
(or, with the giving of notice or lapse of time, would be in default)
("Default") in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to which
the Company or any of its subsidiaries is a party or by which it or any of
them may be bound (including, without limitation, the Credit Facility, the
Maxtor Notes and the Junior Subordinated Notes (each such term as defined
in the Prospectus)), or to which any of the property or assets of the
Company or any of its subsidiaries is subject (each, an "Existing
Instrument"), except for such Defaults as would not, individually or in
the aggregate, result in a Material Adverse Change. The Company's
execution, delivery and performance of this Agreement and consummation of
the transactions contemplated hereby and by the Prospectus (i) have been
duly authorized by all necessary corporate action and will not result in
any violation of the provisions of the charter or by-laws of the Company
or any subsidiary, (ii) will not conflict with or constitute a breach of,
or Default or a Debt Repayment Triggering Event (as defined below) under,
or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances as would not, individually or in
the aggregate, result in a Material Adverse Change, and (iii) will not
result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance
of this Agreement and consummation of the transactions contemplated hereby
and by the Prospectus, except such as have been obtained by the Company
and are in full force and effect under the Securities Act, applicable
state securities or blue sky laws and the NASD. As used herein, a "Debt
Repayment Triggering Event" means any event or condition which gives, or
with the giving of notice or lapse of time would give, the holder of any
note, debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
of its subsidiaries.
(o) No Material Actions or Proceedings. [Except as disclosed in the
Prospectus,] there are no legal or governmental actions, suits or
proceedings pending or, to the Company's knowledge, threatened, (i)
against or affecting the Company or any of its subsidiaries, (ii) which
has as the subject thereof
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any officer or director of, or property owned or leased by, the Company or
any of its subsidiaries or (iii) relating to environmental or
discrimination matters, where (A) there is a reasonable possibility that
such action, suit or proceeding might be determined adversely to the
Company or such subsidiary and (B) any such action, suit or proceeding,
individually or in the aggregate with any other actions, suits or
proceedings, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change, or materially and adversely affect
the consummation of the transactions contemplated by this Agreement. All
pending governmental or legal actions, suits or proceedings to which the
Company or any of its subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in
the Prospectus, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material. No material
labor dispute with the employees of the Company or any of its subsidiaries
exists or, to the Company's knowledge, is threatened or imminent.
(p) Intellectual Property Rights. The Company and its subsidiaries
own or possess sufficient trademarks, trade names, patent rights, mask
works, copyrights, licenses and approvals (collectively, the "Intellectual
Property Rights") reasonably necessary to conduct their businesses as now
conducted; and the expiration of any of such Intellectual Property Rights
would not result in a Material Adverse Change. Neither the Company nor any
of its subsidiaries has received any notice of infringement or conflict
with asserted rights with respect to trademark, trade name, patent, mask
work, copyright, license, trade secret or other similar rights of others,
which infringement or conflict has not been resolved, and which, if the
subject of an unfavorable decision, would reasonably be expected to result
in a Material Adverse Change.
(q) All Necessary Permits, etc. The Company and each subsidiary
possess such valid and current certificates, authorizations or permits
issued by the appropriate state, federal or foreign regulatory agencies or
bodies necessary to conduct their respective businesses, and neither the
Company nor any subsidiary has received any notice of proceedings relating
to the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Change with respect thereto.
(r) Title to Properties. The Company and each of its subsidiaries
has good and marketable title to all the properties and assets reflected
as owned in the financial statements referred to in Section 1(j) above (or
elsewhere in the Prospectus), in each case free and clear of any security
interests,
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mortgages, liens, encumbrances, equities, claims and other defects, except
such as do not materially and adversely affect the value of such property
and do not materially interfere with the use made or proposed to be made
of such property by the Company or such subsidiary. The real property,
improvements, equipment and personal property held under lease by the
Company or any subsidiary are held under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real property,
improvements, equipment or personal property by the Company or such
subsidiary.
(s) Tax Law Compliance. The Company and its subsidiaries have filed
all necessary federal, state and foreign income and franchise tax returns
and have paid all taxes required to be paid by any of them and, if due and
payable, any related or similar assessment, fine or penalty levied against
any of them. The Company has made adequate charges, accruals and reserves
in the applicable financial statements referred to in Section 1(j) above
in respect of all federal, state and foreign income and franchise taxes
for all periods as to which the tax liability of the Company or any of its
subsidiaries has not been finally determined.
(t) Company Not an "Investment Company." The Company has been
advised of rules and requirements under the Investment Company Act of
1940, as amended (the "Investment Company Act"). The Company is not an
"investment company" or an entity "controlled" by an "investment company"
within the meaning of the Investment Company Act and intends to conduct
its business in a manner so that it will not become subject to the
Investment Company Act.
(u) Insurance. Each of the Company and its subsidiaries are insured
by recognized financially sound and reputable institutions with policies
in such amounts and with such deductibles and covering such risks
generally deemed adequate and customary for their businesses including,
but not limited to, policies covering real and personal property owned or
leased by the Company and its subsidiaries against theft damage,
destruction and acts of vandalism. The Company has no reason to believe
that it or any subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change.
(v) No Price Stabilization or Manipulation. The Company has not
taken and will not take, directly or indirectly, any action designed to or
that
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might be reasonably expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Common Shares.
(w) Related Party Transactions. There are no business relationships
or related-party transactions involving the Company or any subsidiary or
any other person required to be described in the Prospectus, other than
those that have been disclosed therein.
(x) No Unlawful Contributions or Other Payments. Neither the Company
nor any of its subsidiaries nor, to the Company's knowledge, any employee
or agent of the Company or any subsidiary, has made any contribution or
other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus.
(y) Company's Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles in the United States and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
Any certificate signed by any officer of the Company and delivered to the
Representatives or to counsel for the Underwriters pursuant hereto shall be
deemed to be a representation and warranty by the Company to each Underwriter as
to the matters covered thereby.
SECTION 2. PURCHASE, SALE AND DELIVERY OF COMMON SHARES.
The Firm Common Shares. The Company agrees to issue and sell to the
several Underwriters the Firm Common Shares upon the terms herein set forth. On
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company the
respective number of Firm Common Shares set forth opposite their names on
Schedule A hereto. The purchase price per Firm Common Share to be paid by the
several Underwriters to the Company shall be $[___] per share.
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The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters against payment therefor by wire
transfer of immediately available funds to the order of the Company shall be
made at the offices of Xxxxxxxxxx Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx (or such other place as may be agreed to by the Company
and the Representatives) at [___] a.m., San Francisco time on [___], 1997, or
such other time and date not later than 10:30 a.m., San Francisco time on [___],
1997 [10 business days later] as the Representatives shall designate by notice
to the Company (the time and date of such closing are herein called the "First
Closing Date"). The Company hereby acknowledges that circumstances under which
the Representatives may provide such notice to postpone the First Closing Date
as originally scheduled include, but are in no way limited to, any determination
by the Company or the Representatives to recirculate to the public copies of an
amended or supplemented Prospectus or a delay as contemplated by the provisions
of Section 10 hereof.
The Optional Common Shares; The Second Closing Date. In addition, on the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of 750,000 Optional Common Shares from the
Company at the purchase price per share to be paid by the Underwriters for the
Firm Common Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the
Representatives to the Company, which notice may be given at any time within 30
days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered (which time
and date may be simultaneous with, but not earlier than, the First Closing Date;
and in such case the term "First Closing Date" shall refer to the time and date
of delivery of certificates for the Firm Common Shares and the Optional Common
Shares). Such time and date of delivery, if subsequent to the First Closing
Date, is herein called the "Second Closing Date" and shall be determined by the
Representatives and shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. If any Optional Common
Shares are to be purchased, each Underwriter agrees, severally and not jointly,
to purchase the number of Optional Common Shares (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that bears the
same proportion to the total number of Optional Common Shares to be purchased as
the number of Firm Common Shares set forth on Schedule A hereto opposite the
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name of such Underwriter bears to the total number of Firm Common Shares. The
Representatives may cancel the option at any time prior to its lapse by giving
written notice of such cancellation to the Company.
Public Offering of the Common Shares. The Representatives hereby advise
the Company that the Underwriters intend to offer for sale to the public, as
described in the Prospectus, their respective portions of the Common Shares as
soon after this Agreement has been executed and the Registration Statement has
been declared effective and the Representatives, in their sole judgment, have
determined is advisable and practicable. The Representatives hereby further
advise the Company that (i) the Underwriters will offer the Common Shares for
sale to the public initially at a price of $[___] per share and to certain
dealers selected by the Representatives at a price that represents a concession
of not more than $[___] per share from such initial public offering price and
(ii) any Underwriter may allow, and such dealers may reallow, a concession of
not more than $[___] per share to any other Underwriter or to certain other
dealers.
Payment for the Common Shares. Payment for the Common Shares shall be made
at the First Closing Date (and, if applicable, at the Second Closing Date) by
wire transfer of immediately available funds to the order of the Company.
It is understood that the Representatives have been authorized, for their
own accounts and the accounts of the several Underwriters, to accept delivery of
and receipt for, and make payment of the purchase price for, the Firm Common
Shares and any Optional Common Shares the Underwriters have agreed to purchase.
Xxxxxxxxxx Securities, individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations under
this Agreement.
Delivery of the Common Shares. The Company shall deliver, or cause to be
delivered, to the Representatives for the accounts of the several Underwriters
certificates for the Firm Common Shares at the First Closing Date, against
payment by wire transfer of immediately available funds therefor. The Company
shall also deliver, or cause to be delivered, to the Representatives for the
accounts of the several Underwriters, certificates for the Optional Common
Shares the Underwriters have agreed to purchase at the First Closing Date or the
Second Closing Date, as the case may be, against payment by wire transfer of
immediately available funds therefor. The certificates for the Common Shares
shall be in definitive form and registered in such names and denominations as
the Representatives shall have requested at least two full business days prior
to the
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First Closing Date (or the Second Closing Date, as the case may be) and shall be
made available for inspection on the business day preceding the First Closing
Date (or the Second Closing Date, as the case may be) at a location in New York
City as the Representatives may designate. Time shall be of the essence, and
delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriters.
SECTION 3. ADDITIONAL COVENANTS.
The Company further covenants and agrees with each Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and Supplements.
The Company agrees that, during such period beginning on the date hereof
and ending on the later of the First Closing Date or such date as in the
opinion of counsel for the Underwriters the Prospectus is required by law
to be delivered in connection with sales by an Underwriter or dealer (the
"Prospectus Delivery Period"), prior to amending or supplementing the
Registration Statement (including any registration statement filed under
Rule 462(b) under the Securities Act) or the Prospectus, the Company shall
furnish to the Representatives for review a copy of each such proposed
amendment or supplement, and the Company further agrees not to file any
such proposed amendment or supplement to which the Representatives
reasonably object.
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representatives in writing (i) of the
receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any filing
of any post-effective amendment to the Registration Statement or any
amendment or supplement to any preliminary prospectus or the Prospectus,
(iii) of the time and date that any post-effective amendment to the
Registration Statement becomes effective and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of any
order preventing or suspending the use of any preliminary prospectus or
the Prospectus, or of any proceedings to remove or suspend from listing or
quotation the Common Stock from any securities exchange upon which it is
listed for trading or quotation, or of the threatening or initiation of
any proceedings for any of such purposes. If the Commission shall enter
any such stop order at any time, the Company will use its best efforts to
obtain the lifting of such order at the earliest possible moment.
Additionally, the Company agrees that it shall comply with the provisions
of Rules 424(b), 430A and 434, as applicable, under the Securities Act and
will use its
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reasonable efforts to confirm that any filings made by the Company under
such Rule 424(b) were received in a timely manner by the Commission.
(c) Amendments and Supplements to the Prospectus and Other
Securities Act Matters. If, during the Prospectus Delivery Period, any
event shall occur or condition exist as a result of which it is necessary
to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if in the opinion of the
Representatives or counsel for the Underwriters it is otherwise necessary
to amend or supplement the Prospectus to comply with law, the Company
agrees to promptly prepare (subject to Section 3(A)(a) hereof), file with
the Commission and furnish, at its own expense, to the Underwriters and to
dealers and such other persons (whose names and addresses will be
furnished to the Company by the Representatives) to whom Common Shares
might have been sold, amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) Copies of any Amendments and Supplements to the Prospectus. The
Company agrees to furnish the Representatives, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any
supplements and amendments thereto as the Representatives may reasonably
request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register
the Common Shares for sale under (or obtain exemptions from the
application of) the Blue Sky or state securities laws of those
jurisdictions designated by the Representatives, shall comply with such
laws and shall continue such qualifications, registrations and exemptions
in effect so long as reasonably required for the distribution of the
Common Shares. The Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service
of process in any such jurisdiction where it is not presently qualified or
where it would be subject to taxation as a foreign corporation. The
Company will advise the Representatives promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the
Common Shares for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to
obtain the withdrawal thereof.
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(f) Use of Proceeds. The Company shall apply the net proceeds of the
sale of the Common Shares sold by it in the manner described under the
caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Stock.
(h) Earnings Statement. As soon as reasonably practicable, the
Company will make generally available to its security holders and to the
Representatives an earnings statement (which need not be audited) covering
the twelve-month period ending October 31, 1998 that satisfies the
provisions of Section 11(a) of the Securities Act.
(i) Periodic Reporting Obligations. During the Prospectus Delivery
Period the Company shall file, on a timely basis, with the Commission and
the Nasdaq National Market all reports and documents required to be filed
under the Exchange Act. Additionally, the Company shall file with the
Commission all reports on Form SR as may be required under Rule 463 under
the Securities Act.
(j) Company Agreement Not To Offer or Sell Additional Securities.
During the period of 180 days following the date of the Prospectus, the
Company agrees that it will not, without the prior written consent of
Xxxxxxxxxx Securities (which consent may be withheld at the sole
discretion of Xxxxxxxxxx Securities), on behalf of the several
Underwriters, directly or indirectly, sell, offer or contract to sell,
grant any option for the sale of, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the
Securities Act in respect of, any shares of Common Stock or any debt or
equity securities convertible into or exchangeable or exercisable for
Common Stock (other than as contemplated by this Agreement with respect to
the Common Shares), provided, however, that the Company may issue shares
of its Common Stock or options to purchase its Common Stock, or Common
Stock upon exercise of options, pursuant to any stock option, stock bonus
or other stock plan or arrangement described in the Prospectus, or, with
respect to up to 1,000,000 shares of Common Stock, in connection with any
acquisition transaction, but only if the holders of such shares, options,
or shares issued upon exercise of such options, agree in writing not to
sell, offer, dispose of or otherwise transfer any such shares or options
during such 180 day period without the prior written consent of Xxxxxxxxxx
Securities (which consent may be withheld at the sole discretion of
Xxxxxxxxxx Securities).
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The Representatives, on behalf of the several Underwriters, may, in their sole
discretion, waive in writing the performance by the Company of any one or more
of the foregoing covenants or extend the time for their performance.
SECTION 4. PAYMENT OF EXPENSES.
The Company agrees to pay whether or not the transactions contemplated
hereunder are consummated, all costs, fees and expenses incurred in connection
with the performance of its obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation, (i) all expenses
incident to the issuance and delivery of the Common Shares (including all
printing and engraving costs), (ii) all fees and expenses of the registrar and
transfer agent of the Common Stock, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Common Shares
to the Underwriters, (iv) all fees and expenses of the Company's counsel,
independent public accountants and other advisors, (v) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each preliminary
prospectus and the Prospectus, and all amendments and supplements thereto, and
this Agreement, (vi) all filing fees, attorneys' fees and expenses incurred by
the Company or the Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Common Shares for offer and sale under the Blue Sky laws, and, if
requested by the Representatives, preparing and printing a "Blue Sky Survey" or
memorandum, and any supplements thereto, and advising the Underwriters of such
qualifications, registrations and exemptions, (vii) the filing fees incident to
the NASD's review and approval of the Underwriters' participation in the
offering and distribution of the Common Shares, (viii) the fees and expenses
associated with listing the Common Stock on the Nasdaq National Market, and (ix)
all other fees, costs and expenses referred to in Item 14 of Part II of the
Registration Statement. Except as provided in this Section 4, Section 6, Section
8 and Section 9 hereof, the Underwriters shall pay all of their own expenses,
including the fees and disbursements of their counsel (excluding those relating
to the matters set forth under subparagraph (vi) above).
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters to purchase and pay for the
Common Shares as provided herein on the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company set
forth in Section 1 hereof as of the date hereof and the First Closing Date and,
with respect to the Optional Common Shares, as of the Second Closing Date, to
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the timely performance by the Company of its covenants and other obligations
hereunder, and to each of the following additional conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, shall have
become effective no later than the date hereof.
(b) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from Price Waterhouse LLP, independent
public accountants for the Company, a letter dated the date hereof, in
form and substance satisfactory to the Representatives and Price
Waterhouse LLP, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the audited and unaudited financial statements and certain
financial information contained in the Registration Statement and the
Prospectus (and the Representatives shall have received an additional
[___] conformed copies of such accountants' letter for each of the several
Underwriters).
(c) Compliance with Registration Requirements; No Stop Order; No
Objection from NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A under
the Securities Act) in the manner and within the time period
required by Rule 424(b) under the Securities Act; or the Company
shall have filed a post-effective amendment to the Registration
Statement containing the information required by such Rule 430A, and
such post-effective amendment shall have become effective; or, if
the Company elected to rely upon Rule 434 under the Securities Act
and obtained the Representatives' consent thereto, the Company shall
have filed a Term Sheet with the Commission in the manner and time
period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, or
any post-effective amendment to the Registration Statement, shall be
in effect, and no proceedings for such purpose shall have been
instituted or threatened by the Commission; and
(iii) the NASD shall have raised no objection to the fairness
and reasonableness of the underwriting terms and arrangements.
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(d) No Material Adverse Change. For the period from and after
effectiveness of this Agreement and prior to the First Closing Date and,
with respect to the Optional Common Shares, the Second Closing Date there
shall not have occurred any Material Adverse Change.
(e) Opinion of Counsel for the Company. On each of the First Closing
Date and the Second Closing Date, the Representatives shall have received
the opinion of Wilson, Sonsini, Xxxxxxxx & Xxxxxx, counsel for the
Company, dated as of such Closing Date, in form and substance satisfactory
to counsel for the Underwriters, with respect to the matters set forth in
Exhibit A hereto (and the Representatives shall have received an
additional [____] conformed copies of such counsel's legal opinion for
each of the several Underwriters).
(f) Opinion of Counsel for the Underwriters. On each of the First
Closing Date and the Second Closing Date, the Representatives shall have
received the opinion of Howard, Rice, Nemerovski, Canady, Xxxx & Rabkin, A
Professional Corporation, counsel for the Underwriters, dated as of such
Closing Date, with respect to the matters set forth in paragraphs[(i),
(vi) through (xiv), inclusive] and the next-to-last paragraph of Exhibit A
hereto (and the Representatives shall have received an additional [___]
conformed copies of such counsel's legal opinion for each of the several
Underwriters).
(g) Officers' Certificate. On each of the First Closing Date and the
Second Closing Date, the Representatives shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer
or President of the Company and the Chief Financial Officer or Chief
Accounting Officer of the Company, dated as of such Closing Date, to the
effect set forth in subsections (c)(ii) and (d) of this Section 5, and
further to the effect that:
(i) the representations and warranties of the Company set
forth in Section I of this Agreement are true and correct with the
same force and effect as though expressly made at and as of such
Closing Date; and
(ii) the Company has complied with all the agreements
hereunder and satisfied all the conditions hereunder on its part to
be performed or satisfied at or prior to such Closing Date.
(h) Bring-down Comfort Letter. On each of the First Closing Date and
the Second Closing Date, the Representatives shall have received from
Price Waterhouse, LLP, independent public accountants for the Company, a
letter dated such date, in form and substance satisfactory to the
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Representatives and Price Waterhouse LLP, to the effect that they reaffirm
the statements made in the letter furnished by them pursuant to subsection
(b) of this Section 5, except that the specified date referred to therein
for the carrying out of procedures shall be no more than three business
days prior to the First Closing Date or Second Closing Date, as the case
may be (and the Representative shall have received an additional [___]
conformed copies of such accountants' letter for each of the several
Underwriters).
(i) Lock-Up Agreement from Stockholders of the Company. On the date
hereof, the Company shall have furnished to the Representatives an
agreement substantially in the form of Exhibit C hereto from [all
stockholders of the Company], and such agreement shall be in full force
and effect on each of the First Closing Date and the Second Closing Date.
(j) Additional Documents. On or before each of the First Closing
Date and the Second Closing Date, as the case may be, the Representatives
and counsel for the Underwriters shall have received such information,
documents and opinions as they may reasonably require for the purposes of
enabling them to pass upon the issuance and sale of the Common Shares as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Common Shares, at any time prior
to the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4, Section 6, Section
8 and Section 9 shall at all times be effective and shall survive such
termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.
Notwithstanding any other provisions hereof, if this Agreement shall be
terminated by the Representatives pursuant to any of Section 5, Section 7 or
Section 11, or if for any reason the sale to the Underwriters of the Common
Shares at the First Closing is not consummated because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or to
comply with any provision hereof, the Company agrees to reimburse the
Representatives and the other Underwriters (or such Underwriters as have
terminated this Agreement with respect to themselves), severally, upon demand
for all out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
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and the sale of the Common Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges relating to the offering contemplated by the Prospectus.
Any such termination shall be without liability of any party to any other party
except that the provisions of this Section 6, Section 4, Section 8 and Section 9
shall at all times be effective and shall survive such termination.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
The parties hereto agree that this Agreement shall not become effective
until the later of (i) the execution of this Agreement by the parties hereto and
(ii) notification by the Commission to the Company and the Representatives of
the effectiveness of the Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any party
by notice to each of the other parties hereto, and any such termination shall be
without liability on the part of (a) the Company to any Underwriter, except that
the Company shall be obligated to reimburse the expenses of the Representatives
and the Underwriters pursuant to Sections 4 and 6 hereof, (b) of any Underwriter
to the Company, or (c) of any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Securities Act and the
Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Underwriter or such controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430A or Rule 434
under the Securities Act, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) upon any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a
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material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
(iii) in whole or in part upon any failure of the Company to perform its
obligations hereunder or under law, and to reimburse each Underwriter and
each such controlling person for any and all expenses (including the fees
and disbursements of counsel chosen by Xxxxxxxxxx Securities) as such
expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising
or paying any such loss, claim, damage, liability, expense or action;
provided, however, that the foregoing indemnity agreement shall not apply
to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company
by the Representatives expressly for use in the Registration Statement,
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided, further, that with respect to any
preliminary prospectus, the foregoing indemnity agreement shall not inure
to the benefit of any Underwriter from whom the person asserting any loss,
claim, damage, liability or expense purchased Common Shares, or person
controlling such Underwriter, if a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Common Shares
to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage,
liability or expense. The indemnity agreement set forth in this Section
8(a) shall be in addition to any liabilities that the Company may
otherwise have.
(b) Indemnification of the Company, Its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act,
against any loss, claim, damage, liability or expense, as incurred, to
which the Company, or any such director, officer or controlling person may
become subject under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with the written consent of such Underwriter), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged
untrue statement of a material fact contained in the Registration
Statement, any preliminary
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prospectus or the Prospectus (or any amendment or supplement thereto), or
arises out of or is based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration Statement,
any preliminary prospectus, the Prospectus (or any amendment or supplement
thereto), in reliance upon and in conformity with written information
furnished to the Company by the Representatives expressly for use therein;
and to reimburse the Company, or any such director, officer or controlling
person for any legal and other expense reasonably incurred by the Company,
or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. The Company hereby
acknowledges that the only information that the Underwriters have
furnished to the Company expressly for use in the Registration Statement,
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) are the statements set forth (A) as the last paragraph
on the inside front cover page of the Prospectus concerning stabilization
by the Underwriters and (B) in the table in the first paragraph and as the
second paragraph under the caption "Underwriting" in the Prospectus; and
the Underwriters confirm that such statements are correct. The indemnity
agreement set forth in this Section 8(b) shall be in addition to any
liabilities that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. 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 an indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
for contribution or otherwise than under the indemnity agreement contained
in this Section 8 or to the extent it is not prejudiced as a proximate
result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that a conflict may
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arise between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there may be
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties.
Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of
such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with
the proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more
than one separate counsel (together with local counsel), approved by the
indemnifying party (Xxxxxxxxxx Securities in the case of Section 8(b) and
Section 9), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action, in
each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by Section 8(c) hereof, the
indemnifying party agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement
is entered into more than 30 days after receipt by such indemnifying party
of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to
the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment in, any pending or
threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party,
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unless such settlement or compromise, or consent to the entry of judgment
included an unconditional release of such indemnified party from all
liability on claims that are the subject action, suit or matter of such
proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 hereto is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand, and the Underwriters, on the
other hand, from the offering of the Common Shares pursuant to this Agreement or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand, and the Underwriters, on the other hand, in
connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand,
and the Underwriters, on the other hand, in connection with the offering of the
Common Shares pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Common
Shares pursuant to this Agreement (before deducting expenses) received by the
Company and the total underwriting discount received by the Underwriters, in
each case as set forth on the front cover page of the Prospectus (or, if Rule
434 under the Securities Act is used, the corresponding location on the Term
Sheet) bear to the aggregate initial public offering price of the Common Shares
as set forth on such cover. The relative fault of the Company, on the one hand,
and the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or the alleged inaccurate representation and/or warranty relates
to information supplied by the Company, on the one hand, or the Underwriters, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in subparagraph (c) of Section 8 herein,
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The provisions
set forth in
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Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 9. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 9 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A hereto. For purposes of this Section 9, each officer and employee of
an Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement and each person, if any,
who controls the Company within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS.
If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the several Underwriters shall fail or refuse to purchase
Common Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the
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other Underwriters shall be obligated, severally, in the proportions that the
number of Firm Common Shares set forth opposite their respective names on
Schedule A bears to the aggregate number of Firm Common Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as may be specified by the Representatives with the consent of the
non-defaulting Underwriters, to purchase the Common Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the First Closing Date or the Second Closing Date, as the case may
be, any Underwriter or Underwriters shall fail or refuse to purchase Common
Shares and the aggregate number of Common Shares with respect to which such
default occurs exceeds 10% of the aggregate number of Common Shares to be
purchased on such date, and arrangements satisfactory to the Representatives and
the Company for the purchase of such Common Shares are not made within 48 hours
after such default this Agreement shall terminate without liability of any party
to any other party except that the provisions of Section 4, Section 6, Section 8
and Section 9 shall at all times be effective and shall survive such
termination. In any such case either the Representatives or the Company shall
have the right to postpone the First Closing Date or the Second Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT.
For the period from and after the effectiveness of this Agreement and
prior to the First Closing Date, this Agreement shall be subject to termination
by the Representatives by notice given to the Company if at any time during such
period (i) trading or quotation in any of the Company's securities shall have
been suspended or limited by the Commission or by the Nasdaq National Market, or
trading in securities generally on either of the Nasdaq National Market or the
New York Stock Exchange shall have been suspended or limited, or minimum or
maximum prices shall have been generally established on any of such markets or
exchanges by the Commission or the NASD; (ii) a general banking moratorium shall
have been declared by any of federal, New York, Delaware or California
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any
substantial change in the United States or international financial markets, or
any substantial change or development involving a prospective substantial change
in United States or
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international political, financial or economic conditions, as in the judgment of
the Representatives, is material and adverse and makes it impracticable to
market the Common Shares in the manner and on the terms described in the
Prospectus or to enforce contracts for the sale of securities; (iv) there shall
have occurred any Material Adverse Change; or (v) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as to interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss shall have
been insured. Any termination pursuant to this Section 11 shall be without
liability on the part of (a) the Company to any Underwriter, except that the
Company shall be obligated to reimburse the expenses of the Representatives and
the Underwriters to the extent provided in Sections 4 and 6 hereof, (b) of any
Underwriter to the Company or (c) of any party hereto to any other party except
that the provisions of Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties and
other statements of the Company, of its officers and of the several Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Common Shares sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES.
All communications hereunder shall be in writing and shall be mailed,
delivered or telecopied and confirmed to the parties hereto as follows:
If to the Representative:
Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. XxXxxx
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with a copy to:
Xxxxxxxxxx Securities
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If sent to the Company:
International Manufacturing Services, Inc.
0000 Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Underwriters pursuant to Section 10
hereof, and to the benefit of the officers and directors and controlling persons
referred to in Section 8 and Section 9, and in each case their respective
successors, personal representatives and assigns, and no other person will have
any right or obligation hereunder. No such assignment shall relieve any party of
its obligations hereunder. The term "successors" shall not include any purchaser
of the Common Shares as such from any of the Underwriters merely by reason of
such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or provision
of this Agreement shall not affect the validity or enforceability of any other
Section, paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
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SECTION 16. GOVERNING LAW PROVISIONS.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed in such State.
SECTION 17. GENERAL PROVISIONS.
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in two or more counterparts, each one of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party for
whom the condition is meant to benefit. The Table of Contents and the section
headings herein are for the convenience of the parties only and shall not affect
the construction or interpretation of this Agreement. Unless otherwise
specified, times of day shall mean New York City time.
Each of the parties hereto hereby acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and are fully informed regarding said provisions. Each of the parties
hereto hereby further acknowledges that the provisions of Sections 8 and 9
hereto fairly allocate the risks in light of the ability of the parties to
investigate the Company, its affairs and its business in order to assure that
adequate disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
INTERNATIONAL MANUFACTURING
SERVICES, INC.
By:
--------------------------------------
Xxxxxx X. Xxxxxxx
Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives in San Francisco, California as of the date first above
written.
XXXXXXXXXX SECURITIES
ALEX. XXXXX & SONS INCORPORATED
UBS SECURITIES LLC
Acting as Representatives of the several Underwriters named in the attached
Schedule A.
By XXXXXXXXXX SECURITIES
By:
----------------------------------
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SCHEDULE A
Underwriters Number of Number of
Firm Common Optional Common
Shares Shares
to be Purchased to be Purchased
Xxxxxxxxxx Securities...................... [___] [___]
Alex. Xxxxx & Sons Incorporated............ [___] [___]
UBS Securities LLC......................... [___] [___]
[___] ..................................... [___] [___]
[___] ..................................... [___] [___]
36
EXHIBIT A
Opinion of counsel for the Company to be delivered pursuant to Section
5(e) of the Underwriting Agreement.
References to the Prospectus in this Exhibit A include any supplements
thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of California and in each
other jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except for such
jurisdictions (other than the State of California) where the failure to so
qualify or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Change.
(iv) Each of IMS Industries Inc. and IMS Holdco, Inc. (each, a "U.S.
Subsidiary") has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, and
has corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus.
(v) All of the issued and outstanding capital stock of each U.S.
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or,
to the best knowledge of such counsel, any pending or threatened claim.
(vi) The authorized capital stock of the Company (including the
Common Stock) conforms as to legal matters to the description thereof set forth
in the Prospectus. All of the shares of Common Stock have been duly authorized
and validly issued, are fully paid and non-assessable and, to such counsel's
knowledge, were not issued in violation of or subject to any preemptive rights
or other rights to subscribe for or purchase any securities under the General
Corporation Law of the State of Delaware or the Company's certificate of
incorporation. The form of certificate used to evidence the Common Stock, as
included in Exhibit 4.2 to the Registration Statement, is in due and proper form
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and complies with all applicable requirements of the charter and by-laws of the
Company and the General Corporation Law of the State of Delaware.
(vii) No stockholder of the Company or any other person has any
preemptive right of first refusal or other similar right to subscribe for or
purchase securities of the Company (i) arising by operation of the certificate
of incorporation or by-laws of the Company or the General Corporation Law of the
State of Delaware or (ii) to the knowledge of such counsel, arising from any
Existing Instrument filed as an Exhibit to the Registration Statement or
otherwise known to such counsel.
(viii) The Underwriting Agreement has been duly authorized, executed
and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
thereunder may be limited by applicable law and except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles.
(ix) The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant to
the Underwriting Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and non-assessable.
(x) Based solely upon the oral advice of the staff of the
Securities and Exchange Commission, each of the Registration Statement and the
Rule 462(b) Registration Statement, if any, has been declared effective by the
Commission under the Securities Act and no stop order suspending the
effectiveness of either of the Registration Statement or the Rule 462(b)
Registration Statement, if any, has been issued under the Securities Act and no
proceedings for such purpose have been instituted or are pending or are
contemplated or threatened by the Commission. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time period required
by such Rule 424(b).
(xi) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus and each amendment or supplement to the
Registration Statement and the Prospectus, as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein or in exhibits to or excluded from the Registration Statement,
as to which no opinion need be rendered) complied as to form in all material
respects with the applicable requirements of the Securities Act.
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(xii) The Common Shares have been approved for listing on the Nasdaq
National Market.
(xiii) The statements (i) in the Prospectus under the captions "Risk
Factors-Shares Eligible for Future Sale; Registration Rights,"
"Management-Compensation Plans," "Description of Capital Stock" and "Shares
Eligible for Future Sale" and (ii) in Item 14 of the Registration Statement
insofar as such statements constitute matters of law, summaries of legal
matters, the Company's charter or by-law provisions, documents or legal
proceedings, has been reviewed by such counsel and accurately summarize, in all
material respects, the matters referred to therein.
(xiv) To the knowledge of such counsel, there are no legal or
governmental actions, suits or proceedings pending or overtly threatened which
are required to be disclosed in the Registration Statement, other than those
disclosed therein.
(xv) To the knowledge of such counsel, there are no Existing
Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto; and the descriptions thereof
and references thereto are accurate in all material respects.
(xvi) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance of the
Underwriting Agreement and consummation of the transactions contemplated thereby
and by the Prospectus, except such as have been obtained by the Company and are
in full force and effect under the Securities Act, applicable state securities
or blue sky laws and the NASD.
(xvii) The execution, delivery and performance of the Underwriting
Agreement by the Company (other than performance by the Company of its
obligations under the indemnification section of the Underwriting Agreement, as
to which no opinion need be rendered) (i) have been duly authorized by all
necessary corporate action on the part of the Company, (ii) will not result in
any violation of the provisions of the charter or by-laws of the Company or any
U.S. Subsidiary, (iii) will not constitute a breach of, or Default or a Debt
Repayment Triggering Event under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, any material Existing Instrument filed as an
Exhibit to the Registration Statement or otherwise known to such counsel; and
(iv) to the knowledge of such counsel, will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the
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Company or any subsidiary, which could reasonably be expected to result in a
Material Adverse Change.
(xviii) The Company is not an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act.
(xix) Except as disclosed in the Prospectus under the caption
"Shares Eligible for Future Sale," to the knowledge of such counsel, there are
no persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by the Underwriting Agreement, except for such rights
as have been duly waived.
(xx) To the knowledge of such counsel, neither the Company nor any
U.S. Subsidiary is in violation of its certificate of incorporation or by-laws
except in each such case for such violations as would not, individually or in
the aggregate, result in a Material Adverse Change.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company and with
representatives of the Underwriters at which the contents of the Registration
Statement and the Prospectus, and any supplements or amendments thereto, and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (other than as specified above), and any supplements or amendments
thereto, on the basis of the foregoing, nothing has come to their attention
which would lead them to believe that either the Registration Statement or any
amendments thereto, at the time the Registration Statement or such amendments
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its date or at
the First Closing Date or the Second Closing Date, as the case may be, contained
an untrue statement of a material fact or omitted 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 (it being understood
that such counsel need express no belief as to the financial statements or
schedules or other financial or statistical data included in the Registration
Statement or the Prospectus or any amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the General Corporation Law of the
State of
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California or the federal law of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion (which shall be dated the
First Closing Date or the Second Closing Date, as the case may be, shall be
satisfactory in form and substance to the Underwriters, shall expressly state
that the Underwriters may rely on such opinion as if it were addressed to them
and shall be furnished to the Representatives) 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.
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EXHIBIT C
_________, 1997
XXXXXXXXXX SECURITIES
ALEX. XXXXX & SONS INCORPORATED
UBS SECURITIES
As Representatives of the several Underwriters
c/x XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: Agreement Not to Sell Stock
Ladies and Gentlemen:
This letter is being delivered in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement") among International
Manufacturing Services, Inc., a Delaware corporation (the "Company"), and
Xxxxxxxxxx Securities, Alex. Xxxxx & Sons Incorporated and UBS Securities, as
the Representatives (the "Representatives") of the several underwriters named or
to be named in Schedule A thereto (the "Underwriters"), relating to an
underwritten public offering of shares (the "Common Shares") of Class A common
stock, par value $0.001 per share (the "Common Stock"), of the Company.
In order to induce the Representatives and the Underwriters to enter
into the Underwriting Agreement, and in recognition of the benefits of the
contemplated Common Stock offering to the Company, the undersigned hereby
represents and warrants to, and covenants and agrees with, each Underwriter and
the Company, and shall be deemed to represent and warrant to each Underwriter on
the date on which the Underwriting Agreement is executed and on each date on
which any Common Shares are sold under the Underwriting Agreement, as follows:
(a) The undersigned will not, for a period of 180 days following the
date of the prospectus first used to confirm sales of the Common Shares, (i)
directly or indirectly, sell, offer or contract to sell, grant any option for
the sale of, or otherwise dispose of or transfer, or announce any offering of,
any shares of Common Stock or any debt or equity securities convertible into or
exchangeable or exercisable for Common Stock, whether owned on the date of
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this letter or hereafter acquired, or (ii) cause to be filed any registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to any of the foregoing, other than (w) as a sale pursuant to the
Underwriting Agreement, (x) as a bona fide gift or gifts, provided the donee or
donees thereof agree in writing to be bound by the terms of this letter, (y) as
a distribution to limited partners or shareholders of the undersigned, provided
that the distributees thereof agree in writing to be bound by the terms of this
letter, or (z) with the prior written consent of Xxxxxxxxxx Securities; and
(b) The undersigned waives any and all registration rights with
respect to registration under the Securities Act of the Common Stock held by the
undersigned, including any and all rights to receive notice with respect to the
offering referred to above, as, and only as, such registration rights apply to
the offering of the Common Shares referred to above.
If for any reason the Underwriting Agreement shall not have been
entered into by December 15, 1997, the agreement set forth above shall be
terminated, and shall be of no further force and effect.
Yours very truly,
[Stockholder]
By
--------------------------------------
Authorized Signatory
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