1
Exhibit 1.1
2,250,000 SHARES(1)
REMEC, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
January ____, 1997
▇▇▇▇▇▇▇ & COMPANY, INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇▇▇▇▇▇ & CO., INC.
As Representatives of the Underwriters
c/o Needham & Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
REMEC, Inc., a California corporation (the "Company") and
certain stockholders of the Company named in Schedule II hereto (the "Selling
Shareholders") propose to sell 2,250,000 shares (the "Firm Shares") of Common
Stock, $0.01 per share par value, of the Company (the "Common Stock"), to you
and to the other Underwriters (as defined below). The Company and the Selling
Shareholders have agreed to grant to you and the other Underwriters named in
Schedule I hereto (collectively, the "Underwriters"), an option (the "Option")
to purchase up to an additional 337,500 shares of Common Stock (the "Option
Shares") on the terms and for the purposes set forth in Section 1(b). In the
event the Option is exercised, _____________ of the Option Shares will be
purchased by the Underwriters from the Company and _____________ of the Option
Shares will be purchased by the Underwriters from the Selling Shareholders. The
Firm Shares and the Option Shares are referred to collectively herein as the
"Shares."
It is understood that, subject to the conditions hereinafter
stated, the Firm Shares will be sold to you and the Underwriters, for whom you
are acting as the Representatives (the "Representatives").
The Company and the Selling Shareholders confirm as follows
their agreement with the Representatives and the other Underwriters.
1. Agreement to Sell and Purchase.
a. On the basis of the representations,
warranties and agreements herein contained and subject to all the terms and
conditions of this Agreement, (i) the Company agrees to issue and sell an
aggregate of 1,750,000 shares of Common Stock to the Underwriters, (ii) each
Selling Shareholder agrees to sell to the Underwriters the number of shares of
Common Stock set forth opposite his, her, or its name in Schedule II hereto, and
(iii) each of the Underwriters, severally and not jointly, agrees to purchase
from the Company and the Selling Shareholders the respective number of Firm
Shares set forth opposite that Underwriter's name in Schedule I hereto, at the
purchase price of $ _________ for each Firm Share.
b. Subject to all the terms and conditions of
this Agreement, the Company and certain of the Selling Shareholders severally
and not jointly grant the Option to the Underwriters to purchase, severally and
not jointly, up to ____________ Option shares from the Company and up to the
maximum number of Option Shares set forth opposite the Selling Shareholder's
name on Schedule II hereto at the same price per share as the Underwriters shall
pay for the Firm Shares. The Option may be exercised only to cover
------------
1 Plus an option to purchase up to an additional 337,500 shares to cover
over-allotments.
2
over-allotments in the sale of the Firm Shares by the Underwriters and may be
exercised in whole or in part at any time (but not more than once) on or before
the 30th day after the date of this Agreement upon written or telegraphic notice
(the "Option Shares Notice") by the Representatives to the Custodian (as defined
herein), no later than 12:00 noon, New York City time, at least two and no more
than four business days before the date specified for closing in the Option
Shares Notice (the "Option Closing Date"), setting forth the aggregate number of
Option Shares to be purchased and the time and date for such purchase. On the
Option Closing Date, the Company and certain of the Selling Shareholders will
sell to the Underwriters the number of Option Shares set forth in the Option
Shares Notice, and each Underwriter will purchase such percentage of the Option
Shares as is equal to the percentage of the Firm Shares that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as it deems
advisable to avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares
shall be made to the Representatives for the accounts of the Underwriters
against payment of the purchase price by wire transfer or by certified or
official bank checks payable in New York Clearing House (next-day) funds to the
order of the Company and the Selling Shareholders, at the offices of ▇▇▇▇ ▇▇▇▇
▇▇▇▇ & Freidenrich, at 7:00 a.m., San Francisco time, on the third business day
following the commencement of the offering contemplated by this Agreement, or at
such time on such other date, not later than five business days after the date
of this Agreement, as may be agreed upon by the Company and the Representatives
(such date is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option
Shares against payment by the Underwriters (in the manner specified above) will
take place at the offices specified above for the Closing Date at the time and
date (which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form
and shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company and the Custodian, as that term is defined in Section 4(b) hereof. For
the purpose of expediting the checking and packaging of certificates for the
Shares, the Company agrees to make such certificates available for inspection at
least 24 hours prior to the Closing Date or the Option Closing Date, as the case
may be.
The cost of original issue tax stamps, if any, in connection
with the issuance and delivery of the Shares by the Company to the respective
Underwriters shall be borne by the Company. The Company will pay and save each
Underwriter and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
such Underwriter of the Shares.
3. Representations and Warranties of the Company. The
Company represents, warrants and covenants to each Underwriter that:
a. A registration statement (Registration No.
___________) on Form S-1 relating to the Shares, including a preliminary
prospectus and such amendments to such registration statement as may have been
required to the date of this Agreement, has been prepared by the Company under
the provisions of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (collectively referred to as the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, and has
been filed with the Commission. The term "preliminary prospectus" as used herein
means a preliminary prospectus as contemplated by Rule 430 or Rule 430A of the
Rules and Regulations included at any time as part of the registration
statement. Copies of such registration statement and amendments and of each
related preliminary prospectus have been delivered to the Representatives. If
such registration statement has not become effective, a further amendment to
such registration statement, including a form of final prospectus, necessary to
permit such registration statement to become effective will be filed promptly by
the Company with the Commission. If the registration statement has become
effective, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A of the Rules and Regulations will be
filed
2
3
promptly by the Company with the Commission in accordance with Rule 424(b) of
the Rules and Regulations. The term "Registration Statement" means the
registration statement as amended at the time it becomes or became effective
(the "Effective Date"), including financial statements and all exhibits and any
information deemed to be included by Rule 430A. The term "Prospectus" means the
prospectus as filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or, if no such filing is required, the form of final prospectus
included in the Registration Statement at the Effective Date.
b. On the Effective Date, the date the
Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times subsequent to and including the Closing Date and, if
later, the Option Closing Date and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included in the Prospectus, did and will comply with all applicable
provisions of the Act and the Rules and Regulations and will contain all
statements required to be stated therein in accordance with the Act and the
Rules and Regulations. On the Effective Date and when any posteffective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement, the Prospectus or any such amendment or supplement did
or will contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date and, if later, the Option Closing Date, the
Prospectus did not and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(b) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company acknowledges that
the statements set forth under the heading "Underwriting" in the Prospectus and
the statements relating to underwriting commissions set forth on the cover page
of the Prospectus and the Preliminary Prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company by the
Representatives specifically for inclusion in the Registration Statement.
c. The Company and each of its subsidiaries
is, and at the Closing Date and, if later, the Option Closing Date will be,
corporations duly organized, validly existing and in good standing under the
laws of the jurisdiction of their incorporation. The Company and each of its
subsidiaries have, and at the Closing Date and, if later, the Option Closing
Date will have, full power and authority to conduct all the activities conducted
by them, to own or lease all the material assets owned by or leased by them and
to conduct their business as described in the Registration Statement and the
Prospectus. The Company and each of its subsidiaries is, and at the Closing Date
and, if later, the Option Closing Date will be, duly licensed or qualified to do
business and in good standing as foreign corporations in all jurisdictions in
which the nature of the activities conducted by them or the character of the
assets owned or leased by them makes such license or qualification necessary,
except to the extent that the failure to be so qualified or be in good standing
would not materially and adversely affect the Company or its business,
properties, condition (financial or other) or results of operations. Except as
disclosed in the Registration Statement and Prospectus, the Company (i) does not
own, and at the Closing Date and, if later, the Option Closing Date will not
own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in any
corporation, firm, partnership, joint venture, association or other entity and
(ii) is not, and at the Closing Date and, if later, the Option Closing Date will
not be, engaged in any discussions or a party to any agreement or understanding,
written or oral, regarding the acquisition of an interest in any corporation,
firm, partnership, joint venture, association or other entity where such
discussions, agreements or understandings would require amendment to the
Registration Statement pursuant to applicable securities laws. Complete and
correct copies of the articles of incorporation and of the by-laws of the
Company and each of its subsidiaries and all amendments thereto have been
delivered to the Representatives, and no changes therein will be made subsequent
to the date hereof and prior to the Closing Date or, if later, the Option
Closing Date.
3
4
d. All of the outstanding shares of capital
stock of the Company (including the Shares when delivered and paid for as
contemplated herein) have been duly authorized and validly issued, are fully
paid and nonassessable and were issued in compliance with all applicable state
and federal securities laws; the Firm Shares and the Option Shares have been
duly authorized and when issued and paid for as contemplated herein, as
applicable, will be validly issued, fully paid and nonassessable; no preemptive
or similar rights exist with respect to any of the Shares. The description of
the capital stock of the Company in the Registration Statement and the
Prospectus is, and at the Closing Date and, if later, the Option Closing Date
will be, complete and accurate in all respects. Except as set forth in the
Prospectus, the Company does not have outstanding, and at the Closing Date and,
if later, the Option Closing Date will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any shares of Common Stock, or any such warrants, convertible securities or
obligations. All of the outstanding shares of capital stock of each of the
Company's subsidiaries are owned by the Company, have been validly issued, are
fully paid and non-assessable, and are free of any liens and any pre-emptive or
similar rights.
e. The financial statements and schedules
included in the Registration Statement or the Prospectus present fairly the
financial condition of the Company and its subsidiaries, taken as a whole, as of
the respective dates thereof and the results of operations and cash flows of the
Company and its subsidiaries, taken as a whole, for the respective periods
covered thereby, all in conformity with generally accepted accounting principles
applied on a consistent basis throughout the entire period involved, except as
otherwise disclosed in the Prospectus. No other financial statements or
schedules of the Company are required by the Act or the Rules and Regulations to
be included in the Registration Statement or the Prospectus. Ernst & Young (the
"Accountants"), who have reported on such financial statements and schedules,
are independent accountants with respect to the Company as required by the Act
and the Rules and Regulations. The summary financial and statistical data
included in the Registration Statement present fairly the information shown
therein and have been compiled on a basis consistent with the financial
statements presented therein.
f. Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus and
prior to the Closing Date and, if later, the Option Closing Date, except as set
forth in or contemplated by the Registration Statement and the Prospectus, (i)
there has not been and will not have been any change in the capitalization of
the Company (other than grants of options or rights to acquire securities of the
Company under the Company's Equity Incentive Plan, Employee Stock Purchase Plan,
or Incentive Stock Option Plan III or any material adverse change in the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company, arising for any reason whatsoever, (ii)
the Company and its subsidiaries have not incurred nor will any of them incur,
except in the ordinary course of business as described in the Prospectus, any
material liabilities or obligations, direct or contingent, nor has it entered
into nor will it enter into, except in the ordinary course of business as
described in the Prospectus, any material transactions other than pursuant to
this Agreement and the transactions referred to herein and (iii) the Company has
not and will not have paid or declared any dividends or other distributions of
any kind on any class of its capital stock.
g. The Company is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
h. Except as set forth in the Registration
Statement and the Prospectus, there are no actions, suits or proceedings pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any of its subsidiaries or any of the directors or officers of the Company or
any of its subsidiaries in their capacity as such, nor to the knowledge of the
Company any reasonable basis therefor, before or by any federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding would
materially and adversely affect the Company or its business, properties,
business prospects, condition (financial or otherwise) or results of operations.
4
5
i. The Company and each of its subsidiaries
have, and at the Closing Date and, if later, the Option Closing Date will have,
performed all obligations required to be performed by each of them,
respectively, and each of them are not, and at the Closing Date and, if later,
the Option Closing Date will not be, in default, under any contract or other
instrument to which they are a party or by which their property is bound or
affected, which default might materially and adversely affect the Company or its
business, properties, business prospects, condition (financial or other) or
results of operations. To the Company's knowledge, no other party under any
contract or other instrument to which it or any of its subsidiaries is a party
is in default in any respect thereunder, which default would materially and
adversely affect the Company or its business, properties, business prospects,
condition (financial or other) or results of operations. Neither the Company nor
any of its subsidiaries is, and at the Closing Date and, if later, the Option
Closing Date will be, in violation of any provision of their articles of
incorporation or by-laws.
j. No consent, approval, authorization or
order of, or any filing or declaration with, any court or governmental agency or
body is required for the consummation by the Company of the transactions on its
part contemplated herein, except such as have been obtained under the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or the Rules
and Regulations and such as may be required under state securities or Blue Sky
laws or the by-laws and rules of the National Association of Securities Dealers,
Inc. (the "NASD") in connection with the purchase and distribution by the
Underwriters of the Shares to be sold by the Company.
k. The Company has full power and authority
to enter into this Agreement. This Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as to (i) rights to indemnity and contribution hereunder which may be
limited by applicable law, (ii) bankruptcy and laws relating to the rights and
remedies of creditors generally and (iii) the availability of equitable
remedies. The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the action or imposition of
any lien, charge or encumbrance upon any of the assets of the Company pursuant
to the terms or provisions of, or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or give any party a right
to terminate any of its obligations under, or result in the acceleration of any
obligation under the articles of incorporation or by-laws of the Company, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which the Company is a party or by
which the Company or any of its properties is bound or affected, or to the
knowledge of the Company violate or conflict with any judgment, ruling, decree,
order, statute, rule or regulation of any court or other governmental agency or
body applicable to the business or properties of the Company presently in
effect.
l. The Company and each of its subsidiaries
have good and marketable title to all properties and assets described in the
Prospectus as owned by them, free and clear of all liens, charges, encumbrances
or restrictions, except such liens, charges, encumbrances or restrictions as are
described in the Prospectus and those which, individually and in the aggregate,
are not material in amount or which, individually and in the aggregate, do not
adversely affect the use made or proposed to be made of such properties and
assets by the Company. The Company and each of its subsidiaries have, as lessee,
valid, subsisting and enforceable leases for the properties described in the
Prospectus as leased by it, except such as are described in the Prospectus or
are not material to the business of the Company. The agreements to which the
Company or any of its subsidiaries is a party and which are described in the
Prospectus are valid agreements, enforceable by the Company or any of its
subsidiaries (as applicable), except as the enforcement thereof may be limited
by bankruptcy and laws relating to the rights and remedies of creditors
generally or by the availability of general equitable remedies. The Company and
its subsidiaries own or lease all such properties as are necessary to their
operations as now conducted or as proposed to be conducted, except where the
failure to so own or lease would not materially and adversely affect the Company
or its business, properties, condition (financial or otherwise) or results of
operations.
m. There is no document or contract of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement which is
5
6
not described or filed as required. All such contracts to which the Company is a
party have been duly authorized, executed and delivered by the Company,
constitute valid and binding agreements of the Company and are enforceable
against the Company in accordance with the terms thereof, except as to (i)
rights to indemnity and contribution thereunder which may be limited by
applicable law, (ii) bankruptcy and laws relating to the rights and remedies of
creditors generally and (iii) the availability of equitable remedies.
n. No statement, representation, warranty or
covenant made by the Company in this Agreement or made in any certificate or
document required by Section 7(l) of this Agreement to be delivered to the
Representatives was or will be, when made, inaccurate, untrue or incorrect.
o. Neither the Company nor any of its
directors, officers or controlling persons has taken, directly or indirectly,
any action designed, or which might reasonably be expected, to cause or result,
under the Act or otherwise, in, or which has constituted, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
p. Except as disclosed in the Prospectus, no
holder of securities of the Company has rights to the registration of any
securities of the Company because of the filing of the Registration Statement.
q. The Common Stock is listed and duly
admitted to trading on the Nasdaq National Market (the "NASDAQ/NM") and the
Company has received notification that the listing by the NASDAQ/NM of the
Shares has been approved, subject only to official notice of issuance of the
Shares.
r. The Company and each of its subsidiaries
have sufficient trademarks, trade names, patent rights, copyrights, licenses,
approvals and governmental authorizations to conduct its business as now
conducted and as proposed to be conducted, where the failure to have any such
right would have a material and adverse effect on the Company or its business,
properties, condition (financial or otherwise) or results of operations. The
Company and each of its subsidiaries is not infringing any rights, copyrights,
trade secrets or other similar rights of others or, to the best knowledge of the
Company, any trademarks, trade name rights or patent rights of others, where
such infringement would have a material and adverse effect on the Company or its
business, properties, condition (financial or otherwise) or results of
operations. No claim has been made against the Company or any of its
subsidiaries regarding trademark, trade name, patent, copyright, license, trade
secret or other infringement which would have a material and adverse effect on
the Company or its business, properties, condition (financial or otherwise) or
results of operations.
s. The Company has timely filed all federal,
state and foreign income tax returns which have been required to be filed and
has paid all taxes and assessments received by it to the extent that such taxes
or assessments have become due. The Company has no tax deficiency which has been
or to the Company's knowledge might be asserted or threatened against the
Company which could have a material and adverse effect on the Company or its
business, properties, condition (financial or otherwise) or results of
operations.
t. The pro forma financial information set
forth in the Registration Statement reflects, subject to the limitations set
forth in the Registration Statement as to such pro forma financial information,
the results of operations of the Company purported to be shown thereby for the
periods indicated and conforms to the requirements of Regulation S-X of the
Rules and Regulations.
u. The Company and its subsidiaries owns or
possesses all authorizations, approvals, orders, licenses, registrations, other
certificates and permits of and from all governmental regulatory officials and
bodies necessary to conduct their business as contemplated in the Prospectus,
except where the failure to own or possess all such authorizations, approvals,
orders, licenses, registrations, other certificates and permits would not
materially and adversely affect the Company or its business, properties,
business prospects, condition (financial or otherwise) or results of operations.
There is no proceeding pending or threatened, or to the Company's knowledge any
reasonable basis therefor, which may cause any such authorization, approval,
6
7
order, license, registration, certificate or permit to be revoked, withdrawn,
canceled, suspended or not renewed; and the Company and each of its subsidiaries
is conducting its business in compliance with all laws, rules and regulations
applicable thereto, including, without limitation, all applicable local, state
and federal environmental laws and regulations.
v. The Company and each of its subsidiaries
maintains insurance of the types and in the amounts generally deemed adequate
for its business, including, but not limited to, insurance covering real and
personal property owned or leased by the Company or its subsidiaries, as
applicable, against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in full force and
effect.
w. Neither the Company nor any of its
subsidiaries has at any time during the last five years (i) made any unlawful
contribution to any candidate for foreign office, or failed to disclose fully
any contribution in violation of law, or (ii) made any payment to any federal or
state governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof.
x. The Company has not taken and shall not
take, directly or indirectly, any action designed to cause or result in, or
which has constituted or which might reasonably be expected to cause or result
in, under the Exchange Act, the Exchange Act Rules and Regulations or otherwise,
the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares. No bid or purchase by the Company
and, to the best knowledge of the Company, no bid or purchase that could be
attributed to the Company (as a result of bids or purchases by an "affiliated
purchaser" within the meaning of Rule 10b-6 under the Exchange Act) for or of
the Shares, the Common Stock, any securities of the same class or series as the
Common Stock or any securities convertible into or exchangeable for or that
represent any right to acquire the Common Stock is now pending or in progress or
will have commenced at any time prior to the completion of the distribution of
the Shares.
y. No labor disturbance by the employees of
the Company or any of its subsidiaries exists, is imminent or, to the knowledge
of the Company, is contemplated or threatened; and the Company is not aware of
an existing, imminent or threatened labor disturbance by the employees of any
principal suppliers, contract manufacturing organizations, manufacturers,
authorized dealers or distributors that might be expected to result in any
material change in the business, properties, condition (financial or otherwise),
results of operations or prospects of the Company and its subsidiaries taken as
a whole. No collective bargaining agreement exists with any of the Company's or
any of the Company's subsidiaries' employees and, to the best knowledge of the
Company, no such agreement is imminent.
z. There are no outstanding loans, advances
or guaranties of indebtedness by the Company to or for the benefit of any of (i)
its "affiliates," as such term is deemed in the Rules and Regulations, (ii) any
of the officers or directors of any of its subsidiaries or (iii) any of the
members of the families of any of them.
aa. Except as may be disclosed in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), neither the Company nor any
of its subsidiaries has any liability, absolute or contingent, relating to: (i)
public health or safety; (ii) worker health or safety; (iii) product defect or
warranty; or (iv) pollution, damage to or protection of the environment,
including, without limitation, relating to damage to natural resources,
emissions, discharges, releases or threatened releases of hazardous materials
into the environment (including, further without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or otherwise
relating to the manufacture, processing, use, treatment, storage, generation,
disposal, transport or handling of any hazardous materials, which, in any case
or in the aggregate, would have a material adverse effect on the Company and its
subsidiaries taken as a whole. As used herein, "hazardous material" includes
chemical substances, wastes, pollutants, contaminants, hazardous or toxic
substances, constituents, materials or wastes, whether solid, gaseous or liquid
in nature.
7
8
ab. The Company has not distributed and will
not distribute prior to the Closing Date or on or prior to any date on which the
Option Stock is to be purchased, as the case may be, any prospectus or other
offering material in connection with the offering and sale of the Stock other
than the Prospectus, the Registration Statement and any other material which may
be permitted by the Act and the Rules and Regulations.
ac. The Company has complied in all respects
with the requirements of the Act and the Securities and Exchange Act of 1934, as
amended, and the rules and regulation thereunder (the "Exchange Act"), including
the periodic reporting requirements under the Exchange Act, and each such filing
has conformed in all respects to the requirements of the Act or the Exchange
Act, as applicable, and, as of its date, did not include any untrue misstatement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
4. Representations and Warranties of the Selling
Shareholders. Except as to Sections 4(e) and 4(f), as to which only the
Principal Selling Shareholders (as herein defined) make any representation,
warranty or agreement, each Selling Shareholder severally represents, warrants
and agrees that:
a. The Selling Shareholder has, and
immediately prior to the Closing Date (as defined in Section 2 hereof) the
Selling Shareholder will have, good and marketable title to the shares of Common
Stock to be sold by the Selling Shareholder hereunder on such date, free and
clear of all liens, encumbrances, equities or claims; and upon delivery of such
shares and payment therefor pursuant hereto, good and valid title to such
shares, free and clear of all liens, encumbrances, equities or claims, will pass
to the Underwriters.
b. The Selling Shareholder has placed in
custody under a custody agreement (the "Custody Agreement" and, together with
all other similar agreements executed by the other Selling Shareholders, the
"Custody Agreements") with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇, or either of them
individually, as custodian (the "Custodian"), for delivery under this Agreement,
certificates in negotiable form (with signature guaranteed by a commercial bank
or trust company having an office or correspondent in the United States or a
member firm of the New York or American Stock Exchanges) representing the shares
of Common Stock to be sold by the Selling Shareholder hereunder.
c. The Selling Shareholder has duly and
irrevocably executed and delivered a power of attorney (the "Power of Attorney"
and, together with all other similar agreements executed by the other Selling
Shareholders, the "Powers of Attorney") appointing the Custodian and one or more
other persons, as attorneys-in-fact, with full power of substitution, and with
full authority (exercisable by any one or more of them) to execute and deliver
this Agreement and to take such other action as may be necessary or desirable to
carry out the provisions hereof on behalf of the Selling Shareholder.
d. The Selling Shareholder has full right,
power and authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement; the execution, delivery and performance of the Agreement, the
Power of Attorney and the Custody Agreement by the Selling Shareholder and the
consummation by the Selling Shareholder of the transactions contemplated hereby
will not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Selling
Shareholder is a party or by which the Selling Shareholder is bound or to which
any of the property or assets of the Selling Shareholder is subject, nor will
such actions result in any violation of the provisions of the charter or by-laws
of the Selling Shareholder, the articles of partnership of the Selling
Shareholder or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Selling Shareholder or
the property or assets of the Selling Shareholder; and, except for the
registration of the Shares under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or
8
9
governmental agency or body is required for the execution delivery and
performance of the Agreement, the Power of Attorney or the Custody Agreement by
the Selling Shareholder and the consummation by the Selling Shareholder of the
transactions contemplated hereby.
e. Nothing has come to the attention of any
of ______ (the "Principal Selling Shareholders") to cause it to believe that the
representations and warranties of the Company set forth in Section 3(b) of this
Agreement are not true and correct; provided that no representation or warranty
is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein. The Principal Selling
Shareholders acknowledge that the statements set forth under the heading
"Underwriting" in the Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement.
f. Each Principal Selling Shareholder has no
reason to believe that the representations and warranties of the Company
contained in section 3 hereof are not materially true and correct, is familiar
with the Registration Statement and the Prospectus (as amended or supplemented)
and has no knowledge of any material fact, condition or information not
disclosed in the Registration Statement, as of the effective date, or the
Prospectus (or any amendment or supplement thereto), as of the applicable filing
date, which has adversely affected or may adversely affect the business of the
Company and is not prompted to sell shares of Common Stock by any information
concerning the Company which is not set forth in the Registration Statement and
the Prospectus.
g. The Selling Shareholder has not taken and
will not take, directly or indirectly, any action which is designed to or which
has constituted or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Stock.
h. To the extent that any statement or
omissions made in the Registration Statement or Prospectus are made in reliance
upon and in conformity with written information furnished to the Company by the
Selling Shareholder specifically for use therein, on the Effective Date, the
Registration Statement did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, and on the Effective Date
and the Closing Date, the Prospectus did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
5. Agreements of the Company. The Company agrees with
the Underwriters as follows:
a. The Company will not, either prior to the
Effective Date or thereafter during such period as the Prospectus is required by
law to be delivered in connection with sales of the Shares by an Underwriter or
dealer, file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
b. The Company will use its best efforts to
cause the Registration Statement to become effective, and will notify the
Representatives promptly, and will confirm such advice in writing, (1) when the
Registration Statement has become effective and when any post-effective
amendment thereto becomes effective, (2) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (3) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose or the threat thereof, (4) of the happening of
any event during the period mentioned in the second sentence of Section 4(e)
that makes any statement made in the Registration Statement or the Prospectus
untrue or that requires the making of any changes in the Registration Statement
or the Prospectus in order to make the
9
10
statements therein, in light of the circumstances in which they are made, not
misleading, and (5) of receipt by the Company or any Representatives or attorney
of the Company of any other communication from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A of the Rules and Regulations, the
Company will comply with the provisions of, and make all requisite filings with
the Commission pursuant to, said Rule 430A and to notify the Representatives
promptly of all such filings.
c. The Company will furnish to the
Representatives, without charge, three signed copies of the Registration
Statement and of any post-effective amendment thereto, including financial
statements and schedules, and all exhibits thereto, and will furnish to the
Representatives, without charge, for transmittal to each of the other
Underwriters, a copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, but without
exhibits.
d. The Company will comply with all the
provisions of any undertakings contained in the Registration Statement.
e. On the Effective Date, and thereafter from
time to time, the Company will deliver to each of the Underwriters, without
charge, as many copies of the Prospectus or any amendment or supplement thereto
as the Representatives may reasonably request. The Company consents to the use
of the Prospectus or any amendment or supplement thereto by the Underwriters and
by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur which in the judgment of the
Company or counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in light of the circumstances under which
it was made, not misleading, or if it is necessary to supplement or amend the
Prospectus to comply with law, the Company will forthwith prepare and duly file
with the Commission an appropriate supplement or amendment thereto, and will
deliver to each of the Underwriters, without charge, such number of copies of
such supplement or amendment to the Prospectus as the Representatives may
reasonably request.
f. Prior to any public offering of the
Shares, the Company will cooperate with the Representatives and counsel to the
Underwriters in connection with the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Representatives may request; provided that in no event shall the Company
be obligated to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.
g. During the period of five years commencing
on the Effective Date, the Company will furnish to the Representatives, and each
other Underwriter who may so request, copies of such financial statements and
other periodic and special reports or statements as the Company may from time to
time distribute generally to the holders of any class of its capital stock, and
will furnish to the Representatives, and each other Underwriter who may so
request, a copy of each annual or other report it shall be required to file with
the Commission.
h. The Company will make generally available
to holders of its securities as soon as may be practicable but in no event later
than the last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which need not
be audited but shall be in reasonable detail) for the applicable 12-month period
after the Effective Date, satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
i. Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company will pay, or reimburse if paid by the Representatives, all costs and
expenses incident to the performance of the obligations of the Company and the
10
11
Selling Shareholders under this Agreement, including but not limited to costs
and expenses of or relating to (1) the preparation, printing and filing by the
Company of the Registration Statement and exhibits to it, each preliminary
prospectus, Prospectus and any amendment or supplement to the Registration
Statement or Prospectus, (2) the preparation and delivery of certificates
representing the Shares, (3) the printing of this Agreement, the Agreement Among
Underwriters, any Dealer Agreements and any Underwriters' Questionnaires, (4)
furnishing (including costs of shipping and mailing) such copies of the
Registration Statement, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold, (5) the costs of delivering and distributing the
Custody Agreements and the Powers of Attorney, (6) the quotation of the Shares
on the Nasdaq National Market, (7) any filings required to be made by the
Underwriters with the NASD, and the fees, disbursements and other charges of
counsel for the Underwriters in connection therewith, (8) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions designated pursuant to Section 5(f), including the
fees, disbursements and other charges of counsel to the Underwriters in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (9) fees, disbursements and other
charges to the Company (but not those of counsel for the Underwriters, except as
otherwise provided herein) and (10) the transfer agent for the Shares.
j. If this Agreement shall be terminated by
the Company pursuant to any of the provisions hereof (other than pursuant to
Section 10 or Section 11 hereof) or if for any reason the Company shall be
unable to perform its obligations hereunder, the Company will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including the fees,
disbursements and other charges of counsel to the Underwriters) actually
incurred by them in connection herewith.
k. The Company will not at any time, directly
or indirectly, take any action designed, or which might reasonably be expected,
to cause or result in, or which will constitute, stabilization of the price of
the shares of Common Stock to facilitate the sale or resale of any of the
Shares.
l. The Company will apply the net proceeds
from the offering and sale of the Shares to be sold by the Company in the manner
set forth in the Prospectus under "Use of Proceeds," and shall file such reports
with the Commission with respect to the sale of the Shares and the application
of the proceeds therefrom as may be required in accordance with Rule 463 under
the Act.
m. During the period of 180 days commencing
at the Effective Date, without the prior written consent of the Representatives,
other than pursuant to the Company's Equity Incentive Plan, Employee Stock
Purchase Plan, or Incentive Stock Option Plan III described in the Prospectus,
the Company will not issue, offer, sell, grant options to purchase or otherwise
dispose of any of the Company's equity securities or any other securities
convertible into or exchangeable with its Common Stock or other equity security.
6. Agreements of the Selling Shareholders. Each
Selling Shareholder agrees:
a. For a period of 180 days from the date of
the Prospectus, not to offer for sale, sell or otherwise dispose of (or enter
into any transaction which is designed to, or could be expected to, result in
the disposition by any person of), directly or indirectly, any shares of Common
Stock (other than the Shares), without the prior written consent of the
Representatives.
b. That the shares of Common Stock to be sold
by the Selling Shareholder hereunder, which are represented by the certificates
held in custody for the Selling Shareholder, are subject to the interest of the
Underwriters and the other Selling Shareholders thereunder, that the
arrangements made by the Selling Shareholder for such custody are to that extent
irrevocable, and that the obligations of the Selling Shareholder hereunder shall
not be terminated by any act of the Selling Shareholder, by operation of law, by
the death or incapacity of any individual Selling Shareholder or the occurrence
of any other event.
11
12
c. To deliver to the Representatives prior to
the Closing Date a properly completed and executed United States Treasury
Department Form W-8 if the Selling Shareholder is a non-United States person or
Form W-9 if the Selling Shareholder is a United States person.
7. Conditions of the Obligations of the Underwriters.
The several obligations of each Underwriter hereunder are subject to the
following conditions:
a. Notification that the Registration
Statement has become effective shall be received by the Representatives not
later than 5:00 p.m., New York City time, on the date of this Agreement or at
such later date and time as shall be consented to in writing by the
Representatives and all filings required by Rule 424 and Rule 430A of the Rules
and Regulations shall have been made.
b. (i) No stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for such purpose shall be pending or threatened by the Commission,
(ii) no order suspending the effectiveness of the Registration Statement or the
qualification or registration of the Shares under the securities or Blue Sky
laws of any jurisdiction shall be in effect and no proceeding for such purpose
shall be pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representatives and the Representatives does
not object thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and the Option Closing Date and signed by
the Chief Executive Officer and the Chief Financial Officer of the Company (who
may, as to proceedings threatened, rely upon the best of their knowledge), to
the effect of clauses (i), (ii) and (iii) of this Section 7(b).
c. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i) there
shall not have been a material adverse change in the general affairs, business,
business prospects, properties, management, condition (financial or otherwise)
or results of operations of the Company, whether or not arising from
transactions in the ordinary course of business, in each case other than as
described in or contemplated by the Registration Statement and the Prospectus,
and (ii) the Company shall not have sustained any material loss or interference
with its business or properties from fire, explosion, flood, earthquake or other
casualty, whether or not covered by insurance, or from any labor dispute or any
court of legislative or other governmental action, order or decree, which is not
described in the Registration Statement and the Prospectus, if in the judgment
of the Representatives any such development makes it impracticable or
inadvisable to consummate the sale and delivery of the Shares by the
Underwriters at the public offering price.
d. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
shall have been no litigation or other proceeding instituted against the Company
or any of its officers or directors in their capacities as such, before or by
any federal, state or local court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would materially and
adversely affect the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company.
e. Each of the representations and warranties
of the Company and the Selling Shareholders contained herein shall be true and
correct in all material respects at the Closing Date and, with respect to the
Option Shares, at the Option Closing Date, and all covenants and agreements
contained herein to be performed on the part of the Company and the Selling
Shareholders and all conditions contained herein to be fulfilled or complied
with by the Company and the Selling Shareholders at or prior to the Closing Date
and, with respect to the Option Shares, at or prior to the Option Closing Date,
shall have been duly performed, fulfilled or complied with.
12
13
f. The Representatives shall have received an
opinion, dated the Closing Date and, with respect to the Option Shares, the
Option Closing Date, satisfactory in form and substance to the Representatives
and counsel for the Underwriters, from Heller, Ehrman, White & ▇▇▇▇▇▇▇▇▇,
counsel to the Company, covering the following matters:
(i) the Company and each of its
subsidiaries have been duly organized, are validly existing as corporations in
good standing under the laws of the of their respective states of incorporation,
have the corporate power and authority to own their property and to conduct
their business as described in the Prospectus and are duly qualified to transact
business and are in good standing in each jurisdiction in which the conduct of
their business or their ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not materially and adversely affect the Company and its
subsidiaries or their business, properties, financial condition or results of
operations;
(ii) the authorized capital stock of
the Company conforms as to legal matters to the description thereof contained in
the Prospectus;
(iii) the authorized, issued and
outstanding number of shares of capital stock of the Company is as set forth
under the caption "Capitalization" in the Prospectus as of the date therein; the
shares of Common Stock outstanding prior to the issuance of the Shares have been
duly authorized and are validly issued, fully paid and nonassessable, and there
is no right of rescission with respect to any outstanding shares of the Company
and none of such shares are void or voidable by reason of the Company's failure
to issue such shares in compliance with federal and state securities laws;
(iv) the specimen certificate
evidencing the Shares filed as an exhibit to the Company's Registration
Statement is in due and proper form under California law, the Shares have been
duly authorized and, when the certificates evidencing the Shares have been
issued and delivered in accordance with the terms of this Agreement, the Shares
will be validly issued, fully paid and non-assessable, and the issuance of such
Shares is not subject to any preemptive rights, or, to the best of such
counsel's knowledge, other rights to subscribe for or purchase securities;
(v) the Registration Statement has
become effective under the Act, and no stop order suspending the effectiveness
of the Registration Statement or preventing the use of the Prospectus has been
issued and no proceedings for that purpose have been instituted or are pending
or contemplated by the Commission; any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) of the Rules and Regulations has been
made in the manner and within the time period required by such Rule 424(b);
(vi) the Registration Statement and
the Prospectus and any supplements or amendments thereto (except for financial
statements, schedules and financial and statistical information included
therein, as to which such counsel need not express any opinion) comply as to
form in all material respects with the Act and the Rules and Regulations;
(vii) this Agreement has been duly
authorized, executed and delivered by the Company, and the Company has all
requisite corporate power and authority to enter into this Agreement and
consummate the transactions contemplated hereby;
(viii) this Agreement is a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as to (a) rights to indemnity and contribution thereunder
which may be limited by applicable law, (b) bankruptcy and laws relating to the
rights and remedies of creditors generally, and (c) the availability of
equitable remedies; the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement does not
contravene any provision of applicable law or the articles of incorporation or
by-laws of the Company or any agreement or other instrument known to such
counsel after due inquiry and which is binding upon and material to the Company
or, any judgment or decree of any governmental body, agency or court having
jurisdiction over
13
14
the Company known to such counsel after due inquiry, presently in effect and a
breach or violation of which, a default under which, a termination of which, an
acceleration under which, or a conflict with which would materially and
adversely affect the Company or its business, properties, financial condition or
results of operations, and no consent, approval or authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except such
as may have been obtained under the Act and such as required by the securities
or Blue Sky laws of the various states in connection with the offer and sale of
the Shares by the Underwriters;
(ix) the statements in the Prospectus
under "Management -- Officers and Directors" (but excluding the paragraphs
describing the business experience of such persons), "-- Compensation Committee
Interlocks and Insider Participation," "-- Executive Compensation," "-- Benefit
Plans" (but excluding the Summary Compensation Table, option tables and
footnotes thereto), "-- Limitation of Liability and Indemnification Matters,"
"Certain Transactions," "Description of Capital Stock" and "Shares Eligible for
Future Sale" and in the Registration Statement in Item 14 and Item 15, insofar
as such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present and summarize the information
with respect to such legal matters, documents and proceedings required under the
Act and the Rules and Regulations;
(x) to such counsel's knowledge, there
are no legal or governmental proceedings pending or threatened to which the
Company or any subsidiary is a party or to which any of the properties of the
Company is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described;
(xi) to such counsel's knowledge,
except as described in the Registration Statement, no holder of securities of
the Company has rights to require the Company to register with the Commission
shares of Common Stock or other securities, as part of the offering contemplated
hereby;
(xii) such counsel does not know of
any contracts or documents required to be filed as exhibits to the Registration
Statement or described in the Registration Statement or Prospectus or any
supplements or amendments thereto which are not so filed, or described as
required, and to such counsel's knowledge, each description of such contracts
and documents as is contained in the Registration Statement and Prospectus
fairly presents in all material respects the information required under the Act
and the Rules and Regulations; and
(xiii) as of the Effective Date, the
Common Stock of the Company was duly authorized for listing on the Nasdaq
National Market upon official notice of issuance; and
(xiv) the outstanding shares of
capital stock of each subsidiary of the Company have been duly authorized and
are validly issued, fully paid and non-assessable and are owned by the Company
as set forth in Exhibit 22 to the Registration Statement.
In addition, such counsel shall state that, although
they have not independently verified the accuracy and completeness of the
statements contained in the Registration Statement or the Prospectus, nothing
has come to the attention of such counsel that caused them to believe that the
Registration Statement (other than the financial statements, as to which such
counsel need express no opinion or belief), at the time it was declared
effective, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (other than the
financial statements, as to which such counsel need express no opinion or
belief), at the time the Registration Statement was declared effective (unless
the term "Prospectus" refers to a prospectus that has been provided to the
Underwriters by the Company after the time the Registration Statement was
declared effective for use in connection with the offering of the Firm Shares
that differs from the Prospectus on file at the Commission at the time the
Registration Statement was declared effective, in which case at the time such
Prospectus was first provided to the Underwriters for such use), or at the
Closing Date or any later date on which the Option Shares are to be purchased,
included or includes any untrue statement of a material fact or
14
15
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
In rendering such opinion, such counsel may rely as
to matters not involving the laws of the United States or the State of
California upon opinions of local counsel, and as to matters of fact, on
representations or certificates of officers of the Company and of governmental
officials, in which case their opinion is to state that they are so doing, that
they have no actual knowledge of any material misstatement or inaccuracy in such
opinions, representations or certificates and that the Underwriters are
justified in relying on such opinions or certificates and copies of said
opinions or certificates are to be attached to the opinion.
In rendering such opinion, such counsel may rely upon
opinions of counsel satisfactory in form and substance to the Representatives
and counsel for the Underwriters, in which case, the opinion of counsel for the
Company shall state that it has no reason to believe that such counsel, the
Representatives and counsel for the Underwriters are not justified in so
relying.
g. The counsel for the Selling Shareholders
shall have furnished to the Representatives their written opinion, as counsel to
the Selling Shareholders, addressed to the Underwriters and dated the Closing
Date, in form and substance reasonably satisfactory to the Representatives, to
the effect that:
(i) Each Selling Shareholder has full
right, power and authority to enter into this Agreement, the Power of Attorney
and the Custody Agreement; the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by each Selling
Shareholder and the consummation by each Selling Shareholder of the transactions
contemplated hereby will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any statute,
any indenture, mortgage deed of trust, loan agreement or other agreement or
instrument to which any Selling Shareholder is a party or by which any Selling
Shareholder is bound or to which any of the property or assets of any Selling
Shareholder is subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of any Selling Shareholder or the articles
of partnership of any Selling Shareholder, or any statute, order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over any Selling Shareholder or the property or assets of
any Selling Shareholder; and, except for the registration of the Shares under
the Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of the Shares
by the Underwriters, no consent, approval, authorization or order of, or filing
or registration with, any such court or governmental agency or body is required
for the execution, delivery and performance of this Agreement, the Power of
Attorney or the Custody Agreement by any Selling Shareholder and the
consummation by any Selling Shareholder of the transactions contemplated hereby;
(ii) This Agreement has been duly
authorized, executed and delivered by or on behalf of each Selling Shareholder;
(iii) A Power-of-Attorney and a
Custody Agreement have been duly authorized, executed and delivered by each
Selling Shareholder and constitute valid and binding agreements of each Selling
Shareholder, enforceable in accordance with their respective terms; and
(iv) Good and valid title to the
Shares to be sold by each Selling Shareholder under this agreement, free and
clear of all liens, encumbrances, equities or claims, has been transferred to
each of the several Underwriters.
In rendering such opinion, such counsel may rely as
to matters not involving the laws of the United States or the State of
California upon opinions of local counsel, and as to matters of fact, on
representations or certificates of officers of the Selling Shareholders and of
governmental officials, in which case their opinion is to state that they are so
doing, that they have no actual knowledge of any material misstatement or
inaccuracy in such opinions, representations or certificates and that the
Underwriters are justified in relying on such opinions or certificates and
copies of said opinions or certificates are to be attached to the opinion.
15
16
h. The Representatives shall have received an
opinion, dated the Closing Date and, with respect to the Option Shares, the
Option Closing Date, from ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich, A Professional
Corporation, counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and this Agreement, which opinion shall be
satisfactory in all respects to the Representatives.
i. The Representatives shall have received,
on or prior to the Closing Date, agreements in substantially the form attached
hereto as Schedule III from all directors, officers, and shareholders of the
Company.
j. Concurrently with the execution and
delivery of this Agreement, the Accountants shall have furnished to the
Representatives a letter ("Original Letter"), dated the date of its delivery,
addressed to the Representatives and in form and substance satisfactory to the
Representatives, confirming that they are independent accountants with respect
to the Company as required by the Act and the Rules and Regulations and with
respect to certain financial and other statistical and numerical information
contained in the Registration Statement. At the Closing Date, and, as to the
Option Shares, the Option Closing Date, the Accountants shall have furnished to
the Representatives a letter, dated the date of its delivery, which shall
confirm, on the basis of a review in accordance with the procedures set forth in
the letter from the Accountants, that nothing has come to their attention during
the period from the date of the letter referred to in the prior sentence to a
date (specified in the letter) not more than two business days prior to the
Closing Date and the Option Closing Date, as the case may be, which would
require any change in their letter dated the date hereof if it were required to
be dated and delivered at the Closing Date and the Option Closing Date. The
Original Letter shall state that the Accountants have performed the procedures
set out in the Statement of Accounting Standards No. 71 ("SAS 71") for a review
of interim financial information with respect to each of the three quarters
ended November 3, 1996 and October 22, 1995.
k. The Representatives shall have received,
on or prior to the Closing Date, copies of a letter to the Company from the
Accountants stating that their review of the Company's system of internal
accounting controls, to the extent they deemed necessary in establishing the
scope of their examination of the Company's financial statements as of and at
____________, 1996, did not disclose any weakness in internal controls that they
considered to be material weaknesses.
l. Concurrently with the execution and
delivery of this Agreement and at the Closing Date and, with respect to the
Option Shares, the Option Closing Date, there shall be furnished to the
Representatives a certificate, dated the date of its delivery, signed by the
Chief Executive Officer and the Chief Financial Officer of the Company and of
any subsidiary reasonably requested by the Representatives, in form and
substance satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate
has carefully examined the Registration Statement and the Prospectus and (A) as
of the date of such certificate, the Registration Statement and the Prospectus
do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading and (B) in the case of the certificate
delivered at the Closing Date and the Option Closing Date, since the Effective
Date no event has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not untrue or
misleading in any material respect.
(ii) Each of the representations and
warranties of the Company contained in this Agreement were, when originally
made, and are, at the time such certificate is delivered, true and correct in
all material respects.
(iii) Each of the covenants required
to be performed by the Company herein on or prior to the date of such
certificate has been duly, timely and fully performed and each condition herein
required to be satisfied or fulfilled on or prior to the date of such
certificate has been duly, timely and fully satisfied or fulfilled.
16
17
m. Each Selling Shareholder (or the Custodian
or one or more attorneys-in-fact on behalf of the Selling Shareholder) shall
have furnished to the Representatives on the Closing Date a certificate, dated
the Closing Date, signed by, or on behalf of, the Selling Shareholder (or the
Custodian or one or more attorneys-in-fact) stating that the representations,
warranties and agreements of the Selling Shareholder contained herein are true
and correct as of the Closing Date and that the Selling Shareholder has complied
with all agreements contained herein to be performed by the Selling Shareholder
at or prior to the Closing Date.
n. The Shares shall be qualified for sale in
such jurisdictions as the Representatives may reasonably request, and each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date or the Option Closing Date.
o. Prior to the Closing Date, the Shares
shall have been duly authorized for listing on the Nasdaq National Market upon
official notice of issuance.
p. The Company shall have furnished to the
Representatives such certificates, in addition to those specifically mentioned
herein, as the Representatives may have reasonably requested as to the accuracy
and completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus, as to the accuracy at
the Closing Date and the Option Closing Date of the representations and
warranties of the Company herein, as to the performance by the Company of its
obligations hereunder, or as to the fulfillment of the conditions concurrent and
precedent to the obligations hereunder of the Representatives.
q. You shall have received from each of the
Company's officers and directors and from those shareholders requested by you,
validly executed lock-up agreements with the Representatives to the effect that
they will not, without the prior written consent of the Representatives, sell,
contract to sell or otherwise dispose of any shares of Common Stock or rights to
acquire such shares according to the terms set forth in Schedule II hereto.
8. Indemnification.
a. The Company will indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person, if any, who controls, within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, each Underwriter, from and
against any and all losses, claims, liabilities, expenses and damages arising
out of any action, suit or proceeding brought by a third party (including any
and all investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted by a third party), to which they, or any of
them, may become subject under the Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, liabilities, expenses or damages (i) relate to, arise out of or
are based on any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus, or the omission or alleged omission to state in such document a
material fact required to be stated in it or necessary to make the statements in
it not misleading in light of the circumstances in which they were made, (ii)
relate to, arise out of or are based on whole or in part on any inaccuracy in
the representations and warranties of the Company or the Selling Shareholders
contained herein or (iii) arise out of or are based upon any failure of the
Company to perform its obligations hereunder or under law in connection with the
transactions contemplated hereby; provided that the Company will not be liable
to the extent that such loss, claim, liability, expense or damage arises from
the sale of the Shares in the public offering to any person by an Underwriter
and is based on an untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives, on
behalf of any Underwriter, expressly for inclusion in the Registration
Statement, the preliminary prospectus or the Prospectus, or any amendment or
supplement thereto, and provided further that the Company will not be liable to
any Underwriter, the directors, officers, employees or agents of such
Underwriter or any person controlling such Underwriter with respect to any loss,
claim, liability, expense, or damage arising out of or based on any untrue
17
18
statement or omission or alleged untrue statement or omission or alleged
omission to state a material fact in the preliminary prospectus which is
corrected in the Prospectus if the person asserting any such loss, claim,
liability, charge or damage purchased any of the Shares from such Underwriter,
was entitled by law to receive a Prospectus but was not sent or given a copy of
the Prospectus at or prior to the written confirmation of the sale of such
Shares to such person. The Company acknowledges that the statements set forth
under the heading "Underwriting" in the preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by the Representatives on behalf of the Underwriters
expressly for inclusion in the Registration Statement, the preliminary
prospectus or the Prospectus. This indemnity will be in addition to any
liability that the Company might otherwise have.
b. Each Selling Shareholder, severally in
proportion to the number of Shares to be sold by each of them hereunder, shall
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Shares), to which that Underwriter or
controlling person may become subject, under the Act or otherwise, insofar as
such loss, claim, damage, liability or action relates to, arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall reimburse
each Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by that Underwriter or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Selling Shareholders shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein. The Selling Shareholders acknowledge that
the statements set forth under the heading "Underwriting" in the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives specifically for inclusion in the
Registration Statement. The foregoing indemnity agreement is in addition to any
liability which the Selling Shareholders may otherwise have to any Underwriter
or any controlling person of that Underwriter. The liability of each Selling
Shareholder under this Section 8(b) shall be limited to an amount equal to the
initial public offering price of the stock sold by such Selling Shareholder to
the Underwriters less the amount of any discounts or commissions paid by such
Selling Shareholder to the Underwriters.
c. Each Underwriter will indemnify and hold
harmless the Company, each person, if any, who controls, within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, the Company, and each
director of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity from the
Company to each Underwriter, as set forth in Section 8(a), but only insofar as
losses, claims, liabilities, expenses or damages relate to, arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives, on
behalf of such Underwriter, expressly for use in the Registration Statement, the
preliminary prospectus or the Prospectus, or any amendment or supplement
thereto. The Company acknowledges that the statements set forth under the
heading "Underwriting" in the preliminary prospectus and the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives on behalf of the Underwriters expressly
for inclusion in the Registration Statement, the preliminary prospectus or the
Prospectus. This indemnity will be in addition to any liability that each
Underwriter might otherwise have.
d. Any party that proposes to assert the
right to be indemnified under this Section 8, shall, promptly after receipt of
notice of commencement of any action against such party in respect of
18
19
which a claim is to be made against an indemnifying party or parties under this
Section 8, notify each such indemnifying party in writing of the commencement of
such action, enclosing with such notice a copy of all papers served, but the
omission so to notify such indemnifying party will not relieve it from any
liability that it may have to any indemnified party under the foregoing
provisions of this Section unless, and only to the extent that, such omission
results in the loss of substantive rights or defenses by the indemnifying party.
If any such action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be entitled
to participate in and, to the extent that it elects by delivering written notice
to the indemnified party promptly after receiving notice of the commencement of
the action from the indemnified party, jointly with any other indemnifying party
similarly notified, to assume the defense of the action, with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense, the indemnifying
party will not be liable to the indemnified party for any legal or other
expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own counsel
in any such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (i) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (ii) there are legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (iii) the indemnified party has reasonably concluded
that a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. Any indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not be
unreasonably withheld).
e. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 8 is applicable in accordance with its
terms, but for any reason is held to be unavailable from the Company, the
Selling Shareholders or the Underwriters, the indemnifying party will contribute
to the total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the Company or
the Selling Shareholders from persons other than the Underwriters, such as
persons who control the Company or a Selling Shareholder within the meaning of
the Act, officers of the Company who signed the Registration Statement and
directors of the Company, who also may be liable for contribution) to which the
Company, any one or more of the Selling Shareholders and any one or more of the
Underwriters may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Company, the Selling Shareholders
and the Underwriters. The relative benefits received by the Company, the Selling
Shareholders and the Underwriters shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company and the Selling Shareholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence, but also the relative fault of the Company, the Selling
Shareholders and the Underwriters with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company, the Selling Shareholders or the
19
20
Representatives on behalf of the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling Shareholders and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 8(d) were to be determined by pro rata allocation (even
if the Selling Shareholders or the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 8(d), shall be deemed to include, for purpose of this Section 8(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts
received by it and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 8(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 8(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against any such party in respect of which a claim for contribution may be made
under this Section 8(d), will notify any such party or parties from whom
contribution may be sought from any other obligation it or they may have under
this Section 8(d). No party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent will not be
unreasonably withheld).
f. The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented by
counsel during the negotiations regarding the provisions hereof including,
without limitation, the provisions of this Section 8, and are fully informed
regarding said provisions. They further acknowledge that the provisions of this
Section 8 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and Prospectus as required by
the Act and the Exchange Act. The parties are advised that federal or state
public policy, as interpreted by the courts in certain jurisdictions, may be
contrary to certain of the provisions of this Section 8, and the parties hereto
hereby expressly waive and relinquish any right or ability to assert such public
policy as a defense to a claim under this Section 8 and further agree not to
attempt to assert any such defense.
g. The indemnity and contribution agreements
contained in this Section 8 and the representations and warranties of the
Company and Selling Shareholders contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any investigation made
by or on behalf of the Underwriters, (ii) acceptance of any of the Shares and
payment therefor or (iii) any termination of this Agreement.
9. Reimbursement of Certain Expenses. In addition to
its other obligations under Section 8(a) of this Agreement, the Company hereby
agrees to reimburse on a quarterly basis the Underwriters for all reasonable
legal and other expenses incurred in connection with investigating or defending
any claim, action, investigation, inquiry or other proceeding brought by a third
party relating to, arising out of or based upon in whole or part, (i) as
described in Section 8(a), any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it not misleading in light of the circumstances in which they
were made, (ii) any inaccuracy in the representations and warranties of the
Company or the Selling Shareholders contained herein or (iii) any failure of the
Company or the Selling Shareholders to perform their obligations hereunder or
under law in connection with the transactions contemplated hereby,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the obligations under this Section 9 and the possibility that
such payment might later be held to
20
21
be improper; provided, however, that, to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them.
10. Termination. The obligations of the Underwriters,
the Company and the Selling Shareholders under this Agreement may be terminated
at any time on or prior to the Closing Date (or, with respect to the Option
Shares, on or prior to the Option Closing Date), by notice to the Company from
the Representatives, without liability on the part of any Underwriter to the
Company and the Selling Shareholders or the Company and the Selling Shareholders
to any underwriter (except as set forth in section 5(i) above) if, prior to
delivery and payment for the Firm Shares or Option Shares, as the case may be,
in the sole judgment of the Representatives, (a) trading in any of the equity
securities of the Company shall have been suspended by the Commission, by an
exchange that lists the Shares or by the Nasdaq National Market, (b) trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or minimum or maximum prices shall have been
generally established on such exchange, or additional material governmental
restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by such exchange or by order of the
Commission or any court or other governmental authority, (c) a general banking
moratorium shall have been declared by either federal or New York State
authorities or (d) any material adverse change in the financial or securities
markets in the United States, or in political, financial or economic conditions
in the United States or any outbreak or material escalation of hostilities or
other calamity or crises, shall have occurred, the effect of which is such as to
make it, in the sole judgment of the Representatives, impracticable to market
the Shares.
11. Substitution of Underwriters. If any one or more of
the Underwriters shall fail or refuse to purchase the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of Firm Shares,
the other Underwriters shall be obligated, severally, to purchase the Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 11 by more than one-ninth of such number of
Firm Shares without the prior written consent of such Underwriter. If any
Underwriter or Underwriters shall fail or refuse to purchase any Firm Shares and
the aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase exceeds one-tenth of the
aggregate number of the Firm Shares and arrangements satisfactory to the
Representatives and the Company for the purchase of such Firm Shares are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any nondefaulting Underwriter, the Company or the
Selling Shareholders for the purchase or sale of any Shares under this
Agreement. In any such case either the Representatives or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or in any other documents or arrangements may be effected.
Any action taken pursuant to this Section 11 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
12. Miscellaneous. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the offices of
the Company, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention:
Chief Executive Officer, with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., Heller, Ehrman,
White & ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, (b) if to any of the
Selling Shareholders, to the address of each as set forth on Schedule II hereto,
or (c) if to the Underwriters, to the Representatives at the offices of ▇▇▇▇▇▇▇
& Company, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Finance Department, with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ &
Freidenrich, A Professional Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Any such notice shall be effective only upon receipt.
Any notice may be made by telex or facsimile transmission, but if so made shall
be subsequently confirmed in writing.
21
22
This Agreement has been and is made solely for the benefit of
the Underwriters, the Selling Shareholders and the Company and of the
controlling persons, directors and officers referred to in Section 8, and their
respective successors and assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. The term "successors and assigns" as
used in this Agreement shall not include a purchaser, as such purchaser, of
Shares from any of the Underwriters.
This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts made
and to be performed entirely within such State.
This Agreement may be signed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Please confirm that the foregoing correctly sets forth the
Agreement among the Company and the Underwriters.
Very truly yours,
REMEC, INC.
By:
----------------------------------
Title: Chief Executive Officer
The Selling Shareholders named in
Schedule II to this Agreement
By:
----------------------------------
Attorney-in-Fact
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
▇▇▇▇▇▇▇ & COMPANY, INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇▇▇▇▇▇▇▇ & CO., INC
As Representatives of the Underwriters listed on
Schedule I
By: ▇▇▇▇▇▇▇ & Company, Inc.
By:
------------------------------
Title: Managing Director
------------------------------
22
23
SCHEDULE I
SCHEDULE OF UNDERWRITERS
NUMBER OF
FIRM SHARES
TO BE
UNDERWRITERS PURCHASED
▇▇▇▇▇▇▇ & Company, Inc........................................
▇.▇. ▇▇▇▇▇▇▇ & Co., Inc.......................................
▇▇▇▇▇▇▇▇▇▇▇ & Co., Inc........................................
-------------
Total...............................................
=============
23
24
SCHEDULE II
SCHEDULE OF SELLING SHAREHOLDERS
NUMBER OF
SHAREHOLDER FIRM SHARES
--------------
Total........................................
==============
NUMBER OF
SHAREHOLDER OPTION SHARES
--------------
Total........................................
==============
24
25
SCHEDULE III
FORM OF LOCK-UP AGREEMENT TO BE SIGNED BY ALL
DIRECTORS, OFFICERS AND SHAREHOLDERS OF THE COMPANY
The undersigned is a holder of securities of REMEC, Inc., a
California corporation (the "Company") and wishes to facilitate the secondary
public offering of shares of the Common Stock (the "Common Stock") of the
Company (the "Offering"). The undersigned recognizes that such Offering will be
of benefit to the undersigned.
In consideration of the foregoing and in order to induce you
to act as underwriters in connection with the Offering, the undersigned hereby
agrees that he, she or it will not, directly or indirectly, sell, contract to
sell, transfer or encumber the economic risk of ownership interest in, make any
short sale, pledge, establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended,
or otherwise dispose of, any shares of Common Stock, options to acquire shares
of Common Stock or securities exchangeable for or convertible into shares of
Common Stock of the Company which he, she or it may own, exclusive of any shares
of Common Stock purchased in connection with the Company's initial public
offering or purchased in the public trading market subsequent to the Company's
initial public offering, without the prior written approval of ▇▇▇▇▇▇▇ &
Company, Inc., acting on its own behalf and/or on behalf of other
representatives of the underwriters, for a period commencing as of the day on
which the Form S-1 Registration Statement to be filed on behalf of the Company
in connection with the Offering (the "Registration Statement") shall become
effective by order of the Securities and Exchange Commission (the "Effective
Date") and ending on the date which is one hundred eighty (180) days after the
Effective Date. The undersigned confirms that he, she or it understands that the
underwriters and the Company will rely upon the representations set forth in
this Agreement in proceeding with the Offering. The undersigned further confirms
that the agreements of the undersigned are irrevocable and shall be binding upon
the undersigned's heirs, legal representatives, successors and assigns. The
undersigned agrees and consents to the entry of stop transfer instructions with
the Company's transfer agent against the transfer of securities held by the
undersigned except in compliance with this Agreement.
This Agreement shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns upon the
effectiveness of the Registration Statement.
25
