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EXHIBIT 1
2,600,000 SHARES*
THREE-FIVE SYSTEMS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
May __, 0000
XXXX XX XXXXXXX SECURITIES LLC
XXXXXXX & COMPANY, INC.
As Representatives of the several Underwriters
c/o Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Three-Five Systems, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell 2,600,000 shares (the "Company Firm Shares") of the
Company's Common Stock, $0.01 par value per share (the "Common Stock"), to you,
ING Barings LLC, X.X. Xxxxxxxx & Co. and the several other Underwriters named in
Schedule I hereto (collectively, the "Underwriters"), for whom you are acting as
representatives (the "Representatives"). The Company has also agreed to grant to
you and the other Underwriters an option (the "Option") to purchase up to an
additional 390,000 shares of Common Stock, on the terms and for the purposes set
forth in Section 1(b) (the "Option Shares"). The Company Firm Shares and the
Option Shares are referred to collectively herein as the "Shares."
The Company confirms as follows its agreements with the Representatives
and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, (i) the
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* Plus an option to purchase up to an additional 390,000 shares to cover
over-allotments.
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Company agrees to issue and sell the Company Firm Shares to the several
Underwriters, and (ii) each of the Underwriters, severally and not jointly,
agrees to purchase from the Company the aggregate number of Company Firm Shares
set forth opposite the respective Underwriter's name in Schedule I hereto, at
the purchase price of $_____ for each Company Firm Share.
(b) Subject to all the terms and conditions of this Agreement,
the Company grants the Option to the several Underwriters to purchase, severally
and not jointly, up to 390,000 Option Shares at the same price per share as the
Underwriters shall pay for the Company Firm Shares. The Option may be exercised
only to cover over-allotments in the sale of the Company 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 Company no later than 12:00 noon, New York City time, at
least two and no more than five 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 will issue and 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 Company Firm Shares that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
2. Delivery and Payment. Delivery of the Company Firm Shares
shall be made to the Representatives for the accounts of the Underwriters
against payment of the purchase price by certified or official bank checks or by
wire transfer payable in same-day funds to the order of the Company at the
offices of Banc of America Securities LLC (as to the Representatives jointly) at
000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 (or such other place as
may be agreed to by the Company and the Representatives), at 7:00 a.m., San
Francisco time, on the third (or, if the purchase price set forth in Section
1(b) hereof is determined after 4:30 p.m., Washington D.C. time, the fourth)
business day following the commencement of the offering contemplated by this
Agreement, or at such time on such other date, not later than seven 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.
It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Company Firm Shares and any Option Shares the Underwriters have agreed to
purchase. Either or both of Banc of America Securities LLC and Xxxxxxx &
Company, Inc., individually and not as the Representatives of the Underwriters,
may (but shall not be obligated to) make payment for any Shares to be purchased
by any Underwriter whose funds shall not have been received by the
Representatives by the Closing Date or the date
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specified for delivery of the Option Shares for the account of such Underwriter,
but any such payment shall not relieve such Underwriter from any of its
obligations under this Agreement.
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. 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 Company Firm Shares and Option 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. The Company represents,
warrants and covenants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 and
a registration statement (Registration No. 333-35788) on Form S-3 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, including the documents incorporated by reference therein, 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 such
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 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 all documents
incorporated by reference therein, financial statements and all exhibits and any
information deemed to be included by Rule 430A and includes any registration
statement relating to the offering contemplated by this Agreement and filed
pursuant to Rule 462(b) of the Rules and Regulations. The term "Prospectus"
means the prospectus, including the documents incorporated by reference therein,
as first filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or, if no such filing is
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required, the form of final prospectus, including the documents incorporated by
reference therein, included in the Registration Statement at the Effective Date.
Any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") after
the Effective Date, the date of any preliminary prospectus or the date of the
Prospectus, as the case may be, and deemed to be incorporated therein by
reference.
(b) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission. 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, the Exchange Act, the rules and regulations under the
Exchange Act (the "Exchange Act Rules and Regulations"), and the Rules and
Regulations and will contain all statements required to be stated therein in
accordance with the Act, the Exchange Act, the Exchange Act Rules and
Regulations, and the Rules and Regulations. On the Effective Date and when any
post-effective 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
the 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
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 documents that are incorporated by reference in the
preliminary prospectus and the Prospectus or from which information is so
incorporated by reference, when they became or become effective or were or are
filed with the Commission, as the case may be, complied or will comply in all
material respects with the requirements of the Act or the Exchange Act, as
applicable, and the Rules and Regulations or the Exchange Act Rules and
Regulations, as applicable; and any documents so filed and incorporated by
reference subsequent to the Effective Date shall, when they are filed with the
Commission, comply in all material respects with the requirements of the Act or
the Exchange Act, as applicable, and the Rules and Regulations or the Exchange
Act Rules and Regulations, as applicable.
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(d) The Company 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, other than Three-Five Systems Limited, Three-Five
Systems Pacific, Inc., and Three-Five Systems (Beijing) Co., Ltd. (the
"Subsidiaries") and other than Inviso, Inc., a California corporation, in which
the Company is a minority owner, a new entity (Xxxx), which the Company has
agreed with Tecdis, S.p.A to form, and TFSM, Inc., an Arizona corporation, which
is inactive. The Company and each of its Subsidiaries is, and at the Closing
Date and, if later, the Option Closing Date, will be, a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation (except where the failure of any Subsidiary to be
in good standing has not had and will not have a material adverse effect on the
Company or any of its Subsidiaries). The Company and each of its Subsidiaries
has, 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 it, to own
or lease all the assets owned or leased by it and to conduct its 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 a foreign corporation in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or leased by
it 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, business prospects,
condition (financial or other) or results of operations. All of the outstanding
shares of capital stock of each Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable, and owned by the Company (except
that, with respect to (i) Three-Five Systems Limited, Xxxxx X. Xxxxxxxx owns one
share; and (ii) Three-Five Systems Pacific, Inc., each of Xxxxx X. Xxxxxxxx,
Xxxxxxx X. Xxxxxxxx, Xxxxxxxx X. Xxxxx, Xxxxxx Xxx X. Xxxxxx, Xxxx Ma. G.
Xxxxxxxx, Xxxxx X.X. Xxxxxxxxx and Xxxxxxxx X.X. Xxxxxx owns one share) free and
clear of all claims, liens, charges and encumbrances; there are no securities
outstanding that are convertible into or exercisable or exchangeable for capital
stock of any Subsidiary. The Company 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 certificate of incorporation
and of the by-laws of the Company and the charter documents of 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.
(e) All of the outstanding shares of capital stock of the
Company have been duly authorized, validly issued and are fully paid and
nonassessable and were issued in compliance with all applicable state and
federal securities laws; the Shares have been duly authorized and when issued
and paid for as contemplated herein will be validly issued, fully paid and
nonassessable; no preemptive or similar rights exist with respect to any of the
Shares or the issue and sale thereof . The description of the capital stock of
the Company in the Registration
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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 capital stock, or any such warrants, convertible
securities or obligations. No further approval or authority of stockholders or
the Board of Directors of the Company will be required for the issuance and sale
of the Shares as contemplated herein.
(f) The financial statements and schedules included or
incorporated by reference in the Registration Statement or the Prospectus
present fairly the financial condition of the Company and its consolidated
Subsidiaries as of the respective dates thereof and the results of operations
and cash flows of the Company and its consolidated Subsidiaries 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, the Exchange
Act, the Exchange Act Rules and Regulations or the Rules and Regulations to be
included in the Registration Statement or the Prospectus. Xxxxxx Xxxxxxxx LLP
(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 consolidated 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.
(g) 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, including,
without limitation, the three-for-two stock split to be effected in the form of
a stock dividend on or about May 12, 2000 to stockholders of record on May 1,
2000, (A) there has not been and will not have been any change in the
capitalization of the Company (other than in connection with the exercise of
options to purchase the Company's Common Stock granted pursuant to the Company's
stock option plans from the shares reserved therefor as described in the
Registration Statement or pursuant to outstanding warrants), or any material
adverse change in the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company or any of its
Subsidiaries taken as a whole, (B) neither the Company nor any of its
Subsidiaries taken as a whole, has 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 the Company or any of
its Subsidiaries 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 (C) 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.
(h) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its business in
a manner that would cause it to become, an "investment company" or an
"affiliated person" of, or "promoter" or "principal
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underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(i) 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 its
Subsidiaries or any of their officers in their capacity as such, nor any 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 might materially and adversely affect
the Company and any of its Subsidiaries taken as a whole, or the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and any of its Subsidiaries taken as a whole.
(j) The Company and each Subsidiary has, and at the Closing
Date and, if later, the Option Closing Date, will have, performed all the
obligations required to be performed by it, and is 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 it is a party or by which its property is
bound or affected, which default might materially and adversely affect the
Company and any of its Subsidiaries taken as a whole, or the business,
properties, business prospects, condition (financial or other) or results of
operations of the Company and any of its Subsidiaries taken as a whole. To the
best knowledge of the Company, no other party under any contract or other
instrument to which it and any of its Subsidiaries is a party is in default in
any respect thereunder, which default might materially and adversely affect the
Company and any of its Subsidiaries taken as a whole, or the business,
properties, business prospects, condition (financial or other) or results of
operations of the Company and any of its Subsidiaries taken as a whole. 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
respective certificates or articles of organization or by-laws or other
organizational documents.
(k) 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 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.
(l) The Company has full corporate 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 the terms hereof
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, or other laws affecting creditors' rights generally or by general
principles of equity and except as rights to indemnity or contribution may be
limited by federal or state securities laws and the public policy underlying
such laws). The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the Company
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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 certificate or articles of
incorporation or by-laws or other organizational documents of the Company or any
of its Subsidiaries, 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 or any of its Subsidiaries is a party or by which the Company, any of
its Subsidiaries or any of their properties is bound or affected, or 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 or any of its Subsidiaries.
(m) The Company or one of its Subsidiaries has good and
marketable title to all properties and assets described in the Prospectus as
owned by them, free and clear of all liens (except for liens for taxes not yet
due and payable as to which appropriate reserves have been established and
reflected on the Company's financial statements), charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not material
to the business of the Company or its Subsidiaries. The Company or its
Subsidiaries have valid, subsisting and enforceable leases for the properties
described in the Prospectus as leased by them. The Company or one of its
Subsidiaries owns or leases all such properties as are necessary to its
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
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a whole.
(n) 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 not described or filed as
required. All such contracts to which the Company or any of its Subsidiaries is
a party have been duly authorized, executed and delivered by the Company or such
Subsidiary, constitute valid and binding agreements of the Company or such
Subsidiary and are enforceable against and by the Company or such Subsidiary in
accordance with the terms thereof (except as such enforceability may be limited
by applicable bankruptcy, insolvency, or other laws affecting creditors' rights
generally or by general principles of equity and except as rights to indemnity
or contribution may be limited by federal or state securities laws and the
public policy underlying such laws).
(o) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document required by
Section 4 of this Agreement to be delivered to the Representatives was or will
be, when made, inaccurate, untrue or incorrect.
(p) 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.
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(q) 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, which rights have not been waived by the holder thereof
as of the date hereof.
(r) The Company has filed an application to list the Shares on
the New York Stock Exchange ("NYSE") and has received notification that the
listing has been approved, subject to notice of issuance of the Shares. The
Company has taken no action designed to, or reasonably likely to have the effect
of, delisting the Common Stock from the NYSE, nor has the Company received any
notification that the NYSE is contemplating terminating such listing.
(s) Except as disclosed in or specifically contemplated by the
Prospectus (i) the Company and its Subsidiaries have sufficient trademarks,
trade names, patent rights, mask works, copyrights, licenses, approvals and
governmental authorizations to conduct their businesses as now conducted, (ii)
the Company has no knowledge of any infringement by it or any of its
Subsidiaries of trademarks, trade name rights, patent rights, mask work rights,
copyrights, licenses, trade secrets or other similar rights of others, where
such infringement could have a material and adverse effect on the Company, any
of its Subsidiaries or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and any of its
Subsidiaries taken as a whole, and (iii) there is no claim being made against
the Company or any of its Subsidiaries, or to the best of the Company's
knowledge, any employee of the Company or any of its Subsidiaries, regarding
trademark, trade name, patent, mask work, copyright, license, trade secret or
other infringement which could have a material and adverse effect on the
Company, any of its Subsidiaries or the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company and any of its Subsidiaries taken as a whole.
(t) The Company and each of its Subsidiaries have filed all
federal, state, local 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. Neither the Company nor any of
its Subsidiaries have any tax deficiency which has been or, to the best
knowledge of the Company, might be asserted or threatened against it which could
have a material and adverse effect on the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole.
(u) The Company or 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 respective businesses as contemplated in the
Prospectus, except where the failure to own or possess such authorizations,
approvals, orders, licenses, registrations, other certificates and permits would
not materially and adversely affect the Company, any of its Subsidiaries or the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and any of its Subsidiaries taken as a
whole. There is no proceeding pending or threatened (or any basis therefor known
to the Company) which may cause any such authorization, approval, order,
license, registration, certificate or permit to be revoked, withdrawn,
cancelled, 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
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applicable federal, state and local environmental laws and regulations) except
where such noncompliance would not materially and adversely affect the Company,
any of its Subsidiaries or the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
any of its Subsidiaries taken as a whole.
(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 and its Subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect. The Company does
not believe that it or any Subsidiary will not be able to (i) renew its existing
insurance coverage as and when such policies expire, or (ii) obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not materially and
adversely affect the Company and its Subsidiaries taken as a whole.
(w) Neither the Company nor any of its Subsidiaries nor, to
the best of the Company's knowledge, any of its or their respective employees or
agents at any time during the last five years have (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 and each of its Subsidiaries is in compliance
in all respects with all applicable Environmental Laws except to the extent that
any noncompliance would not materially and adversely affect the Company, any of
its Subsidiaries or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and any of its
Subsidiaries taken as a whole. Except as set forth in the Registration Statement
and Prospectus, neither the Company nor any of its Subsidiaries have received
any notice or other communication (in writing or otherwise) that alleges that
the Company or any of its Subsidiaries is not in compliance with any
Environmental Law where such noncompliance is required to be disclosed in the
Registration Statement and the Prospectus, and there are no circumstances that
may prevent or interfere with the Company's or any of its Subsidiaries'
compliance with any Environmental Law in the future. For purposes of this
Section 3(x), "Environmental Law" means any federal, state, local or foreign
legal requirement relating to pollution or protection of human health or the
environment or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal or handling of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products.
(y) The Company maintains a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded
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accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(z) The Company and its Subsidiaries and any "employee benefit
plan" (as defined under the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
Subsidiaries or their "ERISA Affiliates" (as defined below) are in compliance in
all material respects with ERISA. No "reportable event" (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any "employee
benefit plan" established or maintained by the Company, its Subsidiaries or any
of their ERISA Affiliates which could reasonably be expected to materially and
adversely affect the Company and any of its Subsidiaries taken as a whole. No
"employee benefit plan" established or maintained by the Company, its
Subsidiaries or any of their ERISA Affiliates, if such "employee benefit plan"
were terminated, would have any "amount of unfunded benefit liabilities" (as
defined under ERISA) which could reasonably be expected to materially and
adversely affect the Company and any of its Subsidiaries taken as a whole.
Neither the Company, its Subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "employee benefit
plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee
benefit plan" established or maintained by the Company, its Subsidiaries or any
of their ERISA Affiliates that is intended to be qualified under Section 401(a)
of the Code is so qualified and to the Company's knowledge nothing has occurred,
whether by action or failure to act, which would cause the loss of such
qualification. "ERISA Affiliate" means, with respect to the Company or a
Subsidiary, any member of any group of organizations described in Sections
414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the "Code") of which the
Company or such Subsidiary is a member.
4. Agreements of the Company.
The Company covenants and agrees with the several 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. The
Company will not, prior to the later of the Option Closing Date and the
completion of the Underwriters' distribution of the Shares, distribute any
offering material in connection with the offering and the sale of the Shares
other than a preliminary prospectus, the Prospectus or the Registration
Statement.
(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, (i) when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective, (ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (iii) of
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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, (iv) of the happening of any event during the period
mentioned in the second sentence of Section 4(e) that in the judgment of the
Company 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 statements therein, in the light of the
circumstances in which they are made, not misleading and (v) of receipt by the
Company or any representative 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
notify the Representatives promptly of all such filings.
(c) The Company will furnish to each Representative, without
charge, one signed copy of each 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 several 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 the 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. The Company will not file any document under the Exchange
Act or the Exchange Act Rules and Regulations before the termination of the
offering of the Shares by the Underwriters, if such document would be deemed to
be incorporated by reference into the Prospectus, that is not approved by the
Representatives after reasonable notice thereof.
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(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 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 a period of 12 months ended commencing after
the Effective Date, and 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 under this Agreement and in
connection with the transactions contemplated hereby, including but not limited
to costs and expenses of or relating to (i) the preparation, printing and filing
of the Registration Statement and exhibits to it, each preliminary prospectus,
Prospectus and any amendment or supplement to the Registration Statement or
Prospectus, (ii) the preparation and delivery of certificates representing the
Shares, (iii) the printing of this Agreement, the Agreement Among Underwriters,
any Selected Dealer Agreements, any Underwriters' Questionnaires, any
Underwriters' Powers of Attorney, and any invitation letters to prospective
Underwriters, (iv) 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, (v) the listing of the Shares on the
NYSE, (vi) 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, (vii) 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 4(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, (viii) fees, disbursements and other charges of counsel to the
Company (but not those of counsel for the Underwriters, except as otherwise
provided herein) and (ix) the transfer agent for the Shares.
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(j) 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.
(k) 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."
(l) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the Prospectus,
without the prior written consent of the Representatives, the Company will not
offer, sell, contract to sell, grant options to purchase or otherwise dispose of
any Common Stock or other equity securities of the Company or any other
securities convertible into or exchangeable with its Common Stock or other
equity securities (other than pursuant to employee stock option plans or the
conversion of convertible securities or the exercise of warrants outstanding on
the date of this Agreement).
(m) During the period of 90 days after the date of the
Prospectus, the Company will not file with the Commission or cause to become
effective any registration statement relating to any securities of the Company
without the prior written consent of the Representatives.
(n) The Company will cause each of its executive officers and
directors to enter into 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 form of Lock-up
Agreement set forth in Schedule II hereto.
(o) The Company shall maintain, at its expense, a registrar
and transfer agent for the Common Stock.
(p) From the date hereof until the Closing Date or such date,
as in the opinion of counsel for the Underwriters, the Prospectus is no longer
required by law to be delivered in connection with sales by an Underwriter or
dealer, the Company will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Act in the manner
and within the time periods required by the Exchange Act.
5. Conditions of the Obligations of the Underwriters. The
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.
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(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
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 do
not object thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and, if later, 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
information and belief), to the effect of clauses (i), (ii) and (iii) of this
paragraph.
(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 and any of its Subsidiaries taken as a whole,
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 or other casualty, whether or not covered by insurance, or from
any labor dispute or any court or 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 initial 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, any of its
Subsidiaries, or any of their 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, in
the judgment of the Representatives, materially and adversely affect the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a whole.
(e) Each of the representations and warranties of the Company
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 all conditions contained herein to be fulfilled or complied with
by the Company at or prior to the Closing Date and, with respect to the
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Option Shares, at or prior to the Option Closing Date, shall have been duly
performed, fulfilled or complied with.
(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 to counsel for the
Underwriters from Xxxxxxxxx Xxxxxxx, LLP, counsel to the Company, with respect
to the following matters:
(i) The Company is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation; has
full corporate power and authority to conduct all the activities conducted by
it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and Prospectus; and is duly
licensed or qualified to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of the activities conducted
by it or the character of the assets owned or leased by it makes such license or
qualification necessary and where the failure to be licensed or qualified would
have a material and adverse effect on the business or financial condition of the
Company and its Subsidiaries taken as a whole.
(ii) All of the outstanding shares of capital stock of the Company
have been duly authorized, validly issued and are fully paid and nonassessable,
and, to such counsel's knowledge, were issued pursuant to the registration and
qualification requirements of federal and applicable state securities laws or
exemptions therefrom, and were not issued in violation of or subject to any
preemptive or, to such counsel's knowledge, similar rights;
(iii) The specimen certificate evidencing the Common Stock filed as
an exhibit to the Registration Statement is in due and proper form under
Delaware law, the Shares to be sold by the Company have been duly authorized
and, when issued and paid for as contemplated by this Agreement, will be validly
issued, fully paid and nonassessable; and, to such counsel's knowledge, no
preemptive or similar rights exist with respect to any of the Shares or the
issue and sale thereof.
(iv) To such counsel's knowledge, all of the outstanding shares of
capital stock of each Subsidiary owned by the Company are owned by the Company
free and clear of all claims, liens, charges and encumbrances; and there are no
securities outstanding that are convertible into or exercisable or exchangeable
for capital stock of any Subsidiary.
(v) The authorized and outstanding capital stock of the Company is
as set forth in the Registration Statement and the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement or pursuant to reservations,
agreements, employee benefit plans or the exercise of convertible securities,
options or warrants referred to in the Prospectus). To such counsel's knowledge,
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except as disclosed in or specifically contemplated by the Prospectus, there are
no outstanding options, warrants of other rights calling for the issuance of,
and no commitments, plans or arrangements to issue, any shares of capital stock
of the Company or any security convertible into or exchangeable or exercisable
for capital stock of the Company. The description of the capital stock of the
Company in the Registration Statement and the Prospectus conforms in all
material respects to the terms thereof.
(vi) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the Company or any of
its Subsidiaries is a party or to which any of their respective properties is
subject that are required to be described in the Registration Statement or the
Prospectus but are not so described.
(vii) 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
under this Agreement, except such as have been obtained or made under the 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 NASD in connection with the
purchase and distribution by the Underwriters of the Shares.
(viii) The Company has the corporate power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The execution and delivery of this Agreement, the compliance
by the Company with all of the terms hereof and the consummation of the
transactions contemplated hereby does not contravene any provision of applicable
law or the Certificate of Incorporation or By-Laws of the Company or the charter
documents of any of its Subsidiaries, and to the best of such counsel's
knowledge will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of its Subsidiaries
pursuant to the terms and provisions of, 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, 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 known to such
counsel to which the Company or any of its Subsidiaries is a party or by which
the Company, any of its Subsidiaries, or any of their respective properties is
bound or affected, or violate or conflict with (A) any judgment, ruling, decree
or order known to such counsel or (B) any statute, rule or regulation of any
court or other governmental agency or body, applicable to the business or
properties of the Company or any of its Subsidiaries.
(x) To such counsel's knowledge, 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
not described or filed or incorporated by reference as required, and each
description of such contracts and documents that 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.
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(xi) The statements (A) in the Prospectus under the captions "Risk
Factors -- Sales of large numbers of shares could adversely affect the price of
our common stock", "Risk Factors -- Change in control provisions may adversely
affect existing stockholders" and "Business -- Intellectual Property"; (B) in
the Company's annual report on Form 10-K for the fiscal year ended December 31,
1999 under the captions "Special Considerations -- Change in control provisions
may adversely affect existing stockholders" and "Special Considerations -- Sales
of large numbers of shares could adversely affect the price of our common
stock"; (C) in the definitive proxy statement on Schedule 14A filed March 28,
2000 under the captions "Executive Compensation -- Employment and Other
Agreements" and "Executive Compensation -- Stock Option Plans and Directors'
Stock Plan"; and (D) in the Form 8-A (Registration No. 1-4373) declared
effective by the SEC on December 28, 1994 under the caption "Description of
Registrant's Securities to be Registered", insofar as the statements constitute
a summary of documents referred to therein or matters of law, are accurate
summaries and fairly and correctly present, in all material respects, the
information called for with respect to such documents and matters (provided,
however, that such counsel may rely on representations of the Company with
respect to the factual matters contained in such statements, and provided
further that such counsel shall state that nothing has come to the attention of
such counsel which leads them to believe that such representations are not true
and correct in all material respects).
(xii) 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.
(xiii) The Shares have been duly authorized for listing on the NYSE
subject to notice of issuance.
(xiv) To such counsel's knowledge, no holder of securities of the
Company has rights, which have not been waived or satisfied, to require the
Company to register with the Commission shares of Common Stock or other
securities, as part of the offering contemplated hereby.
(xv) The Registration Statement has become effective under the
Act, and to the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose has been instituted or is pending or threatened.
(xvi) The Registration Statement and the Prospectus comply as to
form in all material respects with the requirement of the Act and the Rules and
Regulations (other than the financial statements, schedules and other financial
data contained or incorporated by reference in the Registration Statement or the
Prospectus, as to which such counsel need express no opinion).
(xvii) The documents incorporated by reference in the Prospectus
(other than the financial statements, schedules and other financial data
contained therein, as to which such counsel need express no opinion), when they
were filed with the Commission, complied as
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to form in all material respects with the requirements of the Exchange Act and
the Exchange Act Rules and Regulations.
In rendering such opinion, such counsel may rely as to matters of local
law on opinions of counsel satisfactory in form and substance to the
Representatives and to counsel for the Underwriters, provided that the opinion
of counsel to the Company shall state that such counsel are doing so, that they
have no reason to believe that they and the Underwriters are not entitled to
rely on such opinions and that copies of such opinions are to be attached to the
opinion.
Such counsel shall also state that such counsel has participated in the
preparation of the Registration Statement and Prospectus and, without
independent check or verification, such counsel has no knowledge of any facts
that would cause them to believe that, as of the Effective Date the Registration
Statement, or any amendment or supplement thereto, (other than the financial
statements, schedules and other financial data contained or incorporated by
reference therein, as to which such counsel need express no opinion) 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, or any amendment or supplement thereto, as of
its date and the Closing Date and, if later, the Option Closing Date, contained
or contains any untrue statement of a material fact or omitted or omits to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than the
financial statements, schedules and other financial data contained or
incorporated by reference therein, as to which such counsel need express no
opinion).
(g) 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 to counsel for the
Underwriters from Wragge & Co, special counsel to Three-Five Systems Limited, to
the effect that Three-Five Systems Limited has been duly incorporated and
validly exists as a private limited company under the laws of its jurisdiction
of formation; has full corporate power and authority to own or lease all the
assets owned or leased by it and to conduct all the activities conducted by it
and as described in the Registration Statement and Prospectus; is duly licensed
or qualified to do business and is in good standing as a foreign company in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such license or
qualification necessary and where the failure to be licensed or qualified would
have a material and adverse effect on the business or financial condition of the
Company and its Subsidiaries taken as a whole; is located, operates its
business, and all of its assets are located in England and there are no
employees nor business operations outside of England; and that all of the
outstanding shares of capital stock of Three-Five Systems Limited have been duly
authorized and validly issued and are fully paid up and nonassessable.
(h) 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 to counsel for the
Underwriters from SyCip Xxxxxxx Xxxxxxxxx & Xxxxxxxxx, special counsel to
Three-Five Systems Pacific, Inc., to the effect that Three-Five Systems Pacific,
Inc. is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of formation; has full corporate power and
authority to conduct all the activities conducted by it, to own or lease all the
assets owned or leased by it and
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to conduct its business as described in the Registration Statement and
Prospectus; is duly licensed or qualified to do business and is in good standing
as a foreign corporation in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or leased by it
makes such license or qualification necessary and where the failure to be
licensed or qualified would have a material and adverse effect on the business
or financial condition of the Company and its Subsidiaries taken as a whole; is
registered and located and operates its business, and all of its assets are
located in the City of Beijing, PRC and there are no employees nor business
operations outside the Beijing district; and that all of the outstanding shares
of capital stock of Three-Five Systems Pacific, Inc. have been duly authorized
and validly issued and are fully paid and nonassessable.
(i) 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 to counsel for the
Underwriters from Xxx Xxxx Law Firm, special counsel to Three-Five Systems
(Beijing) Co., Ltd. to the effect that Three-Five Systems (Beijing) Co., Ltd. is
a wholly foreign owned limited liability legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation;
authorized to design, develop and manufacture liquid crystal displays, light
emitting diodes and other products using display technologies or electronic
technologies, sell, provide post-sale repair, maintenance and technical
consultation services to self-manufactured products, and does not conduct any
activities beyond the scope of business as above described; with full corporate
power and authority to conduct all the activities conducted by it, own or lease
all the assets owned or leased by it and to conduct its business as described in
the Registration Statement and Prospectus; and is duly registered, licensed or
qualified to do business and is in good standing as a foreign corporation in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such registration, license
or qualification necessary and where the failure to be registered, licensed or
qualified would have a material and adverse effect on the business or financial
condition of the Company and its Subsidiaries taken as a whole; and that all of
the registered capital of Three-Five Systems (Beijing) Co., Ltd. scheduled to be
contributed and paid as provided in the Articles of Association has been fully
contributed and paid and is nonassessable.
(j) The Representatives shall have received an opinion, dated the
Closing Date and the Option Closing Date, from Xxxx Xxxx Xxxx & Freidenrich LLP,
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.
(k) Concurrently with the execution and delivery of this Agreement, the
Accountants shall have furnished to the Representatives a 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 and its Subsidiaries as required by the
Act, the Exchange Act and the Rules and Regulations and with respect to certain
financial and other statistical and numerical information contained or
incorporated by reference 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
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prior sentence to a date (specified in the letter) not more than five 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.
(l) Concurrently with the execution and delivery of this Agreement and
at the Closing Date and, as 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 each of the Chief Executive Officer and the Chief Financial
Officer of the Company, 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 (including any documents filed under
the Exchange Act and deemed to be incorporated by reference into the Prospectus)
and (A) as of the date of such certificate, such documents are true and correct
in all material respects and do not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not untrue
or 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.
(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.
(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.
(m) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 4(n).
(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 NYSE 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
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fulfillment of the conditions concurrent and precedent to the obligations
hereunder of the Representatives.
6. 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 each Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages (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), 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 arise out of or are based in whole or in part on (i) 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, (ii)
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 the light of the circumstances in which they were made, or (iii)
any inaccuracy in the representations and warranties of the Company contained
herein or any failure of the Company to perform its obligations hereunder or
under law in connection with the transactions contemplated hereby; provided,
however, that (x) 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 and (y) 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 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 Shares from such Underwriter 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 agreement will be in addition to any liability that
the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each director of the Company, each officer of the Company who signs the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each Underwriter, as
set forth in Section 6(a), but only insofar as losses, claims,
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liabilities, expenses or damages 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. 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.
(c) Any party that proposes to assert the right to be indemnified
under this Section 6 shall, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 6, 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 6 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)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(iii) 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
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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).
(d) If the indemnification provided for in this Section 6 is
applicable in accordance with its terms but for any reason is held to be
unavailable to or insufficient to hold harmless an indemnified party under
paragraphs (a) and (b) of this Section 6 in respect of any losses, claims,
liabilities, expenses and damages referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable (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 from persons other than the
Underwriters, such as persons who control the Company 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) by such indemnified
party as a result of such losses, claims, liabilities, expenses and damages in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Underwriters, on the other
hand. The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company 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, on the one hand, and the Underwriters, on the other hand,
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 or the 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 and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section 6(d) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take 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 6(d) shall be deemed to include, for purposes of this Section 6(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 6(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 6(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 6(d), any person who
controls a party to this Agreement within the meaning of the
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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 6(d), will notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 6(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).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company 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.
7. Reimbursement of Certain Expenses. In addition to its other
obligations under Section 6(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 arising out of or based upon,
in whole or in part, any statement or omission or alleged statement or omission,
or any inaccuracy in the representations and warranties of the Company contained
herein or failure of the Company to perform its or their respective obligations
hereunder or under law, all as described in Section 6(a), notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the obligations under this Section 7 and the possibility that such payment might
later be held to 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.
8. Termination. The obligations of the several Underwriters 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 if, prior to delivery and payment for the Company
Firm Shares or Option Shares, as the case may be, in the sole judgment of the
Representatives, (i) trading in any of the equity securities of the Company
shall have been suspended by the Commission, (ii) trading in securities
generally on the NYSE shall have been suspended or limited 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,
by order of the Commission or any court or other governmental authority, or by
the NYSE, (iii) a general banking moratorium shall have been declared by Federal
or New York State authorities or (iv) 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 crisis shall have occurred, the
effect of which is such as to make it, in the sole judgment of the
Representatives, impracticable
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or inadvisable to proceed with completion of the public offering or the delivery
of and payment for the Shares.
If this Agreement is terminated pursuant to Section 9 hereof, the
Company shall not be under any liability to any Underwriter except as provided
in Sections 4(i), 6 and 7 hereof; but, if for any other reason the purchase of
the Shares by the Underwriters is not consummated or if for any reason the
Company shall be unable to perform its obligations hereunder, the Company will
reimburse the several Underwriters for all out-of-pocket expenses (including the
fees, disbursements and other charges of counsel to the Underwriters) incurred
by them in connection with the offering of the Shares.
9. Substitution of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Company Firm Shares which it or they
have agreed to purchase hereunder, and the aggregate number of Company 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
Company Firm Shares, the other Underwriters shall be obligated, severally, to
purchase the Company Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase, in the proportions which
the number of Company Firm Shares which they have respectively agreed to
purchase pursuant to Section 1 bears to the aggregate number of Company 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 Company Firm Shares which any Underwriter
has become obligated to purchase pursuant to Section 1 be increased pursuant to
this Section 9 by more than one-ninth of such number of Company Firm Shares
without the prior written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase any Company Firm Shares and the
aggregate number of Company Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase exceeds one-tenth of the
aggregate number of the Company Firm Shares and arrangements satisfactory to the
Representatives and the Company for the purchase of such Company Firm Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter and the Company
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 9 shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
10. Miscellaneous.
(a) 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 office of the Company, 0000 Xxxxx
Xxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000-0000, Attention: Xxxx X. Xxxxxxx, with a copy
to Xxxxxx X. Xxxx, Esq., Xxxxxxxxx Traurig, LLP, Xxx Xxxx Xxxxxxxxx Xxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxx 00000, or (b) if to the Underwriters, to the
Representatives at the offices of Banc of America Securities LLC, 000 Xxxxxxxxxx
Xxxxxx, Xxx
00
00
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Corporate Finance with a copy to Xxxxxxx
& Company, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Finance Department, and a copy to Xxxxxx X. Xxxxxxxx, Esq., Xxxx Xxxx Xxxx &
Freidenrich LLP, 000 Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000-0000. Any such
notice shall be effective only upon receipt. Any notice hereunder may be made by
telecopier or telephone, but if so made shall be subsequently confirmed in
writing.
(b) This Agreement has been and is made solely for the benefit of
the several Underwriters, the Company, and the controlling persons, directors
and officers referred to in Section 6, 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
several Underwriters.
(c) Any action required or permitted to be made by the
Representatives under this Agreement shall be taken by the Representatives
jointly.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
(e) 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.
(f) 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.
(g) The Company and the Underwriters each hereby waive any right
they may have to a trial by jury in respect of any claim based upon or arising
out of this Agreement or the transactions contemplated hereby, provided,
however, that none of the Company or the Underwriters shall be deemed to have
waived any right they may have to a trial by jury in respect of any claim by a
third party against any such party.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
THREE-FIVE SYSTEMS, INC.
By: _________________________
Title:
Confirmed as of the date first
above mentioned:
Banc of America Securities LLC
Xxxxxxx & Company, Inc.
ING Barings LLC
X.X. Xxxxxxxx & Co.
Acting on behalf of themselves
and as the Representatives of
the other several Underwriters
named in Schedule I hereto.
By: BANC OF AMERICA SECURITIES LLC
By: ____________________________________________
Title:
By: XXXXXXX & COMPANY, INC.
By: ____________________________________________
Xxxxx Xxxxxx
Managing Director
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SCHEDULE I
UNDERWRITERS
Number of Company
Firm Shares to be
Underwriters Purchased
------------ ----------------------
Banc of America Securities LLC.........................................
Xxxxxxx & Company, Inc.................................................
ING Barings LLC........................................................
X.X. Xxxxxxxx & Co. ...................................................
Total................................................ 2,600,000
======================
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SCHEDULE II
FORM OF LOCK-UP AGREEMENT
April __, 0000
Xxxx xx Xxxxxxx Securities LLC
Xxxxxxx & Company, Inc.
ING Barings LLC
X.X. Xxxxxxxx & Co.
As Representatives of the several Underwriters
c/o Banc of America Securities LLC
0000 Xxxx Xxxx Xxxx #0
Xxxx Xxxx, Xxxxxxxxxx 00000
or c/o Needham & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned is a holder of securities of Three-Five Systems, Inc.,
a Delaware corporation (the "Company") and wishes to facilitate the 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, without the prior written approval of Banc of America
Securities LLC or Xxxxxxx & Company, Inc. acting on their own behalf and/or on
behalf of other representatives of the underwriters, directly or indirectly,
sell, contract to sell, make any short sale, pledge, 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 public offering or purchased in the
public trading market, for a period commencing as of the day on which the
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 Ninety (90) 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.
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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.
Very truly yours,
_____________________________________
Print Name of Stockholder
_____________________________________
Signature
The Company requests that this Lock-Up Agreement be completed and delivered to
the Company's counsel, Xxxxxxxxx Xxxxxxx, LLP, Xxx X. Xxxxxxxxx Xxxx, Xxxxx
0000, Xxxxxxx, XX 00000, Attn: Xxxxx X. Xxxxxx
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ATTACHMENT TO SCHEDULE II
DIRECTORS, OFFICERS AND STOCKHOLDERS
OF THE COMPANY WHO SHALL SIGN LOCK-UP AGREEMENT
