EXHIBIT 1.1
XXXXXXXXX SEMICONDUCTOR INTERNATIONAL, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
1. Introductory. Xxxxxxxxx Semiconductor International, Inc., a Delaware
corporation ("COMPANY"), proposes to issue and sell from time to time
shares of its Class A Common Stock ("COMMON STOCK") and the stockholder
listed in Annex I hereto (the "SELLING STOCKHOLDER") proposes to sell
from time to time shares of Common Stock, all of which is registered
under the registration statement referred to in Section 2(a)
("REGISTERED SECURITIES"). Particular offerings of the Registered
Securities will be sold pursuant to a Terms Agreement referred to in
Section 3, for resale in accordance with terms of offering determined
at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "OFFERED SECURITIES". The firm or firms which agree to
purchase the Offered Securities are hereinafter referred to as the
"UNDERWRITERS" of such securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "REPRESENTATIVES"; provided, however, that
if the Terms Agreement does not specify any representative of the Underwriters,
the term "Representatives", as used in this Agreement (other than in Sections
2(b), 5(c) and 6 and the second sentence of Section 3), shall mean the
Underwriters.
2. Representations and Warranties of the Company and Selling Stockholder.
(a) The Company, as of the date of each Terms Agreement referred to in
Section 3, represents and warrants to, and agrees with, each
Underwriter that:
(1) A registration statement (No. 333-84094), including a
prospectus, relating to the Registered Securities has been filed with
the Securities and Exchange Commission ("COMMISSION") and has become
effective. Such registration statement, as amended at the time of any
Terms Agreement referred to in Section 3, is hereinafter referred to as
the "REGISTRATION STATEMENT", and the prospectus included in such
Registration Statement, as supplemented as contemplated by Section 3 to
reflect the terms of offering of the Offered Securities, as first filed
with the Commission pursuant to and in accordance with Rule 424(b)
("RULE 424(b)") under the Securities Act of 1933 ("ACT"), including all
material incorporated by reference therein, is hereinafter referred to
as the "PROSPECTUS". No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
(2) On the effective date of the registration statement
relating to the Registered Securities, such registration statement
conformed in all material respects to the requirements of the Act and
the rules and regulations of the Commission
("RULES AND REGULATIONS") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
on the date of the Terms Agreement referred to in Section 3, the
Registration Statement and the Prospectus will conform in all material
respects to the requirements of the Act and the Rules and Regulations,
and the Registration Statement will not include any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and the Prospectus will not include any untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the foregoing does
not apply to statements in or omissions from any of such documents
based upon written information furnished to the Company by any
Underwriter through the Representatives, if any, specifically for use
therein. Except as disclosed in the Prospectus, on the date of this
Agreement, the Company's Annual Report on Form 10-K most recently filed
with the Commission and all subsequent reports (collectively, the
"Exchange Act Reports") which have been filed by the Company with the
Commission or sent to stockholders pursuant to the Securities Exchange
Act of 1934 (the "Exchange Act"), taken as a whole together with the
Prospectus, do not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. Such documents, when they were filed with the
Commission, conformed in all material respects to the requirements of
the Exchange Act and the Rules and Regulations of the Commission
thereunder.
(3) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except to the
extent that the failure to so qualify or be in good standing would not
have a material adverse effect on the business, assets, operations,
properties, financial condition, liabilities or prospects of the
Company and its subsidiaries taken as a whole, or would not materially
and adversely affect the ability of the Company to perform its
obligations under the Terms Agreement (including the provisions of this
Agreement) (a "MATERIAL ADVERSE EFFECT").
(4) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority
to own its properties and conduct its business as described in the
Prospectus; and each subsidiary of the Company is duly qualified to do
business as a foreign corporation in good standing in all other
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jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except to the
extent that the failure to so qualify or be in good standing would not
have a Material Adverse Effect; all of the issued and outstanding
capital stock of each subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable; and
the capital stock of each subsidiary owned by the Company, directly or
through subsidiaries, is owned free from liens, encumbrances and
defects, other than as described in the Prospectus.
(5) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding
shares of capital stock of the Company are, and, when the Offered
Securities have been delivered and paid for in accordance with the
Terms Agreement on the Closing Date (as defined below), such Offered
Securities will have been, validly issued, fully paid and nonassessable
and will conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive
rights with respect to its Common Stock that have not been waived.
(6) There are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid
claim against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment other than to the
Underwriters in connection with any transaction contemplated by this
Agreement.
(7) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act that have not been validly waived or satisfied
prior to the date hereof.
(8) The Offered Securities have been approved for listing on
the New York Stock Exchange (the "STOCK EXCHANGE"), subject to notice
of issuance.
(9) No consent, approval, authorization, or order of the
registration or qualification of, or filing with, any governmental
agency or body or any court is required for the performance by the
Company of its obligations under the Terms Agreement (including the
provisions of this Agreement incorporated therein) or in connection
with the issuance and sale of the Offered Securities by the Company,
except such as have been obtained and made under the Act and such as
may be required under state securities or blue sky laws in connection
with the offer and sale of the Offered Securities by the Company.
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(10) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement incorporated
therein) and the issuance and sale of the Offered Securities by the
Company, and compliance with the terms and provisions thereof by the
Company, will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any domestic, or to
the knowledge of the Company, foreign statute, rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over the Company or any subsidiary of the Company or any
of their properties, or any agreement or instrument to which the
Company or any such subsidiary is a party or by which the Company or
any such subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or by-laws of
the Company or any such subsidiary, and the Company has full power and
authority to authorize, issue and sell the Offered Securities as
contemplated by the Terms Agreement (including the provisions of this
Agreement incorporated therein).
(11) The Terms Agreement (including the provisions of this
Agreement incorporated therein) has been duly authorized, executed and
delivered by the Company.
(12) Except as disclosed in the Prospectus, the Company and
its subsidiaries have good and marketable title to all real properties
and all other properties and assets owned by them and necessary to
conduct the business now operated by them in each case free from liens,
encumbrances and defects that would materially affect the value thereof
or materially interfere with the use made or to be made thereof by
them; and except as disclosed in the Prospectus, the Company and its
subsidiaries hold any leased real or personal property necessary to the
conduct of the business now operated by them under valid and
enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by them.
(13) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business presently operated
and conducted by them, subject to such qualifications as may be set
forth in the Prospectus or except where the failure to so possess would
not singularly, or in the aggregate, have a Material Adverse Effect;
and have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
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(14) No material labor dispute with the employees of the
Company or any subsidiary exists or, to the knowledge of the Company,
is imminent that might have a Material Adverse Effect.
(15) The Company and its subsidiaries own, possess, have the
right to use by license or otherwise, can acquire on reasonable terms,
adequate trademarks, trade names and other rights to inventions,
know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "INTELLECTUAL PROPERTY RIGHTS")
necessary to conduct the business now operated by them and, except as
disclosed in the Prospectus, have not received any notice of
infringement of or conflict with asserted rights of others with respect
to any intellectual property rights that, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(16) Except as disclosed in the Prospectus, neither the
Company nor any of its subsidiaries is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection
or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "ENVIRONMENTAL LAWS"), owns or operates
any real property contaminated with any substance that is subject to
any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware
of any pending investigation which might lead to such a claim.
(17) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the Company,
any of its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
which are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are threatened
or, to the Company's knowledge, contemplated.
(18) The financial statements included in the Registration
Statement and Prospectus (including financial statements incorporated
by reference in such documents) present fairly the financial position
of the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown,
and such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States applied
on a consistent basis; any schedules included in the Registration
Statement and Prospectus present fairly the information required to be
stated therein; and if pro forma financial
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statements are included in the Registration Statement and Prospectus:
the assumptions used in preparing the pro forma financial statements
included in the Registration Statement and the Prospectus provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(19) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus there has been no material adverse change,
nor any development or event involving a prospective material adverse
change, in the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries taken as a
whole, and, except as disclosed in or contemplated by the Prospectus,
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(20) The Company is subject to the reporting requirements of
either Section 13 or Section 15(d) of the Exchange Act and files
reports with the Commission on the Electronic Data Gathering, Analysis,
and Retrieval (XXXXX) system.
(21) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940.
(b) The Selling Stockholder, as of the date of each Terms Agreement
referred to in Section 3, severally represents and warrants to, and agrees with,
each Underwriter that:
(1) Such Selling Stockholder has and on each Closing Date
hereinafter mentioned will have valid and unencumbered title to the
Offered Securities to be delivered by such Selling Stockholder in
accordance with the Terms Agreement (including the provisions of this
Agreement incorporated therein) on such Closing Date and full right,
power and authority to enter into the Terms Agreement (including the
provisions of this Agreement incorporated therein) and to sell, assign,
transfer and deliver the Offered Securities to be delivered by such
Selling Stockholder in accordance with the Terms Agreement (including
the provisions of this Agreement incorporated therein) on such Closing
Date hereunder; and upon the delivery of and payment for the Offered
Securities on each Closing Date hereunder the several Underwriters will
acquire valid and unencumbered title to the Offered Securities to be
delivered by such Selling Stockholder in accordance with the Terms
Agreement
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(including the provisions of this Agreement incorporated therein) on
such Closing Date.
(2) Such Selling Stockholder has no actual knowledge, and any
officer or director of such Selling Stockholder that is an executive
officer or director of the Company as set forth in the Registration
Statement or Prospectus has no reason to believe, that the
representations and warranties of the Company contained in Section 2
hereof are not materially true and correct, is familiar with the
Registration Statement and the Prospectus as amended or supplemented
and has no actual knowledge of any material fact, condition or
information not disclosed in the Registration Statement or the
Prospectus or any amendment or supplement thereto, as of the applicable
filing date, which has adversely affected or may adversely affect the
business of the Company and is not prompted to sell shares of Common
Stock by any information concerning the Company which is not set forth
in the Registration Statement and the Prospectus.
(3) Such Selling Stockholder has full right, power and
authority to execute and deliver the Terms Agreement (including the
provisions of this Agreement), and to perform such Selling
Stockholder's obligations under such agreements; the execution,
delivery and performance of the Terms Agreement (including the
provisions of this Agreement incorporated therein) by such Selling
Stockholder and the consummation by such Selling Stockholder of the
transactions contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any material indenture, mortgage, deed
of trust, note agreement or other material agreement or instrument to
which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of such
Selling Stockholder is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of such Selling
Stockholder or any statute, law, rule, regulation, ordinance, judgment,
order or decree of any government, governmental instrumentality or
court having jurisdiction over such Selling Stockholder or the property
or assets of such Selling Stockholder; and no consent, approval,
authorization or order of, or declaration or filing with, any
government, governmental instrumentality or court is required for the
execution, delivery and performance of the Terms Agreement (including
the provisions of this Agreement incorporated herein) by such Selling
Stockholder and the consummation by such Selling Stockholder of the
transactions contemplated hereby and thereby.
(4) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to stabilize or manipulate,
or which has constituted or which might reasonably be expected to cause
or result, under the Exchange Act or otherwise, in the stabilization or
manipulation of, the price of any security of the Company to facilitate
the sale or resale of the Registered Securities.
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(5) Such Selling Stockholder represents, warrants and agrees
that the Registration Statement and the Prospectus and any further
amendments or supplements to the Registration Statement or the
Prospectus, when they become filed with the Commission, do not and will
not, solely with respect to any information about the Selling
Stockholder, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading; provided that no
representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
(6) There are no contracts, agreements or understandings
between such Selling Stockholder and any person that would give rise to
a valid claim against such Selling Stockholder or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection
with this offering other than to the Underwriter(s) in connection with
any transaction contemplated by this Agreement.
3. Purchase and Offering of Offered Securities. The obligation of the
Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("TERMS
AGREEMENT") at the time the Company and the Selling Stockholder
determine to sell the Offered Securities. The Terms Agreement will
incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which
will be Underwriters, the names of any Representatives, the number of
shares to be purchased by each Underwriter and the purchase price to be
paid by the Underwriters. The Terms Agreement will also specify the
time and date of delivery and payment (such time and date, or such
other time not later than seven full business days thereafter as the
Underwriter first named in the Terms Agreement (the "LEAD UNDERWRITER")
and the Company and the Selling Stockholder agree as the time for
payment and delivery, being herein and in the Terms Agreement referred
to as the "CLOSING DATE"), the place of delivery and payment and any
details of the terms of offering that should be reflected in the
prospectus supplement relating to the offering of the Offered
Securities. For purposes of Rule 15c6-1 under the Exchange Act, the
Closing Date (if later than the otherwise applicable settlement date)
shall be the date for payment of funds and delivery of securities for
all the Offered Securities sold pursuant to the offering. The
obligations of the Underwriters to purchase the Offered Securities will
be several and not joint. It is understood that the Underwriters
propose to offer the Offered Securities for sale as set forth in the
Prospectus.
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The certificates for the Offered Securities delivered to the
Underwriters on the Closing Date will be in definitive form, in such
denominations and registered in such names as the Lead Underwriter requests.
4. Certain Agreements of the Company and the Selling Stockholder. (a) The
Company agrees with the several Underwriters that it will furnish to
counsel for the Underwriters, one signed copy of the registration
statement relating to the Registered Securities, including all
exhibits, in the form it became effective and of all amendments thereto
and that, in connection with each offering of Offered Securities:
(1) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable
and if consented to by the Lead Underwriter, subparagraph (5)) not
later than the second business day following the execution and delivery
of the Terms Agreement.
(2) The Company will advise the Lead Underwriter promptly of
any proposal to amend or supplement the Registration Statement or the
Prospectus and will not effect such amendment or supplementation
without the Lead Underwriter's consent, which consent will not be
unreasonably withheld; and the Company will also advise the Lead
Underwriter promptly of the filing of any such amendment or supplement
and of the institution by the Commission of any stop order proceedings
in respect of the Registration Statement or of any part thereof and
will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued. (1)
(3) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any such time to amend or supplement the Prospectus to
comply with the Act, the Company promptly will notify the Lead
Underwriter of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission or effect such compliance. Neither
the Lead Underwriter's consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of
the conditions set forth in Section 5 hereof.
(4) As soon as practicable, but not later than 16 months,
after the date of each Terms Agreement, the Company will make generally
available to its security holders an earnings statement covering a
period of at least 12 months beginning after the later of (i) the
effective date of the registration statement relating to the
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Registered Securities, (ii) the effective date of the most recent
post-effective amendment to the Registration Statement to become
effective prior to the date of such Terms Agreement and (iii) the date
of the Company's most recent Annual Report on Form 10-K filed with the
Commission prior to the date of such Terms Agreement, which will
satisfy the provisions of Section 11(a) of the Act.
(5) The Company will furnish to the Representatives copies of
the Registration Statement, including all exhibits, any related
preliminary prospectus, any related preliminary prospectus supplement,
the Prospectus and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as the Lead
Underwriter reasonably requests. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
(6) The Company in cooperation with the Representatives and
their counsel, will arrange for the qualification of the Offered
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Lead Underwriter
designates and will continue such qualifications in effect so long as
required for the distribution provided that the Company will not be
required to qualify as a foreign corporation or to file a general
consent to service of process in any such state.
(7) The Company will pay all expenses incident to the
performance of its obligations under the Terms Agreement (including the
provisions of this Agreement incorporated therein), for any filing fees
or other expenses (including fees and disbursements of counsel) in
connection with qualification of the Registered Securities for sale
under the laws of such jurisdictions as the Lead Underwriter may
designate and the printing of memoranda relating thereto, for any
applicable filing fee incident to, the review by the National
Association of Securities Dealers, Inc. of the Registered Securities,
for any travel expenses of the Representative(s) and the Company's
officers and employees and any other expenses of the Representative(s)
and the Company in connection with attending or hosting meetings with
prospective purchasers of Registered Securities, for any transfer taxes
on the sale by the Selling Stockholder of the Offered Securities to the
Underwriters, for the cost of any advertising approved by the Company
in connection with the issuance of the Offered Securities and for
expenses incurred in distributing the Prospectus, any preliminary
prospectuses, any preliminary prospectus supplements or any other
amendments or supplements to the Prospectus to the Underwriters.
(8) The Company will not offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to, any
additional shares of its Common Stock or securities convertible into or
exchangeable or exercisable for any shares of its Common Stock or
warrants or other rights to purchase shares of its Common Stock, or
publicly
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disclose the intention to make any such offer, sale, pledge,
disposition or filing, or enter into any transaction or device which is
designed to, or could be expected to, result in the future disposition
by the Company, without the prior written consent of the Lead
Underwriter for a period of 90 days after the execution of the Terms
Agreement, except, issuances of Common Stock pursuant to the conversion
or exchange of convertible or exchangeable securities or the exercise
of warrants or options, in each case outstanding on the date of the
Terms Agreement, grants of employee and director stock options pursuant
to the terms of a plan in effect on the date of the Terms Agreement, or
issuances of Common Stock pursuant to the Company's dividend
reinvestment plan.
(9) The Company will apply the net proceeds of the offering
and the sale of the Offered Securities in the manner set forth in the
Prospects under the caption "Use of Proceeds".
(b) The Selling Stockholder additionally agrees with the several
Underwriters that:
(1) For a period of 90 days after the execution of the Terms
Agreement, not to, directly or indirectly, (1) offer, sell, contract to
sell, pledge or otherwise dispose of (or publicly disclose the
intention to take any of the foregoing actions or enter into any
transaction or device which is designed to, or could be expected to,
result in the disposition by the Selling Stockholder at any time in the
future of) any additional shares of Common Stock or securities
convertible into or exchangeable or exercisable for any shares of
Common Stock or warrants or other rights to purchase shares of Common
Stock or (2) enter into any swap, hedge or other derivatives
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of the Lead
Underwriter, except (a) sales or other dispositions of common stock
from blind trusts established by the Selling Stockholder, existing on
the date hereof, or (b) contributions of up to 300,000 shares of common
stock by the Selling Stockholder to any nonprofit organization that
qualifies under Section 501(c)(3) of the Internal Revenue Code.
(2) That the shares of Common Stock to be sold by the Selling
Stockholder hereunder which are represented by the certificates held by
the Selling Stockholder, are subject to the interest of the
Underwriters hereunder, and that the obligations of the Selling
Stockholder hereunder shall not be terminated by any act of the Selling
Stockholder, by operation of law or by the occurrence of any other
event; and
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(3) To deliver to the Representatives prior to the Closing
Date a properly completed and executed United States Treasury
Department Form W-8 (if the Selling Stockholder is a non-United States
person) or Form W-9 (if the Selling Stockholder is a United States
person).
5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Offered Securities
will be subject to the accuracy of the representations and warranties
on the part of the Company and the Selling Stockholder, respectively,
herein, in all material respects, except to the extent such
representations and warranties are already qualified by materiality in
Section 2 herein, to the accuracy of the statements of Company officers
made pursuant to the provisions hereof, to the performance by the
Company and the Selling Stockholder, respectively, of their obligations
hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the Representatives
shall have received a letter, dated the date of delivery thereof, of KPMG LLP
confirming that they are independent public accountants within the meaning of
the Act and the applicable published Rules and Regulations thereunder and
stating to the effect that:
(1) in their opinion the financial statements and any
schedules and any summary of earnings examined by them and included in
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations;
(2) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on any unaudited
financial statements included in the Registration Statement;
(3) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe
that:
(1) the unaudited financial statements, if any, and
any summary of earnings included in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or any material modifications should be
made to such unaudited financial statements and summary of
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earnings for them to be in conformity with generally accepted
accounting principles;
(2) if any unaudited "capsule" information is
contained in the Prospectus, the unaudited consolidated net
sales, net operating income, net income and net income per
share amounts or other amounts constituting such "capsule"
information and described in such letter do not agree with the
corresponding amounts set forth in the unaudited consolidated
financial statements or were not determined on a basis
substantially consistent with that of the corresponding
amounts in the audited statements of income;
(3) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date
not more than three business days prior to the date of the
such letter, there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt of the
Company and its consolidated subsidiaries or, at the date of
the latest available balance sheet read by such accountants,
there was any decrease in consolidated net current assets or
net assets, as compared with amounts shown on the latest
balance sheet included in the Prospectus; or
(4) for the period from the closing date of the
latest income statement included in the Prospectus to the
closing date of the latest available income statement read by
such accountants, there were any decreases, as compared with
the corresponding period of the previous year and with the
period of corresponding length ended the date of the latest
income statement included in the Prospectus, in consolidated
net sales, net operating income in the total or per share
amounts of consolidated income before extraordinary items or
net income;
except in all cases set forth in clauses (3) and (4) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(4) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Prospectus (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by analysis
or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
13
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this Agreement. No
stop order suspending the effectiveness of the Registration Statement or of any
part thereof shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of the Company, the Selling
Stockholder or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement (including the
provisions of this Agreement incorporated therein), there shall not have
occurred (i) any change, or any development or event involving a prospective
change, in the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as one enterprise which,
in the reasonable judgment of a majority in interest of the Underwriters
including any Representatives, is material and adverse and makes it impractical
or inadvisable to proceed with completion of the public offering or the sale of
and payment for the Offered Securities; (ii) any downgrading in the rating of
any debt securities of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance or
review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any change in U.S.
or international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the reasonable judgment of a
majority in interest of the Underwriters including any Representatives, be
likely to prejudice materially the success of the proposed issue, sale or
disposition of the Offered Securities; (iv) any suspension or limitation of
trading in securities generally on the New York Stock Exchange, or any setting
of minimum prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the over-the-counter market;
(v) any banking moratorium declared by U.S. Federal or New York authorities;
(vi) any major disruption of settlements of securities or clearance services in
the United States; or (vii) any attack on, outbreak or escalation of hostilities
or act of terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency if, in the
reasonable judgment of a majority in interest of the Underwriters including any
Representatives, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment for
the Offered Securities.
(d) The Representatives shall have received an opinion, dated the
Closing Date, of Xxxxxx X. Xxxxx, Esq., General Counsel of the Company, to the
effect that:
14
(1) Each subsidiary of the Company is an existing corporation
in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus;
and each subsidiary of the Company is duly qualified to do business as
a foreign corporation in good standing in all the jurisdictions listed
in such opinion;
(2) To the knowledge of such counsel, the shareholders of the
Company have no preemptive rights under any document or agreement to
which the Company is a party, other than any such preemptive rights
waived by the holder thereto;
(3) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act that have not been validly waived or satisfied
prior to the date hereof;
(4) Except as disclosed in the Prospectus, insofar as is known
to such counsel, there are no actions, suits or proceedings threatened
or pending against the Company's subsidiaries or any of their
respective properties that if determined adversely to such
subsidiaries, would individually or in the aggregate be reasonably
likely to have a Material Adverse Effect; and
(5) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement incorporated
therein) and the issuance and sale of the Offered Securities by the
Company, and compliance by the Company with the terms and provisions of
the foregoing will not result in a breach or violation of any of the
terms and provisions of any agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of
the properties of the Company is subject.
In rendering such opinion, counsel may rely as to matters involving the
application of laws of any jurisdiction other than the State of Maine, the
General Corporation Law of the State of Delaware or the Federal laws of the
United States, to the extent he deems proper and specified in such opinion, upon
the opinion of other counsel who are satisfactory to counsel for the
Representatives (which opinion will be attached thereto). Alternatively, such
other counsel may deliver its opinion directly to the Underwriters.
15
(e) The Representatives shall have received an opinion, dated the
Closing Date, of Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for the Company, to the
effect that:
(1) The Company is an existing corporation in good standing
under the laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as described
in the Prospectus; and the Company is duly qualified to do business as
a foreign corporation and is in good standing in all the jurisdictions
listed in such opinion;
(2) The Offered Securities and all other outstanding shares of
the capital stock of the Company have been duly authorized; all
outstanding shares of capital stock of the Company are, and, when the
Offered Securities have been delivered and paid for in accordance with
the Terms Agreement, on the Closing Date, such Offered Securities will
have been, validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with respect to
the Offered Securities;
(3) The Company has all requisite corporate power and
authority to execute and deliver this Agreement and to perform their
obligations hereunder; this Agreement has been duly executed and
delivered by the Company;
(4) Insofar as the statements in the Prospectus under the
captions "Description of Capital Stock," "Underwriting," "Plan of
Distribution," and "Certain United States Federal Tax Considerations
for Non-United States Holders" purport to describe or summarize
statutes, legal proceedings or the provisions of the Offered
Securities, such statements present in all material respects the
information required to be disclosed with respect to such statutes,
legal proceedings or provisions;
(5) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, will not be required
to register as an "investment company" under the Investment Company Act
of 1940;
(6) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by the Company for the performance of its obligations
under the Terms Agreement (including the provisions of this Agreement
incorporated therein) or in connection with the issuance or sale of the
Offered Securities by the Company, except such as have been obtained or
made or as may be required under the Act or the Exchange Act and such
as may be required under state securities laws or blue sky laws in
connection with the offer and sale of the Offered Securities by the
Company;
16
(7) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement incorporated
therein) and the issuance and sale of the Offered Securities by the
Company, and compliance by the Company with the terms and provisions of
the foregoing will not (A) result in a breach or violation of any of
the terms and provisions of (1) any material New York or Federal
statute, rule or regulation applicable to the Company or (2) or any
order of any governmental agency or body or any court having
jurisdiction over the Company or any of its properties and which order
is identified on a schedule attached to such opinion that has been
provided by the Company, or (B) result in a breach or violation of the
charter or by-laws of the Company; provided that in rendering such
opinion set forth in clause (A) of this paragraph (vii), such counsel
may state that they are not rendering any opinion on Federal or state
securities laws;
(8) Insofar as is known to such counsel, there are no actions,
suits or proceedings threatened or pending against the Company, or any
of its properties that would be reasonably likely to have a Material
Adverse Effect, except as disclosed in the Prospectus;
(9) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued by the Commission and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act; and
(10) The Terms Agreement (including the provisions of this
Agreement) has been duly authorized, executed and delivered by the
Company.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company and
representatives of the Underwriters and their counsel during which the contents
of the Prospectus and related matters were discussed and reviewed; such counsel
shall state that each of the Registration Statement, at the time such
Registration Statement became effective or was deemed to become effective, and
the Prospectus, as supplemented, as of its date and the Closing Date (in each
case, other than the financial statements, notes thereto and schedules and the
other financial data included therein, as to which such counsel need express no
belief), appeared on its face to comply as to form in all material respects with
the requirements of the Act and the Rules and Regulations; such counsel may
state that the purpose of their professional engagement was not to establish or
confirm factual matters and the scope of their examination of the affairs of the
Company did not permit them to verify the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the Prospectus, as
supplemented, except to the extent set forth in paragraph (iv) above; and such
counsel shall state that, although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus, as
supplemented, on the basis of the information that was developed in the course
of the performance of the services referred to above,
17
nothing came to their attention that caused them to believe that (i) the
Registration Statement, at the time such Registration Statement became effective
or was deemed to become effective (other than the financial statements, notes
thereto and schedules and the other financial data included therein, as to which
such counsel need express no belief), contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or that (ii)
the Prospectus, as supplemented, as of its date and the Closing Date (other than
the financial statements, notes thereto and schedules and the other financial
data included therein, as to which such counsel need express no belief),
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York, the General Corporation Law of the State of Delaware or the Federal
laws of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel who are satisfactory to counsel for
the Representatives (which opinion will be attached thereto) and (B) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. Such opinion may be limited to the
General Corporation Law of the State of Delaware and the laws of the State of
New York, and the Federal laws of the United States.
(f) The Representatives shall have received an opinion, dated the
Closing date, of Xxxxx Xxxxxxx, counsel for the Selling Stockholder named in
Annex I hereto, to the effect that:
(1) The Terms Agreement (including the provisions of this
Agreement) has been duly authorized, executed and delivered by or on
behalf of the Selling Stockholder;
(2) Immediately prior to the Closing Date, to the knowledge of
such counsel after due inquiry of the Selling Stockholder's corporate
books and records, review of certificates representing the shares of
Common Stock to be sold by such Selling Stockholder and all prior
ownership interests and review of all representations, warranties by
and certificates from such Selling Stockholder, the Selling Stockholder
had good and valid title to the shares of Common Stock to be sold by
such Selling Stockholder hereunder on such date, free and clear of all
claims, liens, encumbrances, equities, or security interests and had
full right, power and authority to sell, transfer and deliver such
shares of Common Stock pursuant to the Terms Agreement (including the
terms of this Agreement incorporated therein);
(3) By delivery of a certificate or certificates therefor,
good and valid title to the shares of Common Stock to be sold by the
Selling Stockholder under the Terms Agreement (including the terms of
this Agreement), free and clear of all claims, liens, encumbrances,
equities or claims, will be transferred to each of the several
Underwriters, assuming that such Underwriters have purchased such
shares in good faith and without notice of any such claim, lien,
encumbrance, equities security interests or restrictions on transfer or
any other adverse claim within the meaning of the Uniform Commercial
Code; and
18
(4) The Selling Stockholder has all necessary power and
authority to execute and deliver this Agreement and to perform its
obligations under such agreements; all corporate action required to be
taken by such Selling Stockholder for the due and proper sale and
delivery of the shares of Common Stock to be sold by the Selling
Stockholder has been duly and validly taken; the execution, delivery
and performance of the Terms Agreement (including the terms of this
Agreement incorporated therein) by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument known to such
counsel to which the Selling Stockholder is a party or by which the
Selling Stockholder is bound or to which any of the property or assets
of the Selling Stockholder is subject, nor will such actions result in
any violation of the charter or by-laws of the Selling Stockholder or
any statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over the
Selling Stockholder or the property or assets of the Selling
Stockholder; and, except for the registration of the shares of Common
Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state or foreign securities laws
in connection with the purchase and distribution of the Shares of
Common Stock by the Underwriters, no consent, approval, authorization
or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of the Terms Agreement (including the terms of this
Agreement incorporated therein) by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby.
(g) The Representatives shall have received from Cravath, Swaine &
Xxxxx, counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Offered Securities, the Registration Statement, the Prospectus and other related
matters as the Representatives may require, and the Company shall have furnished
to such counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(h) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal financial
or accounting officer of the Company in which such officers, to the best of
their knowledge after reasonable investigation and in their capacity as such
officers, on behalf of the Company, shall state that the representations and
warranties of the Company in this Agreement are true and correct, that the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing Date,
that no stop order suspending the effectiveness of the Registration Statement or
of any part thereof has been
19
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and that, subsequent to the date of the most
recent financial statements of the Company in the Prospectus, there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries taken as
a whole except as set forth in or contemplated by the Prospectus or as described
in such certificate.
(i) The Representatives shall have received a letter, dated the Closing
Date, of KPMG LLP which meets the requirements of subsection (a) of this
Section, except that the specified date referred to in such subsection will be a
date not more than three days prior to the Closing Date for the purposes of this
subsection.
(j) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Senior Vice President and a principal
financial or accounting officer of the Selling Stockholder in which such
officers, to the best of their knowledge and after reasonable investigation and
in their capacity as such officers, on behalf of such Selling Stockholder, shall
state that the representations and warranties of such Selling Stockholder in
this Agreement are true and correct on the date hereof with the same force and
effect as if made on and as of the date hereof; and such Selling Stockholder has
complied with all of the agreements and satisfied all conditions on its part
contained in this Agreement and required to be complied with or satisfied by
such Selling Stockholder on or prior to such Closing Date.
(k) The Representatives shall have received a lockup letter, dated on
or prior to the date of the Terms Agreement, in substantially the form attached
hereto as Annex II from the persons listed in the Terms Agreement.
The Company and the Selling Stockholder will furnish the Representatives with
such conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. The Lead Underwriter may in its sole
discretion waive on behalf of the Underwriters compliance with any conditions to
the obligations of the Underwriters under this Agreement and the Terms
Agreement.
6. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers
and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Act, against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become
subject, under the Act, Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus or preliminary prospectus
20
supplement, or, in the case of the Registration Statement, or any
amendment or supplement thereto, arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or, in the case of the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, including, in each case, any losses, claims, damages or
liabilities arising out of or based upon the Company's failure to
perform its obligations under Section 4(a)(ii) of this Agreement, and
will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity
with written information furnished to the Company by any Underwriter
through the Representatives, if any, specifically for use therein, it
being understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in the
Terms Agreement.
(b) The Selling Stockholder will indemnify and hold harmless each
Underwriter, its partners, directors and officers and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Act, against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact with respect to the Selling Stockholder contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or any related preliminary prospectus or preliminary prospectus supplement, or,
in the case of the Registration Statement, or any amendment or supplement
thereto, arise out of or are based upon the omission or alleged omission to
state therein a material fact with respect to the Selling Stockholders required
to be stated therein or necessary to make the statements therein not misleading,
or, in the case of the Prospectus, or any amendment or supplement thereto, or
any related preliminary prospectus or preliminary prospectus supplement, arise
out of or are based upon the omission or alleged omission to state therein a
material fact with respect to the Selling Stockholder required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Selling Stockholder will not be liable in any such case to the extent
that any such loss, claim, damage
21
or liability arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from any of such documents
in reliance upon and in conformity with written information furnished to the
Selling Stockholder by any Underwriter through the Representatives, if any,
specifically for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in the Terms Agreement.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, and the Selling Stockholder, its directors and officers
and each person, if any, who controls the Company or the Selling Stockholder
within the meaning of Section 15 of the Act, against any losses, claims, damages
or liabilities to which the Company and the Selling Stockholder may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or, in the case of the Registration Statement, or any amendment or
supplement thereto, arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the case of the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus or preliminary prospectus supplement, arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company or the Selling
Stockholder by such Underwriter through the Representatives, if any,
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company and such Selling Stockholder in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, it being understood and agreed that the
only such information furnished by any Underwriter consists of the information
described as such in the Terms Agreement.
(d) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party (i)
will not relieve it from any liability under subsection (a), (b) or (c) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any liability which it may have to any indemnified party otherwise
than under subsection (a), (b) or (c) above. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
22
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.
(e) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholder on the one hand and the Underwriters on the
other from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Stockholder on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Selling
Stockholder or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (e).
Notwithstanding the provisions of this subsection (e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
discounts, fees and commissions received by such Underwriter exceeds the
23
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (e) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholder under
this Section shall be in addition to any liability which the Company and the
Selling Stockholder may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company, to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act or the Exchange Act.
7. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities under the Terms
Agreement on the Closing Date and the aggregate number of shares of
Offered Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10% of the total number
of shares of Offered Securities, the Lead Underwriter may make
arrangements satisfactory to the Company and the Selling Stockholder
for the purchase of such Offered Securities by other persons, including
any of the Underwriters, but if no such arrangements are made by the
Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments under the
Terms Agreement (including the provisions of this Agreement
incorporated therein), to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters so default and the aggregate number of
shares of Offered Securities with respect to which such default or
defaults occur exceeds 10% of the total number of shares of Offered
Securities and arrangements satisfactory to the Lead Underwriter, the
Company and the Selling Stockholder for the purchase of such Offered
Securities by other persons are not made within 36 hours after such
default, the Terms Agreement will terminate without liability on the
part of any non-defaulting Underwriter, the Company or the Selling
Stockholder, except as provided in Section 8. As used in this
Agreement, the term "Underwriter" includes any person substituted for
an Underwriter under this Section. Nothing herein will relieve a
defaulting Underwriter from liability for its default.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other
statements of the Selling Stockholder, Company or its officers and of
the several Underwriters set forth in or
24
made pursuant to the Terms Agreement (including the provisions of this
Agreement incorporated therein) will remain in full force and effect,
regardless of any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the Selling
Stockholder, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive
delivery of and payment for the Offered Securities. If the Terms
Agreement is terminated pursuant to Section 7 or if for any reason the
purchase of the Offered Securities by the Underwriters is not
consummated, the Company and the Selling Stockholder shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4 and the respective obligations of the Company, the Selling
Stockholder and the Underwriters pursuant to Section 6 shall remain in
effect. If the purchase of the Offered Securities by the Underwriters
is not consummated for any reason other than solely because of the
termination of the Terms Agreement pursuant to Section 7 or the
occurrence of any event specified in clause (iii), (iv), (v), (vi) or
(vii) of Section 5(c), the Company will reimburse the Underwriters for
all out-of-pocket expenses (including reasonable fees and disbursements
of counsel) reasonably incurred by them in connection with the offering
of the Offered Securities.
9. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to them at their address furnished to the Company in writing
for the purpose of communications hereunder or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at
Xxxxxxxxx Semiconductor International, Inc., 00 Xxxxxxx Xxxx Xxxx,
Xxxxx Xxxxxxxx, Xxxxx 00000, Attention: General Counsel, or is sent to
the Selling Stockholder, will be mailed, delivered or telegraphed and
confirmed to such Selling Stockholder at the address set forth in Annex
I.
10. Successors. The Terms Agreement (including the provisions of this
Agreement incorporated therein) will inure to the benefit of and be
binding upon the Company, the Selling Stockholder and such Underwriters
as are identified in the Terms Agreement and their respective
successors and the officers and directors and controlling persons
referred to in Section 6, and no other person will have any right or
obligation hereunder.
11. Representation of Underwriters. Any Representatives will act for the
several Underwriters in connection with the financing described in the
Terms Agreement, and any action under such Terms Agreement (including
the provisions of this Agreement incorporated therein) taken by the
Representatives jointly or by the Lead Underwriter will be binding upon
all the Underwriters.
12. Counterparts. The Terms Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same Agreement.
25
13. Applicable Law. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of
New York, without regard to principles of conflicts of laws.
The Company and the Selling Stockholder hereby submit to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to the Terms Agreement (including the provisions of this Agreement
incorporated therein) or the transactions contemplated thereby.
26
ANNEX I
SELLING STOCKHOLDER
Court Square Capital Limited
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ANNEX II
FORM OF LOCK-UP AGREEMENT
Xxxxxxxxx Semiconductor International, Inc.
Offering of Common Stock
, 2002
Credit Suisse First Boston Corporation
on behalf of itself and the other underwriters
(the "Underwriters") of the
Offering described below
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies & Gentlemen:
As an inducement to the Underwriters to execute an Underwriting Agreement
(the "Underwriting Agreement") in connection with a proposed underwritten public
offering (an "Offering") of shares of Class A Common Stock, par value $.01 per
share (the "Common Stock"), of Xxxxxxxxx Semiconductor International, Inc. (the
"Company"), and as a condition to closing the transactions contemplated by the
Underwriting Agreement, the undersigned understands and hereby agrees that from
the date hereof and until 90 days after the public offering date set forth on
the final prospectus supplement used to sell the Common Stock (the "Public
Offering Date") pursuant to the Underwriting Agreement the undersigned will not
offer, sell, contract to sell, pledge or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for any shares of Common Stock or enter into
a transaction which would have the same effect or enter into any swap, hedge or
other arrangement that transfers in whole or in part, any of the economic
consequences associated with the ownership of any Common Stock, whether such
aforementioned transaction is to be settled by the delivery of Common Stock or
such other securities, in cash or otherwise, or publicly disclose the intention
to make any such offer, sale, pledge or disposition, or to enter into any such
transaction, swap, hedge or other arrangement, without, in each case, the prior
written consent of Credit Suisse First Boston Corporation.
Any Common Stock received upon exercise of options granted to the
undersigned will also be subject to this Agreement. Any Common Stock acquired by
the undersigned in the open market will not be subject to this Agreement. A
transfer of Common Stock to a family member or trust may be made, provided the
transferee agrees to be bound in writing by the terms of this Agreement prior to
such transfer.
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock if such transfer would constitute a violation or breach of this
Agreement.
This Agreement shall be binding on the undersigned and the respective
successors, heirs, personal representatives and assigns of the undersigned. This
Agreement shall lapse and become null and void if the Public Offering Date shall
not have occurred on or before 60 days following the date hereof.
Very truly yours,
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Signature
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Print Name
3
