EXHIBIT 1.1
MICRON ELECTRONICS, INC.
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
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UNDERWRITING AGREEMENT
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,19..
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.
Ladies and Gentlemen:
From time to time Micron Electronics, Inc., a Minnesota corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain shares of its Common Stock, par value $0.01 per
share, (the "Shares") of the Company and the shareholders of the Company, if
any, named in Schedule II to such Pricing Agreement (with respect to such
Pricing Agreement, the "Firm Shares",) pursuant to terms specified in Schedule
III to such Pricing Agreement. If specified in such Pricing Agreement, the
Company and the Selling Shareholders, if any, may grant to the Underwriters the
right to purchase at their election an additional number of shares, specified in
such Pricing Agreement as provided in Section 3 hereof (the "Optional Shares").
The Firm Shares and the Optional Shares, if any, which the Underwriters elect to
purchase pursuant to Section 3 hereof are herein collectively called the
"Designated Shares".
The terms and rights of any particular issuance of Designated Shares shall be as
specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to time to the
Underwriters of such Shares, for whom the firms designated as representatives of
the Underwriters of such Shares in the Pricing Agreement relating thereto will
act as representatives (the "Representatives"). The term "Representatives" also
refers to a single firm acting as sole representative of the Underwriters and to
Underwriters who act without any firm being designated as their representative.
This Underwriting Agreement shall not be construed as an obligation of the
Company to sell any of the Shares or as an obligation of any of the Underwriters
to purchase any of the Shares. The obligation of the Company to issue and sell
any of the Shares and the obligation of any of the Underwriters to purchase any
of
the Shares shall be evidenced by the Pricing Agreement with respect to the
Designated Shares specified therein. Each Pricing Agreement shall specify the
names of Selling Shareholders, if any, the aggregate number of the Firm Shares,
the maximum number of Optional Shares, if any, the initial public offering price
of such Firm and Optional Shares or the manner of determining such price, the
purchase price to the Underwriters of such Designated Shares, the names of the
Underwriters of such Designated Shares, the names of the Representatives of such
Underwriters, the number of such Designated Shares to be purchased by each
Underwriter and the commission, if any, payable to the Underwriters with respect
thereto and shall set forth the date, time and manner of delivery of such Firm
and Optional Shares, if any, and payment therefor. The Pricing Agreement shall
also specify (to the extent not set forth in the registration statement and
prospectus with respect thereto) the terms of such Designated Shares. A Pricing
Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
2. (a) The Company and Micron Technologies, Inc. ("Parent") represent
and warrant to, and agree with, each of the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-....) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered or to be delivered to the Representatives and,
excluding exhibits to the Initial Registration Statement, but including all
documents incorporated by reference in the prospectus included therein, to
the Representatives for each of the other Underwriters have been declared
effective by the Commission in such form; no other document with respect to
the Initial Registration Statement or document incorporated by reference
therein has heretofore been filed, or transmitted for filing, with the
Commission other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing, (and other than prospectuses filed pursuant to
Rule 424(b) of the rules and regulations of the Commission under the Act
each in the form heretofore delivered to the Representatives); and no stop
order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement and the
Rule 462(b) Registration Statement, if any, including all exhibits thereto
and the documents incorporated by reference in the prospectus contained in
the Initial Registration Statement at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, each
as amended at the time such part of the registration statement became
effective, are hereinafter collectively called the "Registration Statement";
the prospectus relating to the Shares, in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on or
prior to the date of this Agreement, is hereinafter called the "Prospectus";
any reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to the applicable form under the Act, as of the date of
such Preliminary
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Prospectus or Prospectus, as the case may be; any reference to any amendment
or supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the Prospectus
as amended or supplemented shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Designated Shares in
the form in which it is filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such filing);
(ii) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus
or any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform
in all material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated Shares through the
Representatives or by a Selling Shareholder expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(iii) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder and do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives or by a Selling Shareholder
expressly for use in the Prospectus as amended or supplemented relating to
such Shares;
(iv) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the
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respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus;
(v) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Minnesota,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;
(vi) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and non-
assessable;
(vii) The Shares have been duly and validly authorized, and, when the
Firm Shares are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Shares and, in the case of
any Optional Shares, pursuant to Over-allotment Options (as defined in
Section 3 hereof) with respect to such Shares, such Designated Shares will
be duly and validly issued and fully paid and non-assessable; the Shares
conform to the description thereof contained in the Registration Statement
and the Designated Shares will conform to the description thereof contained
in the Prospectus as amended or supplemented with respect to such Designated
Shares;
(viii) The issue and sale of the Shares and the compliance by the
Company with all of the provisions of this Agreement, any Pricing Agreement
and each Over-allotment Option, if any, and the consummation of the
transactions contemplated herein and therein will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party
or by which the Company is bound or to which any of the property or assets
of the Company is subject, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-laws of the Company
or any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement or any Pricing
Agreement or any Over-allotment Option, except such as have been, or will
have been prior to each Time of Delivery (as defined in Section 4 hereof),
obtained under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters;
(ix) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
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(x) Neither the Company nor any of its subsidiaries is in violation of
its Certificate of Incorporation or By-laws or in default in the performance
or observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound;
(xi) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the stock, and under the caption "Plan of
Distribution" and "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(xii) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(xiii) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(xiv) Coopers & Xxxxxxx, L.L.P., who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xv) The Company and its subsidiaries own or possess or can acquire
on commercially reasonable terms adequate licenses or other rights to use
all patents, trademarks, service marks, trade names, copyrights, mask work
rights, technology and know-how necessary to conduct the business now or
proposed to be conducted by the Company and its subsidiaries as described in
the Prospectus, and except as disclosed in the Prospectus the Company has
not received any notice of infringement of or conflict with (and knows of no
such infringement of or conflict with) asserted rights of others with
respect to any patents, trademarks, service marks, trade names, copyrights,
mask work rights or know-how which could result in any material adverse
effect upon the Company and its subsidiaries; and, except as disclosed in
the Prospectus, the discoveries, inventions, products or processes of the
Company and its subsidiaries referred to in the Prospectus do not, to the
Company's knowledge, infringe or conflict with any right or patent of any
third party or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the
Company; and
(xvi) The Company and its subsidiaries have obtained any permits,
consents and authorizations required to be obtained by them under laws or
regulations relating to the protection of the environment or concerning the
handling, storage, disposal or discharge of toxic materials (collectively
"Environmental Laws"), and any such permits, consents and authorizations
remain in full force and effect. The Company and its subsidiaries are in
compliance with the Environmental Laws in all material respects, and there
is no pending or, to the Company's knowledge, threatened, action or
proceeding against the Company and its subsidiaries alleging violations of
the Environmental laws.
(b) Each of the Selling Shareholders severally represents and warrants to,
and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Shareholder of this Agreement,
the Pricing Agreement and the
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Power of Attorney and the Custody Agreement hereinafter referred to, and for
the sale and delivery of the Shares to be sold by such Selling Shareholder
under the Pricing Agreement, have been obtained; and such Selling
Shareholder has full right, power and authority to enter into this
Agreement, the Pricing Agreement, the Power-of-Attorney and the Custody
Agreement and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Shareholder under the Pricing Agreement;
(ii) The sale of the Shares to be sold by such Selling Shareholder
under the Pricing Agreement and the compliance by such Selling Shareholder
with all of the provisions of this Agreement; the Pricing Agreement, the
Power of Attorney and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any statute, indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder is bound or to
which any of the property or assets of such Selling Shareholder is subject,
nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of such Selling Shareholder if such
Selling Shareholder is a corporation, or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over such Selling Shareholder or the property of such Selling Shareholder;
(iii) Such Selling Shareholder has, and immediately prior to each
Time of Delivery (as defined in Section 4 hereof) such Selling Shareholder
will have, good and valid title to the Shares to be sold by such Selling
Shareholder under the Pricing Agreement, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares and
payment therefor pursuant thereto, good and valid title to such Shares, free
and clear of all liens, encumbrances, equities or claims, will pass to the
several Underwriters;
(iv) During the period beginning from the date of the Pricing
Agreement and continuing to and including the date 90 days after the date of
such Pricing Agreement, not to offer, sell contract to sell or otherwise
dispose of, except as provided hereunder, any securities of the Company that
are substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that represent
the right to receive, Stock or any such substantially similar securities
(other than pursuant to employee stock option plans existing on, or upon the
conversion or exchange of convertible or exchangeable securities outstanding
as of, the date of the Pricing Agreement for such Designated Shares),
without the prior written consent of the Representatives;
(v) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by such Selling
Shareholder expressly for use therein, such Preliminary Prospectus and the
Registration Statement did, and the Prospectus and any further amendments or
supplements to the Registration Statement and the Prospectus, when they
become effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act and the
rules and regulations of the Commission thereunder and will
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not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Shareholder will deliver to you prior to or at
the First Time of Delivery (as hereinafter defined) a properly completed and
executed United States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu
thereof);
(viii) Certificates in negotiable form representing all of the
Designated Shares to be sold by such Selling Shareholder under the Pricing
Agreement for such Designated Shares have been placed in custody under a
Custody Agreement, in the form heretofore furnished to you (the "Custody
Agreement"), duly executed and delivered by such Selling Shareholder to
[Name of Custodian], as custodian (the "Custodian"), and such Selling
Shareholder has duly executed and delivered a Power of Attorney, in the form
heretofore furnished to you (the "Power of Attorney"), appointing the
persons indicated in Schedule II to the Pricing Agreement, and each of them,
as such Selling Shareholder's attorneys-in-fact (the "Attorneys-in-Fact")
with authority to execute and deliver this Agreement and the Pricing
Agreement on behalf of such Selling Shareholder, to determine the purchase
price to be paid by the Underwriters to the Selling Shareholders as provided
in Section 2 hereof, to authorize the delivery of the Shares to be sold by
such Selling Shareholder thereunder and otherwise to act on behalf of such
Selling Shareholder in connection with the transactions contemplated by this
Agreement, the Pricing Agreement and the Custody Agreement; and
(ix) The Shares represented by the certificates held in custody for
such Selling Shareholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder; the arrangements made by such
Selling Shareholder for such custody, and the appointment by such Selling
Shareholder of the Attorneys-in-Fact by the Power of Attorney, are to that
extent irrevocable; the obligations of the Selling Shareholders hereunder
shall not be terminated by operation of law, whether by the death or
incapacity of any individual Selling Shareholder or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee or
the termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by
the occurrence of any other event; if any individual Selling Shareholder or
any such executor or trustee should die or become incapacitated, or if any
such estate or trust should be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event should occur,
before the delivery of the Shares hereunder, certificates representing the
Shares shall be delivered by or on behalf of the Selling Shareholders in
accordance with the terms and conditions of this Agreement, the Pricing
Agreement and of the Custody Agreements; and actions taken by the Attorneys-
in-Fact pursuant to the Powers of Attorney shall be as valid as if such
death, incapacity, termination, dissolution or other event had not occurred,
regardless of whether or not the Custodian, the Attorneys-in-Fact, or any of
them, shall have received notice of such death, incapacity, termination,
dissolution or other event.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
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The Company and the Selling Shareholders, if any, as and to the extent
indicated in Schedule II to the Pricing Agreement may specify in the Pricing
Agreement applicable to any Designated Shares that the Company, and/or the
Selling Shareholders, if any, thereby grant to the Underwriters the right (an
"Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares shall be
made [in proportion to the maximum number of Optional Shares to be sold by the
Company and each Selling Shareholder as set forth in Schedule II to the Pricing
Agreement] [initially with respect to the Optional Shares to be sold by the
Company and then among the Selling Shareholders in proportion to the maximum
number of Optional Shares to be sold by each Selling Shareholder as set forth in
Schedule II to the Pricing Agreement.] Any such election to purchase Optional
Shares may be exercised by written notice from the Representatives to the
Company and the Attorneys-in-Fact, given within a period specified in the
Pricing Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by the Representatives but in no event earlier than the First Time of
Delivery (as defined in Section 4 hereof) or, unless the Representatives and the
Company and the Selling Shareholders, if any, otherwise agree in writing,
earlier than or later than the respective number of business days after the date
of such notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares to
be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company and the Attorneys-in-Fact, if any,
have been advised by the Representatives have been attributed to such
Underwriter; provided that, if the Company and the Attorneys-in-Fact, if any,
have not been so advised, the number of Optional Shares to be so added shall be,
in each case, that proportion of Optional Shares which the number of Firm Shares
to be purchased by such Underwriter under such Pricing Agreement bears to the
aggregate number of Firm Shares (rounded as the Representatives may determine to
the nearest 100 shares). The total number of Designated Shares to be purchased
by all the Underwriters pursuant to such Pricing Agreement shall be the
aggregate number of Firm Shares set forth in Schedule I to such Pricing
Agreement plus the aggregate number of Optional Shares which the Underwriters
elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company and Selling
Shareholders, if any, shall be delivered by or on behalf of the Company and
Selling Shareholders, if any, to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks, payable
to the order of the Company and [the Custodian, if any] [each of the Selling
Shareholders, if any] as their interests may appear, in the funds specified in
such Pricing Agreement, (i) with respect to the Firm Shares, all in the manner
and at the place and time and date specified in such Pricing Agreement or at
such other place and time and date as the Representatives and the Company and
Selling Shareholders, if any, may agree upon in writing, such time and date
being herein called the "First Time of Delivery" and (ii) with respect to the
Optional Shares, if any, in the manner and at the time and date specified by the
Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such Optional Shares, or at such other time
and date as the Representatives and the Company and Selling Shareholders, if
any, may agree upon in writing, such time and date, if not
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the First Time of Delivery, herein called the "Second Time of Delivery". Each
such time and date for delivery is herein called a "Time of Delivery".
5. The Company and Parent agree with each of the Underwriters of any
Designated Shares:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Shares in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Shares or, if applicable, such earlier
time as may be required by Rule 424(b); to make no further amendment or any
supplement to the Registration Statement or Prospectus as amended or
supplemented after the date of the Pricing Agreement relating to such Shares
and prior to any Time of Delivery for such Shares which shall be disapproved
by the Representatives for such Shares promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment or
supplement after any Time of Delivery for such Shares and furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of such Shares, and during such same
period to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, of the issuance by
the Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Shares, of the suspension of the
qualification of such Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Shares or
suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of such Shares, provided
that in connection therewith the Company shall not be required to qualify as
a foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of the Pricing Agreement and from time to time,
to furnish the Underwriters with copies of the Prospectus in New York City
as amended or supplemented in such quantities as the Representatives may
reasonably request, and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Shares and if at such
time any event shall have occurred 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 in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be
9
necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange Act, to notify
the Representatives and upon their request to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the option
of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement
and continuing to and including the date 90 days after the date of such
Pricing Agreement, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder, any securities of the Company that are
substantially similar to the Designated Shares, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee stock option plans existing on,
or upon the conversion of convertible or exchangeable securities outstanding
as of, the date of the Pricing Agreement for such Designated Shares) without
the prior written consent of the Representatives; and
(f) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of the
Pricing Agreement, and the Company shall at the time of filing either pay to
the Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company and each of the Selling Shareholders, if any, covenant and
agree with one another and with the several Underwriters that (a) the Company
and such Selling Shareholder, if any, will pay or cause to be paid [a pro rata
share (based on the number of Shares to be sold by the Company such Selling
Shareholder hereunder] [, with the number to be sold by . and . to be included,
for purposes of this cause (a), in the number of Shares to be sold by the
Company) of] the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, any
Pricing Agreement, any Blue Sky Memorandum, closing documents (including
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection with
the qualification of the Shares for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey(s); (iv) all fees and expenses in connection
with listing the Designated Shares on the Nasdaq National Market ("Nasdaq"); and
(v) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, any required reviews by the National
10
Association of Securities Dealers, Inc. of the terms of the sale of the Shares;
and (b) the Company will pay or cause to be paid: (i) the cost of preparing
certificates for the Shares; (ii) the cost and charges of any transfer agent or
registrar or dividend disbursing agent; and (iii) all other costs and expenses
incident to the performance of its obligations hereunder and under any Over-
allotment Options which are not otherwise specifically provided for in this
Section[.] [; and (c) such Selling Shareholder, if any, will pay or cause to be
paid all costs and expenses incident to the performance of such Selling
Shareholder's obligations hereunder which are not otherwise specifically
provided for in this Section, including (i) any fees and expenses of counsel for
such Selling Shareholder, (ii) such Selling Shareholder's pro rata share of the
fees and expenses of the Attorneys-in-Fact and the Custodian, and (iii) all
expenses and taxes incident to the sale and delivery of the Shares to be sold by
such Selling Shareholder to the Underwriters hereunder.] It is understood,
however, that [the Company shall bear, and the Selling Shareholders shall not be
required to pay or to reimburse the Company for, the cost of any other matters
not directly relating to the sale and purchase of the Shares pursuant to the
Pricing Agreement, and that,] except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Shares by them, and any advertising expenses connected with any offers they may
make.
7. The obligations of the Underwriters of any Designated Shares under the
Pricing Agreement relating to such Designated Shares shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties and other statements of the Company, Parent and of the Selling
Shareholders, if any, in or incorporated by reference in the Pricing Agreement
relating to such Designated Shares are, at and as of each Time of Delivery for
such Designated Shares, true and correct, the condition that the Company, Parent
and the Selling Shareholders, if any, shall have performed all of their
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Shares shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of the Pricing Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions (a draft of each such opinion is
attached as Annex III(a) hereto), dated each Time of Delivery for such
Designated Shares, with respect to the matters covered in paragraphs (i),
(ii), (iv), (viii), (ix) and (x) of subsection (c) below as well as such
other related matters as the Representatives may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Counsel for the Company satisfactory to the Representatives shall
have furnished to the Representatives their written opinions (a draft of
each such opinion is attached as Annex III(b) hereto), dated each Time of
Delivery for such Designated Shares, respectively, in form and substance
satisfactory to the Representatives, to the effect that:
11
(i) The Company has been duly incorporated and is validly existing as
a 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 as
amended or supplemented;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented, and all of the issued shares of
capital stock of the Company (including the Designated Shares being
delivered at such Time of Delivery) have been duly and validly authorized
and issued and are fully paid and non-assessable; and the Designated Shares
conform to the description thereof in the Prospectus as amended or
supplemented;
(iii) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries; and to the best
of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to the
Designated Shares have been duly authorized, executed and delivered by the
Company;
(v) The issue and sale of the Designated Shares being delivered at
such Time of Delivery and the compliance by the Company with all of the
provisions of this Agreement and the Pricing Agreement with respect to the
Designated Shares and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company is a
party or by which the Company is bound or to which any of the property or
assets of the Company is subject, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or By-laws
of the Company 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 Company or any of its properties;
(vi) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Designated Shares being delivered at
such Time of Delivery or the consummation by the Company of the transactions
contemplated by this Agreement or such Pricing Agreement, except such as
have been obtained under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Shares by the Underwriters;
(vii) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or
by which it or any of its properties may be bound;
12
(viii) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock and under the captions "Plan of
Distribution" and "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(ix) The Company is not an "Investment Company" or an entity
"controlled" by an "Investment Company", as such terms are defined in the
Investment Company Act;
(x) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and they have no reason to believe that any of such
documents, when they became effective or were so filed, as the case may be,
contained, in the case of a registration statement which became effective
under the Act, an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or, in the case of other documents which
were filed under the Act or the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading; and
(xi) The Registration Statement and the Prospectus as amended or
supplemented, and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express no
opinion), comply as to form in all material respects with the requirements
of the Act and the rules and regulations thereunder; although they do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, except
for those referred to in the opinion in subsection (viii) of this Section
7(c), they have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the Prospectus as
amended or supplemented or any further amendment or supplement thereto made
by the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
or that, as of such Time of Delivery, either the Registration Statement or
the Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery (other
than the financial statements and related schedules therein, as to which
such counsel need express no opinion) contains an untrue statement of a
material fact 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; and they do not know of any amendment to the
Registration Statement required to be filed or any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by reference
13
into the Prospectus as amended or supplemented or required to be described
in the Registration Statement or the Prospectus as amended or supplemented
which are not filed or incorporated by reference or described as required;
(d) ., patent counsel for the Company and Parent, shall have furnished
to you their written opinion (a draft of such opinion is attached as Annex
III(c) hereto) dated each Time of Delivery for such Designated Shares, in
form and substance satisfactory to you, to the effect that:
(i) Such counsel does not know of any pending or threatened legal or
governmental proceeding relating to patents of the Company or others, to
which the Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries are subject which,
if determined adversely to the Company or any of its subsidiaries, would be
reasonably likely to have a material adverse effect on the business,
financial condition or results of operations of the Company and its
subsidiaries;
(ii) Such counsel has no knowledge of any infringement or any alleged
infringement by the Company or any of its subsidiaries of patent rights of
others which would be reasonably likely to have a material adverse effect on
the business, financial condition or results of operations of the Company
and its subsidiaries; and
(iii) The statements set forth in the Prospectus under the caption
["Risk Factors -- Intellectual Property Matters" and "Business --Patents and
Licenses,"] insofar as they purport to constitute a summary of the
provisions of the laws and documents referred to therein, are accurate,
complete and fair.
(e) The respective counsel for each of the Selling Shareholders, if
any, as indicated in Schedule II to the Pricing Agreement, each shall have
furnished to you their written opinion with respect to each of the Selling
Shareholders for whom they are acting as counsel, dated each Time of
Delivery for such Designated Shares, in form and substance satisfactory to
you, to the effect that:
(i) A Power-of-Attorney and a Custody Agreement have been duly
executed and delivered by such Selling Shareholder and constitute valid and
binding agreements of such Selling Shareholder in accordance with their
terms;
(ii) This Agreement and the Pricing Agreement have been duly executed
and delivered by or on behalf of such Selling Shareholder; and the sale of
the Designated Shares to be sold by such Selling Shareholder hereunder and
the compliance by such Selling Shareholder with all of the provisions of
this Agreement, the Pricing Agreement, the Power-of-Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any terms or provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which such Selling Shareholder is a
party or by which such Selling Shareholder is bound or to which any of the
property or assets of such Selling Shareholder is subject, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of such Selling Shareholder if such Selling
Shareholder is a corporation or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction over
such Selling Shareholder or the property of such Selling Shareholder;
14
(iii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement and the Pricing Agreement in
connection with the Designated Shares to be sold by such Selling Shareholder
hereunder or thereunder, except [name any such consent, approval,
authorization or order] which [has] [have] been duly obtained and [is] [are]
in full force and effect, such as have been obtained under the Act and such
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of such Designated Shares by the
Underwriters;
(iv) Immediately prior to such Time of Delivery, such Selling
Shareholder had good and valid title to the Designated Shares to be sold at
such Time of Delivery by such Selling Shareholder under this Agreement and
the Pricing Agreement, free and clear of all liens, encumbrances, equities
or claims, and full right, power and authority to sell, assign, transfer and
deliver the Designated Shares to be sold by such Selling Shareholder
hereunder or thereunder; and
(v) Good and valid title to such Designated Shares, free and clear of
all liens, encumbrances, equities or claims, has been transferred to each of
the several Underwriters who have purchased such Designated Shares in good
faith and without notice of any such lien, encumbrance, equity or claim or
any other adverse claim within the meaning of the Uniform Commercial Code.
In rendering the opinion in paragraph (iv), such counsel may rely upon
a certificate of such Selling Shareholder in respect of matters of fact as
to ownership of, and liens, encumbrances, equities or claims on, the
Designated Shares sold by such Selling Shareholder, provided that such
counsel shall state that they believe that both you and they are justified
in relying upon such certificate.
(f) On the date of the Pricing Agreement for such Designated Shares
and at each Time of Delivery for such Designated Shares, the independent
accountants of the Company who have certified the financial statements of
the Company and its subsidiaries included or incorporated by reference in
the Registration Statement shall have furnished to the Representatives a
letter, dated the effective date of the Registration Statement or the date
of the most recent report filed with the Commission containing financial
statements and incorporated by reference in the Registration Statement, if
the date of such report is later than such effective date, and a letter
dated such Time of Delivery, respectively, to the effect set forth in Annex
II hereto, and with respect to such letter dated such Time of Delivery, as
to such other matters as the Representatives may reasonably request and in
form and substance satisfactory to the Representatives (the executed copy of
the letter delivered prior to the execution of the Pricing Agreement is
attached as Annex II(a) hereto and a draft of the form of letter to be
delivered on the effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is attached as Annex
II(b) hereto);
(g) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus as amended prior to the date
of the Pricing Agreement relating to the Designated Shares any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Shares, and (ii) since the
15
respective dates as of which information is given in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Shares there shall not have been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise than as
set forth or contemplated in the Prospectus as amended prior to the date of
the Pricing Agreement relating to the Designated Shares, the effect of
which, in any such case described in Clause (i) or (ii), is in the judgment
of the Representatives so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the
Prospectus as amended relating to the Designated Shares;
(h) On or after the date of the Pricing Agreement relating to the
Designated Shares (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or preferred stock by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the
Company's debt securities or preferred stock;
(i) On or after the date of the Pricing Agreement relating to the
Designated Shares there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange or on Nasdaq; (ii) a suspension or material
limitation in trading in the Company's securities on Nasdaq; (iii) a general
moratorium on commercial banking activities declared by either Federal or
New York or California State authorities; or (iv) the outbreak or escalation
of hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Firm Shares or Optional Shares or both on the terms and in
the manner contemplated in the Prospectus as first amended or supplemented
relating to the Designated Shares;
(j) The Shares at each Time of Delivery shall have been duly listed
for quotation on Nasdaq;
(k) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each officer, director and 5%
shareholder of the Company substantially to the effect set forth in
Subsection 2(b)(iv) hereof in form and substance satisfactory to you;
(l) The Company and the Selling Shareholders, if any, shall have
furnished or caused to be furnished to the Representatives at each Time of
Delivery for the Designated Shares certificates of officers of the Company
and of the Selling Shareholders, if any, respectively, satisfactory to the
Representatives as to the accuracy of the representations and warranties of
the Company and the Selling Shareholders, if any, herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of Delivery,
as to the matters set forth in subsections (a) and (f) of this Section and
as to such other matters as the Representatives may reasonably request;
(m) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of the Pricing Agreement; and
16
(n) The Company shall not have received any notice of infringement of
or conflict with asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights, mask work rights,
technology or know-how which individually or in the aggregate, could have a
material adverse effect on the Company.
8. (a) The Company, Parent and each of the Selling Shareholders, if any,
jointly and severally, will indemnify and hold harmless each Underwriter 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 an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company, Parent
and the Selling Shareholders shall 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 or omission or alleged omission
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter of Designated Shares through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to such
Shares.
(b) Each Underwriter will indemnify and hold harmless the Company and
each Selling Shareholder, if any, against any losses, claims, damages or
liabilities to which the Company, 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 an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, 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 any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Company and each Selling Shareholder for any
legal or other expenses reasonably incurred by the Company or such Selling
Shareholder in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
17
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel 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 shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include
any statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters of the Designated Shares
on the other from the offering of the Designated Shares to which such loss,
claim, damage or liability (or action in respect thereof) relates. If,
however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Selling Shareholders on
the one hand and the Underwriters of the Designated Shares on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Shareholders on the one hand and such
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from such offering (before deducting expenses)
received by the Company and the Selling Shareholders bear to the total
underwriting discounts and commissions received by such 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 or the Selling Shareholders on the one hand or such
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company, each of the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even
if the Underwriters were treated as
18
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include
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 subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the applicable Designated Shares underwritten by it and
distributed to the public were offered to the public exceeds the 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
obligations of the Underwriters of Designated Shares in this subsection (d)
to contribute are several in proportion to their respective underwriting
obligations with respect to such Shares and not joint.
(e) The obligations of the Company and the Selling Shareholders under
this Section 8 shall be in addition to any liability which the Company and
the respective Selling Shareholders 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 8 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 officer and director of the Company
and to each person, if any, who controls the Company or any Selling
Shareholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Shares or Optional Shares which it has agreed to purchase under the
Pricing Agreement relating to such Shares, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after
such default by any Underwriter the Representatives do not arrange for the
purchase of such Firm Shares or Optional Shares, as the case may be, then the
Company and the Selling Shareholders shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to the Representatives to purchase such Shares on such terms. In
the event that, within the respective prescribed period, the Representatives
notify the Company and the Selling Shareholders that they have so arranged for
the purchase of such Shares, or the Company and the Selling Shareholders notify
the Representatives that they have so arranged for the purchase of such Shares,
the Representatives or the Company and the Selling Shareholders shall have the
right to postpone a Time of Delivery for such Shares for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company and the
Selling Shareholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed
19
one-eleventh of the aggregate number of the Firm Shares or Optional Shares,
as the case may be, to be purchased at the respective Time of Delivery, then
the Company and the Selling Shareholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Firm Shares or
Optional Shares, as the case may be, which such Underwriter agreed to
purchase under the Pricing Agreement relating to such Designated Shares and,
in addition, to require each non-defaulting Underwriter to purchase its pro
rata share (based on the number of Firm Shares or Optional Shares, as the
case may be, which such Underwriter agreed to purchase under such Pricing
Agreement) of the Firm Shares or Optional Shares, as the case may be, of
such defaulting Underwriter or Underwriters for which such arrangements have
not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company and the
Selling Shareholders as provided in subsection (a) above, the aggregate
number of Firm Shares or Optional Shares, as the case may be, which remains
unpurchased exceeds one-eleventh of the aggregate number of the Firm Shares
or Optional Shares, as the case may be, to be purchased at the respective
Time of Delivery, as referred to in subsection (b) above, or if the Company
and the Selling Shareholders shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase Firm
Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters, then the Pricing Agreement relating to such Firm Shares or
the Over-allotment Option relating to such Optional Shares, as the case may
be, shall thereupon terminate, without liability on the part of any non-
defaulting Underwriter or the Company or the Selling Shareholders, except
for the expenses to be borne by the Company and the Selling Shareholders and
the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Shareholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Shareholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Shareholder, and shall survive delivery of and payment for the
Shares.
11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, neither the Company nor the Selling Shareholders
shall then be under any liability to any Underwriter with respect to the Firm
Shares or Optional Shares with respect to which such Pricing Agreement shall
have been terminated except as provided in Sections 6 and 8 hereof; but, if for
any other reason, Designated Shares are not delivered by or on behalf of the
Company and the Selling Shareholders as provided herein, the Company and each of
the Selling Shareholders [pro rata (based on the number of Shares to be sold by
the Company and such Selling Shareholder hereunder)] [,with the number of Shares
to be sold by . and . to be included, for purposes of this Section, in the
number of Shares to be sold by the Company,] will reimburse the Underwriters
through the Representatives for all out-of-pocket expenses approved in writing
by the Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Shares, but the Company and the Selling
20
Shareholders shall then be under no further liability to any Underwriter with
respect to such Designated Shares except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement; and in all dealings with
any Selling Shareholder hereunder, you and the Company shall be entitled to act
and rely upon any statement, request, notice or agreement on behalf of such
Selling Shareholder made or given by any or all of the Attorneys-in-Fact for
such Selling Shareholders.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company or the Selling
Shareholders by the Representatives upon request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and the Selling
Shareholders and, to the extent provided in Sections 8 and 10 hereof, the
officers and directors of the Company and each person who controls the Company,
any Selling Shareholder or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Shares from any Underwriter shall
be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us [number] counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Company and each of the Selling Shareholders. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company and the Selling Shareholders for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
21
Any person executing and delivering this Agreement as Attorney-in-Fact for a
Selling Shareholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing and
binding Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
MICRON ELECTRONICS, INC.
By:
----------------------------
Name:
Title:
MICRON TECHNOLOGY, INC.
By:
----------------------------
Name:
Title:
[Names of Selling Shareholders]
By:
----------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf of
certain Selling Shareholders named in
Schedule II to the Pricing Agreement.
Accepted as of the date hereof:
[Name(s) of Representatives]
By:
----------------------------
Name:
Title:
On behalf of each of the Underwriters
22
ANNEX I
PRICING AGREEMENT
-----------------
[Name(s) of Co-Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto,
.........., 19..
Ladies and Gentlemen:
Micron Electronics, Inc., a Minnesota corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated .......... , 19.. (the "Underwriting Agreement"), to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Shares specified in Schedule II hereto (the "Designated Shares" consisting of
Firm Shares and any Optional Shares the Underwriters may elect to purchase).
Each of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Shares pursuant to Section 12 of the Underwriting Agreement
and the address of the Representatives referred to in such Section 12 are set
forth in Schedule III hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, (a) the Company and the Selling
Shareholders, if any, agree to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Company and the Selling Shareholders, if any, at the time and place and at the
purchase price to the Underwriters set forth in Schedule III hereto, the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto and, (b) in the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Shares, as provided below, the
Company and the Selling Shareholders, if any, agree to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company and the
Selling Shareholders, if any, at the purchase price to the Underwriters set
forth in Schedule III hereto that portion of the number of Optional Shares as to
which such election shall have been exercised.
The Company and the Selling Shareholders, if any, hereby grant to each of the
Underwriters the right to purchase at their election up to the number of
Optional Shares set forth opposite the name of such Underwriter in Schedule I
hereto on the terms referred to in the paragraph above for the sole purpose of
covering over-allotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised by written notice from the
Representatives to the Company and the Attorneys-in-Fact, if any, given within a
period of 30 calendar days after the date of this Pricing Agreement, setting
forth the aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Company and the Selling Shareholders, if any,
otherwise agree in writing, no earlier than two or later than ten business days
after the date of such notice.
2
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Company, one for each Selling Shareholder and one for
each of the Representatives plus one for each counsel] counterparts hereof, and
upon acceptance hereof by you, on behalf of each of the Underwriters, this
letter and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding agreement
between each of the Underwriters and the Company and the Selling Shareholders,
if any. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is or will be pursuant to the authority set forth in a form
of Agreement among Underwriters, the form of which shall be submitted to the
Company for examination, upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
MICRON ELECTRONICS, INC.
By:
----------------------------
Name:
Title:
MICRON TECHNOLOGY, INC.
By:
----------------------------
Name:
Title:
[Names of Selling Shareholders]
By:
----------------------------
Name:
Title:
As Attorneys-in-Fact acting on behalf of
certain Selling Shareholders named in
Schedule II to this Agreement
Accepted as of the date hereof:
[Name(s) of Representatives]
By:
----------------------------
Name :
Title:
On behalf of each of the Underwriters
3
SCHEDULE I
MAXIMUM NUMBER
OF OPTIONAL
NUMBER OF SHARES WHICH
FIRM SHARES MAY BE
UNDERWRITER TO BE PURCHASED PURCHASED
----------- --------------- --------------
[NAMES OF UNDERWRITERS]
------------ ------------
Total....................
============ ============
SCHEDULE II
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
--------------- ------------------
The Company................................
The Selling Shareholder(s):
[NAME OF SELLING SHAREHOLDER](a)
[NAME OF SELLING SHAREHOLDER](b)
[NAME OF SELLING SHAREHOLDER](c)
[NAME OF SELLING SHAREHOLDER](d)
Total......................................
(a) This Selling Shareholder is represented by [NAME AND ADDRESS OF COUNSEL]
and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and
each of them, as the Attorneys-in-Fact for such Selling Shareholder.
(b) This Selling Shareholder is represented by [NAME AND ADDRESS OF COUNSEL]
and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and
each of them, as the Attorneys-in-Fact for such Selling Shareholder.
(c) This Selling Shareholder is represented by [NAME AND ADDRESS OF COUNSEL]
and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and
each of them, as the Attorneys-in-Fact for such Selling Shareholder.
(d) This Selling Shareholder is represented by [NAME AND ADDRESS OF COUNSEL]
and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and
each of them, as the Attorneys-in-Fact for such Selling Shareholder.
SCHEDULE III
TITLE OF DESIGNATED SHARES:
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares:
Maximum Number of Optional Shares:
INITIAL OFFERING PRICE TO PUBLIC:
[$........ per Share] [Formula]
PURCHASE PRICE BY UNDERWRITERS:
[$........ per Share] [Formula]
COMMISSION PAYABLE TO UNDERWRITERS:
$........ per Share in Federal (same day) funds
Form of Designated Shares:
Definitive form, to be made available for checking at least twenty-four hours
prior to the Time of Delivery at the office of The Depository Trust Company or
its designated custodian
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds
[DESCRIBE ANY BLACKOUT PROVISIONS WITH RESPECT TO THE DESIGNATED SHARES]
TIME OF DELIVERY:
......... a.m. (New York City time), .................., 19..
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS]*:
--------------------
* A description of particular tax, accounting or other unusual features
(including any event risk provisions) of the Designated Shares should be set
forth, or referenced to an attached or accompanying description, if necessary,
to ensure agreement as to the terms of the Designated Shares to be purchased and
sold. Such a description might appropriately be in the form in which such
features will be described in the Prospectus Supplement for the offering.
ANNEX II
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the representatives of the Underwriters (the
"Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which are attached hereto; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of items 301, 302, 402 and 503(d),
respectively, of Regulation
S-K;
(vi) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference
in the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus or
included in the Company's Quarterly Reports on Form 10-Q incorporated
by reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in
the unaudited consolidated financial statements from which such data
and items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included
or incorporated by reference in the Company's Annual Report on Form 10-
K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options
and stock appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the
2
Company and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per share
amounts of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Shares for purposes of the letter delivered at the Time of Delivery for such
Designated Shares.
3
