1
EXHIBIT 1.1
2,300,000 SHARES(1)
REMEC, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
February __, 1998
XXXXXXX & COMPANY, INC.
X.X. XXXXXXX & SONS, INC.
CIBC XXXXXXXXXXX CORP.
As Representatives of the Underwriters
c/o Needham & Company, Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
REMEC, Inc., a California corporation (the "Company") and certain
shareholders of the Company named in Schedule II hereto (the "Selling
Shareholders") propose to sell 2,300,000 shares (the "Firm Shares") of Common
Stock, $0.01 per share par value, of the Company (the "Common Stock"), to you
and to the other Underwriters (as defined below). The Company has agreed to
grant to you and the other Underwriters named in Schedule I hereto
(collectively, the "Underwriters"), an option (the "Option") to purchase up to
an additional 345,000 shares of Common Stock (the "Option Shares") on the terms
and for the purposes set forth in Section 1(b). In the event the Option is
exercised, all of the Option Shares will be purchased by the Underwriters from
the Company. The Firm Shares and the Option Shares are referred to collectively
herein as the "Shares."
It is understood that, subject to the conditions hereinafter
stated, the Firm Shares will be sold to you and the Underwriters, for whom you
are acting as the Representatives (the "Representatives").
The Company and the Selling Shareholders confirm as follows their
agreement with the Representatives and the other Underwriters.
1. Agreement to Sell and Purchase.
a. On the basis of the representations, warranties and
agreements herein contained and subject to all the terms and conditions of this
Agreement, (i) the Company agrees to issue and sell an aggregate of 1,300,000
shares of Common Stock to the Underwriters, (ii) each Selling Shareholder agrees
to sell to the Underwriters the number of shares of Common Stock set forth
opposite his, her, or its name in Schedule II hereto, and (iii) each of the
Underwriters, severally and not jointly, agrees to purchase from the Company and
the Selling Shareholders the respective number of Firm Shares set forth opposite
that Underwriter's name in Schedule I hereto, at the purchase price of $[______]
for each Firm Share.
b. Subject to all the terms and conditions of this
Agreement, the Company grants the Option to the Underwriters to purchase up to
345,000 Option shares from the Company at the same price per share as the
Underwriters shall pay for the Firm Shares. The Option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the Underwriters and may
be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of this Agreement upon written or
--------
(1) Plus an option to purchase up to an additional 345,000 shares to cover
over-allotments.
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telegraphic notice (the "Option Shares Notice") by the Representatives to the
Company no later than 12:00 noon, New York City time, at least two and no more
than four business days before the date specified for closing in the Option
Shares Notice (the "Option Closing Date"), setting forth the aggregate number of
Option Shares to be purchased and the time and date for such purchase. On the
Option Closing Date, the Company will sell to the Underwriters the number of
Option Shares set forth in the Option Shares Notice, and each Underwriter will
purchase such percentage of the Option Shares as is equal to the percentage of
the Firm Shares that such Underwriter is purchasing, as adjusted by the
Representatives in such manner as it deems advisable to avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares
shall be made to the Representatives for the accounts of the Underwriters
against payment of the purchase price by wire transfer or by certified or
official bank checks payable in New York Clearing House (next-day) funds to the
order of the Company and the Selling Shareholders, at the offices of Xxxx Xxxx
Xxxx & Freidenrich, at 7:00 a.m., San Diego time, on the third business day
following the commencement of the offering contemplated by this Agreement, or at
such time on such other date, not later than five business days after the date
of this Agreement, as may be agreed upon by the Company and the Representatives
(such date is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option
Shares against payment by the Underwriters (in the manner specified above) will
take place at the offices specified above for the Closing Date at the time and
date (which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form
and shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company and the Custodian, as that term is defined in Section 4(b) hereof. For
the purpose of expediting the checking and packaging of certificates for the
Shares, the Company agrees to make such certificates available for inspection at
least 24 hours prior to the Closing Date or the Option Closing Date, as the case
may be.
The cost of original issue tax stamps, if any, in connection with
the issuance and delivery of the Shares by the Company to the respective
Underwriters shall be borne by the Company. The Company will pay and hold each
Underwriter and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
such Underwriter of the Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to each Underwriter that:
a. A registration statement (Registration No.
333-[_______]) on Form S-3 relating to the Shares, including a preliminary
prospectus and such amendments to such registration statement as may have been
required to the date of this Agreement, has been prepared by the Company under
the provisions of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (collectively referred to as the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, and has
been filed with the Commission. The term "preliminary prospectus" as used herein
means a preliminary prospectus as contemplated by Rule 430 or Rule 430A of the
Rules and Regulations included at any time as part of the registration
statement. Copies of such registration statement and amendments and of each
related preliminary prospectus have been delivered to the Representatives. If
such registration statement has not become effective, a further amendment to
such registration statement, including a form of final prospectus, necessary to
permit such registration statement to become effective will be filed promptly by
the Company with the Commission. If the registration statement has become
effective, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A of the Rules and Regulations will be
filed promptly by the Company with the Commission in accordance with Rule 424(b)
of the Rules and Regulations. The term "Registration Statement" means the
registration statement as amended at the time it becomes or became effective
(the "Effective Date"), including financial statements and all exhibits and any
information incorporated by reference or deemed to be included by Rule 430A. The
term "Prospectus" means the prospectus as filed with the Commission pursuant to
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Rule 424(b) of the Rules and Regulations or, if no such filing is required, the
form of final prospectus included in the Registration Statement at the Effective
Date.
b. On the Effective Date, the date the Prospectus is first
filed with the Commission pursuant to Rule 424(b) (if required), at all times
subsequent to and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included in the
Prospectus, did and will comply with all applicable provisions of the Act and
the Rules and Regulations and will contain all statements required to be stated
therein in accordance with the Act and the Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement, the
Prospectus or any such amendment or supplement did or will contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. At the Effective Date, the date the Prospectus or any amendment or
supplement to the Prospectus is filed with the Commission and at the Closing
Date and, if later, the Option Closing Date, the Prospectus did not and will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing representations and
warranties in this Section 3(b) do not apply to any statements or omissions made
in reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives specifically for
inclusion in the Registration Statement or Prospectus or any amendment or
supplement thereto. The Company acknowledges that the statements set forth under
the heading "Underwriting" in the Prospectus and the statements relating to
underwriting commissions set forth on the cover page of the Prospectus and the
Preliminary Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement.
c. The Company and each of its subsidiaries is, and at the
Closing Date and, if later, the Option Closing Date will be, corporations duly
organized, validly existing and in good standing under the laws of the
jurisdiction of their incorporation. The Company and each of its subsidiaries
have, and at the Closing Date and, if later, the Option Closing Date will have,
full power and authority to conduct all the activities conducted by them, to own
or lease all the material assets owned by or leased by them and to conduct their
business as described in the Registration Statement and the Prospectus. The
Company and each of its subsidiaries is, and at the Closing Date and, if later,
the Option Closing Date will be, duly licensed or qualified to do business and
in good standing as foreign corporations in all jurisdictions in which the
nature of the activities conducted by them or the character of the assets owned
or leased by them makes such license or qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not
materially and adversely affect the Company or its business, properties,
condition (financial or otherwise) or results of operations. Except as disclosed
in the Registration Statement and Prospectus, the Company (i) does not own, and
at the Closing Date and, if later, the Option Closing Date will not own,
directly or indirectly, any shares of stock or any other equity or long-term
debt securities of any corporation or have any equity interest in any
corporation, firm, partnership, joint venture, association or other entity and
(ii) is not, and at the Closing Date and, if later, the Option Closing Date will
not be, engaged in any discussions or a party to any agreement or understanding,
written or oral, regarding the acquisition of an interest in any corporation,
firm, partnership, joint venture, association or other entity where such
discussions, agreements or understandings would require amendment to the
Registration Statement pursuant to applicable securities laws. Complete and
correct copies of the articles of incorporation and of the by-laws of the
Company and each of its subsidiaries and all amendments thereto have been
delivered to the Representatives, and no changes therein will be made subsequent
to the date hereof and prior to the Closing Date or, if later, the Option
Closing Date.
d. All of the outstanding shares of capital stock of the
Company (including the Shares when delivered and paid for as contemplated
herein) have been duly authorized and validly issued, are fully paid and
nonassessable and were issued in compliance with all applicable state and
federal securities laws; the Firm Shares and the Option Shares have been duly
authorized and when issued and paid for as contemplated herein, as applicable,
will be validly issued, fully paid and nonassessable; no preemptive or similar
rights exist with respect to any of the Shares. The description of the capital
stock of the Company in the Registration Statement and
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the Prospectus is, and at the Closing Date and, if later, the Option Closing
Date will be, complete and accurate in all respects. Except as set forth in the
Prospectus, the Company does not have outstanding, and at the Closing Date and,
if later, the Option Closing Date will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any shares of Common Stock, or any such warrants, convertible securities or
obligations. All of the outstanding shares of capital stock of each of the
Company's subsidiaries are owned by the Company, have been validly issued, are
fully paid and non-assessable, and are free of any liens and any pre-emptive or
similar rights.
e. The financial statements and schedules included in the
Registration Statement or the Prospectus present fairly the financial condition
of the Company and its subsidiaries, taken as a whole, as of the respective
dates thereof and the results of operations and cash flows of the Company and
its subsidiaries, taken as a whole, for the respective periods covered thereby,
all in conformity with generally accepted accounting principles applied on a
consistent basis throughout the entire period involved, except as otherwise
disclosed in the Prospectus. No other financial statements or schedules of the
Company are required by the Act or the Rules and Regulations to be included in
the Registration Statement or the Prospectus. Ernst & Young LLP (the
"Accountants"), who have reported on such financial statements and schedules,
are independent accountants with respect to the Company as required by the Act
and the Rules and Regulations. The summary financial and statistical data
included in the Registration Statement present fairly the information shown
therein and have been compiled on a basis consistent with the financial
statements presented therein.
f. Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date and, if later, the Option Closing Date, except as set forth
in or contemplated by the Registration Statement and the Prospectus, (i) there
has not been and will not have been any change in the capitalization of the
Company (other than grants of options or rights to acquire securities of the
Company under the Company's Equity Incentive Plan, Employee Stock Purchase Plan,
or Incentive Stock Option Plan III or any material adverse change in the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company, arising for any reason whatsoever, (ii)
the Company and its subsidiaries have not incurred nor will any of them incur,
except in the ordinary course of business as described in the Prospectus, any
material liabilities or obligations, direct or contingent, nor has it entered
into nor will it enter into, except in the ordinary course of business as
described in the Prospectus, any material transactions other than pursuant to
this Agreement and the transactions referred to herein and (iii) the Company has
not and will not have paid or declared any dividends or other distributions of
any kind on any class of its capital stock.
g. The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
h. Except as set forth in the Registration Statement and
the Prospectus, there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its subsidiaries or any of the directors or officers of the Company or any of
its subsidiaries in their capacity as such, nor to the knowledge of the Company
any reasonable basis therefor, before or by any federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding would
materially and adversely affect the Company or its business, properties,
business prospects, condition (financial or otherwise) or results of operations.
i. The Company and each of its subsidiaries have, and at
the Closing Date and, if later, the Option Closing Date will have, performed all
obligations required to be performed by each of them, respectively, and each of
them are not, and at the Closing Date and, if later, the Option Closing Date
will not be, in default, under any contract or other instrument to which they
are a party or by which their property is bound or affected, which default might
materially and adversely affect the Company or its business, properties,
business prospects, condition (financial or otherwise) or results of operations.
To the Company's knowledge, no other party under any contract or other
instrument to which it or any of its subsidiaries is a party is in default in
any respect thereunder, which default would materially and adversely affect the
Company or its business, properties, business prospects, condition (financial or
otherwise) or results of operations. Neither the Company nor any of its
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subsidiaries is, and at the Closing Date and, if later, the Option Closing Date
will be, in violation of any provision of their articles of incorporation or
by-laws.
j. No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
for the consummation by the Company of the transactions on its part contemplated
herein, except such as have been obtained under the Act, the Securities Exchange
Act of 1934, as amended (the "Exchange Act") or the Rules and Regulations and
such as may be required under state securities or Blue Sky laws or the by-laws
and rules of the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the purchase and distribution by the Underwriters of the
Shares to be sold by the Company.
k. The Company has full power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as to (i)
rights to indemnity and contribution hereunder which may be limited by
applicable law, (ii) bankruptcy and laws relating to the rights and remedies of
creditors generally and (iii) the availability of equitable remedies. The
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the action or imposition of any lien,
charge or encumbrance upon any of the assets of the Company pursuant to the
terms or provisions of, or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under the articles of incorporation or by-laws of the Company, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which the Company is a party or by
which the Company or any of its properties is bound or affected, or to the
knowledge of the Company violate or conflict with any judgment, ruling, decree,
order, statute, rule or regulation of any court or other governmental agency or
body applicable to the business or properties of the Company presently in
effect.
l. The Company and each of its subsidiaries have good and
marketable title to all properties and assets described in the Prospectus as
owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such liens, charges, encumbrances or restrictions as are
described in the Prospectus and those which, individually and in the aggregate,
are not material in amount or which, individually and in the aggregate, do not
adversely affect the use made or proposed to be made of such properties and
assets by the Company. The Company and each of its subsidiaries have, as lessee,
valid, subsisting and enforceable leases for the properties described in the
Prospectus as leased by it, except such as are described in the Prospectus or
are not material to the business of the Company. The agreements to which the
Company or any of its subsidiaries is a party and which are described in the
Prospectus are valid agreements, enforceable by the Company or any of its
subsidiaries (as applicable), except as the enforcement thereof may be limited
by bankruptcy and laws relating to the rights and remedies of creditors
generally or by the availability of general equitable remedies. The Company and
its subsidiaries own or lease all such properties as are necessary to their
operations as now conducted or as proposed to be conducted, except where the
failure to so own or lease would not materially and adversely affect the Company
or its business, properties, condition (financial or otherwise) or results of
operations.
m. There is no document or contract of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement which is not described or
filed as required. All such contracts to which the Company is a party have been
duly authorized, executed and delivered by the Company, constitute valid and
binding agreements of the Company and are enforceable against the Company in
accordance with the terms thereof, except as to (i) rights to indemnity and
contribution thereunder which may be limited by applicable law, (ii) bankruptcy
and laws relating to the rights and remedies of creditors generally and (iii)
the availability of equitable remedies.
n. No statement, representation, warranty or covenant made
by the Company in this Agreement or made in any certificate or document required
by Section 7(l) of this Agreement to be delivered to the Representatives was or
will be, when made, inaccurate, untrue or incorrect.
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o. Neither the Company nor any of its directors, officers
or controlling persons has taken, directly or indirectly, any action designed,
or which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
p. Except as disclosed in the Prospectus, no holder of
securities of the Company has rights to the registration of any securities of
the Company because of the filing of the Registration Statement.
q. The Common Stock is listed and duly admitted to trading
on the Nasdaq National Market (the "NASDAQ/NM") and the Company has received
notification that the listing by the NASDAQ/NM of the Shares has been approved,
subject only to official notice of issuance of the Shares.
r. The Company and each of its subsidiaries have
sufficient trademarks, trade names, patent rights, copyrights, licenses,
approvals and governmental authorizations to conduct its business as now
conducted and as proposed to be conducted, where the failure to have any such
right would have a material and adverse effect on the Company or its business,
properties, condition (financial or otherwise) or results of operations. The
Company and each of its subsidiaries is not infringing any rights, copyrights,
trade secrets or other similar rights of others or, to the best knowledge of the
Company, any trademarks, trade name rights or patent rights of others, where
such infringement would have a material and adverse effect on the Company or its
business, properties, condition (financial or otherwise) or results of
operations. No claim has been made against the Company or any of its
subsidiaries regarding trademark, trade name, patent, copyright, license, trade
secret or other infringement which would have a material and adverse effect on
the Company or its business, properties, condition (financial or otherwise) or
results of operations.
s. The Company has timely filed all federal, state and
foreign income tax returns which have been required to be filed and has paid all
taxes and assessments received by it to the extent that such taxes or
assessments have become due. The Company has no tax deficiency which has been or
to the Company's knowledge might be asserted or threatened against the Company
which could have a material and adverse effect on the Company or its business,
properties, condition (financial or otherwise) or results of operations.
t. The pro forma financial information set forth, or
incorporated by reference, in the Registration Statement reflects, subject to
the limitations set forth in the Registration Statement, or incorporated by
reference, as to such pro forma financial information, the results of operations
of the Company purported to be shown thereby for the periods indicated and
conforms to the requirements of Regulation S-X of the Rules and Regulations.
u. The Company and its subsidiaries own or possess all
authorizations, approvals, orders, licenses, registrations, other certificates
and permits of and from all governmental regulatory officials and bodies
necessary to conduct their business as contemplated in the Prospectus, except
where the failure to own or possess all such authorizations, approvals, orders,
licenses, registrations, other certificates and permits would not materially and
adversely affect the Company or its business, properties, business prospects,
condition (financial or otherwise) or results of operations. There is no
proceeding pending or threatened, or to the Company's knowledge any reasonable
basis therefor, which may cause any such authorization, approval, order,
license, registration, certificate or permit to be revoked, withdrawn, canceled,
suspended or not renewed; and the Company and each of its subsidiaries are
conducting their business in compliance with all laws, rules and regulations
applicable thereto, including, without limitation, all applicable local, state
and federal environmental laws and regulations.
v. The Company and each of its subsidiaries maintains
insurance of the types and in the amounts generally deemed adequate for its
business, including, but not limited to, insurance covering real and personal
property owned or leased by the Company or its subsidiaries, as applicable,
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and effect.
w. Neither the Company nor any of its subsidiaries has at
any time during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any
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contribution in violation of law, or (ii) made any payment to any federal or
state governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof.
x. The Company has not taken and shall not take, directly
or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to cause or result in, under
the Exchange Act, the Exchange Act Rules and Regulations or otherwise, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares. No bid or purchase by the Company
and, to the best knowledge of the Company, no bid or purchase that could be
attributed to the Company (as a result of bids or purchases by an "affiliated
purchaser" within the meaning of Regulation M under the Exchange Act) for or of
the Shares, the Common Stock, any securities of the same class or series as the
Common Stock or any securities convertible into or exchangeable for or that
represent any right to acquire the Common Stock is now pending or in progress or
will have commenced at any time prior to the completion of the distribution of
the Shares.
y. No labor disturbance by the employees of the Company or
any of its subsidiaries exists, is imminent or, to the knowledge of the Company,
is contemplated or threatened; and the Company is not aware of an existing,
imminent or threatened labor disturbance by the employees of any principal
suppliers, contract manufacturing organizations, manufacturers, authorized
dealers or distributors that might be expected to result in any material change
in the business, properties, condition (financial or otherwise), results of
operations or prospects of the Company and its subsidiaries taken as a whole. No
collective bargaining agreement exists with any of the Company's or any of the
Company's subsidiaries' employees and, to the best knowledge of the Company, no
such agreement is imminent.
z. There are no outstanding loans, advances or guaranties
of indebtedness by the Company to or for the benefit of any of (i) its
"affiliates," as such term is deemed in the Rules and Regulations, (ii) any of
the officers or directors of any of its subsidiaries or (iii) any of the members
of the families of any of them.
aa. Except as may be disclosed in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), neither the Company nor any of its
subsidiaries has any liability, absolute or contingent, relating to: (i) public
health or safety; (ii) worker health or safety; (iii) product defect or
warranty; or (iv) pollution, damage to or protection of the environment,
including, without limitation, relating to damage to natural resources,
emissions, discharges, releases or threatened releases of hazardous materials
into the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, use, treatment, storage, generation, disposal,
transport or handling of any hazardous materials, which, in any case or in the
aggregate, would have a material adverse effect on the Company and its
subsidiaries taken as a whole. As used herein, "hazardous material" includes
chemical substances, wastes, pollutants, contaminants, hazardous or toxic
substances, constituents, materials or wastes, whether solid, gaseous or liquid
in nature.
bb. The Company has not distributed and will not
distribute prior to the Closing Date or on or prior to any date on which the
Option Stock is to be purchased, as the case may be, any prospectus or other
offering material in connection with the offering and sale of the Stock other
than the Prospectus, the Registration Statement and any other material which may
be permitted by the Act and the Rules and Regulations.
cc. The Company has complied in all respects with the
requirements of the Act and the Exchange Act, including the periodic reporting
requirements under the Exchange Act, and each such filing has conformed in all
respects to the requirements of the Act or the Exchange Act, as applicable, and,
as of its date, did not include any untrue misstatement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
4. Representations and Warranties of the Selling Shareholders.
Except as to Sections 4(e) and 4(f), as to which only the Selling Shareholders
(as herein defined) make any representation, warranty or agreement, each Selling
Shareholder severally represents, warrants and agrees that:
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a. The Selling Shareholder has, and immediately prior to
the Closing Date (as defined in Section 2 hereof) the Selling Shareholder will
have, good and marketable title to the shares of Common Stock to be sold by the
Selling Shareholder hereunder on such date, free and clear of all liens,
encumbrances, equities or claims; and upon delivery of such shares and payment
therefor pursuant hereto, good and valid title to such shares, free and clear of
all liens, encumbrances, equities or claims, will pass to the Underwriters.
b. The Selling Shareholder has placed in custody under a
custody agreement (the "Custody Agreement" and, together with all other similar
agreements executed by the other Selling Shareholders, the "Custody Agreements")
with Chemical Trust Company of California, as custodian (the "Custodian"), for
delivery under this Agreement, certificates in negotiable form (with signature
guaranteed by a commercial bank or trust company having an office or
correspondent in the United States or a member firm of the New York or American
Stock Exchanges) representing the shares of Common Stock to be sold by the
Selling Shareholder hereunder.
c. The Selling Shareholder has duly and irrevocably
executed and delivered a power of attorney (the "Power of Attorney" and,
together with all other similar agreements executed by the other Selling
Shareholders, the "Powers of Attorney") appointing Xxxxxx Xxxxxxx and one or
more other persons, as attorneys-in-fact, with full power of substitution, and
with full authority (exercisable by any one or more of them) to execute and
deliver this Agreement and to take such other action as may be necessary or
desirable to carry out the provisions hereof on behalf of the Selling
Shareholder.
d. The Selling Shareholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody
Agreement; the execution, delivery and performance of the Agreement, the Power
of Attorney and the Custody Agreement by the Selling Shareholder and the
consummation by the Selling Shareholder of the transactions contemplated hereby
will not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Selling
Shareholder is a party or by which the Selling Shareholder is bound or to which
any of the property or assets of the Selling Shareholder is subject, nor will
such actions result in any violation of the provisions of the charter or by-laws
of the Selling Shareholder, the articles of partnership of the Selling
Shareholder or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Selling Shareholder or
the property or assets of the Selling Shareholder; and, except for the
registration of the Shares under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution delivery and
performance of the Agreement, the Power of Attorney or the Custody Agreement by
the Selling Shareholder and the consummation by the Selling Shareholder of the
transactions contemplated hereby.
e. Nothing has come to the attention of any of the persons
identified on Schedule II hereto to cause them to believe that the
representations and warranties of the Company set forth in Section 3(b) of this
Agreement are not true and correct.
f. Each Selling Shareholder has no reason to believe that
the representations and warranties of the Company contained in Section 3 hereof
are not materially true and correct, is familiar with the Registration Statement
and the Prospectus (as amended or supplemented) and has no knowledge of any
material fact, condition or information not disclosed in the Registration
Statement, as of the effective date, or the Prospectus (or any amendment or
supplement thereto), as of the applicable filing date, which has adversely
affected or may adversely affect the business of the Company and is not prompted
to sell shares of Common Stock by any information concerning the Company which
is not set forth in the Registration Statement and the Prospectus.
g. The Selling Shareholder has not taken and will not
take, directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Stock.
9
h. To the extent that any statement or omissions made in
the Registration Statement or Prospectus are made in reliance upon and in
conformity with written information furnished to the Company by the Selling
Shareholder specifically for use therein, on the Effective Date, the
Registration Statement did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, and on the Effective Date
and the Closing Date, the Prospectus did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
5. Agreements of the Company. The Company agrees with the
Underwriters as follows:
a. The Company will not, either prior to the Effective
Date or thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
b. The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify the Representatives
promptly, and will confirm such advice in writing, (1) when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective, (2) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (3) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (4) of the happening of any
event during the period mentioned in the second sentence of Section 4(e) that
makes any statement made in the Registration Statement or the Prospectus untrue
or that requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading, and (5) of receipt by the
Company or any Representatives or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430A of
the Rules and Regulations, the Company will comply with the provisions of, and
make all requisite filings with the Commission pursuant to, said Rule 430A and
to notify the Representatives promptly of all such filings.
c. The Company will furnish to the Representatives,
without charge, three signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto, and will furnish to the Representatives, without
charge, for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, but without exhibits.
d. The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
e. On the Effective Date, and thereafter from time to
time, the Company will deliver to each of the Underwriters, without charge, as
many copies of the Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the Underwriters and by all
dealers to whom the Shares may be sold, both in connection with the offering or
sale of the Shares and for any period of time thereafter during which the
Prospectus is required by law to be delivered in connection therewith. If during
such period of time any event shall occur which in the judgment of the Company
or counsel to the Underwriters should be set forth in the Prospectus in order to
make any statement therein, in light of the circumstances under which it was
made, not misleading, or if it is necessary to supplement or amend the
Prospectus to comply with law, the Company will forthwith prepare and duly file
with the Commission an appropriate supplement or amendment thereto, and will
10
deliver to each of the Underwriters, without charge, such number of copies of
such supplement or amendment to the Prospectus as the Representatives may
reasonably request.
f. Prior to any public offering of the Shares, the Company
will cooperate with the Representatives and counsel to the Underwriters in
connection with the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may request; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.
g. During the period of five years commencing on the
Effective Date, the Company will furnish to the Representatives, and each other
Underwriter who may so request, copies of such financial statements and other
periodic and special reports or statements as the Company may from time to time
distribute generally to the holders of any class of its capital stock, and will
furnish to the Representatives, and each other Underwriter who may so request, a
copy of each annual or other report it shall be required to file with the
Commission.
h. The Company will make generally available to holders of
its securities as soon as may be practicable but in no event later than the last
day of the fifteenth full calendar month following the calendar quarter in which
the Effective Date falls, an earnings statement (which need not be audited but
shall be in reasonable detail) for the applicable 12-month period after the
Effective Date, satisfying the provisions of Section 11(a) of the Act (including
Rule 158 of the Rules and Regulations).
i. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Representatives, all costs and expenses incident to
the performance of the obligations of the Company and the Selling Shareholders
under this Agreement, including but not limited to costs and expenses of or
relating to (1) the preparation, printing and filing by the Company of the
Registration Statement and exhibits to it, each preliminary prospectus,
Prospectus and any amendment or supplement to the Registration Statement or
Prospectus, (2) the preparation and delivery of certificates representing the
Shares, (3) the printing of this Agreement, the Agreement Among Underwriters,
any Dealer Agreements and any Underwriters' Questionnaires, (4) furnishing
(including costs of shipping and mailing) such copies of the Registration
Statement, the Prospectus and any preliminary prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with the offering
and sale of the Shares by the Underwriters or by dealers to whom Shares may be
sold, (5) the costs of delivering and distributing the Custody Agreements and
the Powers of Attorney, (6) the quotation of the Shares on the Nasdaq National
Market, (7) any filings required to be made by the Underwriters with the NASD,
and the fees, disbursements and other charges of counsel for the Underwriters in
connection therewith, (8) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions
designated pursuant to Section 5(f), including the fees, disbursements and other
charges of counsel to the Underwriters in connection therewith, and the
preparation and printing of preliminary, supplemental and final Blue Sky
memoranda, (9) fees, disbursements and other charges to the Company (but not
those of counsel for the Underwriters, except as otherwise provided herein) and
(10) the transfer agent for the Shares.
j. If this Agreement shall be terminated by the Company
pursuant to any of the provisions hereof (other than pursuant to Section 10 or
Section 11 hereof) or if for any reason the Company shall be unable to perform
its obligations hereunder, the Company will reimburse the Underwriters for all
reasonable out-of-pocket expenses (including the fees, disbursements and other
charges of counsel to the Underwriters) actually incurred by them in connection
herewith.
k. The Company will not at any time, directly or
indirectly, take any action designed, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares.
l. The Company will apply the net proceeds from the
offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds," and shall file
11
such reports with the Commission with respect to the sale of the Shares and the
application of the proceeds therefrom as may be required in accordance with Rule
463 under the Act.
m. During the period of 180 days commencing at the
Effective Date, without the prior written consent of the Representatives, other
than pursuant to the Company's Equity Incentive Plan, Employee Stock Purchase
Plan, or Incentive Stock Option Plan III described in the Prospectus, the
Company will not issue, offer, sell, grant options to purchase or otherwise
dispose of any of the Company's equity securities or any other securities
convertible into or exchangeable with its Common Stock or other equity security.
6. Agreements of the Selling Shareholders. Each Selling
Shareholder agrees:
a. For a period of 180 days from the date of the
Prospectus, not to offer for sale, sell or otherwise dispose of (or enter into
any transaction which is designed to, or could be expected to, result in the
disposition by any person of), directly or indirectly, any shares of Common
Stock (other than the Shares), without the prior written consent of the
Representatives.
b. That the shares of Common Stock to be sold by the
Selling Shareholder hereunder, which are represented by the certificates held in
custody for the Selling Shareholder, are subject to the interest of the
Underwriters and the other Selling Shareholders thereunder, that the
arrangements made by the Selling Shareholder for such custody are to that extent
irrevocable, and that the obligations of the Selling Shareholder hereunder shall
not be terminated by any act of the Selling Shareholder, by operation of law, by
the death or incapacity of any individual Selling Shareholder or the occurrence
of any other event.
c. To deliver to the Representatives prior to the Closing
Date a properly completed and executed United States Treasury Department Form
W-8 if the Selling Shareholder is a non-United States person or Form W-9 if the
Selling Shareholder is a United States person.
7. Conditions of the Obligations of the Underwriters. The
several obligations of each Underwriter hereunder are subject to the following
conditions:
a. Notification that the Registration Statement has become
effective shall be received by the Representatives not later than 5:00 p.m., New
York City time, on the date of this Agreement or at such later date and time as
shall be consented to in writing by the Representatives and all filings required
by Rule 424 and Rule 430A of the Rules and Regulations shall have been made.
b. (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for such
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representatives and the Representatives do
not object thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and the Option Closing Date and signed by
the Chief Executive Officer and the Chief Financial Officer of the Company (who
may, as to proceedings threatened, rely upon the best of their knowledge), to
the effect of clauses (i), (ii) and (iii) of this Section 7(b).
c. Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise) or results
of operations of the Company, whether or not arising from transactions in the
ordinary course of business, in each case other than as described in or
contemplated by the Registration Statement and the Prospectus, and (ii) the
Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood,
12
earthquake or other casualty, whether or not covered by insurance, or from any
labor dispute or any court of legislative or other governmental action, order or
decree, which is not described in the Registration Statement and the Prospectus,
if in the judgment of the Representatives any such development makes it
impracticable or inadvisable to consummate the sale and delivery of the Shares
by the Underwriters at the public offering price.
d. Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
officers or directors in their capacities as such, before or by any federal,
state or local court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or proceeding
an unfavorable ruling, decision or finding would materially and adversely affect
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company.
e. Each of the representations and warranties of the
Company and the Selling Shareholders contained herein shall be true and correct
in all material respects at the Closing Date and, with respect to the Option
Shares, at the Option Closing Date, and all covenants and agreements contained
herein to be performed on the part of the Company and the Selling Shareholders
and all conditions contained herein to be fulfilled or complied with by the
Company and the Selling Shareholders at or prior to the Closing Date and, with
respect to the Option Shares, at or prior to the Option Closing Date, shall have
been duly performed, fulfilled or complied with.
f. The Representatives shall have received an opinion,
dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date, satisfactory in form and substance to the Representatives and
counsel for the Underwriters, from Heller, Ehrman, White & XxXxxxxxx, counsel to
the Company, covering the following matters:
(i) the Company and each of its subsidiaries have been
duly organized, are validly existing as corporations in good standing under the
laws of their respective states of incorporation, have the corporate power and
authority to own their property and to conduct their business as described in
the Prospectus and are duly qualified to transact business and are in good
standing in each jurisdiction in which the conduct of their business or their
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
materially and adversely affect the Company and its subsidiaries or their
business, properties, financial condition or results of operations;
(ii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof contained in the
Prospectus;
(iii) the authorized, issued and outstanding number
of shares of capital stock of the Company is as set forth under the caption
"Capitalization" in the Prospectus as of the date therein; the shares of Common
Stock outstanding prior to the issuance of the Shares have been duly authorized
and are validly issued, fully paid and nonassessable, and there is no right of
rescission with respect to any outstanding shares of the Company and none of
such shares are void or voidable by reason of the Company's failure to issue
such shares in compliance with federal and state securities laws;
(iv) the specimen certificate evidencing the Shares
filed as an exhibit to the Company's Registration Statement is in due and proper
form under California law, the Shares have been duly authorized and, when the
certificates evidencing the Shares have been issued and delivered in accordance
with the terms of this Agreement, the Shares will be validly issued, fully paid
and non-assessable, and the issuance of such Shares is not subject to any
preemptive rights, or, to the best of such counsel's knowledge, other rights to
subscribe for or purchase securities;
(v) the Registration Statement has become effective
under the Act, and no stop order suspending the effectiveness of the
Registration Statement or preventing the use of the Prospectus has been issued
and no proceedings for that purpose have been instituted or are pending or
contemplated by the Commission; any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) of the Rules and Regulations has been
made in the manner and within the time period required by such Rule 424(b);
13
(vi) the Registration Statement and the Prospectus and
any supplements or amendments thereto (except for financial statements,
schedules and financial and statistical information included therein, as to
which such counsel need not express any opinion) comply as to form in all
material respects with the Act and the Rules and Regulations;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company, and the Company has all requisite
corporate power and authority to enter into this Agreement and consummate the
transactions contemplated hereby;
(viii) this Agreement is a valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except as to (a) rights to indemnity and contribution thereunder which may be
limited by applicable law, (b) bankruptcy and laws relating to the rights and
remedies of creditors generally, and (c) the availability of equitable remedies;
the execution and delivery by the Company of, and the performance by the Company
of its obligations under, this Agreement does not contravene any provision of
applicable law or the articles of incorporation or by-laws of the Company or any
agreement or other instrument known to such counsel after due inquiry and which
is binding upon and material to the Company or, any judgment or decree of any
governmental body, agency or court having jurisdiction over the Company known to
such counsel after due inquiry, presently in effect and a breach or violation of
which, a default under which, a termination of which, an acceleration under
which, or a conflict with which would materially and adversely affect the
Company or its business, properties, financial condition or results of
operations, and no consent, approval or authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except such
as may have been obtained under the Act and such as required by the securities
or Blue Sky laws of the various states in connection with the offer and sale of
the Shares by the Underwriters;
(ix) the statements in the Prospectus under
"Management -- Officers and Directors" (but excluding the paragraphs describing
the business experience of such persons), insofar as such statements constitute
a summary of the legal matters, documents or proceedings referred to therein,
fairly present and summarize the information with respect to such legal matters,
documents and proceedings required under the Act and the Rules and Regulations;
(x) to such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the Company or any
subsidiary is a party or to which any of the properties of the Company is
subject that are required to be described in the Registration Statement or the
Prospectus and are not so described;
(xi) to such counsel's knowledge, except as described
in the Registration Statement, no holder of securities of the Company has rights
to require the Company to register with the Commission shares of Common Stock or
other securities, as part of the offering contemplated hereby;
(xii) such counsel does not know of any contracts or
documents required to be filed as exhibits, or documents incorporated by
reference, to the Registration Statement or described in the Registration
Statement or Prospectus or any supplements or amendments thereto which are not
so filed, or described as required, and to such counsel's knowledge, each
description of such contracts and documents as is contained in the Registration
Statement and Prospectus fairly presents in all material respects the
information required under the Act and the Rules and Regulations; and
(xiii) the Shares have been approved for listing on the
Nasdaq National Market pursuant to an Additional Listing Application upon
official notice of issuance; and
(xiv) the outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and are validly issued,
fully paid and non-assessable and are owned by the Company.
14
In addition, such counsel shall state that, although they
have not independently verified the accuracy and completeness of the statements
contained in the Registration Statement or the Prospectus, nothing has come to
the attention of such counsel that has caused them to believe that the
Registration Statement (other than the financial statements, as to which such
counsel need express no opinion or belief), at the time it was declared
effective, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (other than the
financial statements, as to which such counsel need express no opinion or
belief), at the time the Registration Statement was declared effective (unless
the term "Prospectus" refers to a prospectus that has been provided to the
Underwriters by the Company after the time the Registration Statement was
declared effective for use in connection with the offering of the Firm Shares
that differs from the Prospectus on file at the Commission at the time the
Registration Statement was declared effective, in which case at the time such
Prospectus was first provided to the Underwriters for such use), or at the
Closing Date or any later date on which the Option Shares are to be purchased,
included or includes any untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may rely as to
matters not involving the laws of the United States or the State of California
upon opinions of local counsel, and as to matters of fact, on representations or
certificates of officers of the Company and of governmental officials, in which
case their opinion is to state that they are so doing, that they have no actual
knowledge of any material misstatement or inaccuracy in such opinions,
representations or certificates and that the Underwriters are justified in
relying on such opinions or certificates and copies of said opinions or
certificates are to be attached to the opinion.
In rendering such opinion, such counsel may rely upon
opinions of counsel satisfactory in form and substance to the Representatives
and counsel for the Underwriters, in which case, the opinion of counsel for the
Company shall state that it has no reason to believe that such counsel, the
Representatives and counsel for the Underwriters are not justified in so
relying.
g. The counsel for the Selling Shareholders shall have
furnished to the Representatives their written opinion, as counsel to the
Selling Shareholders, addressed to the Underwriters and dated the Closing Date,
in form and substance reasonably satisfactory to the Representatives, to the
effect that:
(i) Each Selling Shareholder has all requisite, power
and authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement; the execution and delivery of, and performance by each
Selling Shareholder of his obligations under, this Agreement, the Power of
Attorney and the Custody Agreement will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any statute, any indenture, mortgage deed of trust, loan agreement or
other agreement or instrument to which any Selling Shareholder is a party or by
which any Selling Shareholder is bound or to which any of the property or assets
of any Selling Shareholder is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of any Selling Shareholder
or the articles of partnership of any Selling Shareholder, if applicable, or any
statute, order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over any Selling Shareholder or
the property or assets of any Selling Shareholder; and, except for the
registration of the Shares under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Power of Attorney or the Custody Agreement by
any Selling Shareholder and the consummation by any Selling Shareholder of the
transactions contemplated hereby;
(ii) This Agreement has been duly authorized, executed
and delivered by or on behalf of each Selling Shareholder;
15
(iii) A Power-of-Attorney and a Custody Agreement have
been duly authorized, executed and delivered by each Selling Shareholder and
constitute valid and binding agreements of each Selling Shareholder, enforceable
in accordance with their respective terms; and
(iv) Good and valid title to the Shares to be sold by
each Selling Shareholder under this agreement, free and clear of all liens,
encumbrances, equities or claims, has been transferred to each of the several
Underwriters.
In rendering such opinion, such counsel may rely as to
matters not involving the laws of the United States or the State of California
upon opinions of local counsel, and as to matters of fact, on representations or
certificates of officers of the Selling Shareholders and of governmental
officials, in which case their opinion is to state that they are so doing, that
they have no actual knowledge of any material misstatement or inaccuracy in such
opinions, representations or certificates and that the Underwriters are
justified in relying on such opinions or certificates and copies of said
opinions or certificates are to be attached to the opinion.
h. The Representatives shall have received an opinion,
dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date, from Xxxx Xxxx Xxxx & Freidenrich LLP, counsel to the
Underwriters, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to the
Representatives.
i. The Representatives shall have received, on or prior to
the Closing Date, agreements in substantially the form attached hereto as
Schedule III from all, officers, and Selling Shareholders of the Company.
j. Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Representatives a letter
("Original Letter"), dated the date of its delivery, addressed to the
Representatives and in form and substance satisfactory to the Representatives,
confirming that they are independent accountants with respect to the Company as
required by the Act and the Rules and Regulations and with respect to certain
financial and other statistical and numerical information contained in the
Registration Statement. At the Closing Date, and, as to the Option Shares, the
Option Closing Date, the Accountants shall have furnished to the Representatives
a letter, dated the date of its delivery, which shall confirm, on the basis of a
review in accordance with the procedures set forth in the letter from the
Accountants, that nothing has come to their attention during the period from the
date of the letter referred to in the prior sentence to a date (specified in the
letter) not more than two business days prior to the Closing Date and the Option
Closing Date, as the case may be, which would require any change in their letter
dated the date hereof if it were required to be dated and delivered at the
Closing Date and the Option Closing Date. The Original Letter shall state that
the Accountants have performed the procedures set out in the Statement of
Accounting Standards No. 71 ("SAS 71") for a review of interim financial
information with respect to each of the quarters for which financial information
is reported under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Quarterly Results" to the Registration
Statement.
k. The Representatives shall have received, on or prior to
the Closing Date, copies of a letter to the Company from the Accountants stating
that their review of the Company's system of internal accounting controls, to
the extent they deemed necessary in establishing the scope of their examination
of the Company's financial statements as of and at January 31, 1997, did not
disclose any weakness in internal controls that they considered to be material
weaknesses.
l. Concurrently with the execution and delivery of this
Agreement and at the Closing Date and, with respect to the Option Shares, the
Option Closing Date, there shall be furnished to the Representatives a
certificate, dated the date of its delivery, signed by the Chief Executive
Officer and the Chief Financial Officer of the Company and of any subsidiary
reasonably requested by the Representatives, in form and substance satisfactory
to the Representatives, to the effect that:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus and (A) as of the date of
such certificate, the Registration Statement and the
16
Prospectus do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading and (B) in the case of the
certificate delivered at the Closing Date and the Option Closing Date, since the
Effective Date no event has occurred as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect.
(ii) Each of the representations and warranties of the
Company contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material respects.
(iii) Each of the covenants required to be performed
by the Company herein on or prior to the date of such certificate has been duly,
timely and fully performed and each condition herein required to be satisfied or
fulfilled on or prior to the date of such certificate has been duly, timely and
fully satisfied or fulfilled.
m. Each Selling Shareholder (or the Custodian or one or
more attorneys-in-fact on behalf of the Selling Shareholder) shall have
furnished to the Representatives on the Closing Date a certificate, dated the
Closing Date, signed by, or on behalf of, the Selling Shareholder (or the
Custodian or one or more attorneys-in-fact) stating that the representations,
warranties and agreements of the Selling Shareholder contained herein are true
and correct as of the Closing Date and that the Selling Shareholder has complied
with all agreements contained herein to be performed by the Selling Shareholder
at or prior to the Closing Date.
n. The Shares shall be qualified for sale in such
jurisdictions as the Representatives may reasonably request, and each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date or the Option Closing Date.
o. Prior to the Closing Date, the Shares shall have been
duly authorized for listing on the Nasdaq National Market upon official notice
of issuance.
p. The Company shall have furnished to the Representatives
such certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus, as to the accuracy at the Closing
Date and the Option Closing Date of the representations and warranties of the
Company herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and precedent
to the obligations hereunder of the Representatives.
8. Indemnification.
a. The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls, within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, each Underwriter, from and against any
and all losses, claims, liabilities, expenses and damages arising out of any
action, suit or proceeding brought by a third party (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted by a third party), to which they, or any of them, may become
subject under the Act, the Exchange Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages (i) relate to, arise out of or are based on any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus, or the
omission or alleged omission to state in such document a material fact required
to be stated in it or necessary to make the statements in it not misleading in
light of the circumstances in which they were made, (ii) relate to, arise out of
or are based on whole or in part on any inaccuracy in the representations and
warranties of the Company or the Selling Shareholders contained herein or (iii)
arise out of or are based upon any failure of the Company to perform its
obligations hereunder or under law in connection with the transactions
contemplated hereby; provided that the Company will not be liable to the extent
that such loss,
17
claim, liability, expense or damage arises from the sale of the Shares in the
public offering to any person by an Underwriter and is based on an untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives, on behalf of any Underwriter,
expressly for inclusion in the Registration Statement, the preliminary
prospectus or the Prospectus, or any amendment or supplement thereto, and
provided further that the Company will not be liable to any Underwriter, the
directors, officers, employees or agents of such Underwriter or any person
controlling such Underwriter with respect to any loss, claim, liability,
expense, or damage arising out of or based on any untrue statement or omission
or alleged untrue statement or omission or alleged omission to state a material
fact in the preliminary prospectus which is corrected in the Prospectus if the
person asserting any such loss, claim, liability, charge or damage purchased any
of the Shares from such Underwriter, was entitled by law to receive a Prospectus
but was not sent or given a copy of the Prospectus at or prior to the written
confirmation of the sale of such Shares to such person. The Company acknowledges
that the statements set forth under the heading "Underwriting" in the
preliminary prospectus and the Prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company by the
Representatives on behalf of the Underwriters expressly for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus. This
indemnity will be in addition to any liability that the Company might otherwise
have.
b. Each Selling Shareholder, severally in proportion to
the number of Shares to be sold by each of them hereunder, shall indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Shares), to which that Underwriter or
controlling person may become subject, under the Act or otherwise, insofar as
such loss, claim, damage, liability or action relates to, arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall reimburse
each Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by that Underwriter or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Selling Shareholders shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein. The Selling Shareholders acknowledge that
the statements set forth under the heading "Underwriting" in the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives specifically for inclusion in the
Registration Statement. The foregoing indemnity agreement is in addition to any
liability which the Selling Shareholders may otherwise have to any Underwriter
or any controlling person of that Underwriter. The liability of each Selling
Shareholder under this Section 8(b) shall be limited to an amount equal to the
public offering price of the stock sold by such Selling Shareholder to the
Underwriters less the amount of any discounts or commissions paid by such
Selling Shareholder to the Underwriters.
c. Each Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls, within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, the Company, and each director of the
Company and each officer of the Company who signs the Registration Statement to
the same extent as the foregoing indemnity from the Company to each Underwriter,
as set forth in Section 8(a), but only insofar as losses, claims, liabilities,
expenses or damages relate to, arise out of or are based on any untrue statement
or omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representatives, on behalf of such Underwriter, expressly for
use in the Registration Statement, the preliminary prospectus or the Prospectus,
or any amendment or supplement thereto. The Company acknowledges that the
statements set forth under the heading "Underwriting" in the preliminary
prospectus and the Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by the Representatives on
18
behalf of the Underwriters expressly for inclusion in the Registration
Statement, the preliminary prospectus or the Prospectus. This indemnity will be
in addition to any liability that each Underwriter might otherwise have.
d. Any party that proposes to assert the right to be
indemnified under this Section 8, shall, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 8, notify
each such indemnifying party in writing of the commencement of such action,
enclosing with such notice a copy of all papers served, but the omission so to
notify such indemnifying party will not relieve it from any liability that it
may have to any indemnified party under the foregoing provisions of this Section
unless, and only to the extent that, such omission results in the loss of
substantive rights or defenses by the indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying party of
its commencement, the indemnifying party will be entitled to participate in and,
to the extent that it elects by delivering written notice to the indemnified
party promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (ii)
there are legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party,
(iii) the indemnified party has reasonably concluded that a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (iv) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. Any indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably withheld).
e. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 8 is applicable in accordance with its terms, but for
any reason is held to be unavailable from the Company, the Selling Shareholders
or the Underwriters, the indemnifying party will contribute to the total losses,
claims, liabilities, expenses and damages (including any investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted, but
after deducting any contribution received by the Company or the Selling
Shareholders from persons other than the Underwriters, such as persons who
control the Company or a Selling Shareholder within the meaning of the Act,
officers of the Company who signed the Registration Statement and directors of
the Company, who also may be liable for contribution) to which the Company, any
one or more of the Selling Shareholders and any one or more of the Underwriters
may be subject in such proportion as shall be appropriate to reflect the
relative benefits received by the Company, the Selling Shareholders and the
Underwriters. The relative benefits received by the Company, the Selling
Shareholders and the Underwriters shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company and the Selling Shareholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence, but also the relative fault of the Company, the Selling
Shareholders and the Underwriters with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect
19
to such offering. Such relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Selling Shareholders or the Representatives on behalf of the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section 8(d) were to
be determined by pro rata allocation (even if the Selling Shareholders or the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in respect
thereof, referred to above in this Section 8(d), shall be deemed to include, for
purpose of this Section 8(d), any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 8(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 8(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against any such party in respect of which a claim for contribution may be made
under this Section 8(d), will notify any such party or parties from whom
contribution may be sought from any other obligation it or they may have under
this Section 8(d). No party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent will not be
unreasonably withheld).
f. The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions hereof including, without limitation,
the provisions of this Section 8, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 8
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement and Prospectus as required by the Act and the
Exchange Act. The parties are advised that federal or state public policy, as
interpreted by the courts in certain jurisdictions, may be contrary to certain
of the provisions of this Section 8, and the parties hereto hereby expressly
waive and relinquish any right or ability to assert such public policy as a
defense to a claim under this Section 8 and further agree not to attempt to
assert any such defense.
g. The indemnity and contribution agreements contained in
this Section 8 and the representations and warranties of the Company and Selling
Shareholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of any of the Shares and payment therefor or (iii)
any termination of this Agreement.
9. Reimbursement of Certain Expenses. In addition to its
other obligations under Section 8(a) of this Agreement, the Company hereby
agrees to reimburse on a quarterly basis the Underwriters for all reasonable
legal and other expenses incurred in connection with investigating or defending
any claim, action, investigation, inquiry or other proceeding brought by a third
party relating to, arising out of or based upon in whole or part, (i) as
described in Section 8(a), any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it not misleading in light of the circumstances in which they
were made, (ii) any inaccuracy in the representations and warranties of the
Company or the Selling Shareholders contained herein or (iii) any failure of the
Company or the Selling Shareholders to perform their obligations hereunder or
under law in connection with the transactions contemplated hereby,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the obligations under this Section 9 and the possibility that
such payment might later be held to be improper; provided,
20
however, that, to the extent any such payment is ultimately held to be improper,
the persons receiving such payments shall promptly refund them.
10. Termination. The obligations of the Underwriters, the
Company and the Selling Shareholders under this Agreement may be terminated at
any time on or prior to the Closing Date (or, with respect to the Option Shares,
on or prior to the Option Closing Date), by notice to the Company from the
Representatives, without liability on the part of any Underwriter to the Company
and the Selling Shareholders or the Company and the Selling Shareholders to any
underwriter (except as set forth in section 5(i) above) if, prior to delivery
and payment for the Firm Shares or Option Shares, as the case may be, in the
sole judgment of the Representatives, (a) trading in any of the equity
securities of the Company shall have been suspended by the Commission, by an
exchange that lists the Shares or by the Nasdaq National Market, (b) trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or minimum or maximum prices shall have been
generally established on such exchange, or additional material governmental
restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by such exchange or by order of the
Commission or any court or other governmental authority, (c) a general banking
moratorium shall have been declared by either federal or New York State
authorities or (d) any material adverse change in the financial or securities
markets in the United States, or in political, financial or economic conditions
in the United States or any outbreak or material escalation of hostilities or
other calamity or crises, shall have occurred, the effect of which is such as to
make it, in the sole judgment of the Representatives, impracticable to market
the Shares.
11. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase the Firm Shares which it or they
have agreed to purchase hereunder, and the aggregate number of Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of Firm Shares, the
other Underwriters shall be obligated, severally, to purchase the Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase, in the proportions which the number of Firm Shares which they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares which all such non-defaulting Underwriters have so agreed
to purchase, or in such other proportions as the Representatives may specify;
provided that in no event shall the maximum number of Firm Shares which any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 11 by more than one-ninth of such number of Firm Shares
without the prior written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase any Firm Shares and the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase exceeds one-tenth of the aggregate number of
the Firm Shares and arrangements satisfactory to the Representatives and the
Company for the purchase of such Firm Shares are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter, the Company or the Selling Shareholders for the
purchase or sale of any Shares under this Agreement. In any such case either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Any action taken pursuant to
this Section 11 shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
12. Miscellaneous. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the offices of
the Company, 0000 Xxxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000, Attention:
Chief Executive Officer, with a copy to Xxxxxx X. Xxxxxx, Esq., Heller, Ehrman,
White & XxXxxxxxx, 000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000-0000 (b) if to any of the Selling Shareholders, to the address
of each as set forth on Schedule II hereto, or (c) if to the Underwriters, to
the Representatives at the offices of Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance Department,
with a copy to Xxxxxxx X. Xxxx, Esq., Xxxx Xxxx Xxxx & Freidenrich LLP, 0000
Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000. Any such notice shall
be effective only upon receipt. Any notice may be made by telex or facsimile
transmission, but if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Selling Shareholders and the Company and of the controlling
persons, directors and officers referred to in Section 8, and
21
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" as used in this Agreement shall not include a purchaser, as such
purchaser, of Shares from any of the Underwriters.
This Agreement shall be governed by and construed in accordance
with the laws of the State of California applicable to contracts made and to be
performed entirely within such State.
This Agreement may be signed in two or more counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Please confirm that the foregoing correctly sets forth the
Agreement among the Company and the Underwriters.
Very truly yours,
REMEC, INC.
By:______________________________________
Title: Chief Executive Officer
The Selling Shareholders named in
Schedule II to this Agreement
By:______________________________________
Attorney-in-Fact
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
XXXXXXX & COMPANY, INC.
X.X. XXXXXXX & SONS, INC.
CIBC XXXXXXXXXXX CORP.
As Representatives of the Underwriters
listed on Schedule I
By: Xxxxxxx & Company, Inc.
By:________________________________
Title: Managing Director
22
SCHEDULE I
SCHEDULE OF UNDERWRITERS NUMBER OF
FIRM SHARES
TO BE
UNDERWRITERS PURCHASED
------------ ---------
Xxxxxxx & Company, Inc. ........................................................
X.X. Xxxxxxx & Sons, Inc. ......................................................
CIBC Xxxxxxxxxxx Corp...........................................................
Total ................................................................ 2,300,000
23
SCHEDULE II
SCHEDULE OF SELLING SHAREHOLDERS
NUMBER OF
SHAREHOLDER FIRM SHARES
----------- -----------
XXXXXX .........................................................................
CALLAWAY .......................................................................
CHOW ...........................................................................
XXXXXXXX .......................................................................
XXXXXXX ........................................................................
XXXXX ..........................................................................
XXXXX ..........................................................................
HICKOCK ........................................................................
XXXXXX .........................................................................
HORN ...........................................................................
XXXXX ..........................................................................
XXX ............................................................................
XXXXX ..........................................................................
XXXXXXXX .......................................................................
XXXXXX .........................................................................
XXXXXXXX .......................................................................
XXXXXX .........................................................................
XXXX ...........................................................................
XXXXXXX ........................................................................
XXXXXXX ........................................................................
---------
Total ................................................................ 1,000,000
24
SCHEDULE III
FORM OF LOCK-UP AGREEMENT TO BE SIGNED BY ALL
DIRECTORS, OFFICERS AND SELLING SHAREHOLDERS OF THE COMPANY
The undersigned is a holder of securities of REMEC, Inc., a
California corporation (the "Company"), and wishes to facilitate the public
offering of shares of the Common Stock (the "Common Stock") of the Company (the
"Offering"). The undersigned recognizes that such Offering will be of benefit to
the undersigned.
In consideration of the foregoing and in order to induce you to
act as underwriters in connection with the Offering, the undersigned hereby
agrees that he, she or it will not, directly or indirectly, sell, contract to
sell, transfer or encumber the economic risk of ownership interest in, make any
short sale, pledge, establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Exchange Act of 1934, as amended, or
otherwise dispose of, any shares of Common Stock, options to acquire shares of
Common Stock or securities exchangeable for or convertible into shares of Common
Stock of the Company which he, she or it may own, exclusive of any shares of
Common Stock purchased in connection with the Company's public offering or
purchased in the public trading market subsequent to the Company's public
offering, without the prior written approval of Xxxxxxx & Company, Inc., acting
on its own behalf and/or on behalf of other representatives of the underwriters,
for a period commencing as of the day on which the Form S-3 Registration
Statement to be filed on behalf of the Company in connection with the Offering
(the "Registration Statement") shall become effective by order of the Securities
and Exchange Commission (the "Effective Date") and ending on the date which is
one hundred eighty (180) days after the Effective Date. The undersigned confirms
that he, she or it understands that the underwriters and the Company will rely
upon the representations set forth in this Agreement in proceeding with the
Offering. The undersigned further confirms that the agreements of the
undersigned are irrevocable and shall be binding upon the undersigned's heirs,
legal representatives, successors and assigns. The undersigned agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent against the transfer of securities held by the undersigned except in
compliance with this Agreement.
This Agreement shall be binding on the undersigned and his, her
or its respective successors, heirs, personal representatives and assigns upon
the effectiveness of the Registration Statement.
