1
EXHIBIT 1.1
2,000,000 SHARES
QLOGIC CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
___________, 1997
XXXXX & COMPANY
PRUDENTIAL SECURITIES INCORPORATED
XXXXXX XXXXXX & COMPANY, INC.
As Representatives of the several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
1. Introductory. QLogic Corporation, a Delaware corporation (the
"Company"), proposes to sell, pursuant to the terms of this Agreement, to the
several underwriters named in Schedule A hereto (the "Underwriters," or, each,
an "Underwriter"), an aggregate of 2,000,000 shares of Common Stock, $0.10 par
value (the "Common Stock"). The aggregate of 2,000,000 shares so proposed to
be sold is hereinafter referred to as the "Firm Stock." The Company also
proposes to sell to the Underwriters, upon the terms and conditions set forth
in Section 3 hereof, up to an additional 300,000 shares of Common Stock (the
"Optional Stock"). The Firm Stock and the Optional Stock are hereinafter
collectively referred to as the "Stock". Xxxxx & Company ("Cowen"), Prudential
Securities Incorporated ("Prudential") and Xxxxxx Xxxxxx & Company, Inc.
("Xxxxxx Xxxxxx") are acting as representatives of the several Underwriters and
in such capacity are hereinafter referred to as the "Representatives."
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-_________) in the form in which it became or becomes effective and
also in such form as it may be when any post-effective amendment
thereto shall become effective with respect to the Stock, including
any preeffective prospectuses included as part of the registration
statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Securities
Act of 1933, as amended (the "Securities Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, copies of which
(including all documents incorporated by reference therein) have
heretofore been delivered to you, has been prepared by the Company in
conformity with the requirements of the Securities Act and has been
filed with the Commission under the Securities Act; one or more
amendments to such registration statement, including in each case an
amended preeffective prospectus, copies of which amendments (including
all documents incorporated by reference therein), have heretofore been
delivered to you, have been so prepared and filed. If it is
contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed
and must be declared effective before the offering of the Stock may
commence, the term "Registration Statement" as used in this Agreement
means the registration statement as amended by said post-effective
amendment. The term "Registration Statement" as used in this
Agreement shall also include any registration statement relating to
the Stock that is filed and declared effective pursuant to Rule 462(b)
under the Securities Act. The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the
Registration Statement, or, (A) if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A
under the Securities Act and such information is
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included in a prospectus filed with the Commission pursuant to Rule
424(b) under the Securities Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the
Registration Statement as supplemented by the addition of the Rule
430A information contained in the prospectus filed with the Commission
pursuant to Rule 424(b) and (B) if prospectuses that meet the
requirements of Section 10(a) of the Securities Act are delivered
pursuant to Rule 434 under the Securities Act, then (i) the term
"Prospectus" as used in this Agreement means the "prospectus subject
to completion" (as such term is defined in Rule 434(g) under the
Securities Act) as supplemented by (a) the addition of Rule 430A
information or other information contained in the form of prospectus
delivered pursuant to Rule 434(c)(2) under the Securities Act or (b)
the information contained in the abbreviated term sheets described in
Rule 434(c)(3) under the Securities Act, and (ii) the date of such
prospectuses shall be deemed to be the date of the abbreviated term
sheets. The term "Preeffective Prospectus" as used in this Agreement
means the prospectus subject to completion in the form included in the
Registration Statement at the time of the initial filing of the
Registration Statement with the Commission, and as such prospectus
shall have been amended from time to time prior to the date of the
Prospectus. Any reference herein to any Preeffective Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Form S-3 under the
Securities Act, as of the date of such Preeffective Prospectus or
Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preeffective Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and so incorporated by reference.
(b) The Commission has not issued or, to the best of the
Company's knowledge, threatened to issue any order preventing or
suspending the use of any Preeffective Prospectus, and, at its date of
issue, each Preeffective Prospectus conformed in all material respects
with the requirements of the Securities Act and did not include any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, other than any such nonconformance or untrue statement or
omission in a Preeffective Prospectus which has been corrected in the
Prospectus; and, when the Registration Statement becomes effective and
at all times subsequent thereto up to and including each of the
Closing Dates (as hereinafter defined), the Registration Statement and
the Prospectus and any amendments or supplements thereto contained and
will contain all material statements and information required to be
included therein by the Securities Act and conformed and will conform
in all material respects to the requirements of the Securities Act and
neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, included or will include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the foregoing representations,
warranties and agreements shall not apply to information contained in
or omitted from any Preeffective Prospectus or the Registration
Statement or the Prospectus or any such amendment or supplement
thereto in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any Underwriter, directly
or through you, specifically for use in the preparation thereof; there
is no franchise, lease, contract, agreement or document required to be
described in the Registration Statement or Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or
filed therein as required; and all descriptions of any such
franchises, leases, contracts, agreements or documents contained in
the Registration Statement are accurate and complete descriptions of
such documents in all material respects.
(c) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus, and
except as set forth or contemplated in the Prospectus, neither the
Company nor its subsidiary has incurred any liabilities or
obligations, direct or contingent, not in the ordinary course of
business nor entered into any transactions not in the ordinary course
of business, and there has not been any material adverse change in the
condition (financial or otherwise), properties, business, management,
prospects, net worth or results of operations of the Company and its
subsidiary considered as a whole, or any change in the capital stock,
short-term or long-term debt of the Company and its subsidiary
considered as a whole.
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(d) The financial statements, together with the related notes
and schedules, set forth in the Prospectus and elsewhere in the
Registration Statement fairly present, on the basis stated in the
Registration Statement, the financial position and the results of
operations and changes in financial position of the Company and its
consolidated subsidiaries at the respective dates or for the
respective periods therein specified. Such statements and related
notes and schedules have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis except as
may be set forth in the Prospectus. The selected financial and
statistical data set forth in the Prospectus and in the Company's
Annual Report on Form 10-K for the fiscal year ended March __ , 199_,
incorporated by reference in the Prospectus fairly present, on the
basis stated in the Registration Statement and such Annual Report, the
information set forth therein.
(e) KPMG Peat Marwick, LLP, who have expressed their opinions
on the audited financial statements and related schedules included in
the Registration Statement and the Prospectus are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(f) The Company and its subsidiary have been duly organized
and are validly existing and in good standing as corporations under
the laws of their respective jurisdictions of organization, with power
and authority (corporate and other) to own or lease their properties
and to conduct their businesses as described in the Prospectus; the
Company and its subsidiary are in possession of and operating in
compliance with all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders required for the
conduct of its business, all of which are valid and in full force and
effect or the absence of which would not have a material adverse
effect on the business or financial condition of the Company and its
subsidiary considered as a whole; and the Company and such subsidiary
are duly qualified to do business and in good standing as foreign
corporations in all other jurisdictions where their ownership or
leasing of properties or the conduct of their businesses requires such
qualification, except where the failure to so qualify would not have a
material adverse effect on the business or financial condition of the
Company and its subsidiary considered as a whole. The Company has and
its subsidiary have all requisite power and authority, and all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public regulatory
or governmental agencies and bodies to own, lease and operate its
properties and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus, and no
such consent, approval, authorization, order, registration,
qualification, license or permit contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and
the Prospectus. The Company owns or controls, directly or indirectly,
only the following corporations, associations or other entities:
QLogic Foreign Sales Corporation, a U.S. Virgin Islands Corporation
and a wholly-owned subsidiary.
(g) The Company's authorized and outstanding capital stock is
on the date hereof, and will be on the Closing Date[s], as set forth
under the heading "Capitalization" in the Prospectus; the outstanding
shares of common stock of the Company conform to the description
thereof in the Prospectus and have been duly authorized and validly
issued and are fully paid and nonassessable; are duly listed on the
Nasdaq National Market and have been issued in compliance with all
federal and state securities laws and were not issued in violation of
or subject to any preemptive rights or similar rights to subscribe for
or purchase securities and conform to the description thereof
contained in the Prospectus. Except as disclosed in and or
contemplated by the Prospectus and the financial statements of the
Company and related notes thereto included in the Prospectus, the
Company does not have outstanding any options or warrants to purchase,
or any preemptive rights or other rights to subscribe for or to
purchase any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of its capital stock
or any such options, rights, convertible securities or obligations,
except for options granted subsequent to the date of information
provided in the Prospectus pursuant to the Company's employee and
stock option plans as disclosed in the Prospectus. The description of
the Company's stock option and other stock plans or arrangements, and
the options or other rights granted or exercised thereunder, as set
forth in the Prospectus, accurately and fairly presents the
information required to be shown with respect to such plans,
arrangements, options and rights. All outstanding shares of capital
stock of each
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subsidiary have been duly authorized and validly issued, and are fully
paid and nonassessable and (except for directors' qualifying shares)
are owned directly by the Company or by another wholly owned
subsidiary of the Company free and clear of any liens, encumbrances,
equities or claims.
(h) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and nonassessable and free of
any preemptive or similar rights and will conform to the description
thereof in the Prospectus.
(i) Except as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or its
subsidiary is a party or of which any property of the Company or its
subsidiary is subject, which, if determined adversely to the Company
or its subsidiary, might individually or in the aggregate (i) prevent
or adversely affect the transactions contemplated by this Agreement,
(ii) suspend the effectiveness of the Registration Statement, (iii)
prevent or suspend the use of the Preeffective Prospectus in any
jurisdiction or (iv) result in a material adverse change in the
condition (financial or otherwise), properties, business, management
prospects, net worth or results of operations of the Company and its
subsidiary considered as a whole and there is no valid basis for any
such legal or governmental proceeding; and to the best of the
Company's knowledge no such proceedings are threatened or contemplated
against the Company or its subsidiary by governmental authorities or
others. The Company is not a party nor subject to the provisions of
any material injunction, judgment, decree or order of any court,
regulatory body or other governmental agency or body. The description
of the Company's litigation under the heading "Legal Proceedings" in
the Prospectus is true and correct and complies with the Rules and
Regulations.
(j) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated (A) will
not result in any violation of the provisions of the certificate of
incorporation, by-laws or other organizational documents of the
Company or its subsidiary, or any law, order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or its subsidiary or any of their properties or assets, (B)
will not conflict with or result in a breach or violation of any of
the terms or provisions of or constitute a default under any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or its subsidiary is a party or by
which it or any of its properties is or may be bound, the Certificate
of Incorporation, By-laws or other organizational documents of the
Company or any of its subsidiaries, or any law, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or its subsidiary or any of their
properties or will result in the creation of a lien.
(k) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby, except such as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") or under the Securities Act or the Securities Exchange Act of
1934, as amended (the "Exchange Act") or the securities or "Blue Sky"
laws of any jurisdiction in connection with the purchase and
distribution of the Stock by the Underwriters.
(l) The Company has the full corporate power and authority to
enter into this Agreement and to perform its obligations hereunder
(including to issue, sell and deliver the Stock), and this Agreement
has been duly and validly authorized, executed and delivered by the
Company and is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except
to the extent that rights to indemnity and contribution hereunder may
be limited by federal or state securities laws or the public policy
underlying such laws.
(m) The Company and its subsidiary are in all material
respects in compliance with, and conduct their businesses in
conformity with, all applicable federal, state, local and foreign
laws, rules and regulations or any court or governmental agency or
body; to the knowledge of the Company, otherwise than as set forth in
the Registration Statement and the Prospectus, no prospective change
in any of such
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federal or state laws, rules or regulations has been adopted which,
when made effective, would have a material adverse effect on the
operations of the Company and its subsidiary considered as a whole.
In the ordinary course of business, employees of the Company conduct
periodic reviews of the effect of Environmental Laws (as defined
below) on the business operations and properties of the Company and
its subsidiaries, in the ordinary course of which they seek to
identify and evaluate associated costs and liabilities. Except as
disclosed in the Registration Statement, the Company and its
subsidiary are in compliance with all applicable existing federal,
state, local and foreign laws and regulations relating to the
protection of human health or the environment or imposing liability or
requiring standards of conduct concerning any Hazardous Materials
("Environmental Laws"), except for such instances of noncompliance
which, either singly or in the aggregate, would not have a material
adverse effect. The term "Hazardous Material" means (i) any
"hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (ii) any
"hazardous waste" as defined by the Resource Conservation and Recovery
Act, as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl and (v) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environment Law.
(n) The Company and its subsidiary have filed all necessary
federal, state, local and foreign income, payroll, franchise and other
tax returns and have paid all taxes shown as due thereon or with
respect to any of their properties, and there is no tax deficiency
that has been, or to the knowledge of the Company is likely to be,
asserted against the Company or its subsidiary or any of their
respective properties or assets that would materially adversely affect
the financial position, business or operations of the Company and its
subsidiary considered as a whole.
(o) No person or entity has the right to require registration
of shares of Common Stock or other securities of the Company because
of the filing or effectiveness of the Registration Statement or
otherwise, except for persons and entities who have expressly waived
such right and notice of such right or who have been given required
notice and have failed to exercise such right within the time or times
required under the terms and conditions of such right.
(p) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any
security of the Company, or which caused or resulted in, or which
might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the
Company.
(q) The Company has provided you with all financial
statements since __________ to the date hereof that are available to
the officers of the Company, including financial statements for the
months of _______, ____________ and ________ of 1997.
(r) The Company and its subsidiary own or possess the right
to use all patents, trademarks, trademark registrations, service
marks, service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as
being owned by them or either of them or necessary for the conduct of
their respective businesses, and the Company is not aware of any claim
to the contrary or any challenge by any other person to the rights of
the Company and its subsidiary with respect to the foregoing. Except
as disclosed in the Prospectus, the Company's business as now
conducted and as proposed to be conducted does not and will not
infringe or conflict with in any material respect patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses or
other intellectual property or franchise right of any person. Except
as described in the Prospectus, no claim has been made against the
Company alleging the infringement by the Company of any patent,
trademark, service xxxx, trade name, copyright, trade secret, license
in or other intellectual property right or franchise right of any
person.
(s) The Company and its subsidiary have performed all
material obligations required to be performed by them under all
contracts required by Item 601(b)(10) of Regulation S-K under the
Securities
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Act to be filed as exhibits to the Registration Statement, and neither
the Company nor its subsidiary nor any other party to such contract is
in default under or in breach of any such obligations. Neither the
Company nor its subsidiary has received any notice of such default or
breach.
(t) The Company is not involved in any labor dispute nor, to
the best of the Company's knowledge, is any such dispute threatened.
The Company is not aware that (A) any executive, key employee or
significant group of employees of the Company or its subsidiary plans
to terminate employment with the Company or any such subsidiary or (B)
any such executive or key employee is subject to any noncompete,
nondisclosure, confidentiality, employment, consulting or similar
agreement that would be violated by the present or proposed business
activities of the Company and its subsidiary. Neither the Company nor
its subsidiary has or expects to have any liability for any prohibited
transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing or
other plan which is subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), to which the Company or its
subsidiary makes or ever has made a contribution and in which any
employee of the Company or its subsidiary is or has ever been a
participant. With respect to such plans, the Company and its
subsidiary are in compliance in all material respects with all
applicable provisions of ERISA.
(u) The Company has obtained the written agreement described
in Section 8(j) of this Agreement from each of its officers, directors
and holders of Common Stock listed on Schedule B hereto.
(v) The Company and its subsidiary have, and the Company and
its subsidiary as of the Closing Date[s] will have, good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned or proposed to be
owned by them which is material to the business of the Company or of
its subsidiary, in each case free and clear of all liens, encumbrances
and defects except such as are described the Prospectus or such as
would not have a material adverse effect on the Company and its
subsidiary considered as a whole; and any real property and buildings
held under lease by the Company and its subsidiary or proposed to be
held after giving effect to the transactions described in the
Prospectus are, or will be as of each of the Closing Dates, held by
them under valid, subsisting and enforceable leases with such
exceptions as would not have a material adverse effect on the Company
and its subsidiary considered as a whole, in each case except as
described in or contemplated by the Prospectus.
(w) The Company and its subsidiary are insured by insurers of
recognized financial responsibility against such losses and risks and
in such amounts as are customary in the businesses in which they are
engaged or propose to engage after giving effect to the transactions
described in the Prospectus; and neither the Company nor its
subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary
to continue their business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the
earnings, business or operations of the Company and its subsidiary
considered as a whole, except as described in or contemplated by the
Prospectus.
(x) The Company has complied with all provisions of Section
517.075 Florida Statutes (Chapter 92-198; Laws of Florida).
(y) Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this Agreement.
(z) The Company and its subsidiary maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain
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accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(aa) To the Company's knowledge, neither the Company nor its
subsidiary nor any employee or agent of the Company or its subsidiary
has made any payment of funds of the Company or its subsidiary or
received or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(bb) Neither the Company nor its subsidiary is or, after
application of the net proceeds of this offering as described under
the caption "Use of Proceeds" in the Prospectus, will become an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended.
(cc) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company as to the
matters covered thereby.
3. Purchase by, and Sale and Delivery to, Underwriters--Closing
Dates. The Company agrees to sell to the Underwriters the Firm Stock, and on
the basis of the representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase the Firm Stock from
the Company, the number of shares of Firm Stock to be purchased by each
Underwriter being set opposite its name in Schedule A, subject to adjustment in
accordance with Section 12 hereof.
The purchase price per share to be paid by the Underwriters to the
Company will be $____ per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or
prior to 12:00 Noon, New York Time, on the second full business day preceding
the First Closing Date (as defined below) or, if no such direction is received,
in the names of the respective Underwriters or in such other names as Cowen may
designate (solely for the purpose of administrative convenience) and in such
denominations as Cowen may determine, against payment of the aggregate Purchase
Price therefor by certified or official bank check or checks in immediately
available funds (same day funds), payable to the order of the Company, all at
the offices of Stradling, Yocca, Xxxxxxx & Xxxxx, a Professional Corporation,
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx Xxxxx, XX 00000. The time and
date of the delivery and closing shall be at 10:00 A.M., New York Time, on
_________, 1997, in accordance with Rule 15c6-1 of the Exchange Act. The time
and date of such payment and delivery are herein referred to as the "First
Closing Date." The First Closing Date and the location of delivery of, and the
form of payment for, the Firm Stock may be varied by agreement between the
Company and Cowen. The First Closing Date may be postponed pursuant to the
provisions of Section 12.
The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters not later than
10:00 A.M., New York Time, on the business day preceding the First Closing Date
at the offices of Xxxxx & Company, Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
It is understood that Cowen, Prudential or Xxxxxx Xxxxxx, individually
and not as Representatives of the several Underwriters, may (but shall not be
obligated to) make payment to the Company on behalf of any Underwriter or
Underwriters, for the Stock to be purchased by such Underwriter or
Underwriters. Any such payment by Cowen, Prudential or Xxxxxx Xxxxxx shall not
relieve such Underwriter or Underwriters from any of its or their other
obligations hereunder.
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The several Underwriters agree to make an initial public offering of
the Firm Stock at the initial public offering price as soon after the
effectiveness of the Registration Statement as in their judgment is advisable.
The Representatives shall promptly advise the Company of the making of the
initial public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Company hereby grants to the Underwriters an option to purchase, severally and
not jointly, up to the aggregate number of shares of Optional Stock set forth
opposite the Company's name on Schedule A hereto, for an aggregate of up to
300,000 shares. The price per share to be paid for the Optional Stock shall be
the Purchase Price. The option granted hereby may be exercised as to all or
any part of the Optional Stock at any time, and from time to time, not more
than thirty (30) days subsequent to the effective date of this Agreement. No
Optional Stock shall be sold and delivered unless the Firm Stock previously has
been, or simultaneously is, sold and delivered. The right to purchase the
Optional Stock or any portion thereof may be surrendered and terminated at any
time upon notice by the Underwriters to the Company.
The option granted hereby may be exercised by the Underwriters by
giving written notice from Cowen to the Company setting forth the number of
shares of the Optional Stock to be purchased by them and the date and time for
delivery of and payment for the Optional Stock. Each date and time for
delivery of and payment for the Optional Stock (which may be the First Closing
Date, but not earlier) is herein called the "Option Closing Date" and shall in
no event be earlier than two (2) business days nor later than ten (10) business
days after written notice is given. (The Option Closing Date and the First
Closing Date are herein called the "Closing Dates".) All purchases of Optional
Stock from the Company shall be made on a pro rata basis. Optional Stock shall
be purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Stock set forth opposite such Underwriter's name in
Schedule A hereto bears to the total number of shares of Firm Stock (subject to
adjustment by the Underwriters to eliminate odd lots). Upon exercise of the
option by the Underwriters, the Company agrees to sell to the Underwriters the
number of shares of Optional Stock set forth in the written notice of exercise
and the Underwriters agree, severally and not jointly and subject to the terms
and conditions herein set forth, to purchase the number of such shares
determined as aforesaid.
The Company will deliver the Optional Stock to the Underwriters (in
the form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York Time, on the second full
business day preceding the Option Closing Date or, if no such direction is
received, in the names of the respective Underwriters or in such other names as
Cowen may designate (solely for the purpose of administrative convenience) and
in such denominations as Cowen may determine, against payment of the aggregate
Purchase Price therefor by certified or official bank check or checks in
immediately available funds (same day funds), payable to the order of the
Company, all at the offices of Stradling, Yocca, Xxxxxxx & Xxxxx, a
Professional Corporation, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx Xxxxx,
XX 00000. The Option Closing Date and the location of delivery of, and the
form of payment for, the Option Stock may be varied by agreement between the
Company and Cowen. The Option Closing Date may be postponed pursuant to the
provisions of Section 12.
4. Covenants and Agreements of the Company. The Company
covenants and agrees with the several Underwriters that:
(a) The Company will (i) if the Company and the
Representatives have determined not to proceed pursuant to Rule 430A
of the of the Rules and Regulations, use its best efforts to cause the
Registration Statement to become effective, (ii) if the Company and
the Representatives have determined to proceed pursuant to Rule 430A
of the Rules and Regulations, use its best efforts to comply with the
provisions of and make all requisite filings with the Commission
pursuant to Rule 430A and Rule 424 of the Rules and Regulations and
(iii) if the Company and the Representatives have determined to
deliver Prospectuses pursuant to Rule 434 of the Rules and
Regulations, to use its best efforts to comply with all the applicable
provisions thereof. The Company will advise the Representatives
promptly as to the time at which the Registration Statement becomes
effective, will advise the Representatives promptly of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for
that purpose, and will use its best efforts to prevent
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the issuance of any such stop order and to obtain as soon as possible
the lifting thereof, if issued. The Company will advise the
Representatives promptly of the receipt of any comments of the
Commission or any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for
additional information and will not at any time file any amendment to
the Registration Statement or supplement to the Prospectus which shall
not previously have been submitted to the Representatives a reasonable
time prior to the proposed filing thereof or to which the
Representatives shall reasonably object in writing or which is not in
compliance with the Securities Act and the Rules and Regulations.
(b) The Company will prepare and file with the
Commission, promptly upon the request of the Representatives, any
amendments or supplements to the Registration Statement or the
Prospectus which in the opinion of the Representatives may be
necessary to enable the several Underwriters to continue the
distribution of the Stock and will use its best efforts to cause the
same to become effective as promptly as possible. The Company will
promptly file all reports and any definitive proxy or information
statements required to be filed with the Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act subsequent to the date of
the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Stock.
(c) If at any time after the effective date of the
Registration Statement when a prospectus relating to the Stock is
required to be delivered under the Securities Act any event relating
to or affecting the Company or its subsidiary occurs as a result of
which the Prospectus or any other prospectus as then in effect would
include an untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or if it
is necessary at any time to amend the Prospectus to comply with the
Securities Act, the Company will promptly notify the Representatives
thereof and will prepare an amended or supplemented prospectus or make
an appropriate filing pursuant to Section 13 or 14 of the Exchange Act
which will correct such statement or omission; and in case any
Underwriter is required to deliver a prospectus relating to the Stock
nine (9) months or more after the effective date of the Registration
Statement, the Company upon the request of the Representatives and at
the expense of such Underwriter will prepare promptly such prospectus
or prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act.
(d) The Company will deliver to the Representatives, at
or before the Closing Date, signed copies of the Registration
Statement, as originally filed with the Commission, and all amendments
thereto including all financial statements and exhibits thereto and
all documents theretofore incorporated by reference therein, and will
deliver to the Representatives such number of copies of the
Registration Statement, including such financial statements and all
documents theretofore incorporated by reference therein but without
exhibits, and all amendments thereto, as the Representatives may
reasonably request. The Company will deliver or mail to or upon the
order of the Representatives, from time to time until the effective
date of the Registration Statement, as many copies of the Preeffective
Prospectus as the Representatives may reasonably request. The Company
will deliver or mail to or upon the order of the Representatives on
the date of the initial public offering, and thereafter from time to
time during the period when delivery of a prospectus relating to the
Stock is required under the Securities Act, as many copies of the
Prospectus, in final form or as thereafter amended or supplemented as
the Representatives may reasonably request; provided, however, that
the expense of the preparation and delivery of any prospectus required
for use nine (9) months or more after the effective date of the
Registration Statement shall be borne by the Underwriters required to
deliver such prospectus.
(e) The Company will make generally available to its
stockholders as soon as practicable, but not later than fifteen (15)
months after the effective date of the Registration Statement, an
earnings statement which will be in reasonable detail (but which need
not be audited) and which will comply with Section 11(a) of the
Securities Act, covering a period of at least twelve (12) months
beginning after the "effective date" (as defined in Rule 158 under the
Securities Act) of the Registration Statement.
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(f) The Company will cooperate with the Representatives
to enable the Stock to be registered or qualified for offering and
sale by the Underwriters and by dealers under the securities laws of
such jurisdictions as the Representatives may designate and at the
request of the Representatives will make such applications and furnish
such consents to service of process or other documents as may be
required of it as the issuer of the Stock for that purpose; provided,
however, that the Company shall not be required to qualify to do
business or to file a general consent (other than that arising out of
the offering or sale of the Stock) to service of process in any such
jurisdiction where it is not now so subject. The Company will, from
time to time, prepare and file such statements and reports as are or
may be required of it as the issuer of the Stock to continue such
qualifications in effect for so long a period as the Representatives
may reasonably request for the distribution of the Stock. The Company
will advise the Representatives promptly after the Company becomes
aware of the suspension of the qualifications or registration of (or
any such exception relating to) the Common Stock of the Company for
offering, sale or trading in any jurisdiction or of any initiation or
threat of any proceeding for any such purpose, and in the event of the
issuance of any orders suspending such qualifications, registration or
exception, the Company will, with the cooperation of the
Representatives use its best efforts to obtain the withdrawal thereof.
(g) The Company will furnish to its stockholders annual
reports containing financial statements certified by independent
public accountants and with quarterly summary financial information in
reasonable detail which may be unaudited. During the period of five
(5) years from the date hereof, the Company will deliver to the
Representatives and, upon request, to each of the other Underwriters,
as soon as they are available, copies of each annual report of the
Company and each other report furnished by the Company to its
stockholders and will deliver to the Representatives, (i) as soon as
they are available, copies of any other reports (financial or other)
which the Company shall publish or otherwise make available to any of
its stockholders as such, (ii) as soon as they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange and (iii) from time to
time such other information concerning the Company as you may request.
So long as the Company has active subsidiaries, such financial
statements will be on a consolidated basis to the extent the accounts
of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally. Separate financial
statements shall be furnished for all subsidiaries whose accounts are
not consolidated but which at the time are significant subsidiaries as
defined in the Rules and Regulations.
(h) The Company will use its best efforts to list the
Stock, subject to official notice of issuance, on the Nasdaq National
Market concurrently with the effectiveness of the Registration
Statement.
(i) The Company will maintain a transfer agent and
registrar for its Common Stock.
(j) For a period of one year from the date hereof, prior
to filing its quarterly statements on Form 10-Q, the Company will have
its independent auditors perform a limited quarterly review of its
quarterly numbers.
(k) The Company will not, without the prior written
consent of Cowen, offer, sell, assign, transfer, encumber, contract to
sell, grant an option to purchase or otherwise dispose of, other than
by operation of law, gifts, pledges or dispositions by estate
representatives, any shares of Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock (including,
without limitation, Common Stock of the Company which may be deemed to
be beneficially owned by the Company in accordance with the Rules and
Regulations) during the 90 days following the date on which the price
of the Common Stock to be purchased by the Underwriters is set, other
than the Company's sale of Common Stock hereunder and the Company's
issuance of Common Stock upon the exercise of warrants and stock
options which are presently outstanding and described in the
Prospectus or pursuant to the Company's stock plan described in the
Prospectus or document incorporated by reference therein.
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(l) Prior to filing with the Commission any reports on
Form SR or successor report thereto pursuant to Rule 463 of Rules and
Regulations which reflects a material change in the use of proceeds
described in the Prospectus, the Company will furnish a copy thereof
to the counsel for the Underwriters and receive and consider its
comments thereon, and will deliver promptly to the Representatives a
signed copy of each report on Form SR filed by it with the Commission.
(m) The Company will apply the net proceeds from the sale
of the Stock as set forth in the description under "Use of Proceeds"
in the Prospectus, which description complies in all respects with the
requirements of Item 504 of Regulation S-K.
(n) The Company will supply you with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(o) Prior to each of the Closing Dates the Company will
furnish to you, as soon as they have been prepared, copies of any
unaudited interim consolidated financial statements of the Company and
its subsidiary for any periods subsequent to the periods covered by
the financial statements appearing in the Registration Statement and
the Prospectus.
(p) Prior to each of the Closing Dates the Company will
issue no press release or other communications directly or indirectly
and hold no press conference with respect to the Company or its
subsidiary, the financial condition, results of operations, business,
prospects, assets or liabilities of any of them, or the offering of
the Stock, without your prior written consent. For a period of twelve
(12) months following the first Closing Date, the Company will use its
best efforts to provide to you copies of each press release or other
public communications with respect to the financial condition, results
of operations, business, prospects, assets or liabilities of the
Company as soon as practicable prior to the public issuance thereof.
(q) During the period of five (5) years hereafter, the
Company will furnish to the Representatives, and upon request of the
Representatives, to each of the Underwriters: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as
of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public accountants; (ii)
as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Report on Form 8-K or other report filed by the Company with the
Commission, or the NASD or any securities exchange; and (iii) as soon
as available, copies of any report or communication of the Company
mailed generally to holders of its Common Stock.
5. Payment of Expenses. (a) The Company will pay (directly or
by reimbursement) all costs, fees and expenses incurred in connection with
expenses incident to the performance of its obligations under this Agreement
and in connection with the transactions contemplated hereby, including but not
limited to (i) all expenses and taxes incident to the issuance and delivery of
the Stock to the Representatives; (ii) all expenses incident to the
registration of the Stock under the Securities Act; (iii) the costs of
preparing stock certificates (including printing and engraving costs); (iv) all
fees and expenses of the registrar and transfer agent of the Stock; (v) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Stock to the Underwriters; (vi) fees and expenses of the
Company's counsel and the Company's independent accountants; (vii) all costs
and expenses incurred in connection with the preparation, printing filing,
shipping and distribution of the Registration Statement, each Preeffective
Prospectus and the Prospectus (including all exhibits and financial statements)
and all amendments and supplements provided for herein, the "Agreement Among
Underwriters" between the Representatives and the Underwriters, the Master
Selected Dealers' Agreement, the Underwriters' Questionnaire and the Blue Sky
memoranda (including related fees and expenses of counsel to the Underwriters)
and this Agreement; (viii) all filing fees, attorneys' fees and expenses
incurred by the Company or the Underwriters in connection with exemptions from
the qualifying or registering (or obtaining qualification or
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registration of) all or any part of the Stock for offer and sale and
determination of its eligibility for investment under the Blue Sky or other
securities laws of such jurisdictions as the Representatives may designate;
(ix) all fees and expenses paid or incurred in connection with filings made
with the NASD (including related fees and expenses of counsel to the
Underwriters); and (x) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section.
(b) In addition to its other obligations under Section 6(a) hereof,
the Company agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon (i) any statement or omission or any alleged statement or omission,
(ii) any act or failure to act or any alleged act or failure to act or (iii)
any breach or inaccuracy in its representations and warranties, it will
reimburse each Underwriter on a quarterly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Company's obligation to reimburse each Underwriter for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Underwriter shall
promptly return it to the Company together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by
Citibank, New York, New York (the "Prime Rate"). Any such interim
reimbursement payments which are not made to an Underwriter in a timely manner
as provided below shall bear interest at the Prime Rate from the due date for
such reimbursement. This expense reimbursement agreement will be in addition
to any other liability which the Company may otherwise have. The request for
reimbursement will be sent to the Company.
(c) In addition to its other obligations under Section 6(b)
hereof, each Underwriter severally agrees that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged
statement or omission, described in Section 6(b) hereof which relates to
information furnished to the Company pursuant to Section 2(b) hereof, it will
reimburse the Company (and, to the extent applicable, each officer, director or
controlling person) on a quarterly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director or controlling person) for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company (and, to
the extent applicable, each officer, director or controlling person) shall
promptly return it to the Underwriters together with interest, compounded
daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company within thirty (30)
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(d) It is agreed that any controversy arising out of the operation
of the interim reimbursement arrangements set forth in paragraph (b) and/or (c)
of this Section 5, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled by
arbitration conducted under the provisions of the Constitution and Rules of the
Board of Governors of the New York Stock Exchange, Inc. or pursuant to the Code
of Arbitration Procedure of the NASD. Any such arbitration must be commenced
by service of a written demand for arbitration or written notice of intention
to arbitrate, therein electing the arbitration tribunal. In the event the
party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Such an arbitration would be limited to the
operation of the interim reimbursement provisions contained in paragraph (b)
and/or (c) of this Section 5 and would not resolve the ultimate propriety or
enforceability of the obligation to reimburse expenses which is created by the
provisions of Section 6.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of the Securities
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Act and the respective officers, directors, partners, employees,
representatives and agents of each of such Underwriter (collectively, the
"Underwriter Indemnified Parties" and, each, an "Underwriter Indemnified
Party"), against any losses, claims, damages, liabilities or expenses
(including the reasonable cost of investigating and defending against any
claims therefor and counsel fees incurred in connection therewith), joint or
several, which may be based upon the Securities Act, or any other statute or at
common law, (i) on the ground or alleged ground that any Preeffective
Prospectus, the Registration Statement or the Prospectus (or any Preeffective
Prospectus, the Registration Statement or the Prospectus as from time to time
amended or supplemented) includes or allegedly includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, unless such statement
or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter, directly or through
the Representatives, specifically for use in the preparation thereof or (ii)
for any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Stock or the
offering contemplated hereby, and which is included as part of or referred to
in any loss, claim, damage, liability or expense arising out of or based upon
matters covered by clause (i) above (provided that the Company shall not be
liable under this clause (ii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage, or
liability or expense resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct); provided, that with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
Preeffective Prospectus, the indemnity agreement contained in this subsection
(a) shall not inure to the benefit of any Underwriter Indemnified Party from
whom the person asserting any such losses, claims, damages or liabilities
purchased the shares of Stock concerned to the extent that any such loss,
claim, damage or liability of such Underwriter Indemnified Party results from
the fact that a copy of the Prospectus excluding documents incorporated by
reference therein was not sent or given to such person at or prior to the
written confirmation of the sale of such shares of Stock to such person as
required by the Securities Act and if the untrue statement or omission
concerned has been corrected in the Prospectus. The Company will be entitled
to participate at its own expense in the defense or, if it so elects, to assume
the defense of any suit brought to enforce any such liability, but if the
Company elects to assume the defense, such defense shall be conducted by
counsel chosen by it and reasonably acceptable to the Underwriters. In the
event the Company elects to assume the defense of any such suit and retain such
counsel, any Underwriter Indemnified Parties, defendant or defendants in the
suit, may retain additional counsel but shall bear the fees and expenses of
such counsel unless (i) the Company shall have specifically authorized the
retaining of such counsel or (ii) the parties to such suit include any such
Underwriter Indemnified Parties, and the Company and such Underwriter
Indemnified Parties at law or in equity have been advised by counsel to the
Underwriters that one or more legal defenses may be available to it or them
which may not be available to the Company, in which case the Company shall not
be entitled to assume the defense of such suit notwithstanding its obligation
to bear the fees and expenses of such counsel. This indemnity agreement is not
exclusive and will be in addition to any liability which the Company might
otherwise have and shall not limit any rights or remedies which may otherwise
be available at law or in equity to each Underwriter Indemnified Party.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement and each person, if any, who controls
the Company within the meaning of the Securities Act (collectively, the
"Company Indemnified Parties") against any losses, claims, damages, liabilities
or expenses (including, unless the Underwriter or Underwriters elect to assume
the defense, the reasonable cost of investigating and defending against any
claims therefor and counsel fees incurred in connection therewith), joint or
several, which arise out of or are based in whole or in part upon the
Securities Act, the Exchange Act or any other federal, state, local or foreign
statute or regulation, or at common law, on the ground or alleged ground that
any Preeffective Prospectus, the Registration Statement or the Prospectus (or
any Preeffective Prospectus, the Registration Statement or the Prospectus, as
from time to time amended and supplemented) includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading, but only insofar as any
such statement or omission was made in reliance upon, and in conformity with,
written information furnished to the Company by such Underwriter, directly or
through the Representatives, specifically for use in the preparation thereof;
provided, however, that in no case is such Underwriter to be liable with
respect to any claims made against any Company Indemnified Party against
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whom the action is brought unless such Company Indemnified Party shall have
notified such Underwriter in writing within a reasonable time after the summons
or other first legal process giving information of the nature of the claim
shall have been served upon the Company Indemnified Party, but failure to
notify such Underwriter of such claim shall not relieve it from any liability
which it may have to any Company Indemnified Party otherwise than on account of
its indemnity agreement contained in this paragraph. Such Underwriter shall be
entitled to participate at its own expense in the defense, or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, but,
if such Underwriter elects to assume the defense, such defense shall be
conducted by counsel chosen by it. In the event that any Underwriter elects to
assume the defense of any such suit and retain such counsel, the Company
Indemnified Parties and any other Underwriter or Underwriters or controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, respectively. The
Underwriter against whom indemnity may be sought shall not be liable to
indemnify any person for any settlement of any such claim effected without such
Underwriter's consent. This indemnity agreement is not exclusive and will be
in addition to any liability which such Underwriter might otherwise have and
shall not limit any rights or remedies which may otherwise be available at law
or in equity to any Company Indemnified Party.
(c) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Stock. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to above shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating, defending, settling or compromising any such
claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the shares of the Stock underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. The
Underwriters' obligations to contribute are several in proportion to their
respective underwriting obligations and not joint. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
7. Survival of Indemnities, Representations, Warranties, etc.
The respective indemnities, covenants, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by them respectively, pursuant to this Agreement,
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter, the
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Company or any of its officers or directors or any controlling person, and
shall survive delivery of and payment for the Stock.
8. Conditions of Underwriters' Obligations. The respective
obligations of the several Underwriters hereunder shall be subject to the
accuracy, at and (except as otherwise stated herein) as of the date hereof and
at and as of each of the Closing Dates, of the representations and warranties
made herein by the Company, to compliance at and as of each of the Closing
Dates by the Company with its covenants and agreements herein contained and
other provisions hereof to be satisfied at or prior to each of the Closing
Dates, and to the following additional conditions:
(a) The Registration Statement shall have become
effective and no stop order suspending the effectiveness thereof shall
have been issued and no proceedings for that purpose shall have been
initiated or, to the knowledge of the Company or the Representatives,
shall be threatened by the Commission, and any request for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representatives.
Any filings of the Prospectus, or any supplement thereto, required
pursuant to Rule 424(b) or Rule 434 of the Rules and Regulations,
shall have been made in the manner and within the time period required
by Rule 424(b) and Rule 434 of the Rules and Regulations, as the case
may be.
(b) The Representatives shall have been satisfied that
there shall not have occurred any change, on a consolidated basis,
prior to each of the Closing Dates in the condition (financial or
otherwise), properties, business, management, prospects, net worth or
results of operations of the Company and its subsidiary considered as
a whole, or any change in the capital stock, short-term or long- term
debt of the Company and its subsidiary considered as a whole, such
that (i) the Registration Statement or the Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact
which, in the opinion of the Representatives, is material, or omits to
state a fact which, in the opinion of the Representatives, is required
to be stated therein or is necessary to make the statements therein
not misleading, or (ii) it is unpracticable in the reasonable judgment
of the Representatives to proceed with the public offering or purchase
the Stock as contemplated hereby.
(c) The Representatives shall be satisfied that no legal
or governmental action, suit or proceeding affecting the Company which
is material and adverse to the Company or which affects or may affect
the Company's ability to perform their respective obligations under
this Agreement shall have been instituted or threatened and there
shall have occurred no material adverse development in any existing
such action, suit or proceeding.
(d) At the time of execution of this Agreement, the
Representatives shall have received from KPMG Peat Marwick, LLP,
independent certified public accountants, a letter, dated the date
hereof, in form and substance satisfactory to the Underwriters.
(e) The Representatives shall have received from KPMG
Peat Marwick, LLP, independent certified public accountants, letters,
dated each of the Closing Dates, to the effect that such accountants
reaffirm, as of each of the Closing Dates, and as though made on each
of the Closing Dates, the statements made in the letter furnished by
such accountants pursuant to paragraph (d) of this Section 8.
(f) The Representatives shall have received from
Stradling, Yocca, Xxxxxxx & Xxxxx, counsel for the Company, opinions,
dated each of the Closing Dates, to the effect set forth in Exhibit I
hereto.
(g) The Representatives shall have received from
Pillsbury Madison & Sutro LLP, counsel for the Underwriters, their
opinions dated each of the Closing Dates with respect to the
incorporation of the Company, the validity of the Stock, the
Registration Statement and the Prospectus and such other
-15-
16
related matters as it may reasonably request, and the Company shall
have furnished to such counsel such documents as they may request for
the purpose of enabling them to pass upon such matters.
(h) The Representatives shall have received certificates,
dated each of the Closing Dates, of the chief executive officer or the
President and the chief financial or accounting officer of the Company
to the effect that:
(i) No stop order suspending the effectiveness of
the Registration Statement has been issued, and, to the best
of the knowledge of the signers, no proceedings for that
purpose have been instituted or are pending or contemplated
under the Securities Act;
(ii) Neither any Preeffective Prospectus, as of
its date, nor the Registration Statement nor the Prospectus,
nor any amendment or supplement thereto, as of the time when
the Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate,
included any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(iii) Subsequent to the respective dates as of
which information is given in the Registration Statement and
the Prospectus, and except as set forth or contemplated in the
Prospectus, neither the Company nor its subsidiary has
incurred any material liabilities or obligations, direct or
contingent, nor entered into any material transactions not in
the ordinary course of business and there has not been any
material adverse change in the condition (financial or
otherwise), properties, business, management, prospects, net
worth or results of operations of the Company and its
subsidiary considered as a whole, or any change in the capital
stock, short-term or long-term debt of the Company and its
subsidiary considered as a whole;
(iv) The representations and warranties of the
Company in this Agreement are true and correct at and as of
each of the Closing Dates, and the Company has complied with
all the agreements and performed or satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Dates; and
(v) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as disclosed in or contemplated by the
Prospectus, (i) there has not been any material adverse change
or a development involving a material adverse change in the
condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of
the Company and its subsidiary considered as a whole; (ii) the
business and operations conducted by the Company and its
subsidiary have not sustained a loss by strike, fire, flood,
accident or other calamity (whether or not insured) of such a
character as to interfere materially with the conduct of the
business and operations of the Company and its subsidiary
considered as a whole; (iii) no legal or governmental action,
suit or proceeding is pending or threatened against the
Company which is material to the Company, whether or not
arising from transactions in the ordinary course of business,
or which may materially and adversely affect the transactions
contemplated by this Agreement; (iv) since such dates and
except as so disclosed, the Company has not incurred any
material liability or obligation, direct, contingent or
indirect, made any change in its capital stock (except
pursuant to its stock plans), made any material change in its
short-term or funded debt or repurchased or otherwise acquired
any of the Company's capital stock; and (v) the Company has
not declared or paid any dividend, or made any other
distribution, upon its outstanding capital stock payable to
stockholders of record on a date prior to the Closing Date.
(vi) The Company shall have furnished to the
Representatives such additional certificates as the
Representatives may have reasonably requested as to the
accuracy, at and as of each of the Closing Dates, of the
representations and warranties made herein by it and as to
compliance at and as
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17
of each of the Closing Dates by it with its covenants and
agreements herein contained and other provisions hereof to be
satisfied at or prior to each of the Closing Dates, and as to
satisfaction of the other conditions to the obligations of the
Underwriters hereunder.
(vii) Cowen shall have received the written
agreements, substantially in the form of Exhibit II hereto, of
the officers, directors and holders of Common Stock listed in
Schedule B that each will not directly or indirectly, offer,
sell, contract to sell, grant an option to purchase, transfer
the economic risk of ownership in, make any short sale, assign,
transfer, pledge, encumber or otherwise sell or dispose of,
other than by operation of law, gifts, pledges or dispositions
by estate representatives, any shares of Common Stock
(including, without limitation, Common Stock which may be
deemed to be beneficially owned by such officer, director or
holder in accordance with the Rules and Regulations) during the
90 days following the date of the final Prospectus.
The Nasdaq National Market shall have approved the stock for listing,
subject only to official notice of issuance.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters and
other documents as the Representatives shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Representatives by notifying the Company of such termination
in writing or by telegram at or prior to each of the Closing Dates, but Cowen,
on behalf of the Representatives, shall be entitled to waive any of such
conditions.
9. Effective Date. This Agreement shall become effective
immediately as to Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to
all other provisions, at 11:00 a.m. New York City time on the first full
business day following the effectiveness of the Registration Statement or at
such earlier time after the Registration Statement becomes effective as the
Representatives may determine on and by notice to the Company or by release of
any of the Stock for sale to the public. For the purposes of this Section 9,
the Stock shall be deemed to have been so released upon the release for
publication of any newspaper advertisement relating to the Stock or upon the
release by you of telegrams (i) advising Underwriters that the shares of Stock
are released for public offering or (ii) offering the Stock for sale to
securities dealers, whichever may occur first.
10. Termination. This Agreement (except for the provisions of
Section 5) may be terminated by the Company at any time before it becomes
effective in accordance with Section 9 by notice to the Representatives and may
be terminated by the Representatives at any time before it becomes effective in
accordance with Section 9 by notice to the Company. In the event of any
termination of this Agreement under this or any other provision of this
Agreement, there shall be no liability of any party to this Agreement to any
other party, other than as provided in Sections 5, 6 and 11 and other than as
provided in Section 12 as to the liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to the First
Closing Date trading in securities on any of the Nasdaq National Market shall
have been suspended or minimum or maximum prices shall have been established on
any such exchange or market, or a banking moratorium shall have been declared
by New York or United States authorities; (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market; (iii) if at or prior to the First Closing Date there shall have been
(A) an outbreak or escalation of hostilities between the United States and any
foreign power or of any other insurrection or armed conflict involving the
United States or (B) any change in financial markets or any calamity or crisis
which, in the judgment of the Representatives, makes it impractical or
inadvisable to offer or sell the Stock on the terms contemplated by the
Prospectus; (iv) if there shall have been any development or prospective
development involving particularly the business or properties or securities of
the Company or its subsidiary or the transactions contemplated by this
Agreement, which, in the judgment of the Representatives, makes it
impracticable or inadvisable to offer or deliver the Stock on the terms
contemplated by the Prospectus; (v) if there shall be any litigation or
proceeding,
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18
pending or threatened, which, in the judgment of the Representatives, makes it
impracticable or inadvisable to offer or deliver the on the terms contemplated
by the Prospectus; or (vi) if there shall have occurred any of the events
specified in the immediately preceding clauses (i) - (v) together with any
other such event that makes it, in the judgment of the Representatives,
impractical or inadvisable to offer or deliver the Stock on the terms
contemplated by the Prospectus.
11. Reimbursement of Underwriters. Notwithstanding any other
provisions hereof, if this Agreement shall not become effective by reason of
any election of the Company pursuant to the first paragraph of Section 10 or
shall be terminated by the Representatives under Section 8 or Section 10, the
Company will bear and pay the expenses specified in Section 5 hereof and, in
addition to its obligations pursuant to Section 6 hereof, the Company will
reimburse the reasonable out-of-pocket expenses of the several Underwriters
(including reasonable fees and disbursements of counsel for the Underwriters)
incurred in connection with this Agreement and the proposed purchase of the
Stock, and promptly upon demand the Company will pay such amounts to you as
Representatives.
12. Substitution of Underwriters. If any Underwriter or
Underwriters shall default in its or their obligations to purchase shares of
Stock hereunder and the aggregate number of shares which such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed ten
percent (10%) of the total number of shares underwritten, the other
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the shares which such defaulting Underwriter
or Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters shall so default and the aggregate number of shares with respect
to which such default or defaults occur is more than ten percent (10%) of the
total number of shares underwritten and arrangements satisfactory to the
Representatives and the Company for the purchase of such shares by other
persons are not made within forty-eight (48) hours after such default, this
Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 12, (i) the Company
shall have the right to postpone the Closing Date for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other
Underwriters for damages occasioned by its default hereunder. Any termination
of this Agreement pursuant to this Section 12 shall be without liability on the
part of any non-defaulting Underwriter or the Company, except for expenses to
be paid or reimbursed pursuant to Section 5 and except for the provisions of
Section 6.
13. Notices. All communications hereunder shall be in writing
and, if sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed to you, as their Representatives c/o Cowen & Company at Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 with a copy to Pillsbury Madison & Sutro LLP
0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx, XX 00000 attention: Xxxxx del Xxxxx except
that notices given to an Underwriter pursuant to Section 6 hereof shall be sent
to such Underwriter at the address furnished by the Representatives or, if sent
to the Company, shall be mailed, delivered or telegraphed and confirmed c/o
QLogic Corporation at 0000 Xxxxxx Xxxxxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000 with
a copy to Stradling, Yocca, Xxxxxxx & Xxxxx, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx Xxxxx, XX 00000 attention: Xxxx Xxxxx.
14. Successors. This Agreement shall inure to the benefit of and
be binding upon the several Underwriters, the Company and their respective
successors and legal representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right,
remedy or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company contained in
this Agreement
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19
shall also be for the benefit of the person or persons, if any, who control any
Underwriter or Underwriters within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and the indemnities of the several
Underwriters shall also be for the benefit of each director of the Company,
each of its officers who has signed the Registration Statement and the person
or persons, if any, who control the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act.
15. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. Authority of the Representatives. In connection with this
Agreement, you will act for and on behalf of the several Underwriters, and any
action taken under this Agreement by Cowen, as Representative, will be binding
on all the Underwriters.
17. Partial Unenforceability. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made
such minor changes (and only such minor changes) as are necessary to make it
valid and enforceable.
18. General. This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect
to the subject matter hereof. In this Agreement, the masculine, feminine and
neuter genders and the singular and the plural include one another. The
section headings in this Agreement are for the convenience of the parties only
and will not affect the construction or interpretation of this Agreement. This
Agreement may be amended or modified, and the observance of any term of this
Agreement may be waived, only by a writing signed by the Company and the
Representatives.
19. Counterparts. This Agreement may be signed in two (2) or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
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20
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
QLOGIC CORPORATION
By:____________________________________
X. X. Xxxxx
President and Chief Executive Officer
Accepted and delivered in
__________________ as of
the date first above written.
XXXXX & COMPANY
PRUDENTIAL SECURITIES INCORPORATED
XXXXXX XXXXXX & COMPANY, INC.
Acting on their own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: XXXXX & COMPANY
By: Cowen Incorporated,
its general partner
By: _______________________________________
Xxxx X. Xxxxxx
Managing Director - Syndicate
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21
SCHEDULE A
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
---- --------- ---------
Xxxxx & Company .........................................
Prudential Securities Incorporated ......................
Xxxxxx Xxxxxx & Company, Inc. ...........................
Total................................................... 2,000,000 300,000
========= =======
22
SCHEDULE B
23
[Form of Opinion of Issuer's Counsel] Exhibit I
[Date]
Xxxxx & Company
Prudential Securities Incorporated
Xxxxxx Xxxxxx & Company, Inc.
As representatives of the several
Underwriters named in Schedule A
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: QLogic Corporation
_______ Shares of Common Stock
Dear Sirs:
We have acted as counsel for QLogic Corporation, a Delaware corporation (the
"Company"), in connection with the sale by the Company and purchase of ____
shares of Common Stock, par value $.10 per share, of the Company (the "Shares")
by the several Underwriters listed in Schedule A to the Underwriting Agreement,
dated ____, among the Company, Xxxxx & Company, Prudential Securities
Incorporated and Xxxxxx Xxxxxx & Company, Inc., as representatives of the
several Underwriters named therein (the "Underwriting Agreement"). This
opinion is being furnished pursuant to Section 8(f) of the Underwriting
Agreement. All defined terms not defined herein shall have the meanings
ascribed to them in the Underwriting Agreement. [final opinion to include
customary assumptions and qualifications]
We are of the opinion that:
1. The Company and each of its subsidiaries have been duly incorporated
and are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations in each jurisdiction
in which their respective ownership or lease of property or the conduct of
their respective businesses requires such qualification, except to the extent
that the failure to so qualify would not have a material adverse effect on the
Company and its subsidiaries taken as a whole, and have all corporate power and
authority necessary to own or hold their respective properties and conduct the
businesses in which they are engaged;
2. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and all of the Shares to be issued and sold by the Company to the Underwriters
pursuant to the Underwriting Agreement have been duly and validly authorized
and, when issued and delivered against payment therefor as provided for in the
Underwriting Agreement, shall be duly and validly issued, fully paid and
non-assessable; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued and
are fully paid, non- assessable and are owned directly or indirectly by the
Company;
3. There are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any of the Shares
pursuant to the Company's Certificate of Incorporation or By-Laws or, to the
best of our knowledge, any agreement or other instrument;
4. To the best of our knowledge, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
or of which any property or assets of the Company or any of its Subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, could have
24
a material adverse effect on the Company and its subsidiaries; and, to the best
of our knowledge, no such proceedings are threatened or contemplated by
governmental authorities or other third parties;
5. The Company has full corporate power and authority to enter into the
Underwriting Agreement and to perform its obligations thereunder (including to
issue, sell and deliver the Shares), and the Underwriting Agreement has been
duly and validly authorized, executed and delivered by the Company and is a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that rights to indemnification
and contribution thereunder may be limited by federal or state securities laws
or the public policy underlying such laws, and except as enforcement may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws relating to or affecting creditors' rights generally
or by general principles of equity and limitations on availability of equitable
remedies.;
6. The execution, delivery and performance of the Underwriting Agreement
and the consummation of the transactions therein contemplated will not result
in a breach or violation of any of the terms or provisions of or constitute a
default under any material indenture, mortgage, deed of trust, note agreement
or other agreement or instrument known to us to which the Company or any of its
subsidiaries is a party or by which any of them or any of their properties is
or may be bound, the Certificate of Incorporation, By-laws or other
organizational documents of the Company or any of its subsidiaries, or, to the
best of our knowledge, any law, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or result in the creation of a lien;
7. No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company of
the transactions contemplated by the Underwriting Agreement, except such as may
be required by the National Association of Securities Dealers, Inc. (the
"NASD") or under the Securities Act or the securities or "Blue Sky" laws of any
jurisdiction in connection with the purchase and distribution of the Shares by
the Underwriters;
8. The Registration Statement was declared effective under the
Securities Act as of __________, 1997, the Prospectus was filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations on __________,
1997 and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose is pending or threatened by the Commission;
9. The Registration Statement and the Prospectus and any amendments or
supplements thereto comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations and the
documents incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be, complied as to
form in all material respects with the requirements of the Securities Act or
the Exchange Act, as applicable, and the Rules and Regulations; and any
amendment or supplement to any such incorporated document, when they became
effective or were filed with the Commission, as the case may be, complied as to
form in all respects with the requirements of the Securities Act or the
Exchange Act, as applicable, and the Rules and Regulations;
10. To the best of our knowledge, there are no contracts or other
documents which are required by the Securities Act or by the Rules and
Regulations to be described in the Prospectus or filed as exhibits to the
Registration Statement which have not been described in the Prospectus or filed
as exhibits to the Registration Statement or incorporated therein by reference
as permitted by the Rules and Regulations;
11. To the best of our knowledge, there are no contracts, agreements or
understandings between the Company and any person granting such person the
right (other than rights which have been waived or satisfied) to require the
Company to file a registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered
pursuant to this Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Securities Act;
12. The descriptions in the Registration Statement and Prospectus of
statutes, rules, regulations, legal or governmental proceedings, contracts and
other documents are accurate and such descriptions fairly present the
25
information required to be disclosed; and to the best of our knowledge, there
are no legal or governmental proceedings, statutes, ruler or regulations, or
any contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required;
13. The statements under the captions "Risk Factors"; and
"Business-Government Regulation", to the extent they reflect matters of federal
law arising under the laws of the United States or legal conclusions relating
to such law, accurately summarize and fairly present the legal and regulatory
matters described therein; and
14. The Company and each of its subsidiaries are not, nor will they be
immediately after receiving the proceeds from the sale of the Shares, an
"investment company" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended.
The foregoing opinion is limited to matters governed by the Federal
laws of the United States of America, the general corporate law of the State of
Delaware and the laws of the State of California.
In connection with our participation in the preparation and filing of
the Registration Statement and the Prospectus, we have not independently
verified the accuracy, completeness or fairness of the statements contained
therein (except with respect to the descriptions of the Company's capital
stock), and the limitations inherent in the examination made by us and the
knowledge available to us are such that we are unable to assume, and we do not
assume, any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus (except
with respect to the descriptions of the Company's capital stock). However, on
the basis of our examination and our participation in conferences with certain
officers of the Company, its independent public accountants and representatives
of the Underwriters and the Underwriters' counsel in connection with the
preparation of the Registration Statement and the Prospectus, we can advise you
supplementally as a matter of fact and not as an opinion that we have no current
actual knowledge that the Registration Statement or any amendment thereto, as of
the Effective Date (other than the consolidated financial statements and the
notes thereto or the schedules or other financial and numerical data derived
therefrom, as to which we express no belief), 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, as of the date of the Prospectus or the date hereof (other than the
consolidated financial statements and the notes thereto or the schedules or
other financial and numerical data derived therefrom, as to which we express no
belief), contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Very truly yours,
26
SCHEDULE A
Xxxxx & Company
Prudential Securities Incorporated
Xxxxxx Xxxxxx & Company, Inc.
27
[Form of Lock-Up Agreement] Exhibit II
April __, 1997
Xxxxx & Company
Prudential Securities Incorporated
Xxxxxx Xxxxxx & Company, Inc.
As representatives of the
several Underwriters
c/o Cowen & Company
Four Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: QLogic Corporation
Ladies and Gentlemen:
In order to induce Xxxxx & Company ("Cowen"), Prudential Securities
Incorporated and Xxxxxx Xxxxxx & Company, Inc. (together with Cowen, the
"Representatives") to enter into a certain underwriting agreement with QLogic
Corporation, a Delaware corporation (the "Company"), with respect to the public
offering (the "Public Offering") of shares of the Company's common stock, par
value $0.10 per share ("Common Stock"), the undersigned hereby agrees that for
a period commencing from the date hereof through 90 days from the date of the
final prospectus, filed by the Company with the Securities and Exchange
Commission in connection with such Public Offering, the undersigned will not,
without the prior written consent of Cowen, directly or indirectly, offer,
sell, contract to sell, grant an option to purchase, transfer the economic risk
of ownership in, make any short sale, assign, transfer, pledge, encumber or
otherwise sell or dispose of (i) any shares of Common Stock, or (ii) any
securities convertible into or exchangeable for shares of Common Stock held by
the undersigned or over which the undersigned has the power of disposition
during such period or which may be deemed to be beneficially owned, whether
directly or indirectly, by the undersigned or issuable upon exercise of
options, warrants or rights to purchase or acquire held by the undersigned
during such period.
Notwithstanding the foregoing, if the undersigned is an individual, he or she
may transfer any or all of his or her shares either during his or her lifetime
by gift or on death by will or intestacy; provided, however, that in any such
case it shall be a condition to the transfer that the transferee execute an
agreement stating that the transferee is receiving and holding the shares
subject to the provisions of this Lock-Up Agreement.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of legends and/or stop-transfer orders with the
transfer agent of the Common Stock with respect to such shares.
The undersigned understands that the Company, the Underwriters and the
Representatives will proceed with the Public Offering in reliance upon this
Lock-Up Agreement.
The undersigned hereby agrees that this Lock-Up Agreement is valid and
binding notwithstanding any prior agreements relating to this matter and
further represents and warrants that the undersigned has full power and
authority to enter into this Lock-Up Agreement. All authority herein conferred
or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors and assigns of the undersigned.
Notwithstanding anything to the contrary herein, if the closing of the Public
Offering has not occurred prior to September 30, 1997, this Lock-Up Agreement
shall be of no further force and effect.
28
Very truly yours,
______________________________________________
Signature
______________________________________________
Printed Name
______________________________________________
Title, if applicable
______________________________________________
Additional signature(s), if stock jointly held
