EXHIBIT 1.1
3,520,000 SHARES/1/
ETEC SYSTEMS, INC.
COMMON STOCK
-----------------------------
U.S. UNDERWRITING AGREEMENT
-----------------------------
December__, 1996
XXXXXX BROTHERS INC.
XXXXXXXXX, XXXXXXXX & COMPANY, LLC
XXXXX XXXXXX INC.
XXXXXXX & COMPANY, INC.
As Representatives of the several U.S. Underwriters
c/x Xxxxxx Brothers Inc.
Three World Financial Center
New York, New York 10285
Ladies/Gentlemen:
Etec Systems, Inc., a Nevada corporation (the "Company") and certain
stockholders of the Company named in Schedule B hereto (hereafter called the
"Selling Stockholders"), address you as the Representatives of each of the
persons, firms and corporations listed in Schedule A hereto (herein collectively
called the "U.S. Underwriters") and hereby confirm their respective agreements
with the several U.S. Underwriters as follows:
1. Description of Shares. The Company proposes to issue and sell 387,200
shares of its authorized and unissued Common Stock to the several U.S.
Underwriters. The Selling Stockholders, acting severally and not jointly,
propose to sell an aggregate of 3,132,800 shares of authorized and outstanding
shares of the Company's Common Stock to the several U.S. Underwriters. The
387,200 shares of Common Stock of the Company to be sold by the Company are
hereinafter called the "Company Shares" and the 3,132,800 shares of Common
Stock to be sold by the Selling Stockholders are hereinafter called the "Selling
Stockholder Shares." The Company Shares and the Selling Stockholder Shares are
hereinafter collectively referred to as the "Firm Shares." The Company also
proposes to grant to the U.S. Underwriters an option to purchase up to 528,000
additional shares of the Company's Common Stock (the "Option Shares"), as
provided in Section 7 hereof. As used in this Agreement, the term "Shares"
shall include the Firm Shares and the Option Shares. All shares of Common Stock
of the Company, including the Shares, are hereinafter referred to as "Common
Stock."
It is understood by all parties that the Company and the Selling
Stockholders are concurrently entering into an agreement dated the date hereof
(the "International Underwriting Agreement") providing for the sale by the
Company and the Selling Stockholders of an aggregate of 1,012,000 shares of
Common Stock (including the over-allotment option thereunder) (the
"International Stock") through arrangements with certain underwriters outside
the United States (the "International Managers"), for whom Xxxxxx Brothers
International (Europe) is acting as lead manager. The U.S. Underwriters and the
International Managers simultaneously are entering into an agreement between the
U.S. and International underwriting syndicates (the "Agreement Between U.S.
Underwriters and International Managers") which provides for, among other
things, the transfer of shares of Common Stock between
-------------------------------
/1/ Plus an option to purchase up to 528,000 shares from the Company to cover
over-allotments.
1
the two syndicates. Two forms of prospectus are to be used in connection with
the offering and sale of shares of Common Stock contemplated by the foregoing,
one relating to the Stock and the other relating to the International Stock.
The latter form of prospectus will be identical to the former except for certain
substitute pages as included in the registration statement and amendments
thereto referred to below. Except as the context may otherwise require,
references herein to the Stock shall include all the shares of the Common Stock
which may be sold pursuant to either this Agreement or the International
Underwriting Agreement, and references herein to any prospectus whether in
preliminary or final form, and whether as amended or supplemented, shall include
both the U.S. and the international versions thereof.
2. Representations, Warranties and Agreements of the Company.
I. The Company represents and warrants to and agrees with each U.S. Underwriter
that:
(a) A registration statement on Form S-3 (File No. ___-_____) with respect
to the Shares, including a prospectus subject to completion, has been prepared
by the Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Act"), and the applicable Rules and Regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") under the Act and has been filed with the Commission; such
amendments to such registration statement and such amended prospectuses subject
to completion, as may have been required prior to the date hereof have been
similarly prepared and filed with the Commission; and the Company will file such
additional amendments to such registration statement and such amended
prospectuses subject to completion, as may hereafter be required. Copies of such
registration statement and amendments and of each related prospectus subject to
completion (the "Preliminary Prospectuses") have been delivered to you.
If the registration statement has been declared effective under the Act by
the Commission, the Company will prepare and promptly file with the Commission
the information omitted from the registration statement pursuant to Rule 430A(a)
of the Rules and Regulations pursuant to subparagraph (1) or (4) of Rule 424(b)
of the Rules and Regulations or as part of a post-effective amendment to the
registration statement (including a final form of prospectus). If the
registration statement has not been declared effective under the Act by the
Commission, the Company will prepare and promptly file a further amendment to
the registration statement, including a final form of prospectus. The term
"Registration Statement" as used in this Agreement shall mean such registration
statement, including any documents incorporated by reference therein, financial
statements, schedules and exhibits in the form in which it became or becomes, as
the case may be, effective (including, if the Company omitted information from
the registration statement pursuant to Rule 430A(a) of the Rules and
Regulations, the information deemed to be a part of the registration statement
at the time it became effective pursuant to Rule 430A(b) of the Rules and
Regulations) and, in the event of any amendment thereto after the effective date
of such registration statement, shall also mean (from and after the
effectiveness of such amendment) such registration statement as so amended. The
term "Prospectus" as used in this Agreement shall mean the prospectus relating
to the Shares as included in such registration statement at the time it becomes
effective, except that if any revised prospectus shall be provided to the
Underwriters by the Company for use in connection with the offering of the
Shares that differs from the Prospectus on file with the Commission at the time
the registration statement became or becomes, as the case may be, effective
(whether or not such revised prospectus is required to be filed with the
Commission pursuant to Rule 424(b)(3) of the Rules and Regulations), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the U.S. Underwriters for such use. Reference made herein
to any Preliminary Prospectus or to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Act, as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any amendment or supplement
to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any document filed under the United States Securities Exchange Act of
1934, as amended (the "Exchange Act") after the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and incorporated by reference
in such Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to
include any annual report of the Company filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the date and time as of which
the registration statement has been declared effective under the Act by the
Commission.
2
(b) The Commission has not issued any order preventing or suspending the use
of any Preliminary Prospectus, or instituted proceedings for that purpose, and
each such Preliminary Prospectus has conformed in all material respects to the
requirements of the Act and the Rules and Regulations and, as of its date, has
not included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein not misleading; and at
the time the Registration Statement became or becomes, as the case may be,
effective and at all times subsequent thereto up to and on the Closing Date
(hereinafter defined) and on any later date on which Option Shares are to be
purchased, (i) the Registration Statement, Prospectus, and any documents
incorporated by reference in the Prospectus and any amendments or supplements
thereto, contained and will contain all material information required to be
included therein by the Act and the Rules and Regulations and will in all
material respects conform to the requirements of the Act and the Rules and
Regulations, and (ii) neither the Registration Statement nor the Prospectus, or
any documents incorporated by reference in the Prospectus, nor any amendment or
supplement thereto, 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 none of the representations and
warranties contained in this subparagraph shall apply to information contained
in or omitted from the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon, and in conformity with, written
information furnished to the Company by any U.S. Underwriter through you or by
any Selling Stockholder specifically for inclusion therein.
(c) Each of the Company and its subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation with full corporate power and authority to own,
lease and operate its properties and conduct its business as described in the
Registration Statement; the Company owns all of the outstanding capital stock of
its subsidiaries free (except for qualifying shares required under local law)
and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest; each of the Company and its subsidiaries is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the ownership or leasing of properties or the conduct of
its business requires such qualification except where the failure to be so
qualified would not have a material adverse effect on the condition (financial
or otherwise), earnings, operations, business or business prospects of the
Company and its subsidiaries considered as one enterprise; each of the Company
and its subsidiaries is in possession of and operating in compliance with all
authorizations, licenses, certificates, consents, orders and permits from state,
federal and other regulatory authorities which are material to the conduct of
its business, all of which are valid and in full force and effect; each of the
Company and its subsidiaries is not in violation of its respective charter or
bylaws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any bond, debenture,
note or other evidence of indebtedness or in any contract, indenture, mortgage,
loan agreement, joint venture or other agreement or instrument to which the
Company or its subsidiaries is a party or by which it or any of its properties
may be bound or in violation of any law, order, rule, regulation, writ,
injunction or decree of any government, government instrumentality or court,
domestic or foreign, except violations and defaults which individually or in the
aggregate would not be material to the Company and its subsidiaries considered
as one enterprise. The Company does not own or control, directly or indirectly,
any corporation, association or other entity other than Etec Systems, a French
corporation ("Etec France"), Etec Systems (Korea) Incorporated ("Etec Korea"),
Etec Systems Japan Ltd., Etec GmbH, Etec Systems Limited, Etec Polyscan, Inc., a
Nevada corporation, and Etec Systems International, Inc., a Nevada corporation.
(d) The Company has full legal right, power and authority to enter into this
Agreement and perform the transactions contemplated hereby. This Agreement has
been duly authorized, executed and delivered by the Company and is a valid and
binding agreement on the part of the Company, enforceable in accordance with its
terms, except as rights to indemnity and contribution hereunder may be limited
by applicable law and except as the enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally, or by general equitable principles;
the performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of the terms
and provisions of or constitute a default under, (i) any material indenture,
mortgage, deed of trust, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, or any material lease, contract or other
agreement or instrument to which the Company or its subsidiaries is a party or
by which the property of the Company or any of its subsidiaries is bound, or
(ii) the charter or bylaws of the Company or any
3
of its subsidiaries, or (iii) any law, order, rule, regulation, writ,
injunction, judgment or decree of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or over the
properties of the Company or any of its subsidiaries; and no consent, approval,
authorization or order of any court or governmental agency or body is required
for the consummation by the Company or any of its subsidiaries of the
transactions herein contemplated, except such as may be required under the Act,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
National Association of Securities Dealers, Inc. or under state or other
securities or Blue Sky laws.
(e) Except as disclosed in the Registration Statement, there is not any
pending or, to the Company's knowledge, threatened action, suit, claim or
proceeding against the Company, any of its subsidiaries or any of their
respective officers or any of their properties, assets or rights before any
court or governmental agency or body or otherwise which (i) could reasonably be
expected to result in any material adverse change in the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries considered as one enterprise or could reasonably be
expected to materially and adversely affect their properties, assets or rights,
or (ii) could reasonably be expected to prevent consummation of the transactions
contemplated hereby or (iii) is required to be disclosed in the Registration
Statement; and there are no contracts or documents of the Company or any of its
subsidiaries that are required to be described in the Prospectus or be filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations which have not been accurately described in all material respects in
the Prospectus and filed as exhibits to the Registration Statement. The
contracts so described in the Prospectus are in full force and effect on the
date hereof; and neither the Company nor any of its subsidiaries, nor to the
best of the Company's knowledge, any other party is in material breach of or
default under any of such contracts.
(f) All outstanding shares of capital stock of the Company (including the
Selling Stockholder Shares) have been duly authorized and validly issued and are
fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, were not issued in violation of any preemptive rights
or other rights to subscribe for or purchase securities, and the authorized and
outstanding capital stock of the Company conforms in all respects to the
description thereof contained in the Registration Statement and the Prospectus
(except for issuances under the Company's employee benefit plans after the dates
stated therein); the Company Shares and the Option Shares to be purchased from
the Company hereunder have been duly authorized for issuance and sale to the
U.S. Underwriters pursuant to this Agreement and, when issued and delivered by
the Company against payment therefor in accordance with the terms of this
Agreement, will be duly and validly issued and fully paid and nonassessable; and
no preemptive right, co-sale right, registration right, right of first refusal
or other similar right of stockholders exists with respect to any of the Company
Shares or Option Shares or the issuance and sale thereof, other than those
registration rights that are being exercised in connection with the sale of
Selling Stockholder Shares pursuant to this Agreement or those that have been
expressly waived prior to the date hereof or those that will automatically
expire upon the consummation of the transactions contemplated on the Closing
Date. No further approval or authorization of any stockholder or the Board of
Directors, or to the knowledge of the Company any third party, is required for
the issuance and sale or transfer of the Shares except as may be required under
the Act, the Exchange Act or under state, foreign or other securities or Blue
Sky laws. All issued and outstanding shares of capital stock of each subsidiary
of the Company have been duly authorized and validly issued and are fully paid
and nonassessable. Except as disclosed in or contemplated by the Prospectus and
the financial statements of the Company, and the related notes thereto, included
in the Prospectus, and except as will terminate on or prior to the Closing Date,
neither the Company nor any subsidiary has outstanding any options 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. The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the options or
other rights granted and exercised thereunder, set forth in the Prospectus
accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights.
(g) Price Waterhouse, LLP, who has examined the consolidated financial
statements, together with the related schedules and notes, of the Company filed
with the Commission as a part of the Registration Statement which are included
in the Prospectus, are to the best of the Company's knowledge, independent
accountants within the meaning
4
of the Act and the Rules and Regulations; the audited consolidated financial
statements of the Company, together with the related schedules and notes, and
the unaudited consolidated financial information, forming part of the
Registration Statement and Prospectus, fairly present the financial position and
the results of operations of the Company and its subsidiaries at the respective
dates and for the respective periods to which they apply; and all audited
consolidated financial statements, together with the related schedules and
notes, and the unaudited consolidated financial information, filed with the
Commission as part of the Registration Statement have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved except as may be otherwise stated therein
("GAAP"). The selected and summary financial and statistical data included in
the Registration Statement present fairly the information shown therein and have
been compiled on the basis stated therein. No other financial statements or
schedules are required to be included in the Registration Statement.
(h) Subsequent to the respective dates as of which information is given in
the Registration Statement and Prospectus, there has not been (i) any material
adverse change in the business, properties or assets described or referred to in
the Registration Statement, or the results of operations, condition (financial
or otherwise) earnings, operations, business or business prospects, of the
Company and its subsidiaries considered as one enterprise, (ii) any transaction
that is material to the Company and its subsidiaries considered as one
enterprise, except transactions in the ordinary course of business or disclosed
or described in the Prospectus, (iii) any obligation that is material to the
Company and its subsidiaries considered as one enterprise, direct or contingent,
incurred by the Company or its subsidiaries, except obligations incurred in the
ordinary course of business, (iv) any change in the capital stock or outstanding
indebtedness of the Company or any of its subsidiaries, which is material to the
Company and its subsidiaries considered as one enterprise, other than as
described in the Prospectus, (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any of its
subsidiaries, or (vi) any loss or damage (whether or not insured) to the
property of the Company or its subsidiaries which has been sustained or will
have been sustained which has a material adverse effect on the condition
(financial or otherwise), earnings, operations or business of the Company and
its subsidiaries considered as one enterprise.
(i) Except as set forth in the Prospectus, (i) each of the Company and its
subsidiaries has good and marketable title to all properties and assets
described in the Prospectus as owned by it, free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest other than such as
are not material to the business of the Company and its subsidiaries considered
as one enterprise, (ii) the agreements to which the Company or any of its
subsidiaries is a party described in the Prospectus are valid agreements,
enforceable by the Company and such subsidiary (as applicable), except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or by general equitable principles and, to their knowledge, the other
contracting party or parties thereto are not in material breach or material
default under any of such agreements, and (iii) the Company and its subsidiaries
have valid and enforceable leases for the properties described in the Prospectus
as leased by them except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles. The
Company owns or leases all such properties as are necessary to its operations as
now conducted.
(j) The Company and its subsidiaries have timely filed all necessary federal
and state income and franchise tax returns and have paid all taxes shown thereon
as due, and there is no tax deficiency that has been or, to the Company's
knowledge, might be asserted against the Company or any of its subsidiaries that
would reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), of the Company and its subsidiaries' earnings,
operations, business or business prospects considered as one enterprise. All
tax liabilities are properly provided for in accordance with GAAP on the books
of the Company and its subsidiaries.
(k) The Company and its subsidiaries maintain insurance of the types and in
the amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including but not limited to, insurance covering real and personal
property owned or leased by the Company against theft, damage, destruction, acts
of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect; and the Company has no reason to believe
that the Company or
5
any of its subsidiaries will not be able to renew their existing insurance
coverage as and when such coverage expires or to obtain similar coverage as may
be necessary to continue their business at a cost that would not materially and
adversely affect the condition (financial or otherwise), earnings, operations or
business of the Company and its subsidiaries considered as one enterprise.
(l) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or to the Company's knowledge is imminent; and the Company
is not aware of any existing or imminent labor disturbance by the employees of
any of its principal suppliers, subassemblers, sales representatives or
international distributors that would reasonably be expected to result in any
material adverse change in the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its subsidiaries
considered as one enterprise. No collective bargaining agreement exists with any
of the Company's employees and, to the Company's knowledge, no such agreement is
imminent.
(m) Each of the Company and its subsidiaries owns or possesses adequate
rights, including licenses, to use all patents, patent rights, inventions, trade
secrets, know-how, trademarks, service marks, trade names and copyrights
described or referred to in the Prospectus as owned or used by it or which are
necessary for the conduct of its businesses as described in the Prospectus;
neither the Company nor any of its subsidiaries has received any notice of, or
has knowledge of, any infringement of or conflict with asserted rights of others
with respect to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise, except as described in the
Prospectus.
(n) The Common Stock is registered pursuant to Section 12(g) of the Exchange
Act and is quoted on the National Association of Securities Dealers Automated
Quotation National Market (the "Nasdaq National Market") under the symbol
"ETEC", and the Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or removing the Common Stock from quotation on the Nasdaq National Market,
nor has the Company received notification of any delisting proceedings, or that
the Commission or the National Association of Securities Dealers, Inc. ("NASD")
is contemplating terminating such registration or quotation.
(o) The Company has filed all documents that the Company was required to
file with the Commission under Section 13 or 14(a) of the Exchange Act since it
became subject to the reporting requirements of the Exchange Act. Such documents
conformed in all material respects to the requirements of the Exchange Act and
the rules and regulations thereunder. When such documents were filed with the
Commission, none of such documents 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.
(p) The Company has been advised concerning the United States Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations
thereunder, and has in the past conducted, and intends in the future to conduct
its affairs in such a manner as to ensure that it will not become, an
"investment company" within the meaning of the 1940 Act and such rules and
regulations.
(q) The Company has not distributed and will not distribute prior to the
Closing Date or prior to any date on which Option Shares are to be purchased, as
the case may be, any offering material in connection with the offering and sale
of the Shares other than the Prospectus, the Registration Statement and the
other materials permitted by the Act.
(r) To the Company's knowledge, neither the Company nor any of its
subsidiaries has at any time during the last five years (i) made any unlawful
contribution to any candidate for foreign office, or failed to disclose fully
any contribution in violation of law, or (ii) made any payment to any federal or
state governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States of any jurisdiction thereof.
6
(s) The Company has not taken and will not take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Shares.
(t) Each officer and director of the Company has agreed that such person
will not, for a period of 90 days after the date of the Prospectus, directly or
indirectly sell, offer, contract to sell, grant any option to purchase, or
otherwise sell or dispose of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for or any rights to purchase or
acquire Common Stock owned directly by the undersigned or with respect to which
the undersigned has the power disposition, other than (i) as a gift or gifts,
provided the xxxxx or donees thereof agree to be bound by such restriction or
(ii) with the prior written consent of Xxxxxx Brothers Inc. (the "Lock-Up
Agreements"). Furthermore, each such person has also agreed and consented to the
entry of stop transfer instructions with the Company's transfer agent against
the transfer of the securities held by such person except in compliance with
this restriction. The Company has provided to U.S. Underwriters' Counsel
accurate and complete copies of all of the Lock-Up Agreements that are presently
in effect. The Company hereby represents and warrants that it will not release
any of its officers or directors from any Lock-Up Agreements currently existing
or hereafter effected without the prior written consent of Xxxxxx Brothers Inc.
(u) Except as set forth in the Prospectus, (i) each of the Company and its
subsidiaries is in compliance in all material respects with all rules, laws and
regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental Laws")
which are applicable to its respective business, (ii) neither the Company nor
its subsidiaries has received any notice from any governmental authority or
third party of an asserted claim under Environmental Laws, (iii) to the
Company's knowledge, neither the Company nor its subsidiaries is required to
make future material capital expenditures to comply with Environmental Laws, and
(iv) no property which is owned, leased or occupied by the Company and its
subsidiaries has been designated as a Superfund site pursuant to the
Comprehensive Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. (S) 9601, et seq.), or otherwise designated as a contaminated site under
applicable state or local law.
(v) The Company and its subsidiaries 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
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(w) There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of them,
except as disclosed in the Prospectus and except for promissory notes issued in
consideration of the Company's capital stock (none of which has an outstanding
balance of more than $40,000).
7
(x) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
II. Each Selling Stockholder, severally and not jointly, represents and
warrants to and agrees with each U.S. Underwriter and the Company that:
(a) Such Selling Stockholder now has and on the Closing Date will have good
title to such of the Shares as are deposited with the Custodian and such Shares
to be sold by such Selling Stockholder are free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest in each case,
created during the period title to such Shares is held by such Selling
Stockholders, other than pursuant to this Agreement; and such Selling
Stockholder has full right, power and authority to sell, assign, transfer and
deliver the Shares (except in the cases of share certificates held in escrow by
the Company pending payment of promissory notes issued in favor of the Company)
which are to be sold by such Selling Stockholder hereunder; and the Selling
Stockholder has no knowledge of any fact which would impair the validity or
genuineness of the certificates for Common Stock delivered on behalf of the
Selling Stockholder to the Custodian in connection with the sale of the Shares;
and assuming each underwriter is a bona fide purchaser without notice of defect
in the title of any of such Shares, upon delivery hereunder of the Shares and
payment of the purchase price as herein contemplated, each of the U.S.
Underwriters will obtain good title to the Shares purchased by it from such
Selling Stockholder, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest, including any liability for estate or
inheritance taxes, or any liability to or claims of any creditor, devisee,
legatee or beneficiary of such Selling Stockholder.
(b) Such Selling Stockholder has duly authorized (if applicable), executed
and delivered, a Power of Attorney (the "Power of Attorney") appointing Xxxxxxx
X. Xxxxxx, Xxxxxx X. Xxxx, Xx. and Xxxx Xxxxxx as attorneys-in-fact
(collectively, the "Attorneys" and individually, an "Attorney") and a Letter of
Transmittal and Custody Agreement (the "Custody Agreement") with [Boston
Equiserve] as custodian (the "Custodian"); each of the Power of Attorney and the
Custody Agreement constitutes a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles; and each of such Selling Stockholder's Attorneys,
acting alone, is authorized to execute and deliver this Agreement and the
certificate referred to in Section 6(i) hereof on behalf of such Selling
Stockholder, to determine the purchase price to be paid by the several U.S.
Underwriters to such Selling Stockholder as provided in Section 3 hereof, to
authorize the delivery of the Selling Stockholder Shares under this Agreement
and to duly endorse (in blank or otherwise) the certificate or certificates
representing such Shares or a stock power or powers with respect thereto, and to
accept payment therefor.
(c) All authorizations, approvals, consents and orders required to be
obtained by such Selling Stockholder in connection with the execution and
delivery by such Selling Stockholder of the Power of Attorney and the Custody
Agreement, the execution and delivery by or on behalf of such Selling
Stockholder of this Agreement and the sale and delivery of the Selling
Stockholder Shares under this Agreement (other than, at the time of the
execution hereof (if the Registration Statement has not yet been declared
effective by the Commission), the issuance of the order of the Commission
declaring the Registration Statement effective and such authorizations,
approvals or consents as may be necessary under state or other securities or
Blue Sky laws) have been obtained and are in full force and effect; such Selling
Stockholder, if other than a natural person, has been duly organized and is
validly existing and in good standing under the laws of the jurisdiction of its
organization as the type of entity that it purports to be; and such Selling
Stockholder has full right, power and authority to enter into and perform its
obligations under this Agreement and such Power of Attorney and Custody
Agreement, and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Stockholder under this Agreement.
8
(d) Certificates in negotiable form for all Shares to be sold by such
Selling Stockholder under this Agreement, together with a stock power or powers
duly endorsed in blank by such Selling Stockholder, have been placed in custody
with the Custodian for the purpose of effecting delivery hereunder.
(e) This Agreement, the Selling Stockholder's Power of Attorney and the
Custody Agreement have been duly authorized by such Selling Stockholder that is
not a natural person and have been duly executed and delivered by or on behalf
of such Selling Stockholder and are valid and binding agreements of such Selling
Stockholder, enforceable in accordance with their terms, except as the
indemnification and contribution provisions hereunder may be limited by
applicable law and except as the enforcement hereof and thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles; and the performance of this Agreement, such Selling Stockholder's
Power of Attorney and the Custody Agreement and the consummation of the
transactions herein contemplated by such Selling Shareholder will not result in
a breach of or default under any material bond, debenture, note or other
evidence of indebtedness, or any material contract, indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which such
Selling Stockholder is a party or by which such Selling Stockholder or any
Selling Stockholder Shares hereunder may be bound (in each case, where such
breach or default would have any effect upon the ability of such Selling
Shareholder to perform its obligations under this Agreement, the Custody
Agreement or the Power of Attorney) or, result in any violation of any law,
order, rule, regulation, writ, injunction or decree of any court or governmental
agency or body or, if such Selling Stockholder is other than a natural person,
result in any violation of any provisions of the charter, bylaws or other
organizational documents of such Selling Stockholder.
(f) Such Selling Stockholder has not taken and will not take, directly or
indirectly, any action designed to, or which might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(g) Such Selling Stockholder has not distributed and will not distribute in
connection with the offering and sale of the Shares any prospectus or other
offering material in connection with the offering and sale of the Shares, other
than internal distribution of the Preliminary Prospectus and the Prospectus in
compliance with the requirements of the Act.
(h) All information furnished by or on behalf of such Selling Stockholder
relating to such Selling Stockholder and the Selling Stockholder Shares that is
used in connection with the preparation of the Registration Statement including
any information furnished in connection with such Selling Stockholder's Power of
Attorney and all such information furnished by such Selling Stockholder
specifically for inclusion in the copy of the Registration Statement on Form S-
3, as filed with the Securities and Exchange Commission on [November __, 1996],
as delivered to the Selling Stockholders (with such modifications as approved by
the Selling Stockholders) is, and on the Closing Date will be, true, correct and
complete, and does not, and on the Closing Date, will not, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make such statements not misleading insofar as it
relates to such Selling Stockholder.
(i) Such Selling Stockholder will review the Registration Statement and
Prospectus and will comply with all agreements and satisfy all conditions on its
part to be complied with or satisfied pursuant to this Agreement on or prior to
the Closing Date, and will advise one of its Attorneys prior to the Closing Date
if such Selling Stockholder's name and address, as may be set forth in the
Registration Statement is not set forth properly or if any
9
statement to be made on behalf of such Selling Stockholder in the certificate
contemplated by Section 6(i) would be inaccurate if made as of the Closing Date.
(j) Such Selling Stockholder is not a party to any oral or written agreement
pursuant to which it has been granted or, if it is a party to any such
agreement, it has waived prior to the date hereof, any preemptive right, co-sale
right or right of first refusal or other similar right to purchase any of the
Shares that are to be sold by the Company or any of the other Selling
Stockholders to the U.S. Underwriters pursuant to this Agreement; and such
Selling Stockholder does not own any warrants, options or similar rights to
acquire, and does not have any right or arrangement to acquire, any capital
stock, rights, warrants, options or other securities from the Company, other
than those described in the Registration Statement and the Prospectus.
3. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and the Selling Stockholders
agree, severally and not jointly, to sell to the U.S. Underwriters, and each
U.S. Underwriter agrees, severally and not jointly, to purchase from the Company
and the Selling Stockholders, respectively, at a purchase price of [$____] per
share, the respective number of Company Shares as hereinafter set forth and
Selling Stockholder Shares set forth opposite the names of the Company and the
Selling Stockholders in Schedule B hereto. The obligation of each U.S.
Underwriter to the Company and to each Selling Stockholder shall be to purchase
from the Company or such Selling Stockholder that number of full Company Shares
or Selling Stockholder Shares, as the case may be, which (as nearly as
practicable) is in the same proportion to the number of Company Shares or
Selling Stockholder Shares, as the case may be, set forth opposite the name of
the Company or such Selling Stockholder in Schedule B hereto as the number of
Firm Shares which is set forth opposite the name of such U.S. Underwriter in
Schedule A hereto (subject to adjustment as provided in Section 10) is to the
total number of Firm Shares to be purchased by all the Underwriters under this
Agreement.
The certificates in negotiable form for the Selling Stockholder Shares have
been placed in custody (for delivery under this Agreement) under the Custody
Agreement. Each Selling Stockholder agrees that the certificates for the Selling
Stockholder Shares of such Selling Stockholder so held in custody are subject to
the interests of the Underwriters hereunder, that the arrangements made by such
Selling Stockholder for such custody, including the Power of Attorney, are to
that extent irrevocable and that the obligations of such Selling Stockholder
hereunder shall not be terminated by the act of such Selling Stockholder or by
operation of law, whether by the death or incapacity of such Selling Stockholder
or the occurrence of any other event, except as specifically provided herein or
in the Custody Agreement. If any Selling Stockholder should die or be
incapacitated, or if any other such event should occur, before the delivery of
the certificates for the Selling Stockholder Shares hereunder, the Selling
Stockholder Shares to be sold by such Selling Stockholder shall, except as
specifically provided herein or in the Custody Agreement, be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such death, incapacity or other event had not occurred, regardless of whether
the Custodian shall have received notice of such death or other event.
Delivery of definitive certificates for the Firm Shares to be purchased by
the U.S. Underwriters pursuant to this Section 3 shall be made against payment
of the purchase price therefor by the several U.S. Underwriters by wire transfer
or certified or official bank check in same-day funds as elected by the Company,
payable to the order of the Company with regard to the Shares being purchased
from the Company, and to the order of the Custodian for the respective accounts
of the Selling Stockholders with regard to the Shares being purchased from such
Selling Stockholders at the offices of Pillsbury Madison & Sutro LLP, 000
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000 (or at such other place as may be
agreed upon among the Representatives, the Company and the Selling
Stockholders), at 7:00 A.M., San Francisco time on the third (or, if the Firm
Shares are priced, as contemplated by Rule 15c6-1(c) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") after 4:30 p.m. Washington D.C.
time, the fourth) full business day following the first day that Shares are
traded (or at such time and date to which payment and delivery shall have been
postponed pursuant to Section 10 hereof), such time and date of payment and
delivery being herein called the "Closing Date." The certificates for the Firm
Shares to be so delivered will be made available to you at such office or at
such other location including, without limitation, in New York City, as you may
reasonably request for checking at least one full business day prior to the
Closing Date and
10
will be in such names and denominations as you may request, such request to be
made at least two full business days prior to the Closing Date. If the
Representatives so elect, delivery of the Shares may be made by credit through
full fast transfer to the accounts at Depository Trust Company designated by the
Representatives.
It is understood that you, individually and not as the Representatives of
the several U.S. Underwriters, may (but shall not be obligated to) make payment
of the purchase price on behalf of any U.S. Underwriter or U.S. Underwriters
whose check or checks shall not have been received by you prior to the Closing
Date for the Firm Shares to be purchased by such U.S. Underwriter or U.S.
Underwriters. Any such payment by you shall not relieve any such U.S.
Underwriter or U.S. Underwriters of any of its or their obligations hereunder.
After the Registration Statement becomes effective, the several U.S.
Underwriters intend to offer the Firm Shares to the public as set forth in the
Prospectus.
The information set forth in the last paragraph on the front cover page
(insofar as such information relates to the U.S. Underwriters), the legend
appearing on the inside front cover page and all information set forth under
"Underwriting" in any Preliminary Prospectus and in the Prospectus filed
pursuant to Rule 424(b) constitutes the only information furnished by the U.S.
Underwriters to the Company for inclusion in any Preliminary Prospectus, the
Prospectus or the Registration Statement, and you, on behalf of the respective
U.S. Underwriters, represent and warrant to the Company and the Selling
Stockholders that the statements made therein are true and correct and do not
fail to state any material fact required to be stated therein in order to make
such statements in light of the circumstances in which made not misleading.
4. Further Agreements of the Company. The Company agrees with the several
U.S. Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement and amendments thereof, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective as promptly as possible; it will notify you, promptly after it shall
receive notice thereof, of the time when the Registration Statement or any
subsequent amendment to the Registration Statement has become effective or any
supplement to the Prospectus has been filed; if the Company omitted information
from the Registration Statement at the time it was originally declared effective
in reliance upon Rule 430A(a), the Company will provide evidence satisfactory to
you that the Prospectus contains such information and has been filed, within the
time period prescribed, with the Commission pursuant to subparagraph (1) or (4)
of Rule 424(b) of the Rules and Regulations or as part of a post-effective
amendment to such Registration Statement as originally declared effective which
is declared effective by the Commission; if for any reason the filing of the
final form of Prospectus is required under Rule 424(b)(3) of the Rules and
Regulations, it will provide evidence satisfactory to you that the Prospectus
contains such information and has been filed with the Commission within the time
period prescribed; it will notify you promptly of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; promptly upon your request, it will in
good faith consider and discuss with you the preparation and filing with the
Commission any amendments or supplements to the Registration Statement or
Prospectus which, in the opinion of Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for
the U.S. Underwriters ("U.S. Underwriters' Counsel"), may be necessary or
advisable in connection with the distribution of the Shares by the U.S.
Underwriters; it will promptly prepare and file with the Commission, and
promptly notify you of the filing of, any amendments or supplements to the
Registration Statement, Prospectus, or any documents incorporated by reference
in the Prospectus, which may be necessary to correct any statements or
omissions, if, at any time when a prospectus relating to the Shares is required
to be delivered under the Act, any event shall have occurred as a result of
which the Prospectus or any other prospectus relating to the Shares 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; in case any U.S.
Underwriter is required to deliver a prospectus nine months or more after the
effective date of the Registration Statement in connection with the sale of the
Shares, it will prepare promptly upon request, but at the expense of such U.S.
Underwriter, such amendment or amendments to the Registration Statement and such
prospectus or prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act; and it will file no amendment or
supplement to the Registration Statement or Prospectus which shall not
previously have been
11
submitted to you a reasonable time prior to the proposed filing thereof or to
which you shall reasonably object in writing, subject, however, to compliance
with the Act and the Rules and Regulations thereunder and the provisions of this
Agreement.
(b) The Company will advise you, promptly after it shall receive notice or
obtain knowledge thereof of the issuance of any stop order by the Commission
suspending the effectiveness of the Registration Statement or of the initiation
or threat of any proceeding for that purpose; and it will promptly use its best
efforts to prevent the issuance of any stop order or to obtain its withdrawal at
the earliest possible moment if such stop order should be issued.
(c) The Company will use its best efforts to qualify the Shares for offering
and sale under the securities laws of such jurisdictions as you may designate
and to continue such qualifications in effect for so long as may be required for
purposes of the distribution of the Shares, except that the Company shall not be
required in connection therewith or as a condition thereof to qualify as a
foreign corporation or to execute a general consent to service of process in any
jurisdiction or to make any undertaking with respect to the conduct of its
business. In each jurisdiction in which the Shares shall have been qualified as
above provided, the Company will make and file such statements and reports in
each year as are or may be reasonably required by the laws of such jurisdiction.
(d) The Company will furnish to you, as soon as available, copies of the
Registration Statement (three of which will be signed and which will include all
exhibits), each Preliminary Prospectus, the Prospectus and any amendments or
supplements to such documents, including any prospectus prepared to permit
compliance with Section 10(a)(3) of the Act, all in such quantities as you may
from time to time reasonably request for the purposes contemplated by the Act
(subject to paragraph (a) above regarding payment of expenses).
(e) The Company will make generally available to its shareholders as soon as
practicable, but in any event not later than the 45th day following the end of
the fiscal quarter first occurring after the first anniversary of the effective
date of the Registration Statement, an earnings statement (which will be in
reasonable detail but need not be audited) complying with the provisions of
Section 11(a) of the Act and covering a twelve-month period beginning after the
effective date of the Registration Statement.
(f) During a period of five years after the date hereof, the Company will
furnish to its shareholders, as soon as practicable after the end of each
respective period, annual reports (including financial statements audited by
independent certified public accountants) and unaudited quarterly reports of
operations for each of the first three quarters of the fiscal year, and will
furnish to you and the other several U.S. Underwriters hereunder, upon your
reasonable request (i) concurrently with furnishing such reports to its
shareholders, statements of operations of the Company for each of the first
three quarters in the form furnished to the Company's shareholders; (ii)
concurrently with furnishing to its shareholders, a balance sheet of the Company
as of the end of such fiscal year, together with statements of operations, of
shareholders' equity, and of cash flow of the Company for such fiscal year,
accompanied by a copy of the certificate or report thereon of independent
certified public accountants; (iii) as soon as they are available, copies of all
reports (financial or other) mailed to shareholders generally; (iv) as soon as
they are available, copies of all reports and financial statements furnished to
or filed with the Commission, any securities exchange or the National
Association of Securities Dealers, Inc. ("NASD"); (v) every material press
release and every material news item or article in respect of the Company or its
affairs which was released or prepared by the Company or any of its
subsidiaries; and (vi) any additional information of a public nature concerning
the Company or its subsidiaries, or its business. During such five-year period,
if the Company shall have active subsidiaries, the foregoing financial
statements shall be on a consolidated basis to the extent that the accounts of
the Company and its subsidiaries are consolidated, and shall be accompanied by
similar financial statements for any significant subsidiary which is not so
consolidated.
(g) Prior to issuing any press release regarding the Company's operating
results or financial condition with respect to any of the Company's first three
fiscal quarters in fiscal years 1997 and 1998, and prior to filing a Quarterly
Report on Form 10-Q relating to any such fiscal quarter, to retain Price
Waterhouse, LLP or other independent public accountants of recognized national
standing who shall review, in accordance with AICPA
12
Statement on Auditing Standards No. 71, the Company's unaudited consolidated
financial statements at the end of each such fiscal quarter; provided, however,
that the Company's obligations under this covenant may terminate after the
second quarter of fiscal year 1997 at the discretion of the Company's Board of
Directors or Audit Committee.
(h) The Company will apply the net proceeds from the sale of the Shares
being sold by it substantially in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(i) The Company will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar (which may be the same
entity as the transfer agent) for its Common Stock.
(j) If the transactions contemplated hereby are not consummated by reason of
any failure, refusal or inability on the part of the Company or any Selling
Stockholder to perform any agreement on its part to be performed hereunder or to
fulfill any condition of the U.S. Underwriters' obligations hereunder, or if the
Company shall terminate the Agreement under Section 11(a), the Company will
reimburse the several U.S. Underwriters for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel for the several U.S.
Underwriters) incurred by the U.S. Underwriters in investigating, preparing to
market or marketing the Shares.
(k) If at any time during the 90-day period after the Registration Statement
becomes effective, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which in your opinion the market price of the
Common Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus), the Company will, after written notice from you
advising the Company to the effect set forth above, forthwith consult with you
concerning the advisability of disseminating, and the potential substance of, a
press release or other public statement responding to or commenting on such
rumor, publication or event.
(l) During a period of 90 days from the effective date of the Prospectus,
the Company will not, without your prior written consent, issue, sell, offer or
agree to sell, or otherwise dispose of, directly or indirectly, any Common
Stock, any options, rights or warrants with respect to any shares of Common
Stock or any securities convertible into, exercisable for or exchangeable for
Common Stock other than the sale of the Firm Shares and the Option Shares
hereunder, and the Company's issuance of options or Common Stock under the
Company's presently authorized 1990 Employee Stock Option Plan, 1990 Executive
Stock Plan, 1994 Employee Stock Option Plan, 1995 Omnibus Incentive Plan, 1995
Directors' Stock Option Plan and 1995 Employee Stock Purchase Plan and
nonstatutory option agreements to former holders of ATEQ securities (the
"Benefit Plans").
(m) Except as described in the Prospectus, during a period of 90 days from
the effective date of the Registration Statement, the Company will not file a
registration statement registering shares under any Benefit Plan or other
employee benefit plan.
(n) the Company will not release any of its officers, directors or
stockholders from any currently existing Lock-up Agreements if such release
would be effective earlier than 90 days after the effective date of the
Registration Statement, without the prior written consent of Xxxxxx Brothers
Inc.
5. Expenses.
(a) The Company agrees with each U.S. Underwriter that:
(i) The Company will pay and bear all costs and expenses in connection
with the preparation by the Company, printing and filing of the Registration
Statement (including financial statements, schedules and exhibits), Preliminary
Prospectuses and the Prospectus and any amendments or supplements thereto
(except as provided in Section 4(a) hereof); the printing of this Agreement, the
Agreement Among U.S. Underwriters, the Supplemental Agreement Among
Underwriters, the Master Dealers Agreement, the Agreement Between U.S.
Underwriters and International Managers, the Preliminary Blue Sky Survey and any
Supplemental Blue Sky Survey, the U.S. Underwriters' Questionnaire and Power of
Attorney, and any instruments related to any of the foregoing; the issuance and
delivery of the Shares hereunder to the several U.S. Underwriters, including
transfer taxes, if any, the cost of all certificates
13
representing the Shares and Transfer Agents' and Registrars' fees; the fees and
disbursements of counsel for the Company; all fees and other charges of the
Company's independent public accountants; the cost of furnishing to the several
U.S. Underwriters copies of the Registration Statement (including appropriate
exhibits), Preliminary Prospectus and the Prospectus, and any amendments or
supplements to any of the foregoing (except as provided in Section 4(a) hereof);
NASD filing fees and the cost of qualifying the Shares under the laws of such
jurisdictions as you may designate (including filing fees and fees and
disbursements of U.S. Underwriters' Counsel in connection with such NASD filings
and Blue Sky qualifications); and all other expenses directly incurred by the
Company and the Selling Stockholders in connection with the performance of their
obligations hereunder. The provisions of this Section 5(a)(i) are intended to
relieve the U.S. Underwriters from the payment of the expenses and costs which
the Selling Stockholders and the Company hereby agree to pay, but shall not
affect any agreement which the Selling Stockholders and the Company may make, or
may have made, for the sharing of any of such expenses and costs. Such
agreements shall not impair the obligations of the Company and the Selling
Stockholders hereunder to the several U.S. Underwriters.
(ii) In addition to its other obligations under Section 8(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
any statement or omission, or any alleged statement or omission, described in
Section 8(a) hereof, it will reimburse the U.S. Underwriters on a monthly 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 the
U.S. Underwriters 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 U.S. Underwriters 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)
listed from time to time in the Wall Street Journal which represents the base
rate on corporate loans posted by the substantial majority of the nation's 30
largest banks (the "Prime Rate"). Any such interim reimbursement payments which
are not made to the U.S. Underwriters within 30 days of a request for
reimbursement, shall bear interest at the Prime Rate from the date of such
request.
(iii) In addition to its obligations under Section 8(b) hereof, each
Selling Stockholder 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 8(b) hereof, it will reimburse the U.S. Underwriters on a
monthly 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 such Selling Stockholder's obligation to
reimburse the U.S. Underwriters 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 U.S. Underwriters shall promptly return such
payment to the Selling Stockholders together with interest, compounded daily,
determined on the basis of the Prime Rate. Any such interim reimbursement
payments which are not made to the U.S. Underwriters within 30 days of a request
for reimbursement shall bear interest at the Prime Rate from the date of such
request.
(b) In addition to their other obligations under Section 8(c) hereof, the
U.S. Underwriters agree 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 8(c) hereof, it will reimburse the Company and each Selling
Stockholder on a monthly 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 U.S.
Underwriters' obligation to reimburse the Company and each such Selling
Stockholder 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 each such Selling Stockholder shall promptly refund it
to the U.S. Underwriters together with interest, compounded daily, determined on
the basis of the Prime Rate. Any such interim reimbursement payments which
14
are not made to the Company and each such Selling Stockholder within 30 days of
a request for reimbursement shall bear interest at the Prime Rate from the date
of such request.
(c) In the event that any claim arises out of statements or omissions, or
alleged statements or omissions, described in more than one of Sections 8(a),
8(b), or 8(c), the interim reimbursement obligations described in Sections
5(a)(i), 5(a)(ii), and 5(b) shall be apportioned based upon the principals, and
subject to the limitations contained in Section 8 hereof. It is agreed that any
controversy arising out of the operation of the interim reimbursement
arrangements set forth in Sections 5(a)(ii), 5(a)(iii) and 5(b) hereof,
including the amounts of any requested reimbursement payments, the method of
determining such amounts and the basis on which such amounts shall be
apportioned among the indemnifying parties, 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 National Association of Securities Dealers, Inc.
Any such arbitration must be commenced by service of a written demand for
arbitration or a 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. Any such
arbitration will be limited to the operation of the interim reimbursement
provisions contained in Sections 5(a)(ii), 5(a)(iii) and 5(b) hereof and will
not resolve the ultimate propriety or enforceability of the obligation to
indemnify for expenses which is created by the provisions of Sections 8(a), 8(b)
and 8(c) hereof.
6. Conditions of U.S. Underwriters' Obligations. The obligations of the
several U.S. Underwriters to purchase and pay for the Company Shares and the
Selling Stockholder Shares as provided herein, shall be subject to the accuracy,
as of the date hereof and the Closing Date and any later date on which Option
Shares are to be purchased, as the case may be, of the representations and
warranties of the Company and the Selling Stockholders herein, to the
performance by the Company and the Selling Stockholders of their respective
obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than
2:00 P.M., San Francisco Time, on the date following the date of this Agreement,
or such later date as shall be consented to in writing by you; and no stop order
suspending the effectiveness thereof shall have been issued and no proceeding
for that purpose shall have been initiated or, to the knowledge of the Company
or any U.S. Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to the
satisfaction of U.S. Underwriters' Counsel.
(b) All corporate proceedings and other legal matters in connection with
this Agreement, the form of Registration Statement and the Prospectus, and the
registration, authorization, issue, sale and delivery of the Shares, shall have
been satisfactory to U.S. Underwriters' Counsel, and such counsel shall have
been furnished with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in this
subsection.
(c) You shall have received on the Closing Date and on any later date on
which Option Shares are purchased, as the case may be, the following opinion of
Pillsbury Madison & Sutro LLP, counsel for the Company, and with respect to
subparagraph (v) below, an opinion from Aoki, Xxxxxxxxxxx & Nomoto, each dated
the Closing Date or such later date addressed to the U.S. Underwriters and with
reproduced copies or signed counterparts thereof for each of the U.S.
Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada;
(ii) The Company has the corporate power to own, lease and operate its
property and to conduct its business as described in the Prospectus;
(iii) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction, if any, in which the
ownership or leasing of its property or the conduct of its business requires
such
15
qualification, except where the failure so to qualify would not have a material
adverse effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries considered as
one enterprise. To such counsel's knowledge, the Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than Etec Systems Japan, Ltd., Etec France, Etec GmbH and Etec Korea, Etec
Systems Limited, Etec Polyscan, Inc., a Nevada corporation, and Etec Systems
International, a Nevada corporation.
(iv) The Company owns all of the shares of capital stock of its
subsidiaries (except for qualifying shares required under local law) free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest;
(v) Etec Systems Japan, Ltd., a subsidiary of the Company, has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business and is duly qualified
to transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires, to the
best knowledge of such counsel, such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries considered as one enterprise;
(vi) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus under the caption "Capitalization" as of the
dates stated therein; the issued and outstanding shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid and
nonassessable, and have not been issued in violation of any preemptive right,
co-sale right, registration right, right of first refusal or other similar
right;
(vii) The Firm Shares or the Option Shares, as the case may be, to be
issued by the Company pursuant to the terms of this Agreement will be, upon
issuance and delivery against payment therefor in accordance with the terms
hereof, and the shares to be sold by the Selling Stockholders are, duly
authorized and validly issued and fully paid and nonassessable, and have not
been issued in violation of any preemptive right, registration right, co-sale
right, right of first refusal or other similar right and the shareholders of the
Company have no preemptive or, to such counsel's knowledge, other rights to
purchase any of these Shares.
(viii) The Company has the corporate power and authority to enter into
this Agreement and to issue, sell and deliver to the U.S. Underwriters the Firm
Shares or the Option Shares, as the case may be, to be issued and sold by it
hereunder;
(ix) This Agreement has been duly authorized by all necessary corporate
action on the part of the Company and has been duly executed and delivered by
the Company and, assuming due authorization, execution and delivery by you, is a
valid and binding agreement of the Company, except insofar as indemnification
and contribution provisions may be limited by applicable law or equitable
principles, and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general equitable principles;
(x) The Registration Statement has become effective under the Act and,
to such counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement have been issued and no proceedings for that purpose have
been instituted or are pending or threatened under the Act;
(xi) The Registration Statement, the Prospectus, and the documents
incorporated by reference in the Prospectus, and each amendment or supplement
thereto (other than the financial statements (including supporting schedules)
and financial data derived therefrom as to which such counsel need express no
opinion) as of the effective date of the Registration Statement, complied as to
form in all material respects with requirements of the Act and the applicable
Rules and Regulations, and any further amendment or supplement to any such
incorporated document made by the Company prior to such effective date (other
than the financial statements and related schedules therein,
16
as to which such counsel need express no opinion), when they became effective or
were filed with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Exchange Act, and the rules and
regulations of the Commission thereunder;
(xii) The terms and provisions of the capital stock of the Company
conform in all material respects to the description thereof contained in the
Registration Statement and Prospectus;
(xiii) The information in the Prospectus under the caption "Shares
Eligible for Future Sale" to the extent that it constitutes matters of law or
legal conclusions, has been reviewed by such counsel and is correct in all
material respects, and the forms of certificates evidencing the Common Stock
comply with Nevada law;
(xiv) The description in the Registration Statement and the Prospectus
of the charter and bylaws of the Company and of statutes and contracts are
accurate in all material respects and fairly present the information required to
be presented by the Act or the Rules and Regulations;
(xv) To such counsel's knowledge, there are no agreements, contracts,
leases or documents of a character required to be described or referred to in
the Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement which are not described or referred to therein and filed
as required;
(xvi) The performance of this Agreement and the consummation of the
transactions herein contemplated (other than performance of the Company's
indemnification and contribution obligations hereunder, concerning which no
opinion need be expressed) will not, (a) result in any violation of the
Company's charter or bylaws, or (b) result in the material breach or violation
of any of the terms and provisions, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other agreement
or instrument filed as an exhibit to the Registration Statement, or any
applicable statute, rule or regulation known to such counsel or any order, writ
or decree known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries, or over any of
their properties or operations; provided however, that no opinion need be
rendered concerning state securities or Blue Sky laws;
(xvii) No authorization, approval or consent of any governmental
authority or agency is necessary in connection with the consummation of the
transactions herein contemplated except such as have been obtained under the Act
or such as may be required under state, foreign, or other securities or Blue Sky
laws or by the National Association of Securities Dealers, Inc. in connection
with the purchase and the distribution of the Shares by the U.S. Underwriters;
(xviii) There are no legal or governmental proceedings pending or, to
such counsel's knowledge, threatened against the Company or any of its
subsidiaries of a character which are required to be disclosed in the
Registration Statement or the Prospectus, by the Act or the applicable Rules and
Regulations, other than those described therein;
(xix) To such counsel's knowledge, except as set forth in the
Prospectus, neither the Company nor any of its subsidiaries is presently in
material breach of, or in default under, any bond, debenture, note or other
evidence of indebtedness or any contract, indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which any of its property is bound that
is material to the financial condition, earnings, operations, business or
business prospects of the Company and its subsidiaries considered as one
enterprise;
(xx) Except as set forth in the Registration Statement and Prospectus,
no holders of Common Stock or other securities of the Company have registration
rights with respect to securities of the Company and, except as set forth in the
Registration Statement and Prospectus, all holders of securities of the Company
or any of its
17
subsidiaries having rights to registration of such shares of Common Stock, or
other securities, because of the filing of the Registration Statement by the
Company have, with respect to the offering contemplated thereby, waived such
rights or such rights have expired by reason of lapse of time following
notification of the Company's intent to file the Registration Statement, or have
included securities in the Registration Statement pursuant to the exercise of
such rights;
In addition, such counsel shall state that although they have not verified
the accuracy or completeness of the statements contained in the Registration
Statement or the Prospectus, nothing has come to the attention of such counsel
which (i) caused them to believe that, at the time the Registration Statement
became effective, the Registration Statement (other than the financial
statements including supporting schedules and financial data derived therefrom,
as to which such counsel need express no comment) 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 at
the Closing Date or any later date on which the Option Shares are to be
purchased, as the case may be, the Registration Statement, the Prospectus, or
any document incorporated by reference in the Prospectus (except as aforesaid)
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,
in light of the circumstances under which they were made, not misleading or (ii)
caused them to believe that the Registration Statement and the Prospectus, and
each amendment or supplement thereto (other than the financial statements
(including supporting schedules) and financial data derived therefrom as to
which such counsel need express no opinion) as of the effective date of the
Registration Statement, failed to comply as to form in all material respects
with the requirements of the Act and the applicable Rules and Regulations.
Counsel rendering the foregoing opinions may rely as to questions of law not
involving the laws of the United States or the States of California and Nevada
upon opinions of local counsel satisfactory to U.S. Underwriters' Counsel (or
such local counsel may deliver separate opinions directly to the U.S.
Underwriters in lieu of inclusion of such matters in the foregoing opinion), and
as to questions of fact upon representations or certificates of officers of the
Company, the Selling Stockholders or officers of the Selling Stockholders (when
the Selling Stockholder is not a natural person), and of government officials,
in which case their opinion is to state that they are so relying and that they
have no knowledge of any material misstatement or inaccuracy in such opinions,
representations or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of the
U.S. Underwriters, and to U.S. Underwriters' Counsel.
(d) You shall have received on the Closing Date and on any later date on
which Option Shares are to be purchased, as the case may be, the following
opinion of Skjerven, Morrill, XxxXxxxxxx, Xxxxxxxx and Xxxxx, patent counsel to
the Company, dated the Closing Date or such later date, to the effect that:
(i) The Company is listed in the records of the United States Patent and
Trademark Office ("PTO") as the holder of record of the patent applications
listed in Exhibit A to such opinion (the "Patent Applications"), and such
counsel shall state that number of such Patent Applications, listed on Exhibit B
to such opinion, which have been allowed or indicated as containing allowable
subject matters. To the best of such counsel's knowledge, written assignments to
the Company of all ownership interests in the Patent Applications have been duly
authorized, executed and delivered by all of the inventors in accordance with
their terms. To the best of such counsel's knowledge, there is no claim of any
party other than the Company to any ownership interest or lien with respect to
any of the Patent Applications;
(ii) to such counsel's knowledge, other than in connection with
assertions or inquiries made by patent office examiners in the ordinary course
of the prosecution of the Company's Patent Applications and except as set forth
on Exhibit C to such opinion, there is no pending or threatened in writing any
action, suit, proceeding or claim by others (A) challenging the validity or
scope of the Patent Applications held by or licensed to the Company, or (B)
asserting that any third party patent is infringed by the activities of the
Company described in the Prospectus or by the manufacture, use or sale of any of
the Company's products or other items made and used according to the Patent
Applications held by or licensed to the Company;
18
(iii) to such counsel's knowledge and except as set forth on Exhibit D
to such opinion, there is not pending or threatened in writing any action, suit,
proceeding or claim by the Company asserting infringement on the part of any
third party of the Patent Applications; and
(iv) the statements in the Prospectus under the captions "Risk Factors
--Patents and Other Intellectual Property" and "Business -- Patents and Other
Proprietary Rights", to the best of such counsel's knowledge, insofar as such
statements relate to the patents listed in Exhibit A or any legal matters,
documents and proceedings relating thereto, fairly present the information
called for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein.
(e) You shall have received on the Closing Date an opinion from counsel for
the respective Selling Stockholders, which counsel shall be reasonably
satisfactory to you, each dated the Closing Date addressed to the U.S.
Underwriters and with reproduced copies or signed counterparts thereof for each
of the U.S. Underwriters, to the effect that:
(i) If the Selling Stockholder is not a natural person, such Selling
Stockholder has full right, power and authority to enter into and to perform its
obligations under the Power of Attorney and Custody Agreement to be executed and
delivered by it in connection with the transactions contemplated herein; the
Power of Attorney and Custody Agreement of such Selling Stockholder that is not
a natural person has been duly authorized by such Selling Stockholder; the Power
of Attorney and Custody Agreement of the Selling Stockholder has been duly
executed and delivered by or on behalf of such Selling Stockholder; and the
Power of Attorney and Custody Agreement of the Selling Stockholder constitutes
the valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles;
(ii) The Selling Stockholder has full right, power and authority to
enter into and to perform its obligations under this Agreement and to sell,
transfer, assign and deliver the Shares to be sold by such Selling Stockholder
hereunder;
(iii) This Agreement has been duly authorized by the Selling Stockholder
that is not a natural person and has been duly executed and delivered by or on
behalf of such Selling Stockholder and, assuming due authorization, execution
and delivery by you, is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except insofar as the
indemnification and contribution provisions hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles; and
(iv) Upon the delivery of and payment for the Shares as contemplated in
this Agreement, each of the Underwriters will receive good title to the Shares
purchased by it from such Selling Stockholder, free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest. In rendering
such opinion, such counsel may assume that the Underwriters are bona fide
purchasers without notice of any defect in the title of any of such Selling
Stockholders to the Shares being purchased from such Selling Stockholders.
Such opinion may be based upon the laws of the domicile of the Selling
Stockholder or, in the case of a corporate Selling Stockholder, the laws of the
jurisdiction of incorporation or the location of its principal executive
offices, and, for purposes of rendering opinions regarding the enforceability of
agreements which purport to be governed by the laws of a jurisdiction other than
California, such counsel may assume that the laws of the State of California are
the same as the laws of the jurisdiction upon which the opinion is based. Such
opinion may be based upon certificates as to factual matters of the Selling
Stockholder and may include reasonable and customary assumptions and
qualifications under the laws of the relevant jurisdiction.
19
(f) You shall have received on the Closing Date and on any later date on
which Option Shares are to be purchased, as the case may be, an opinion of
Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the underwriters, in form and
substance satisfactory to you, with respect to the sufficiency of all such
corporate proceedings and other legal matters relating to this Agreement and the
transactions contemplated hereby as you may reasonably require, and the Company
shall have furnished to such counsel such documents as they may have requested
for the purpose of enabling them to pass upon such matters.
(g) You shall have received on the Closing Date and on any later date on
which Option Shares are to be purchased, as the case may be, a letter from Price
Waterhouse, LLP addressed to the Company and the U.S. Underwriters, dated the
Closing Date or such later date on which Option Shares are to be purchased, as
the case may be, confirming that they are independent certified public
accountants with respect to the Company within the meaning of the Act and the
applicable published Rules and Regulations thereunder and based upon the
procedures described in their letter delivered to you concurrently with the
execution of this Agreement (herein called the "Original Letter"), but carried
out to a date not more than three business days prior to the Closing Date or to
such later date on which Option Shares are to be purchased, as the case may be,
(i) confirming, to the extent true, that the statements and conclusions set
forth in the Original Letter are accurate as of the Closing Date or such later
date on which Option Shares are to be purchased, as the case may be; and (ii)
setting forth any revisions and additions to the statements and conclusions set
forth in the Original Letter which are necessary to reflect any changes in the
facts described in the Original Letter since the date of such letter, or to
reflect the availability of more recent financial statements, data or
information. The letter shall not disclose any change, or any development
involving a prospective change, in or affecting the business or properties of
the Company and its subsidiaries considered as one enterprise which, in your
sole judgment, makes it impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Prospectus. Also you shall have
received an Original Letter from Price Waterhouse, LLP addressed to or for the
use of the U.S. Underwriters setting forth their opinion with respect to their
examination of the consolidated balance sheet of the Company as of October 31,
1996 and related consolidated statements of operations, shareholders' equity,
and cash flow for the three months ended October 31, 1996, as well as other
matters agreed upon by Price Waterhouse, LLP and you. In addition, you shall
have received from Price Waterhouse, LLP a copy of a letter addressed to the
Company and made available to you for the use of the Underwriters stating that
their review of the Company's system of internal accounting controls, to the
extent they deemed necessary in establishing the scope of their examination of
the Company's consolidated financial statements as of October 31, 1996, did not
disclose any weaknesses in internal controls that they considered to be material
weaknesses.
(h) You shall have received on the Closing Date and on any later date on
which Option Shares are purchased, as the case may be, a certificate of the
Company, dated the Closing Date or such later date on which Option Shares are to
be purchased, as the case may be, signed by the Chief Executive Officer and
Chief Financial Officer of the Company, to the effect that, and you shall be
satisfied that :
(i) The representations and warranties of the Company in this Agreement
are true and correct, as if made on and as of the Closing Date or any later date
on which Option Shares are to be purchased, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date or any later date on which Option
Shares are to be purchased, as the case may be;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose have been
instituted or, to the Company's knowledge, are pending or threatened under the
Act;
(iii) When the Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate, the Registration
Statement and the Prospectus and any amendments or supplements thereto contained
all statements and information required to be included therein, and neither the
Registration Statement nor the Prospectus nor any amendment or supplement
thereto included an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which made, not misleading, and, since
the effective date of the Registration Statement,
20
there has occurred no event required to be set forth in an amended or
supplemented Prospectus which has not been so set forth;
(iv) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been (A) any
material adverse change in the properties or assets described or referred to in
the Registration Statement and the Prospectus or in the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries considered as one enterprise, (B) any transaction which is
material to the Company and its subsidiaries considered as one enterprise,
except transactions entered into in the ordinary course of business, (C) any
obligation, direct or contingent, incurred by the Company or any of its
subsidiaries which is material to the Company and its subsidiaries considered as
one enterprise, except obligations incurred in the ordinary course of business,
(D) any change in the capital stock or outstanding indebtedness of the Company
or any of its subsidiaries which is material to the Company and its subsidiaries
considered as one enterprise or (E) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any of its
subsidiaries.
(i) You shall be satisfied that, and you shall have received a certificate,
dated the Closing Date from the Attorneys for each Selling Stockholder to the
effect that, as of the Closing Date, they have not been informed that:
(i) The representations and warranties made by such Selling Stockholder
herein are not true or correct in any material respect on the Closing Date; or
(ii) Such Selling Stockholder has not complied with any obligation or
satisfied any condition which is required to be performed or satisfied on his or
its part at or prior to the Closing Date or any later date on which Option
Shares are to be purchased, as the case may be.
(j) The Company and the Selling Stockholders shall have furnished to you
such further certificates and documents as you shall reasonably request
(including certificates of officers of the Company, the Selling Stockholders or
officers of the Selling Stockholders (when the Selling Stockholder is not a
natural person)) as to the accuracy of the representations and warranties of the
Company and the Selling Stockholders herein, as to the performance by the
Company of its obligations hereunder and as to the other conditions concurrent
and precedent to the obligations of the U.S. Underwriters hereunder.
All such opinions, certificates, letters and documents will be in compliance
with the provisions hereof only if they are reasonably satisfactory to U.S.
Underwriters' Counsel. The Company and the Selling Stockholders will furnish you
with such number of conformed copies of such opinions, certificates, letters and
documents as you shall reasonably request.
7. Option Shares.
(a) On the basis of the representations and warranties herein contained, but
subject to the terms and conditions herein set forth, the Company hereby grants
to the several U.S. Underwriters, for the purpose of covering over-allotments in
connection with the distribution and sale of the Firm Shares only, a non-
transferable option to purchase up to an aggregate of 528,000 Option Shares at
the purchase price per share for the Firm Shares set forth in Section 3 hereof.
Such option may be exercised by the Representatives on behalf of the several
U.S. Underwriters on one occasion in whole or in part during the period of
thirty (30) days from and after the date on which the Firm Shares are initially
offered to the public, by giving written notice to the Company and the
Custodian. The number of Option Shares to be purchased by each U.S. Underwriter
upon the exercise of such option shall be the same proportion of the total
number of Option Shares to be purchased by the several U.S. Underwriters
pursuant to the
21
exercise of such option as the number of Firm Shares purchased by such U.S.
Underwriter (set forth in Schedule A hereto) bears to the total number of Firm
Shares purchased by the several U.S. Underwriters (set forth in Schedule A
hereto), adjusted by the Representatives in such manner as to avoid fractional
shares.
Delivery of definitive certificates for the Option Shares to be purchased by
the several U.S. Underwriters pursuant to the exercise of the option granted by
this Section 7 shall be made against payment of the purchase price therefor by
the several U.S. Underwriters by wire transfer or certified or official bank
check or checks drawn in same-day funds, as elected by the Company, payable to
the order of the Company. Such delivery and payment shall take place at the
offices of Pillsbury Madison & Sutro LLP, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
XX 00000 or at such other place as may be agreed upon among the Representatives
and the Company (i) on the Closing Date, if written notice of the exercise of
such option is received by the Company and the Custodian not later than two full
business days prior to the Closing Date or (ii) on a later date, not later than
the third full business day following the date the Company and the Custodian
receives written notice of the exercise of such option, if such notice is not
received by the Company and the Custodian at least three full business days
prior to the Closing Date.
The certificates for the Option Shares so to be delivered will be made
available to you at such office or other location including, without limitation,
in New York City, as you may reasonably request for checking at least one full
business day prior to the date of payment and delivery and will be in such names
and denominations as you may request, such request to be made at least two full
days prior to such date of payment and delivery. If the Representatives so
elect, delivery of the Shares may be made by credit through full fast transfer
to the accounts at Depository Trust Company of the Representatives.
It is understood that you, individually, and not as the Representatives of
the U.S. Underwriters, may (but shall not be obligated to) make payment of the
purchase price on behalf of any U.S. Underwriter or U.S. Underwriters whose
check or checks shall not have been received by you prior to the date of payment
and delivery for the Option Shares to be purchased by such U.S. Underwriter or
U.S. Underwriters. Any such payment by you shall not relieve any U.S.
Underwriter or U.S. Underwriters of any of its or their obligations hereunder.
The several U.S. Underwriters intend to make an initial public offering (as
such term is described in Section 11 hereof) of the Option Shares to be issued
upon exercise of such option as set forth in the Prospectus, but after the
initial public offering the several U.S. Underwriters may in their discretion
vary the public offering price.
(b) Upon exercise of any option provided for in Section 7(a) hereof the
obligations of the U.S. Underwriters to purchase such Option Shares will be
subject (as of the date hereof and as of the date of payment for such Option
Shares) to the accuracy of and compliance with the representations and
warranties of the Company herein, to the accuracy of the statements of the
Company and officers of the Company made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
condition that all proceedings taken at or prior to the payment date in
connection with the sale and transfer of such Option Shares shall be
satisfactory in form and substance to you and to U.S. Underwriters' Counsel, and
you shall have been furnished with all such documents, certificates and opinions
as you may request in order to evidence the accuracy and completeness of any of
the representations, warranties or statements, the performance of any of the
covenants of the Company or the compliance with any of the conditions herein
contained.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each U.S. Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such U.S. Underwriter may become subject (including, without limitation, in its
capacity as an U.S. Underwriter or as a "qualified independent underwriter"
within the meaning of Schedule E of the Bylaws of the NASD), under the Act or
otherwise, specifically including but not limited to losses, claims, damages or
liabilities related to negligence on the part of any U.S. Underwriter, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any breach of any representation, warranty,
agreement or covenant of the Company herein contained or any untrue statement or
alleged
22
untrue statement of any material fact contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading; and agrees to reimburse each U.S. Underwriter for any legal or
other expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, such Preliminary Prospectus or the Prospectus, or
any such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by any U.S. Underwriter, directly
or through you, or by any Selling Stockholder, specifically for use in the
preparation thereof and, provided further, that the indemnity agreement provided
in this Section 8(a) with respect to any Preliminary Prospectus shall not inure
to the benefit of any U.S. Underwriter from whom the person asserting any
losses, claims, charges, liabilities or litigation based upon any untrue
statement or alleged untrue statement of material fact or omission or alleged
omission to state therein a material fact purchased Shares, if a copy of the
Prospectus in which such untrue statement or alleged untrue statement or
omission or alleged omission was corrected has not been sent or given to such
person within the time required by the Act and the Rules and Regulations
thereunder, unless such failure is the result of noncompliance by the Company
with Section 4(d) hereof.
The indemnity agreement in this Section 8(a) shall extend upon the same
terms and conditions to, and shall inure to the benefit of each officer and
employee of any U.S. Underwriter, and each person, if any, who controls any U.S.
Underwriter within the meaning of the Act. This indemnity agreement shall be in
addition to any liabilities which the Company may otherwise have.
(b) Each Selling Stockholder, severally and not jointly, agrees to indemnify
and hold harmless each U.S. Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such U.S. Underwriter may become
subject, under the Act or otherwise, only insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any breach of any representation, warranty, agreement or covenant of such
Selling Stockholder contained in Section 2.II. hereof or any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company or such U.S. Underwriter, directly
by such Selling Stockholder or through such Selling Stockholder's
representatives, specifically for inclusion therein, and, subject to Section
8(f), agrees to reimburse each U.S. Underwriter for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that such Selling
Stockholder shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, such Preliminary Prospectus or the Prospectus, or
any such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by any Underwriter, through you,
specifically for use in the preparation thereof and, provided further, that the
indemnity agreement provided in this Section 8(b) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any losses, claims, charges, liabilities or litigation
based upon any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission to state therein a material fact purchased
Shares, if a copy of the Prospectus in which such untrue statement or alleged
untrue statement or omission or alleged omission was corrected has not been sent
or given to such person within the time required by the Act and the Rules and
Regulations thereunder, unless such failure is the result of noncompliance by
the Company with Section 4(d) hereof. The Company and the Underwriters
acknowledge that the only written information furnished to them by or on behalf
of the Selling Stockholders specifically for inclusion in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto
23
are the representations, warranties, agreements and covenants in Section 2.II of
this Agreement and those contained in the Custody Agreement, the Power of
Attorney and the accompanying Information Statement.
The indemnity agreement in this Section 8(b) shall extend upon the same
terms and conditions to, and shall inure to the benefit of each officer and
employee of any U.S. Underwriter, and each person, if any, who controls any U.S.
Underwriter within the meaning of the Act. This indemnity agreement shall be in
addition to any liabilities which such Selling Stockholder may otherwise have.
(c) Each U.S. Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company and each Selling Stockholder against any losses,
claims, damages or liabilities, joint or several, to which the Company or such
Selling Stockholder may become subject under the Act or otherwise, specifically
including but not limited to losses, claims, damages or liabilities related to
negligence on the part of the Company or such Selling Stockholder, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any breach of any representation, warranty,
agreement or covenant of such U.S. Underwriter herein contained or any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which made, not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such U.S. Underwriter, directly
or through you, specifically for inclusion therein, and will reimburse the
Company and each such Selling Stockholder for any legal or other expenses
reasonably incurred by the Company and each such Selling Stockholder in
connection with investigating or defending any such loss, claim, damage,
liability or action. The indemnity agreement in this Section 8(c) shall extend
upon the same terms and conditions to, and shall inure to the benefit of each
officer and director of the Company, each Selling Stockholder and each officer
or director of each Selling Stockholder and each person, if any, who controls
the Company or any Selling Stockholder within the meaning of the Act. This
indemnity agreement shall be in addition to any liabilities which each U.S.
Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8 and without limiting the generality of the foregoing, shall not
relieve it from any liability which it may have to any indemnified party under
Section 8, except to the extent it has been prejudiced by such omission. In case
any such action is brought against any indemnified party, and it notified the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified parties and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties, at the expense of the indemnifying party. Upon receipt of notice from
the indemnifying party to such indemnified party of its election so to assume
the defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel approved by the indemnifying party, representing all the
indemnified parties under Section 8(a) or 8(b) hereof who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of
24
commencement of the action, or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. In no event shall any indemnifying party be liable in
respect of any amounts paid in settlement of any action unless the indemnifying
party shall have approved the terms of such settlement; provided however that
such consent shall not be unreasonably withheld.
(e) In order to provide for just and equitable contribution in any action in
which a claim for indemnification is made pursuant to this Section 8 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 8 provides for indemnification in
such case, all the parties hereto shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportion so that, except as set forth in Section 8(f)
hereof, the U.S. Underwriters are responsible pro rata for the portion
represented by the percentage that the underwriting discount bears to the
initial public offering price, and the Company and the Selling Stockholders are
severally responsible for the remaining portion, provided, however, that (i) no
U.S. Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Shares purchased by such U.S.
Underwriter, and (ii) no person guilty of a fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to a contribution
from any person who is not guilty of such fraudulent misrepresentation. This
subsection (e) shall not be operative (i) as to any U.S. Underwriter to the
extent that the Company or any Selling Stockholder has received indemnity under
this Section 8; or (ii) as to the Company or any Selling Stockholder to the
extent that any U.S. Underwriter has received indemnity under Section 8. The
contribution agreement in this Section 8(e) shall extend upon the same terms and
conditions to, and shall inure to the benefit of, each person, if any, who
controls any U.S. Underwriter, the Company or any Selling Stockholder within the
meaning of the Act or the Exchange Act.
(f) The liability of each Selling Stockholder under the representations and
warranties contained in Section 2.II hereof and under the indemnity,
reimbursement and contribution agreements contained in the provisions of this
Section 8 shall be limited to an amount equal to the initial public offering
price of the Selling Stockholder Shares sold by such Selling Stockholder to the
U.S. Underwriters minus the amount of the underwriting discount paid thereon to
the U.S. Underwriters by such Selling Stockholder. The Company and such Selling
Stockholders may agree, as among themselves and without limiting the rights of
the U.S. Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible. The provisions of this
Section 8 shall not limit the liability of the Company in respect of indemnity
of any Selling Stockholder pursuant to any other agreement.
(g) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including without limitation the
provisions of this Section 8, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 8 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Securities
Exchange Act of 1934, as amended. The parties are advised that federal or state
public policy, as interpreted by the courts in certain jurisdictions, may be
contrary to certain of the provisions of this Section 8, and the parties hereto
hereby expressly waive and relinquish any right or ability to assert such public
policy as a defense to a claim under this Section 8 and further agree not to
attempt to assert any such defense.
9. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties, covenants and agreements of the Company and the
Selling Stockholders herein or in certificates delivered pursuant hereto, and
the indemnity and contribution agreements contained in Section 8 hereof shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any U.S. Underwriter or any controlling person, or by or
on behalf of the Company or any Selling Stockholder, or any of their officers,
directors or controlling persons, and shall survive the delivery of the Shares
to the several U.S. Underwriters hereunder or termination of this Agreement.
25
10. Substitution of U.S. Underwriters. If any U.S. Underwriter or U.S.
Underwriters shall fail to take up and pay for the number of Firm Shares agreed
by such U.S. Underwriter or U.S. Underwriters to be purchased hereunder upon
tender of such Firm Shares in accordance with the terms hereof, and if the
aggregate number of Firm Shares which such defaulting U.S. Underwriter or U.S.
Underwriters so agreed but failed to purchase does not exceed 10% of the Firm
Shares, the remaining U.S. Underwriters shall be obligated, severally in
proportion to their respective commitments hereunder, to take up and pay for the
Firm Shares of such defaulting U.S. Underwriter or U.S. Underwriters.
If any U.S. Underwriter or U.S. Underwriters so defaults and the aggregate
number of Firm Shares which such defaulting U.S. Underwriter or U.S.
Underwriters agreed but failed to take up and pay for exceeds 10% of the Firm
Shares, the remaining U.S. Underwriters shall have the right, but shall not be
obligated, to take up and pay for (in such proportions as may be agreed upon
among them) the Firm Shares which the defaulting U.S. Underwriter or U.S.
Underwriters so agreed but failed to purchase. If such remaining U.S.
Underwriters do not, at the Closing Date, take up and pay for the Firm Shares
which the defaulting U.S. Underwriter or U.S. Underwriters so agreed but failed
to purchase, the Closing Date shall be postponed for twenty-four hours
(including non-business hours) to allow the several U.S. Underwriters the
privilege of substituting within twenty-four hours another underwriter or
underwriters (which may include any nondefaulting U.S. Underwriter) satisfactory
to the Company. If no such underwriter or underwriters shall have been
substituted as aforesaid by such postponed Closing Date, the Closing Date may,
at the option of the Company, be postponed for a further twenty-four hours, if
necessary, to allow the Company the privilege of finding another underwriter or
underwriters, satisfactory to you, to purchase the Firm Shares which the
defaulting U.S. Underwriter or U.S. Underwriters so agreed but failed to
purchase. If it shall be arranged for the remaining U.S. Underwriters or
substituted underwriters to take up the Firm Shares of the defaulting U.S.
Underwriter or U.S. Underwriters as provided in this Section, (i) the Company
shall have the right to postpone the time of delivery for a period of not more
than seven full business days, in order to 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 number of Firm Shares to
be purchased by the remaining U.S. Underwriters and substituted underwriters
shall be taken as the basis of their underwriting obligation. If the remaining
U.S. Underwriters shall not take up and pay for all such Firm Shares so agreed
to be purchased by the defaulting U.S. Underwriter or U.S. Underwriters or
substitute another underwriter or underwriters as aforesaid and the Company
shall not find or shall not elect to seek another underwriter or underwriters
for such Firm Shares as aforesaid, then this Agreement shall terminate.
In the event of any termination of this Agreement pursuant to the preceding
paragraph of this Section, neither the Company nor any Selling Stockholder shall
be liable to any U.S. Underwriter (except to the extent provided in Sections
4(j), 5 and 8 hereof) nor shall any U.S. Underwriter (other than an U.S.
Underwriter who shall have failed, otherwise than for some reason permitted
under this Agreement, to purchase the number of Firm Shares agreed by such U.S.
Underwriter to be purchased hereunder, which U.S. Underwriter shall remain
liable to the Company, the Selling Stockholders and the other U.S. Underwriters
for damages, if any, resulting from such default) be liable to the Company or
any Selling Stockholder (except to the extent provided in Sections 5 and 8
hereof).
The term "U.S. Underwriter" in this Agreement shall include any person
substituted for an U.S. Underwriter under this Section.
11. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at the earlier of (i) 6:30 A.M.,
San Francisco Time, on the first full business day following the effective date
of the Registration Statement, or (ii) the time of the initial public offering
of any of the Shares by the U.S. Underwriters after the Registration Statement
becomes effective. The time of the initial public offering shall mean the time
of the release by you, for publication, of the first newspaper
26
advertisement relating to the sale of the Shares, or the time at which the
Shares are first generally offered by the U.S. Underwriters to dealers by letter
or telegram or telecopy, whichever shall first occur. By giving notice as set
forth in Section 12 before the time this Agreement becomes effective, you, as
Representatives of the several Underwriters, or the Company, may prevent this
Agreement from becoming effective without liability of any party to any other
party, except that the Company and the Selling Stockholders shall remain
obligated to pay costs and expenses to the extent provided in Sections 4(j), 5
and 8 hereof.
(b) You, as Representatives of the several Underwriters, shall have the
right to terminate this Agreement by giving notice as hereinafter specified at
any time at or prior to the Closing Date or on or prior to any later date on
which the Option Shares are to be purchased, as the case may be, (i) if the
Company or any Selling Stockholder shall have failed, refused or been unable, at
or prior to the Closing Date, or on or prior to any later date on which the
Option Shares are to be purchased, as the case may be, to perform any agreement
on its part to be performed, or because any other condition of the U.S.
Underwriters' obligations hereunder required to be fulfilled by the Company or
any Selling Stockholder is not fulfilled, or (ii) if trading on the New York
Stock Exchange shall have been suspended, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for securities shall
have been required on the New York Stock Exchange, by the New York Stock
Exchange or by order of the Commission or any other governmental authority
having jurisdiction, or if a banking moratorium shall have been declared by
federal or New York or California authorities, or (iii) if on or prior to the
Closing Date, or on or prior to any later date on which Option Shares are to be
purchased, as the case may be, the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
to interfere materially with the conduct of the business and operations of the
Company regardless of whether or not such loss shall have been insured, or (iv)
if there shall have been a material adverse change in the general political or
economic conditions or financial markets in the United States as in your
reasonable judgment makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Shares, or (v) if on or prior to the Closing
Date, or on or prior to any later date on which Option Shares are to be
purchased, as the case may be, there shall have been 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 the declaration by
the United States of a national emergency which, in the reasonable opinion of
the Representatives, makes it impracticable or inadvisable to offer or sell the
Shares. Any such termination shall be without liability of any party to any
other party except as provided in Sections 4(j), 5 and 8 hereof and except that
in the event of termination solely pursuant to Section 11(b)(i) hereof, the
Company shall remain obligated to pay costs and expenses pursuant to Sections
4(j) and 5 hereof.
If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section 11, you shall promptly
notify the Company by telephone, telecopy or telegram, in each case confirmed by
letter. If the Company shall elect to prevent this Agreement from becoming
effective, the Company shall promptly notify you by telephone, telecopy or
telegram, in each case, confirmed by letter.
12. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall be
mailed, delivered, telegraphed (and confirmed by letter) or telecopied (and
confirmed by letter) to you c/x Xxxxxx Brothers Inc., Three World Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, telecopier number (000) 000-0000, Attention:
Syndicate Department, with a copy, in the case of any notice pursuant to Section
10(d), to the Director of Litigation, Office of the General Counsel, Xxxxxx
Brothers Inc., Three World Financial Center, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000; if sent to the Company, such notice shall be mailed, delivered,
telegraphed (and confirmed by letter) or telecopied (and confirmed by letter) to
Etec Systems, Inc., 00000 Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000, telecopier number
(000) 000-0000, Attention: Xxxxxxx X. Xxxxxx, President; if sent to one or more
of the Selling Stockholders, such notice shall be sent mailed, delivered,
telegraphed (and confirmed by letter) or telecopied (and confirmed by letter) to
Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxx, Xx., or Xxxx Xxxxxx, as Attorney-in-Fact for
the Selling Stockholders, at Etec Systems, Inc., 00000 Xxxxxxxxx Xxxxxx,
Xxxxxxx, XX 00000, telecopier (000) 000-0000.
27
13. Parties. This Agreement shall inure to the benefit of and be binding
upon the several U.S. Underwriters and the Company, the Selling Stockholders and
their respective executors, administrators, successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person or corporation, other than the parties hereto and their
respective executors, administrators, successors and assigns, and the
controlling persons, officers and directors referred to in Section 8 hereof, any
legal or equitable right, remedy or claim 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 the
parties hereto and their respective executors, administrators, successors and
assigns and said controlling persons and said officers and directors, and for
the benefit of no other person or corporation. No purchaser of any of the Shares
from any Underwriter shall be construed a successor or assign by reason merely
of such purchase.
In all dealings with the Company and the Selling Stockholders under this
Agreement, you shall act on behalf of each of the several U.S. Underwriters, and
the Company and the Selling Stockholders shall be entitled to act and rely upon
any statement, request, notice or agreement made or given by you jointly or by
Xxxxxxxxx, Xxxxxxxx & Company on behalf of you.
14. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of New York.
15. Counterparts. This Agreement may be signed in several counterparts, each
of which will constitute an original.
28
If the foregoing correctly sets forth the understanding among the Company,
the Selling Stockholders and the several U.S. Underwriters, please so indicate
in the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement among the Company, the Selling Stockholders and
the several U.S. Underwriters.
Very truly yours,
ETEC SYSTEMS, INC.
By: ___________________________
SELLING STOCKHOLDERS
By: ___________________________
Attorney-in-Fact for the
Selling Stockholders named
in Schedule B hereto
Accepted as of the date first
above written:
XXXXXX BROTHERS INC.
XXXXXXXXX, XXXXXXXX & COMPANY, LLC
XXXXX XXXXXX INC.
XXXXXXX & COMPANY, INC.
For themselves and as Representatives
of the several U.S. Underwriters
named in Schedule A hereto.
By Xxxxxx Brothers Inc.
By: -------------------------------------------------------------------
Authorized Representative
-------------------------------------------------------------------
Please Print Name
29
SCHEDULE A
Number of Firm Shares
U.S. Underwriters
--------------------------------------------------------------------------
To Be Purchased
-------------------------
Xxxxxx Brothers Inc. ..............................
Xxxxxxxxx, Xxxxxxxx & Company, LLC ................
Xxxxx Xxxxxx Inc. .................................
Xxxxxxx & Company .................................
Total ......................................... 3,520,000
===============
30
SCHEDULE B
Number of Company
Company Shares To Be Sold
------------------------- -------------------
......................................... 387,200
Total .........................................
Number of Selling
Name of Selling Stockholder Shares
Stockholder To Be Sold
------------------------- -------------------
Total Selling Stockholders ....................... 3,132,800
31
