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EXHIBIT 1.2
READ-RITE CORPORATION
CONVERTIBLE DEBT SECURITIES
UNDERWRITING AGREEMENT
, 19..
To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
Ladies and Gentlemen:
From time to time Read-Rite Corporation, a Delaware corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its convertible debt securities (the
"Securities"), convertible into Common Stock, par value $0.0001 per share, of
the Company (the "Common Stock"), specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, the "Firm Securities"). If
specified in such Pricing Agreement, the Company may grant to the Underwriters
the right to purchase at their election an additional number of Securities,
specified in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Securities"). The Firm Securities and the Optional Securities, if
any, which the Underwriters elect to purchase pursuant to Section 3 hereof are
herein collectively called the "Designated Securities."
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from
time to time to the Underwriters of such Securities, for whom the firms
designated as representatives of the Underwriters of such Securities in the
Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives. This Underwriting Agreement shall not be construed as an
obligation of the Company to sell any of the Securities or as an obligation of
any of the Underwriters to purchase the Securities. The obligation of the
Company to issue and sell any of the Securities and the obligation of any of
the Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified therein.
Each Pricing Agreement shall specify the aggregate principal amount of Firm
Securities, the maximum aggregate principal amount of Optional Securities, if
any, the initial public offering price of such Firm Securities and Optional
Securities or the manner determining such price, the purchase price to the
Underwriters of such Designated Securities, the names of any Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Securities to be
purchased by each Underwriter and shall set forth the
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date, time and manner of delivery of such Firm Securities and Optional
Securities, if any, and payment therefor. The Pricing Agreement shall also
specify (to the extent not set forth in the Indenture and the registration
statement and prospectus related to the Designated Securities described in such
Pricing Agreement) the terms of such Designated Securities. A Pricing
Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic
communications or any other rapid transmission device designed to produce a
written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-24183) (the "Initial Registration Statement") in respect of the
Securities and the shares of Common Stock issuable upon conversion
thereof has been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits to
the Initial Registration Statement, but including all documents
incorporated by reference in the prospectus contained therein, to the
Representatives for each of the other Underwriters, have been declared
effective by the Commission in such form; no other document with
respect to the Initial Registration Statement or document incorporated
by reference therein has heretofore been filed or transmitted for
filing with the Commission other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing (and
other than prospectuses filed pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act, each in the form
heretofore delivered to the Representatives); and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or, to the Company's knowledge, threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) under
the Act, is hereinafter called a "Preliminary Prospectus"; the various
parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective,
but excluding Form T-1, each as amended at the time such part of the
registration statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the
Securities, in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of
this Agreement, being hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of
the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Sections 13(a) or 15(d)
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of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration
Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in
the form in which it is filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof, including
any documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter of Designated Securities through the
Representatives expressly for use in such documents incorporated by
reference in the Prospectus as amended or supplemented relating to
such Securities;
(c) The Registration Statement and the Prospectus
conform, and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to
the requirements of the Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of
the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter of Designated Securities through the Representatives
expressly for use in the Registration Statement or Prospectus as
amended or supplemented relating to such Securities.
(d) The Company does not have any "significant
subsidiaries" as defined in Rule 405 under the Act except for
Read-Rite International, Read-Rite (Malaysia) Sdn. Bhd., Read-Rite
(Thailand) Co., Ltd., Sunward Technologies, Inc. and Read-Rite SMI
Corporation (collectively, the "Significant Subsidiaries").
(e) Neither the Company nor any of its Significant
Subsidiaries has sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any material change in the
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capital stock or long-term debt of the Company or any of its
Significant Subsidiaries or any material adverse change, or any
development that would reasonably be expected to result in a
prospective material adverse change, in the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus;
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus and
has been duly qualified as a foreign corporation for the transaction
of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require 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,
taken as a whole;
(g) Each Significant Subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of
the Company's Significant Subsidiaries has been duly qualified for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts
any business, so as to require 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, taken as a whole;
(h) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable; the shares of Common Stock
initially issuable upon conversion of the Securities (the "Conversion
Shares") have been duly and validly authorized and reserved for
issuance and, when issued and delivered in accordance with the
provisions of the Securities and the Indenture, will be duly and
validly issued, fully paid and non-assessable and will conform to the
description of the Common Stock contained in the Prospectus; and all
of the issued shares of capital stock of each Significant Subsidiary
of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and (except for directors qualifying
shares and as otherwise set forth in the Prospectus) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(i) When the Firm Securities are issued and delivered
pursuant to this Agreement and the Pricing Agreement with respect to
such Designated Securities and, in the case of any Optional
Securities, pursuant to the Overallotment Option (as defined in
Section 3 hereof) with respect to such Securities, such Designated
Securities will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture, which
will be substantially in the form filed as an exhibit to the
Registration Statement; the Indenture has been duly authorized and
duly qualified under the Trust Indenture Act and, at the Time of
Delivery for such Designated Securities (as defined in Section 4
hereof), the Indenture will constitute a valid and legally binding
instrument, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Indenture conforms, and the Designated Securities will conform in all
material respects, to the description thereof contained in the
Prospectus as amended or supplemented with respect to such Designated
Securities;
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(j) The issue and sale of the Securities and the
compliance by the Company with its obligations pursuant to the
provisions of the Securities, the Indenture, this Agreement, any
Pricing Agreement and each Overallotment Option, if any, will not
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any material indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company or any of its Significant Subsidiaries is a party or by which
the Company or any of its Significant Subsidiaries is bound or to
which any of the property or assets of the Company or any of its
Significant Subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or the charter documents of any of its
Significant Subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its Significant Subsidiaries
or any of their properties except where any such breach, violation or
default would not be reasonably likely to result in a material adverse
effect on the Company and its subsidiaries, taken as a whole; and no
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required
for the issue and sale of the Securities or the performance by the
Company of its obligations pursuant to this Agreement or any Pricing
Agreement or the Indenture or any Overallotment Option, except (i)
such as have been, or will have been prior to the Time of Delivery,
obtained under the Act and the Trust Indenture Act, (ii) the approval
of the Conversion Shares for quotation on the Nasdaq National Market
("Nasdaq"') and (iii) such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters and except where
the failure to obtain any such consent, approval, authorization,
order, registration or qualification would not be reasonably likely to
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(k) The statements set forth in the Prospectus under the
captions "Description of Securities", "Description of [Notes]
[Debentures]" and "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the Securities and the
Common Stock, and under the caption ["Taxation"], insofar as they
purport to describe the provisions of the laws and documents referred
to therein, fairly summarize such terms in all material respects;
(l) Neither the Company nor any of its Significant
Subsidiaries is in violation of its Certificate of Incorporation or
By- laws or other charter documents or, in any material respect, in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other material agreement or
material instrument to which it is a party or by which it or any of
its properties may be bound;
(m) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or
any of its Significant Subsidiaries is a party or of which any
property of the Company or any of its Significant Subsidiaries is the
subject which, if determined adversely to the Company or any of its
Significant Subsidiaries, would individually or in the aggregate be
reasonably likely to result in a material adverse effect on the
current or future consolidated financial position, shareholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole; and, to the best of the Company's knowledge, no such
proceedings are threatened by governmental authorities or by others;
(n) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an "investment
company" or an entity "controlled" by an "investment
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company", as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(o) To the Company's knowledge, after reasonable inquiry,
Ernst & Young, LLP, who have certified certain financial statements of
the Company and its subsidiaries, are independent public accountants
as required by the Act and the rules and regulations of the Commission
thereunder;
(p) The Company and its Significant Subsidiaries own or
possess or can acquire on commercially reasonable terms adequate
licenses or other rights to use all patents, trademarks, service
marks, trade names, copyrights, mask work rights, technology and know-
how necessary to conduct the business now conducted by the Company and
its Significant Subsidiaries as described in the Prospectus, and
except as disclosed in the Prospectus the Company has not received any
notice of infringement of or conflict with (and knows of no such
infringement of or conflict with) asserted rights of others with
respect to any patents, trademarks, service marks, trade names,
copyrights, mask work rights or know-how which is reasonably likely to
result in any material adverse effect upon the Company and its
subsidiaries taken as a whole; and, except as disclosed in the
Prospectus, the discoveries, inventions, products or processes of the
Company and its Significant Subsidiaries referred to in the Prospectus
do not, to the Company's knowledge, infringe or conflict with any
right or patent of any third party or any discovery, invention,
product or process which is the subject of a patent application filed
by any third party, known to the Company; and
(q) The Company and its Significant Subsidiaries have
obtained any permits, consents and authorizations required to be
obtained by them under laws or regulations relating to the protection
of the environment or concerning the handling, storage, disposal or
discharge of toxic materials (collectively "Environmental Laws"), and
any such permits, consents and authorizations remain in full force and
effect. The Company and its Significant Subsidiaries are in
compliance with the Environmental Laws in all material respects, and
there is no pending or, to the Company's knowledge, threatened, action
or proceeding against the Company and its subsidiaries alleging
violations of the Environmental laws.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release
of such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
The Company may specify in the Pricing Agreement applicable to
any Designated Securities that the Company thereby grants to the Underwriters
the right (an "Overallotment Option") to purchase at their election up to the
principal amount of Optional Securities set forth in such Pricing Agreement, on
the terms set forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Securities. Any such election to
purchase Optional Securities may be exercised by written notice from the
Representatives to the Company given within a period specified in the Pricing
Agreement, setting forth the aggregate principal amount of Optional Securities
to be purchased and the date on which such Optional Securities are to be
delivered, as determined by the Representatives but in no event earlier than
the First Time of Delivery (as defined in Section 4 hereof) or, unless the
Representatives and the Company otherwise agree in writing, earlier than or
later than the respective number of days after the date of such notice set
forth in such Pricing Agreement.
The principal amount of Optional Securities to be added to the
principal amount of Firm Securities to be purchased by each Underwriter as set
forth in Schedule I to the Pricing Agreement applicable to such Designated
Securities shall be, in each case, the principal amount of
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Optional Securities which the Company has been advised by the Representatives
have been attributed to such Underwriter; provided that, if the Company has not
been so advised, the principal amount of Optional Securities to be so added
shall be, in each case, that proportion of Optional Securities which the
principal amount of Firm Securities to be purchased by such Underwriter under
such Pricing Agreement bears to the aggregate principal amount of Firm
Securities. The total principal amount of Designated Securities to be purchased
by all the Underwriters pursuant to such Pricing Agreement shall be the
aggregate principal amount of Firm Securities set forth in Schedule I to such
Pricing Agreement plus the aggregate principal amount of Optional Securities
which the Underwriters elect to purchase.
4. Firm Securities and Optional Securities to be purchased by
each Underwriter pursuant to the Pricing Agreement relating thereto, in the
form specified in such Pricing Agreement, and in such authorized denominations
and registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks or wire
transfer, payable to the order of the Company in the funds specified in such
Pricing Agreement, (i) with respect to the Firm Securities, all in the manner
and at the place and time and date specified in such Pricing Agreement or at
such other place and time and date as the Representatives and the Company may
agree upon in writing, such time and date being herein called the "First Time
of Delivery" and (ii) with respect to the Optional Securities, if any, in the
manner and at the time and date specified by the Representatives in the written
notice given by the Representatives of the Underwriters' election to purchase
such Optional Securities, or at such other time and date as the Representatives
and the Company may agree upon in writing, such time and date, if not the First
Time of Delivery, herein called the "Second Time of Delivery." Each such time
and date for delivery is herein called a "Time of Delivery."
5. The Company agrees with each of the Underwriters of any
Designated Securities:
(a) To prepare the Prospectus as amended or supplemented
in relation to the applicable Designated Securities and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following
the execution and delivery of the Pricing Agreement relating to the
applicable Designated Securities or, if applicable, such earlier time
as may be required by Rule 424(b); to make no further amendment or any
supplement to the Registration Statement or Prospectus as amended or
supplemented after the date of the Pricing Agreement relating to such
Securities and prior to the Time of Delivery for such Securities which
shall be disapproved by the Representatives for such Securities
promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after
such Time of Delivery and furnish the Representatives with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of such Securities, and during
such same period to advise the Representatives, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
with the Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
prospectus relating to the Securities, of the suspension of the
qualification of such Securities or the Conversion Shares for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional
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information; and, in the event of the issuance of any such stop order
or of any such order preventing or suspending the use of any
prospectus relating to the Securities or suspending any such
qualification, to promptly use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities and
the Conversion Shares for offering and sale under the securities laws
of such jurisdictions as the Representatives may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to
complete the distribution of such Securities, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction;
(c) Prior to 3:00 p.m., New York City time, on the New
York Business Day next succeeding the date of the Pricing Agreement
and from time to time, to furnish the Underwriters with copies of the
Prospectus in New York City as amended or supplemented in such
quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required at any time in connection with
the offering or sale of the Securities and the Conversion Shares and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the
Prospectus in order to comply with the Act or the Trust Indenture Act,
to notify the Representatives and upon their request to prepare and
furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect
such compliance;
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
[(e) During the period beginning from the date of the
Pricing Agreement for such Designated Securities and continuing to and
including the later of (i) the termination of trading restrictions for
such Designated Securities, as notified to the Company by the
Representatives, and (ii) the Time of Delivery for such Designated
Securities, not to offer, sell, contract to sell or otherwise dispose
of any securities of the Company which are substantially similar to
such Designated Securities or the Common Stock (other than pursuant to
employee stock option plans or employee stock purchase plans existing
on, or upon the conversion of convertible or exchangeable securities
outstanding as of, the date of the Pricing Agreement for such
Designated Securities and other than in connection with the
acquisition of another corporation or entity (including, without
limitation, any subsidiary of the Company), without the prior written
consent of the Representatives;]
(f) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of the Pricing Agreement, and the Company shall
at the time of filing either pay to the Commission the filing fee for
the Rule 462(b)
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Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act;
(g) To reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling
the Company to satisfy any obligation to issue the Conversion Shares,
and
(h) To use its best efforts, subject to notice of
issuance, to have the Conversion Shares accepted for quotation on
Nasdaq.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities and the Conversion Shares
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, any
Pricing Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities and
the Conversion Shares for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and Legal Investment Surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(v) any filing fees incident to any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the Securities; (vi)
the cost of preparing the Securities; (vii) the fees and expenses of any
Trustee and any agent of any Trustee and the fees and disbursements of counsel
for any Trustee in connection with any Indenture and the Securities; and (viii)
all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
It is understood, however, that, except as provided in this Section, and
Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters of any Designated
Securities under the Pricing Agreement relating to such Designated Securities
shall be subject, in the discretion of the Representatives, to the condition
that all representations and warranties and other statements of the Company in
or incorporated by reference in the Pricing Agreement relating to such
Designated Securities are, at and as of the Time of Delivery for such
Designated Securities, true and correct, the condition that the Company shall
have performed all of its obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation
to the applicable Designated Securities shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the
date of the Pricing Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
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(b) Counsel for the Underwriters shall have furnished to
the Representatives such opinion or opinions, dated the Time of
Delivery for such Designated Securities, with respect to such matters
as the Representatives may reasonably request, and such counsel shall
have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel for
the Company, shall have furnished to the Representatives their written
opinion dated the Time of Delivery for such Designated Securities, in
form and substance reasonably satisfactory to the Representatives, 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
Delaware, with power and authority (corporate and
other) to own its properties and conduct its business
as described in the Prospectus as amended or
supplemented;
(ii) The Company has been duly qualified as a
foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in
which it owns or leases properties, 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, taken as a whole;
(iii) The Company has an authorized capitalization
as set forth in the Prospectus as amended or supplemented and
all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid
and non-assessable; the Conversion Shares (based on the
initial conversion rate) have been validly authorized and
reserved for issuance and, when issued and delivered in
accordance with the provisions of the Designated Securities
and the Indenture, will be duly and validly issued and fully
paid and non-assessable, and will conform in all material
respects to the description of the Common Stock contained in
the Prospectus;
(iv) To such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate
reasonably be expected to have a material adverse effect on
the current consolidated financial position, shareholders'
equity or results of operations of the Company and its
subsidiaries taken as a whole; and, to such counsel's
knowledge, no such proceedings are threatened in writing by
governmental authorities or by others;
(v) This Agreement and the Pricing Agreement with
respect to the Designated Securities have been duly
authorized, executed and delivered by the Company;
(vi) The Designated Securities have been duly
authorized by all necessary corporate action on the part of
the Company, and when duly executed and authenticated in
accordance with the terms of the Indenture and delivered to
and paid by you in accordance with the provisions of the
Underwriting Agreement, will be valid and binding obligations
of the Company entitled to the benefits of the Indenture; and
the Designated Securities and the Indenture conform in all
material respects to the descriptions thereof under the
captions "Description of Securities" and "Description of
Notes" contained in the Prospectus as amended or supplemented;
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(vii) The Indenture has been duly authorized,
executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Trustee, and
constitutes a valid and binding instrument, enforceable
against the Company in accordance with its terms, and the
Indenture has been duly qualified under the Trust Indenture
Act;
(viii) The issue and sale of the Designated
Securities and the performance by the Company with its
obligations pursuant to the provisions of the Designated
Securities, the Indenture, this Agreement and the Pricing
Agreement with respect to the Designated Securities will not
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument filed or which would be required to be filed as an
exhibit to an annual report on Form 10-K of the Company
pursuant to Item 601(b)(10) of Regulation S-K if such Form
10-K was filed as of the date of such opinion covering the
period of time from the date of the last Form 10-K filed by
the Company and up to and including the date such opinion, as
certified to such counsel by the Company, nor will such
actions result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation known to such counsel
of any court or governmental agency or body having
jurisdiction over the Company or any of its properties;
(ix) To such counsel's knowledge, no consent,
approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is
required for the issue and sale of the Designated Securities
or the performance by the Company of its obligations pursuant
to this Agreement or such Pricing Agreement or the Indenture,
except (x) such as have been obtained under the Act and the
Trust Indenture Act, (y) the approval of the Conversion Shares
for quotation on Nasdaq and (z) such consents, approvals,
authorizations, orders, registrations or qualifications as may
be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the
Designated Securities by the Underwriters;
(x) To such counsel's knowledge, the Company is
not in violation of its By-laws or Certificate of
Incorporation;
(xi) The statements set forth in the Prospectus
under the captions "Description of Securities", "Description
of [Notes] [Debentures]" and "Description of Capital Stock"
insofar as they purport to constitute a summary of the terms
of the Securities and the Common Stock, and under the caption
["Taxation"], insofar as they purport to summarize certain
provisions of the laws and documents referred to therein,
fairly summarize such terms in all material respects;
(xii) To such counsel's knowledge, the Company is
not an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the
Investment Company Act;
(xiii) The documents incorporated by reference in
the Prospectus as amended or supplemented (other than the
financial statements and related schedules therein, as to
which such counsel need express no belief), when they became
effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder;
and
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(xiv) Such counsel shall also include a statement
to the effect that the Registration Statement and the
Prospectus as amended or supplemented and any further
amendments and supplements thereto made by the Company prior
to the Time of Delivery for the Designated Securities (other
than the financial statements and related schedules therein,
as to which such counsel need express no belief) comply as to
form in all material respects with the requirements of the Act
and the Trust Indenture Act and the rules and regulations
thereunder; although they do not assume any responsibility for
the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in subsection (xv)
of this Section 7(c), they have no reason to believe that, as
of its effective date, the Registration Statement or any
further amendment thereto made by the Company prior to the
Time of Delivery (other than the financial statements and
related schedules therein, and other than the documents
incorporated by reference therein as to which such counsel
need express no belief) contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or that, as of its date, the Prospectus as
amended or supplemented or any further amendment or supplement
thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules
therein, and other than the documents incorporated by
reference therein as to which such counsel need express no
belief) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading or that, as of the Time
of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further amendment
or supplement thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related
schedules therein, and other than the documents incorporated
by reference therein as to which such counsel need express no
belief) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; and they do not know of
any amendment to the Registration Statement required to be
filed or any contracts or other documents of a character
required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus as amended or supplemented or required to be
described in the Registration Statement or the Prospectus as
amended or supplemented which are not filed or incorporated by
reference or described as required;
(d) our opinion that any agreement is valid, binding or
enforceable in accordance with its terms may be qualified as to:
(i) limitations imposed by bankruptcy,
insolvency, reorganization, arrangement, fraudulent
conveyance, moratorium or other laws relating to or affecting
the rights of creditors generally;
(ii) rights to indemnification and contribution
which may be limited by applicable law or equitable
principles; and
(iii) general principles of equity, including
without limitation, concepts of materiality, reasonableness,
good faith and fair dealing, and the possible unavailability
of specific performance or injunctive relief and limitations
on rights of acceleration, regardless of whether such validity
and binding effect are considered in a proceeding in equity or
at law.
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In addition, we will express no opinion as to the validity, binding
effect or enforceability of Sections 510 or 515 of the Indenture.
(e) On the date of the Pricing Agreement for such
Designated Securities, at a time prior to the execution of the Pricing
Agreement with respect to such Designated Securities and at the Time
of Delivery for such Designated Securities, the independent
accountants of the Company who have certified the financial statements
of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to the
Representatives a letter, dated the effective date of the Registration
Statement or the date of the most recent report filed with the
Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex II hereto,
and with respect to such letter dated such Time of Delivery, as to
such other matters as the Representatives may reasonably request and
in form and substance satisfactory to the Representatives;
(f) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, where such loss or interference would have a material
adverse effect on the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities, and (ii) since the respective dates as of which
information is given in the Prospectus as amended prior to the date of
the Pricing Agreement relating to the Designated Securities there
shall not have been any material change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
change, or any development that would reasonably be expected to cause
a prospective change, in the general affairs, management, financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Securities, the effect of which, in any
such case described in Clause (i) or (ii), is in the reasonable
judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Designated Securities on the terms and in the
manner contemplated in the Prospectus as first amended or supplemented
relating to the Designated Securities;
(g) On or after the date of the Pricing Agreement
relating to the Designated Securities (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or
preferred stock by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's
debt securities or preferred stock;
(h) On or after the date of the Pricing Agreement
relating to the Designated Securities there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange or on
Nasdaq; (ii) a suspension or material limitation in trading in the
Company's securities on Nasdaq; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York
or California State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the
United States of a national emergency or war, if
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the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Firm
Securities or Optional Securities or both on the terms and in the
manner contemplated in the Prospectus as first amended or supplemented
relating to the Designated Securities;
(i) The Company shall have furnished or caused to be
furnished to the Representatives at the Time of Delivery for the
Designated Securities a certificate or certificates of officers of the
Company satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (f) of
this Section and as to such other matters as the Representatives may
reasonably request;
(j) The Company shall have complied with the provisions
of Section 5(c) hereof with respect to the furnishing of prospectuses
on the New York Business Day next succeeding the date of the Pricing
Agreement;
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter of Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such
Securities and provided, further, that the Company shall not be liable
to any Underwriter under this subsection (a) with respect to any
Preliminary Prospectus to the extent that any loss, claim, damage or
liability of such Underwriter results from the fact that such
Underwriter sold Designated Securities to a person to whom there was
not given or sent, at or prior to the written confirmation of such
sale, a copy of the Prospectus or of the Prospectus as then amended or
supplemented in any case where such delivery is required by the Act if
the Company has previously furnished copies thereof to such
Underwriter and the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission of a material
fact contained in the Preliminary Prospectus which was corrected in
the Prospectus (or the Prospectus as amended or supplemented).
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
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15
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or
any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such Underwriter
through the Representatives expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall
be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable
to such indemnified party under such subsection for any legal expenses
of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying
party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters
of the Designated Securities on the other from the offering of the
Designated Securities to which such loss, claim, damage or liability
(or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice
required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified
party in such proportion
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as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the Underwriters
of the Designated Securities on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and such Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from
such offering (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by such
Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the
one hand or such Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d).
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the applicable Designated
Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The obligations of the Underwriters of Designated Securities in this
subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Securities
and not joint.
(e) The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may otherwise
have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the
Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of
the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Firm Securities or the Optional Securities which it has
agreed to purchase under the Pricing Agreement relating to such
Designated Securities, the Representatives may in their discretion
arrange for themselves or another party or other parties to purchase
such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Firm
Securities or Optional Securities, as the case may be, then the
Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties reasonably
satisfactory to the Representatives to purchase such Designated
Securities on such terms. In the event that, within the respective
prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated
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Securities, or the Company notifies the Representatives that it has so
arranged for the purchase of such Designated Securities, the
Representatives or the Company shall have the right to postpone the
Time of Delivery for such Designated Securities for a period of not
more than seven days, in order to effect whatever changes may thereby
be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements,
and the Company agrees to file promptly any amendments or supplements
to the Registration Statement or the Prospectus which in the
reasonable opinion of the Company or the Representatives may thereby
be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like
effect as if such person had originally been a party to the Pricing
Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Firm Securities or the Optional Securities, as the
case may be, of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above,
the aggregate principal amount of such Designated Securities which
remains unpurchased does not exceed one-eleventh of the aggregate
principal amount of the Firm Securities or the Optional Securities, as
the case may be, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Firm
Securities or the Optional Securities, as the case may be, which such
Underwriter agreed to purchase under the Pricing Agreement relating to
such Firm Securities or the Optional Securities, as the case may be,
and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Firm
Securities or the Optional Securities, as the case may be, which such
Underwriter agreed to purchase under such Pricing Agreement) of the
Firm Securities or the Optional Securities, as the case may be, of
such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Firm Securities or the Optional Securities, as the
case may be, of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above,
the aggregate principal amount of the Firm Securities or the Optional
Securities, as the case may be, which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of the Firm Securities
or the Optional Securities, as the case may be, as referred to in
subsection (b) above, or if the Company shall not exercise the right
described in subsection (b) above to require non-defaulting
Underwriters to purchase Firm Securities or the Optional Securities,
as the case may be, of a defaulting Underwriter or Underwriters, then
the Pricing Agreement relating to such Firm Securities or the Optional
Securities, as the case may be, shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the
Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to
Section 9 hereof, or if the Underwriters do not purchase Designated Securities
under the Pricing Agreement relating to such
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Designated Securities because the condition set forth in Section 7(b) or 7(h)
hereof shall not have been satisfied, the Company shall not then be under any
liability to any Underwriter with respect to the Designated Securities covered
by such Pricing Agreement except as provided in Sections 6 and 8 hereof; but,
if for any other reason Designated Securities are not delivered by or on behalf
of the Company as provided herein, the Company will reimburse the Underwriters
through the Representatives for all out-of-pocket expenses approved in writing
by the Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Securities shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if
any, as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Representatives as set forth in
the Pricing Agreement; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement: Attention: Secretary; provided, however, that
any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered
or sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Company by the
Representatives promptly following the Time of Delivery or otherwise upon
request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Company and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. "Subsidiary" shall for purposes of this Agreement have the
meaning ascribed to it in Rule 405 of the Act.
15. Time shall be of the essence of each Pricing Agreement. As
used herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement and each Pricing Agreement may be executed by
any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
18
19
If the foregoing is in accordance with your understanding, please sign
and return to us [one for the Company and for each of the Representatives plus
one for each counsel] counterparts hereof.
Very truly yours,
Read-Rite Corporation
By:
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Representative(s)]
By: . . . . . . . . . . . . . . .
Name:
Title:
19
20
ANNEX I
PRICING AGREEMENT
[Names of Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto,
, 19..
Ladies and Gentlemen:
Read-Rite Corporation, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated . . . . . . . . . . ., 19 . . (the "Underwriting
Agreement"), between the Company on the one hand and (names of Representatives
named therein) on the other hand, to issue and sell to the Underwriters named
in Schedule I hereto (the "Underwriters") the Securities specified in Schedule
II hereto (the "Designated Securities," consisting of Firm Securities and any
Optional Securities the Underwriters may elect to purchase). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as
therein defined), and also a representation and warranty as of the date of this
Pricing Agreement in relation to the Prospectus as amended or supplemented
relating to the Designated Securities which are the subject of this Pricing
Agreement. Each reference to the Representatives herein and in the provisions
of the Underwriting Agreement so incorporated by reference shall be deemed to
refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Securities pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the principal amount of Firm Securities set forth opposite the name of
such Underwriter in Schedule I hereto and, (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional
Securities, as provided below, the Company agrees to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company at the purchase price to the Underwriters
set forth in Schedule II hereto that portion of the principal amount of
Optional Securities as to which such election shall have been exercised.
21
The Company hereby grants to each of the Underwriters the right to
purchase at their election up to the principal amount of Optional Securities
set forth opposite the name of such Underwriter in Schedule I hereto on the
terms referred to in the paragraph above for the sole purpose of covering
over-allotments in the sale of the Firm Securities. Any such election to
purchase Optional Securities may be exercised by written notice from the
Representatives to the Company given within a period of 30 calendar days after
the date of this Pricing Agreement, setting forth the principal amount of
Optional Securities to be purchased and the date on which such Optional
Securities are to be delivered, as determined by the Representatives, but in no
event earlier than the First Time of Delivery or, unless the Representatives
and the Company otherwise agrees in writing, no earlier than two or later than
ten business days after the date of such notice.
If the foregoing is in accordance with your understanding, please sign
and return to us [one for the Company and each of the Representatives plus one
for each counsel] counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
READ-RITE CORPORATION
By:
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Representative(s)]
By: . . . . . . . . . . . . . . . . . . . . . . . . . . .
Name:
Title:
On behalf of each of the Underwriters
2
22
SCHEDULE I
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
FIRM OPTIONAL
SECURITIES SECURITIES
TO BE TO BE
UNDERWRITER PURCHASED PURCHASED
----------- --------- ---------
<
[Names of Underwriters] $ $
-------------- ------------
Total $ $
============== ============
23
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due ,
AGGREGATE PRINCIPAL AMOUNT OF DESIGNATED SECURITIES:
Aggregate principal amount of Firm Securities:
Aggregate principal amount of Optional Securities:
PRICE TO PUBLIC:
% of the principal amount of the Designated Securities, plus accrued
interest[, if any,] from to [and accrued
amortization[, if any,] from to ]
PURCHASE PRICE BY UNDERWRITERS:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization[, if any,]
from to ]
CONVERSION PRICE:
[$ ] per share [subject to adjustment upon the occurrence of
certain events]
FORM OF DESIGNATED SECURITIES:
[Definitive form to be made available for checking and packaging at
least twenty four hours prior to the Time of Delivery at the office of
[The Depository Trust Company or its designated custodian] [the
Representatives]].
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds [by wire transfer].
TIME OF DELIVERY:
a.m. (New York City time), , 19
INDENTURE:
Indenture dated , 19 , between the Company
and State Street Bank and Trust Company of California, N.A., as
Trustee
MATURITY:
INTEREST RATE:
[ %] [Zero Coupon] [See Floating Rate Provisions]
INTEREST PAYMENT DATES:
[months and dates, commencing ....................., 19..]
REDEMPTION PROVISIONS:
[No provisions for redemption] [The Designated Securities may be
redeemed, otherwise than through the sinking fund, in whole or in part
at the option of the Company, in the amount of [$ ] or an
integral multiple thereof, [on or after , at the following
redemption prices (expressed in percentages of principal amount). If
[redeemed on or before , %, and if] redeemed during the
12-month period beginning ,
24
REDEMPTION
YEAR PRICE
---- -----
and thereafter at 100% of their principal amount, together in each
case with accrued interest to the redemption date.]
[on any interest payment date falling on or after ,
, at the election of the Company, at a redemption price equal to
the principal amount thereof, plus accrued interest to the date of
redemption.]]
[Other possible redemption provisions, such as mandatory
redemption upon occurrence of certain events or redemption for changes
in tax law]
[Restriction on refunding]
SINKING FUND PROVISIONS:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund
to retire [$ ] principal amount of Designated Securities on in
each of the years through at 100% of their principal amount
plus accrued interest [, together with [cumulative] [noncumulative]
redemptions at the option of the Company to retire an additional
[$ ] principal amount of Designated Securities in the years through
at 100% of their principal amount plus accrued interest.]
[If Designated Securities are extendable debt securities, insert--
EXTENDABLE PROVISIONS:
Designated Securities are repayable on , [insert date
and years], at the option of the holder, at their principal amount with
accrued interest. The initial annual interest rate will be %, and
thereafter the annual interest rate will be adjusted on ,
and to a rate not less than % of the effective annual
interest rate on U.S. Treasury obligations with -year maturities
as of the [insert date 15 days prior to maturity date] prior to such
[insert maturity date].]
[If Designated Securities are floating rate debt securities, insert--
FLOATING RATE PROVISIONS:
Initial annual interest rate will be % through [and
thereafter will be adjusted [monthly] [on each , , and ]
[to an annual rate of % above the average rate for -year
[month][securities][certificates of deposit] issued by and
[insert names of banks],] [and the annual interest rate [thereafter] [from
through ] will be the interest yield equivalent of the weekly
average per annum market discount rate for -month Treasury
bills plus % of Interest Differential (the excess, if any, of
(i) the then current weekly average per annum secondary market yield for
-month certificates of deposit over (ii) the then current interest yield
equivalent of the weekly average per annum market discount rate for
-month Treasury bills); [from and thereafter the rate will be the then
current interest yield equivalent plus % of Interest Differential].]
DEFEASANCE PROVISIONS:
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
2
25
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
ADDITIONAL CLOSING CONDITIONS:
Paragraph 7(h) of the Underwriting Agreement should be modified in the
event that the Securities are denominated in, indexed to, or principal or
interest are paid in, a currency other than the U.S. dollar, more than one
currency or in a composite currency. The country or countries issuing such
currency should be added to the banking moratorium and hostilities clauses
and the following additional clause should be added to the paragraph (the
entire paragraph should be restated, as amended): "; ( ) the imposition of
the proposal of exchange controls by any governmental authority in [insert
the country or countries issuing such currency, currencies or composite
currency]".
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS]* :
__________________________________
* A description of particular tax, accounting or other unusual features (such
as the addition of event risk provisions) of the Designated Securities should
be set forth, or referenced to an attached and accompanying description, if
necessary, to ensure agreement as to the terms of the Designated Securities to
be purchased and sold. Such a description might appropriately be in the form
in which such features will be described in the Prospectus Supplement for the
offering.
3
26
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial
information) examined by them and included or incorporated by
reference in the Registration Statement or the Prospectus comply as to
form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the
related published rules and regulations thereunder; and, if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the consolidated interim financial statements, selected financial
data, pro forma financial information, financial forecasts and/or
condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been
furnished to the representative or representatives of the Underwriters
(the "Representatives") such term to include an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which are attached
hereto; and on the basis of specified procedures including inquiries
of officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i)
below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the
related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years included
in the Prospectus and included or incorporated by reference in Item 6
of the Company's Annual Report on Form 10-K for the most recent fiscal
year agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for five
such fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of
Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting
an examination in accordance with generally accepted auditing
standards, consisting of a reading of the
27
unaudited financial statements and other information referred to
below, a reading of the latest available interim financial statements
of the Company and its subsidiaries, inspection of the minute books of
the Company and its subsidiaries since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were
not included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated
condensed financial statements included or incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those statements;
(E) as of a specified date not more than five
days prior to the date of such letter, there have been any
changes in the consolidated capital stock (other than
issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case which
were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or
any increase in the consolidated long-term debt of the Company
and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items
specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included
2
28
or incorporated by reference in the Prospectus, except in each
case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in Clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the audit referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and
other procedures referred to in paragraphs (iii) and (vi) above, they
have carried out certain specified procedures, not constituting an
audit in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference), or
in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in
agreement.
All references in this Annex II to the Prospectus shall be
deemed to refer to the Prospectus (including the documents incorporated by
reference therein) as defined in the Underwriting Agreement as of the date of
the letter delivered on the date of the Pricing Agreement for purposes of such
letter and to the Prospectus as amended or supplemented (including the
documents incorporated by reference therein) in relation to the applicable
Designated Securities for purposes of the letter delivered at the Time of
Delivery for such Designated Securities.
3
