1
Exhibit 1.2
Maxtor Corporation
9,500,000 Shares (a)
Common Stock
($0.01 par value)
Form of International Underwriting Agreement
London, England
o , 1998
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇ Brothers International (Europe)
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
As Lead Managers of the several Managers,
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Maxtor Corporation, a Delaware corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule I hereto (the
"Managers"), for whom you (the "Lead Managers") are acting as representatives,
9,500,000 shares of Common Stock, $0.01 par value ("Common Stock") of the
Company (said shares to be issued and sold by the Company being hereinafter
called the "International Underwritten Securities"). The Company also proposes
to grant to the Managers an option to purchase up to 1,425,000 additional shares
of Common Stock to cover over-allotments (the "International Option Securities";
the International Option Securities, together with the International
Underwritten Securities, being hereinafter called the "International
Securities").
It is understood that the Company and Hyundai Electronics America
("HEA"), a stockholder of the Company, are concurrently entering into a U.S.
Underwriting Agreement dated the date hereof (the "U.S. Underwriting Agreement")
providing for the sale by the Company of an aggregate of 38,000,000 shares of
Common Stock (said shares to be issued and sold by the Company pursuant to the
U.S. Underwriting Agreement being hereinafter called the
----------
(a) Plus an option to purchase from the Company up to 1,425,000 additional
shares of Common Stock to cover over-allotments.
2
2
"U.S. Underwritten Securities"), and providing for the grant to the underwriters
named in Schedule I thereto (the "U.S. Underwriters") of an option to purchase
from the Company up to 5,700,000 additional shares of Common Stock (the "U.S.
Option Securities"; the U.S. Option Securities, together with the U.S.
Underwritten Securities, being hereinafter called the "U.S. Securities"; and the
U.S. Securities, together with the International Securities, being hereinafter
called the "Securities").
It is further understood and agreed that the Managers and the
U.S. Underwriters have entered into an Agreement Between U.S. Underwriters and
Managers dated the date hereof (the "Agreement Between U.S. Underwriters and
Managers"), pursuant to which, among other things, the Managers may purchase
from the U.S. Underwriters a portion of the U.S. Securities to be sold pursuant
to the U.S. Underwriting Agreement and the U.S. Underwriters may purchase from
the Managers a portion of the International Securities to be sold pursuant to
the International Underwriting Agreement. To the extent there are no additional
Managers listed on Schedule I other than you, the term Lead Managers as used
herein shall mean you, as Managers, and the terms Lead Managers and Managers
shall mean either the singular or plural as the context requires. The use of the
neuter in this Agreement shall include the feminine and masculine wherever
appropriate. Certain terms used herein are defined in Section 17 hereof.
1. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, each
Manager as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-56099) on Form S-1, including
the related Preliminary Prospectuses, for registration under the Act of
the offering and sale of the Securities. The Company may have filed one
or more amendments thereto, including the related Preliminary
Prospectuses, each of which has previously been furnished to you. The
Company will next file with the Commission either (1) prior to the
Effective Date of such registration statement, a further amendment to
such registration statement (including the form of the final
Prospectuses) or (2) after the Effective Date of such registration
statement, a final prospectus in accordance with Rules 430A and 424(b).
In the case of clause (2), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to
be included in such registration statement and the Prospectuses. As
filed, such amendment and form of final Prospectuses, or such final
Prospectuses, shall contain all Rule 430A Information, together with all
other such required information, and, except to the extent the Lead
Managers shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes
(beyond that contained in the latest U.S. Preliminary Prospectus) as the
Company has advised you, prior to the Execution Time, will be included
or made therein.
3
3
It is understood that two forms of prospectus are to be used in
connection with the offering and sale of the Securities: one form of
prospectus relating to the U.S. Securities, which are to be offered and
sold to United States and Canadian Persons, and one form of prospectus
relating to the International Securities, which are to be offered and
sold to persons other than United States and Canadian Persons. The two
forms of prospectus are identical except for the outside front cover
page, the discussion under the heading "Underwriting" and the outside
back cover page. Such form of prospectus relating to the U.S. Securities
as first filed pursuant to Rule 424(b) after the Execution Time or, if
no filing pursuant to Rule 424(b) is made, such form of prospectus
included in the Registration Statement at the Effective Date, is
hereinafter called the "U.S. Prospectus"; such form of prospectus
relating to the International Securities as first filed pursuant to Rule
424(b) after the Execution Time or, if no filing pursuant to Rule 424(b)
is made, such form of prospectus included in the Registration Statement
at the Effective Date, is hereinafter called the "International
Prospectus"; and the U.S. Prospectus and the International Prospectus
are hereinafter collectively called the "Prospectuses".
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectuses are first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any date on which International Option Securities are purchased,
if such date is not the Closing Date (a "settlement date"), each
Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the rules
thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, each Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date and any settlement date,
each Prospectus (together with any supplement thereto) will not, include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
the information contained in or omitted from the Registration Statement
or the Prospectuses (or any supplement thereto) in reliance upon and in
conformity with information furnished herein or in writing to the
Company by or on behalf of any Manager through the Lead Managers
specifically for inclusion in the Registration Statement or the
Prospectuses (or any supplement thereto).
(c) Each of the Company and Maxtor Asia Pacific Limited, Maxtor
Disc Drives Pty. Limited, Maxtor Europe GmbH, Maxtor Europe Limited,
Maxtor Europe SARL, Maxtor (Japan) Limited, Maxtor Korea Limited, Maxtor
Ireland Limited, Maxtor Peripherals (S) Pte. Limited, Maxtor Receivables
Corporation, Maxtor Sales Private Limited, Maxtor (Thailand) Limited and
Old SDI Sub (each a "Subsidiary" and collectively the "Subsidiaries")
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized with full corporate power and authority to own or
lease, as the case may be,
4
4
and to operate its properties and conduct its business as described in
the Prospectuses, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification except to the extent that the failure
to be so qualified or be in good standing could not reasonably be
expected to have a Material Adverse Effect (as defined herein).
(d) All the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and all outstanding shares of capital
stock of the Subsidiaries are owned by the Company either directly or
through wholly owned Subsidiaries free and clear of any perfected
security interest or any other security interests, claims, liens or
encumbrances.
(e) The Company's authorized equity capitalization is as set
forth in the Prospectuses; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectuses; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
International Securities being sold hereunder by the Company have been
duly and validly authorized, and, when issued and delivered to and paid
for by the Managers pursuant to this Agreement, will be fully paid and
nonassessable; the International Securities being sold hereunder are
duly listed, and admitted and authorized for trading, subject to
official notice of issuance, on the Nasdaq National Market; the
certificates for the International Securities are in valid and
sufficient form; the holders of outstanding shares of capital stock of
the Company are not entitled to preemptive or other rights to subscribe
for the International Securities; and, except as set forth in the
Prospectuses, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock
of or ownership interests in the Company are outstanding.
(f) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectuses, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Prospectuses
under the headings "Risk Factors--Limited Protection of Intellectual
Property; Risk of Third Party Claims of Infringement", "Relationship
Between the Company and HEA", "Business--Intellectual Property",
"Description of Capital Stock", "Shares Eligible for Future Sale",
"Certain Transactions" and "Certain United States Federal Tax
Consequences to Holders of Common Stock" insofar as such statements
summarize legal matters, agreements, documents, or proceedings discussed
therein, are accurate and fair summaries of such legal matters,
agreements, documents or proceedings.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company, enforceable in accordance with its terms, except (i) as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles and (ii) to
5
5
the extent that rights to indemnity or contribution under this Agreement
may be limited by Federal and state securities laws or the public policy
underlying such laws.
(h) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectuses, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated herein,
except such as have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the International Securities by the
Managers in the manner contemplated herein and in the Prospectuses.
(j) Neither the issue and sale of the International Securities
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will conflict with,
or result in a breach or violation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
Subsidiaries pursuant to, (i) the charter or by-laws of the Company or
any Subsidiaries, (ii) the terms of any material indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
material agreement, obligation, condition, covenant or instrument to
which the Company or any Subsidiary is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
Subsidiary of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or any Subsidiary or any of its or their properties.
(k) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement which
have not been waived in writing prior to the Execution Time.
(l) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries included in
the Prospectuses and the Registration Statement present fairly in all
material respects the financial condition, results of operations and
cash flows of the Company as of the dates and for the periods indicated,
comply as to form with the applicable accounting requirements of the Act
and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved
(except as otherwise noted therein). The selected financial data set
forth under the caption "Selected Consolidated Financial Data" in the
Prospectuses and Registration Statement fairly present, on the basis
stated in the Prospectuses and the Registration Statement, the
information included therein.
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any Subsidiaries or its or their property is pending or, to
the knowledge of the Company, threatened that (i) could
6
6
reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected to
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and the Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business (a "Material Adverse
Effect"), except as set forth in or contemplated in the Prospectuses
(exclusive of any supplement thereto).
(n) Each of the Company and the Subsidiaries owns, leases or has
sufficient rights to use all such properties as are necessary to the
conduct of its operations as presently conducted.
(o) Neither the Company nor any Subsidiary is in violation or
default of (i) any provision of its charter or bylaws, (ii) the terms of
any material indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other material agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or such subsidiary or any of its
properties, as applicable, the violation of which could reasonably be
expected to have a Material Adverse Effect.
(p) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectuses, and
Ernst & Young LLP, who have certified certain financial statements of
the Company and its consolidated subsidiaries and delivered their report
with respect to the audited consolidated financial statements included
in the Prospectuses, are each independent public accountants with
respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
(q) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance and sale by the Company of
the International Securities.
(r) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not
have a Material Adverse Effect) and has paid all taxes required to be
paid by it and any other assessment, fine or penalty levied against it,
to the extent that any of the foregoing is due and payable, except for
any such assessment, fine or penalty that is currently being contested
in good faith or as could not reasonably be expected to have a Material
Adverse Effect.
7
7
(s) No labor problem or dispute with the employees of the Company
or any Subsidiary exists or, to the knowledge of the Company, is
threatened or imminent, that could, in any such case, reasonably be
expected to have a Material Adverse Effect.
(t) The Company and each Subsidiary carry, or are entitled to the
benefits of, insurance (including self-insurance) in such amounts and
covering such risks as are prudent and customary in the businesses in
which they are engaged and all such insurance is, and after consummation
of the transactions contemplated herein will be, in full force and
effect; and neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that could not reasonably be expected to have a Material Adverse
Effect.
(u) No Subsidiary is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any
other distribution on such Subsidiary's capital stock, from repaying to
the Company any loans or advances to such Subsidiary from the Company or
from transferring any of such Subsidiary's property or assets to the
Company or any other Subsidiary, except for any requirements under the
laws of the jurisdictions in which any Subsidiary is organized that
corporations organized in such jurisdictions maintain specified levels
of capital or statutory reserves.
(v) The Company and the Subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses as presently conducted except where the
failure to possess such licenses, certificates, permits or
authorizations would not have a Material Adverse Effect, and neither the
Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any such license,
certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to have a Material Adverse Effect.
(w) The Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(x) Neither the Company nor its affiliated purchasers, as defined
in Rule 100 of Regulation M ("Regulation M") under the Exchange Act,
either alone or with one or more other persons, (i) has taken, either
directly or indirectly, any action which was
8
8
designed to cause or result in, or which has constituted, or which might
reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company ("Subject
Securities") in connection with the offering of the Securities or (ii)
will bid for or purchase any Subject Securities of the Company or any
other covered securities (within the meaning of Regulation M) relating
to the Subject Securities (together with Subject Securities, "Covered
Securities"), or attempt to induce any person to bid for or purchase any
Covered Securities, in either case, for the purpose of creating actual
or apparent active trading in, or raising the price of the Securities.
(y) The Company and the Subsidiaries (i) are in material
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses as presently conducted and (iii) have not received
notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances
or wastes, pollutants or contaminants, except where such non-compliance
with Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any
Subsidiary has been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended.
(z) Each of the Company and the Subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of ▇▇▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in Section 3(3) of ERISA and
such regulations and published interpretations) in which employees of
the Company or any of the Subsidiaries are eligible to participate. Each
such plan is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations, except where the failure to so comply could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. Neither the Company nor any of the Subsidiaries
has incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary
course) or to any such plan under Title IV of ERISA.
(aa) Maxtor Peripherals (S) Pte. Limited ("Maxtor Singapore") is
the only Subsidiary that reasonably could be deemed to be a "significant
subsidiary" of the Company within the meaning of Rule 11-02(w) of
Regulation S-X under the Act.
(bb) The Company and the Subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the
9
9
"Intellectual Property") necessary for the conduct of their respective
businesses as now conducted (as described in the Prospectuses), except
where the failure to own or possess any such Intellectual Property could
not reasonably be expected, singly or in the aggregate, to have a
Material Adverse Effect and (i) to the knowledge of the Company, there
are no rights of third parties to any such Intellectual Property; (ii)
to the knowledge of the Company, there is no material infringement by
third parties of any such Intellectual Property; (iii) there is no
pending or, to the knowledge of the Company, threatened action, suit,
proceeding or claim by others challenging the Company's rights in or to
any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (iv) there is no
pending or to the knowledge of the Company, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any
such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (v) except as
specifically set forth in the Prospectuses under the caption
"Business--Intellectual Property," there is no pending or, to the
knowledge of the Company, threatened action, suit, proceeding or claim
by others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a
reasonable basis for any such claim and (vi) to the Company's knowledge,
all U.S. patents owned by the Company are valid and enforceable.
(cc) Except as disclosed in the Prospectuses, the Company (i)
does not have any material lending or other relationship with any bank
or lending affiliate of any of the Managers and (ii) does not intend to
use any of the proceeds from the sale of the International Securities
hereunder to repay any outstanding debt owed to any affiliate of any of
the Managers.
(dd) The Company and the Subsidiaries have determined that the
computer hardware and software used by them may be unable to recognize
and properly execute date-sensitive functions involving certain dates
prior to and any dates after December 31, 1999 (the "Year 2000
Problem"), and reasonably believe that the Company's implementation of a
new enterprise-wide information system provided by SAP, AG will remedy
such risk on a timely basis and that such risk could not reasonably be
expected to have a Material Adverse Effect. The Company is in compliance
with the Commission's staff legal bulletin No. 5 dated January 12, 1998
related to Year 2000 compliance.
(ee) Neither the Company nor any of the Subsidiaries has
distributed nor will it distribute prior to the latest of (i) the
Closing Date, (ii) any settlement date and (iii) completion of the
distribution of the International Securities, any offering material in
connection with the offering and sale of the International Securities
other than any Preliminary Prospectuses, the Prospectuses, the
Registration Statement and other materials, if any, permitted by the
Act.
(ff) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by
10
10
the Company or any of the Subsidiaries to or for the benefit of any of
the officers or directors of the Company or any Subsidiary or any of the
members of the families of any of them, which loans, advances or
guarantees are required to be, and are not, disclosed in the
Registration Statement and Prospectuses.
(gg) There have not been, and there are not proposed, any
transactions or agreements between the Company or any of the
Subsidiaries on the one hand and the officers, directors or stockholders
of the Company or any of the Subsidiaries on the other, which
transactions or agreements are required to be, and are not, disclosed in
the Registration Statement and Prospectuses.
(hh) No officer or director of the Company is in breach or
violation of any employment agreement, non-competition agreement,
confidentiality agreement, or other agreement restricting the nature or
scope of employment to which such officer or director is a party, other
than such breaches or violations which could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; the
conduct of the Company's business, as described in the Registration
Statement and Prospectuses, will not result in a breach or violation of
any such agreement.
(ii) There are no outstanding options to acquire shares of
capital stock of the Company that are vested and exercisable, and there
are no outstanding options to acquire shares of capital stock of the
Company that can, by their terms, become exercisable within 180 days of
the date hereof, except as disclosed in the Registration Statement and
the Prospectuses.
(jj) The Company has not received any notice or communication (in
writing or otherwise), or any other information, indicating that there
is a material possibility that any customer of the Company identified in
the "Business-Customers" section of the Registration Statement will
cease dealing with the Company or otherwise materially reduce the volume
of business transacted by such customer with the Company below
historical levels.
Any certificate signed by any officer of the Company and
delivered to the Lead Managers or counsel for the Managers in connection with
this Agreement shall be deemed a representation and warranty by the Company, as
to matters covered thereby, to each Manager.
(ii) HEA represents and warrants to, and agrees with, each
Manager that:
(a) HEA has full legal right, capacity, power and authority to
enter into and perform this Agreement.
(b) Neither HEA nor its affiliated purchasers, as defined in
Regulation M under the Exchange Act, either alone or with one or more
other persons, (i) has taken, either directly or indirectly, any action
which was designed to cause or result in, or which has constituted, or
which might reasonably be expected to cause or result in, stabilization
or manipulation of the price of any Subject Securities in connection
with the offering of the
11
11
Securities or (ii) will bid for or purchase any Covered Securities or
attempt to induce any person to bid for or purchase any Covered
Securities, in either case, for the purpose of creating actual or
apparent active trading in, or raising the price of the Securities.
(c) Neither the issue and sale by the Company of the
International Securities nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof
will conflict with, or result in a breach or violation or imposition of
any lien, charge or encumbrance upon any property or assets of HEA
pursuant to, (i) the charter or by-laws of HEA, (ii) the terms of any
material indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other material agreement, obligation,
condition, covenant or instrument to which HEA is a party or bound or to
which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to HEA of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over HEA or any of its properties.
(d) On the Effective Date, the Registration Statement did or
will, and when the Prospectuses are first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any settlement date, each Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act and the rules thereunder; on the Effective Date
and at the Execution Time, the Registration Statement did not or will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, on the Effective Date,
each Prospectus, if not filed pursuant to Rule 424(b), will not, and on
the date of any filing pursuant to Rule 424(b) and on the Closing Date
and any settlement date, each Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that HEA makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement, or the Prospectuses (or any supplement thereto)
in reliance upon and in conformity with information furnished herein or
in writing to the Company or HEA by or on behalf of any Manager through
the Lead Managers specifically for inclusion in the Registration
Statement or the Prospectuses (or any supplement thereto).
(e) This Agreement has been duly authorized, executed and
delivered by HEA and constitutes a valid and binding obligation of HEA
enforceable in accordance with its terms, except (i) as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles and (ii) to the extent that rights to indemnity or
contribution under this Agreement may be limited by Federal and state
securities laws or the public policy underlying such laws.
12
12
(f) HEA is not and, after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as
described in the Prospectuses, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(g) Except as disclosed in the Prospectuses, HEA (i) does not
have any material lending or other relationship with any bank or lending
affiliate of any of the Managers and (ii) does not intend to use any of
the proceeds from the sale of the International Securities hereunder to
repay any outstanding debt owed to any affiliate of any of the Managers.
(h) There have not been, and there are not proposed, any
transactions or agreements between HEA or any of its subsidiaries
(excluding the Company and the Subsidiaries) on the one hand and the
officers, directors or stockholders of the Company or any of the
Subsidiaries on the other, which transactions or agreements are required
to be, and are not, disclosed in the Registration Statement and
Prospectuses.
Any certificate signed by any officer of HEA and delivered to the
Lead Managers or counsel for the Managers in connection with this Agreement
shall be deemed a representation and warranty by HEA, as to matters covered
thereby, to each Manager.
2. Purchase and Sale. (a) Subject to such adjustments as you may
determine in order to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Manager and, upon the basis of the representations, warranties and
agreements of the Company and HEA herein contained and subject to all the terms
and conditions set forth herein, each Manager agrees, severally and not jointly,
to purchase from the Company, at a purchase price of -- per share (the
"purchase price per share"), the number of International Underwritten Securities
which bears the same proportion to the aggregate number of International
Underwritten Securities to be issued and sold by the Company as the number of
International Underwritten Securities set forth opposite the name of such
Manager in Schedule I hereto (or such number of International Underwritten
Securities increased as set forth in Section 9 hereof) bears to the aggregate
number of International Underwritten Securities to be sold by the Company.
(b) The Company also agrees, subject to all the terms and
conditions set forth herein, to sell to the Managers, and, upon the basis of the
representations, warranties and agreements of the Company and HEA herein
contained and subject to all the terms and conditions set forth herein, the
Managers shall have the right to purchase from the Company, at the purchase
price per share, pursuant to an option (the "over-allotment option") which may
be exercised at any time (but not more than once) prior to 9:00 P.M., New York
City time, on the 30th day after the date of the Prospectus (or, if such 30th
day shall be a Saturday or Sunday or a holiday, on the next business day
thereafter when the Nasdaq National Market is open for trading), up to an
aggregate of 1,425,000 shares of International Option Securities from the
Company. International Option Securities may be purchased only for the purpose
of covering over-allotments made in connection with the sale of the
International Underwritten Securities by
13
13
the Managers. The number of International Option Securities which the Managers
elect to purchase upon any exercise of the over-allotment option shall be
provided by the Company in proportion to the maximum number of International
Option Securities which the Company has agreed to sell. Upon any exercise of the
over-allotment option, each Manager, severally and not jointly, agrees to
purchase from the Company the number of International Option Securities (subject
to such adjustments as you may determine in order to avoid fractional shares)
which bears the same proportion to the number of International Option Securities
to be sold by the Company as the number of International Underwritten Securities
set forth opposite the name of such Manager in Schedule I hereto (or such number
of International Underwritten Securities increased as set forth in Section 9
hereof) bears to the aggregate number of International Underwritten Securities
to be sold by the Company.
3. Delivery and Payment. Delivery of and payment for the
International Underwritten Securities and the International Option Securities
(if the option provided for in Section 2(b) hereof shall have been exercised on
or before the third Business Day prior to the Closing Date) shall be made at
10:00 AM, New York City time, on --, 1998, or at such time on such later date
not more than three Business Days after the foregoing date as the Lead Managers
shall designate, which date and time may be postponed by agreement among the
Lead Managers and the Company or as provided in Section 9 hereof (such date and
time of delivery and payment for the International Securities being herein
called the "Closing Date"). Delivery of the International Securities shall be
made to the Lead Managers for the respective accounts of the several Managers
against payment by the several Managers through the Lead Managers of the
respective aggregate purchase prices of the International Securities being sold
by the Company to or upon the order of the Company by wire transfer payable in
same-day funds to the accounts specified by the Company. Delivery of the
International Underwritten Securities and the International Option Securities
shall be made through the facilities of The Depository Trust Company unless the
Lead Managers shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will deliver
the International Option Securities (at the expense of the Company) to the Lead
Managers on the date specified by the Lead Managers (which shall be within three
Business Days after exercise of said option) for the respective accounts of the
several Managers, against payment by the several Managers through the Lead
Managers of the purchase price thereof to or upon the order of the Company by
wire transfer payable in same-day funds to the accounts specified by the
Company. If settlement for the International Option Securities occurs after the
Closing Date, the Company and HEA will deliver to the Lead Managers on the
settlement date for the International Option Securities, and the obligation of
the Managers to purchase the International Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Managers. It is understood that the several
Managers propose to offer the International Securities for sale to the public as
set forth in the Prospectuses.
14
14
5. Agreements.
(i) The Company agrees with the several Managers that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the International Securities, the Company will not file any
amendment of the Registration Statement or supplement to the
Prospectuses or any Rule 462(b) Registration Statement unless the
Company has furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectuses is otherwise required under Rule
424(b), the Company will cause the Prospectuses, properly completed, and
any supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence satisfactory to the Lead Managers of such
timely filing. The Company will promptly advise the Lead Managers (1)
when the Registration Statement, if not effective at the Execution Time,
shall have become effective, (2) when the Prospectuses, and any
supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration
Statement shall have been filed with the Commission, (3) when, prior to
termination of the offering of the International Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectuses or for any
additional information, (5) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the institution or threatening of any proceeding for that purpose and
(6) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the International Securities for
sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or the suspension of any
such qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the
International Securities is required to be delivered under the Act, any
event occurs as a result of which either of the Prospectuses as then
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein
in the light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend the Registration
Statement or supplement either of the Prospectuses to comply with the
Act or the rules thereunder, the Company promptly will (1) notify the
Lead Managers of any such event; (2) prepare and file with the
Commission, subject to the second sentence of paragraph (i)(a) of this
Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance; and (3) supply any supplemented
Prospectuses to you in such quantities as you may reasonably request.
15
15
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Lead Managers an earnings
statement or statements of the Company and the Subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company will furnish to the Lead Managers and counsel for
the Managers signed copies of the Registration Statement (including
exhibits thereto) and to each other Manager a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a
prospectus by a Manager or dealer may be required by the Act, as many
copies of each Preliminary Prospectus and the International Prospectus
and any supplement thereto as the Lead Managers may reasonably request.
(e) The Company will use its best efforts to arrange, if
necessary, for the qualification of the International Securities for
sale under the laws of such jurisdictions as the Lead Managers may
designate and will maintain such qualifications in effect so long as
required for the distribution of the International Securities; provided
that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to service of process in suits, other
than those arising out of the offering or sale of the International
Securities, in any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
▇▇▇▇▇ ▇▇▇▇▇▇ Inc., for a period of 180 days following the Execution
Time, offer, sell or contract to sell, or otherwise dispose of (or enter
into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by
the Company or any affiliate of the Company or any person in privity
with the Company or any affiliate of the Company) directly or
indirectly, or announce the offering of, any other shares of Common
Stock or any securities convertible into, or exchangeable for, shares of
Common Stock; provided, however, that the Company may issue and sell
Common Stock pursuant to any employee stock option plan, restricted
stock plan, employee stock purchase plan or dividend reinvestment plan
of the Company in effect at the Execution Time and the Company may issue
Common Stock issuable upon the conversion of securities or the exercise
of warrants outstanding at the Execution Time.
(g) Neither the Company nor its affiliated purchasers, as defined
in Regulation M under the Exchange Act, either alone or with one or more
other persons, (i) will take, either directly or indirectly, any action
which is designed to cause or result in, or which will constitute, or
which might reasonably be expected to cause or result in, stabilization
or manipulation of the price of any Subject Securities in connection
with the offering of the Securities or (ii) will bid for or purchase any
Covered Securities or attempt to induce any person to bid for or
purchase any Covered Securities, in either case, for the purpose of
creating actual or apparent active trading in, or raising the price of
the Securities.
16
16
(h) The Company agrees to pay the costs and expenses relating to
the following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary Prospectus,
the International Prospectus, and each amendment or supplement to any of
them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, each Preliminary Prospectus,
the International Prospectus, and all amendments or supplements to any
of them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the International Securities;
(iii) the preparation, printing, authentication, issuance and delivery
of certificates for the International Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
International Securities; (iv) the printing (or reproduction) and
delivery of this Agreement, any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered in
connection with the offering of the International Securities; (v) the
registration of the International Securities under the Exchange Act and
the listing of the International Securities on the Nasdaq National
Market; (vi) any registration or qualification of the International
Securities for offer and sale under the securities or blue sky laws of
the several states (including filing fees and the reasonable fees and
expenses of counsel for the Managers relating to such registration and
qualification); (vii) any filings required to be made with the National
Association of Securities Dealers, Inc. (including filing fees and the
reasonable fees and expenses of counsel for the Managers relating to
such filings); (viii) the transportation and other expenses incurred by
or on behalf of Company representatives (excluding the Managers) in
connection with presentations to prospective purchasers of the
International Securities; (ix) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and
special counsel) for the Company and HEA; and (x) all other costs and
expenses incident to the performance by the Company and HEA of their
obligations hereunder.
(i) The Company will use the net proceeds to the Company of the
offering of the Securities as described under the heading "Use of
Proceeds" in the Prospectuses.
(ii) HEA agrees with the several Managers that:
(a) HEA will not, without the prior written consent of ▇▇▇▇▇
▇▇▇▇▇▇ Inc., offer, sell, contract to sell, pledge or otherwise dispose
of, or file (or participate in the filing of) a registration statement
with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act with respect to,
any shares of capital stock of the Company or any securities convertible
into or exercisable or exchangeable for such capital stock, or publicly
announce an intention to effect any such transaction, for a period of
180 days after the date of this Agreement, other than shares of Common
Stock disposed of as bona fide gifts approved by ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
17
17
(b) Neither HEA nor its affiliated purchasers, as defined in
Regulation M under the Exchange Act, either alone or with one or more
other persons, (i) will take, either directly or indirectly, any action
which is designed to cause or result in, or which will constitute, or
which might reasonably be expected to cause or result in, stabilization
or manipulation of the price of any Subject Securities in connection
with the offering of the Securities or (ii) will bid for or purchase any
Covered Securities or attempt to induce any person to bid for or
purchase any Covered Securities, in either case, for the purpose of
creating actual or apparent active trading in, or raising the price of
the Securities.
(c) HEA will advise you promptly, and if requested by you, will
confirm such advice in writing, so long as delivery of a prospectus
relating to the International Securities by an underwriter or dealer may
be required under the Act, of (i) any material change in the Company's
condition (financial or otherwise), prospects, earnings, business or
properties, (ii) any change in information in the Registration Statement
or the Prospectuses relating to HEA or (iii) any new material
information relating to the Company or relating to any matter stated in
the Prospectuses which comes to the attention of HEA.
(iii)(a) Each Manager agrees that (i) it is not purchasing any of
the International Securities for the account of any United States or Canadian
Person, (ii) it has not offered or sold, and will not offer or sell, directly or
indirectly, any of the International Securities or distribute any International
Prospectus to any person in the United States or Canada, or to any United States
or Canadian Person, and (iii) any dealer to whom it may sell any of the
International Securities will represent that it is not purchasing for the
account of any United States or Canadian Person and agree that it will not offer
or resell, directly or indirectly, any of the International Securities in the
United States or Canada, or to any United States or Canadian Person or to any
other dealer who does not so represent and agree; provided, however, that the
foregoing shall not restrict (i) purchases and sales between the U.S.
Underwriters on the one hand and the Managers on the other hand pursuant to the
Agreement Between U.S. Underwriters and Managers, (ii) stabilization
transactions contemplated under the Agreement Between U.S. Underwriters and
Managers, conducted through ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (or through the U.S.
Representatives and Lead Managers) as part of the distribution of the
Securities, and (iii) sales to or through (or distributions of International
Prospectuses or Preliminary Prospectuses to) persons not United States or
Canadian Persons who are investment advisors, or who otherwise exercise
investment discretion, and who are purchasing for the account of any United
States or Canadian Person.
The agreement of the Managers set forth in the above paragraph
shall terminate upon the earlier of the following events:
(A) a mutual agreement of the U.S. Representatives and the
Lead Managers to terminate the selling restrictions set forth in
such paragraph and in Section 5(iii) of the U.S. Underwriting
Agreement; or
(B) the expiration of a period of 30 days after the
Closing Date, unless (A) the Lead Managers shall have given
notice to the Company and the U.S.
18
18
Representatives that the distribution of the International
Securities by the Managers has not yet been completed, or (B) the
U.S. Representatives shall have given notice to the Company and
the Managers that the distribution of the U.S. Securities by the
U.S. Underwriters has not yet been completed. If such notice by
the U.S. Representatives or the Lead Managers is given, the
agreements set forth in such paragraph shall survive until the
earlier of (1) the event referred to in clause (A) above or (2)
the expiration of an additional period of 30 days from the date
of any such notice.
(b) Each Manager severally represents and agrees that:
(A) it has not offered or sold and, prior to the
expiration of six months from the closing of the offering of the
International Securities, will not offer or sell any
International Securities in the United Kingdom other than to
persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (whether as
principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not
result in an offer to the public within the meaning of the U.K.
Public Offers of Securities Regulations 1995;
(B) it has complied and will comply with all applicable
provisions of the U.K. Financial Services ▇▇▇ ▇▇▇▇ with respect
to anything done by it in relation to the International
Securities in, from or otherwise involving the United Kingdom;
and
(C) it has only issued or passed on and will only issue or
pass on in the United Kingdom any document received by it in
connection with the issue of the International Securities to a
person who is of a kind described in Article 11(3) of the U.K.
Financial Services ▇▇▇ ▇▇▇▇ (Investment
Advertisement)(Exemptions) order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
6. Conditions to the Obligations of the Managers. The obligations
of the Managers to purchase the International Underwritten Securities and the
International Option Securities, as the case may be, shall be subject to the
accuracy of the representations and warranties on the part of the Company and
HEA contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and HEA made in any certificates pursuant to the provisions
hereof, to the performance by the Company and HEA of their respective
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Lead Managers agree in writing to a
later time, the Registration Statement will become effective not later
than (i) 6:00 PM New York City time on the date of determination of the
public offering price, if such determination occurred at or prior to
3:00 PM New York City time on such date or (ii) 9:30 AM on the Business
Day
19
19
following the day on which the public offering price was determined, if
such determination occurred after 3:00 PM New York City time on such
date; if filing of any of the Prospectuses, or any supplement thereto,
is required pursuant to Rule 424(b), the Prospectuses, and any such
supplement, will be filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or threatened.
(b) The Company shall have caused ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich
LLP, counsel for the Company, to have furnished to the Lead Managers
their opinion, dated the Closing Date and addressed to the Lead
Managers, 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 corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its businesses as described in the Prospectuses, and is
duly qualified to do business as foreign corporation and is in
good standing under the laws of the State of California and, to
the knowledge of such counsel, each other jurisdiction which
requires such qualification, except where the failure to be so
qualified or be in good standing could not reasonably be expected
to have a Material Adverse Effect.
(ii) except as otherwise set forth in the Prospectuses,
all outstanding shares of capital stock of each Subsidiary are
owned of record by the Company or by another Subsidiary;
(iii) the Company's authorized equity capitalization is as
set forth in the Prospectuses; the capital stock of the Company
conforms in all material respects to the description thereof
contained in the Prospectuses; the outstanding shares of Common
Stock have been duly and validly authorized and issued and are
fully paid and nonassessable; the International Securities being
sold hereunder by the Company have been duly and validly
authorized, and, when issued and delivered to and paid for by the
Managers pursuant to this Agreement, will be fully paid and
nonassessable; the International Securities being sold hereunder
are duly listed, and admitted and authorized for trading, subject
to official notice of issuance, on the Nasdaq National Market;
the certificates for the International Securities are in valid
and sufficient form; the holders of outstanding shares of capital
stock of the Company are not entitled to preemptive rights under
the Company's charter documents, Delaware corporate law or any
agreements of which such counsel is aware, or to such counsel's
knowledge, similar rights to subscribe for the International
Securities except for the ownership maintenance rights granted to
HEA under the stockholder agreement, dated as of June 25, 1998
among the Company, HEA and Hyundai Electronics Industries Co.,
Ltd. (the "Stockholder Agreement); and, except as set forth in
the Prospectuses, to the knowledge of such counsel, no options,
warrants or other rights to purchase, agreements or other
20
20
obligations to issue, or rights to convert any obligations into
or exchange any securities for, shares of capital stock of or
ownership interests in the Company are outstanding;
(iv) to the knowledge of such counsel, there is no pending
or threatened action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator
involving the Company or any Subsidiaries or its or their
property of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectuses, and, to the knowledge of such counsel, there is no
franchise, contract or other document of a character required to
be described in the Registration Statement or Prospectuses, or to
be filed as an exhibit thereto, which is not described or filed
as required under the Act or the applicable rules and regulations
of the Commission thereunder; and the statements in the
Prospectuses under the headings "Relationship Between the Company
and Hyundai," "Business--Intellectual Property," "Certain
Transactions," "Management--Executive Compensation--Employment
Agreements--Benefit Plans," "Description of Capital Stock,"
"Shares Eligible for Future Sale" and "Certain United States
Federal Tax Consequences to Holders of Common Stock" accurately
summarize in all material respects the matters therein described
to the extent they are matters of law and descriptions of
contractual arrangements;
(v) the Registration Statement has become effective under
the Act; any required filing of the Prospectuses, and any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); to the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened
and the Registration Statement and the Prospectuses (other than
the financial statements, schedules and other financial
information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the rules
thereunder;
(vi) each of this Agreement and the U.S. Underwriting
Agreement has been duly authorized, executed and delivered by the
Company (assuming due authorization and execution by each party
thereto other than the Company);
(vii) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectuses, will not be,
an "investment company" as defined in the Investment Company Act
of 1940, as amended;
(viii) no consent, approval, authorization, filing with or
order of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such
as have been obtained under the Act and such as
21
21
may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the
International Securities by the Managers in the manner
contemplated in this Agreement and in the Prospectuses and such
other approvals (specified in such opinion) as have been
obtained;
(ix) neither the issuance and sale of the International
Securities, nor the consummation of any other of the transactions
herein contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of or imposition
of any lien, charge or encumbrance upon any property or assets of
the Company pursuant to, (i) the charter or by-laws of the
Company, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which
the Company is a party or bound or to which its property is
subject and that is filed as an exhibit to the Registration
Statement, or (iii) any statute, law, rule or regulation which,
in the experience of such counsel, typically is applicable to the
types of transactions contemplated herein or, to the knowledge of
such counsel, any judgment, order or decree applicable to the
Company of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority asserting
jurisdiction over the Company or any of its properties; and
(x) to the knowledge of such counsel, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement except for rights
granted to HEA under the Stockholder Agreement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of California, the General Corporation Law of the State of
Delaware or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
reasonably satisfactory to counsel for the Managers and (B) as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to
the Prospectuses in this paragraph (b) include any supplements thereto
at the Closing Date.
In addition, such counsel shall state that such counsel has participated
in conferences and in telephone conversations with officers and other
representatives of the Company, representatives of the Lead Managers and
representatives of the independent public accountants of the Company,
during which conferences and conversations the contents of the
Registration Statement and the Prospectuses were discussed, and such
counsel has reviewed certain corporate records and documents furnished
to such counsel by the Company and that, although such counsel has not
undertaken to independently verify and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectuses
(except as specified in the foregoing opinion), on the basis of the
foregoing, and such counsel's understanding of the U.S. federal
securities laws, no information has come to the
22
22
attention of such counsel that causes such counsel to believe that the
Registration Statement on the Effective Date or at the Execution Time
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectuses as of their
date and on the Closing Date included or include any untrue statement of
a material fact or omitted or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading (other than financial statements
and schedules and other financial information contained therein, as to
which such counsel need express no opinion).
(c) The Company shall have caused counsel for each Subsidiary
(each such counsel to be reasonably satisfactory to the Lead Managers)
to have furnished to the Lead Managers an opinion, dated the Closing
Date and addressed to the Lead Managers, to the effect that:
(i) Maxtor Singapore has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction in which it is chartered or organized, with
corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its businesses as
described in the Prospectuses, and, to the knowledge of such
counsel, is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the
failure to be so qualified or be in good standing could not
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business
or properties of Maxtor Singapore, whether or not arising from
transactions in the ordinary course of business;
(ii) all the outstanding shares of capital stock of Maxtor
Singapore have been duly and validly authorized and issued and
are fully paid and nonassessable, and except as otherwise set
forth in the Prospectuses, are owned of record by the Company;
(iii) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator
involving Maxtor Singapore or its property which, if determined
adversely to Maxtor Singapore, would have, individually or in the
aggregate, could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of Maxtor Singapore,
whether or not arising from transactions in the ordinary course
of business; and
(iv) neither the issue and sale of the International
Securities, nor the consummation of any other of the transactions
herein contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of or imposition
of any lien, charge or encumbrance upon any property or assets of
23
23
Maxtor Singapore pursuant to, (i) the charter or by-laws of
Maxtor Singapore, (ii) to the knowledge of such counsel, the
terms of any material indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other material
agreement, obligation, condition, covenant or instrument to which
Maxtor Singapore is a party or bound or to which its property is
subject, or (iii) any statute, law, rule or regulation which, in
the experience of such counsel, typically is applicable to the
types of transactions contemplated herein or, to the knowledge of
such counsel, any judgment, order or decree applicable to Maxtor
Singapore of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority asserting
jurisdiction over Maxtor Singapore or any of its property.
In rendering such opinion, such counsel may rely as to matters of fact,
to the extent they deem proper and specified in such opinion, upon
certificates of responsible officers of the Company, Maxtor Singapore
and public officials. References to the Prospectuses in this paragraph
(c) include any supplements thereto at the Closing Date.
(d) HEA shall have caused ▇▇▇ ▇▇▇▇▇▇▇, counsel for HEA, to have
furnished to the Lead Managers his opinion dated the Closing Date and
addressed to the Lead Managers, to the effect that:
(i) HEA is duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction
in which it is chartered or organized, with corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the
Prospectuses, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of the State
of California and, to the knowledge of such counsel, each other
jurisdiction which requires such qualification, except where the
failure to be so qualified or be in good standing could not
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business
or properties of HEA and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course
of business.
(ii) each of this Agreement and the International
Underwriting Agreement has been duly authorized, executed and
delivered by HEA (assuming due authorization and execution by
each party thereto other than HEA);
(iii) HEA is not, and after giving effect to the offering
and sale of the Securities and the application of the proceeds
thereof as described in the Prospectuses, will not be, an
"investment company" as defined in the Investment Company Act of
1940, as amended.
(iv) no consent, approval, authorization, filing with or
order of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such
as have been obtained under the Act and such as
24
24
may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the U.S.
Securities by the U.S. Underwriters in the manner contemplated in
this Agreement and in the Prospectuses and such other approvals
(specified in such opinion) as have been obtained; and
(v) neither the sale of the International Securities being
sold by the Company nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any property
or assets of HEA pursuant to, (i) the charter or by-laws of the
HEA, (ii) to the knowledge of such counsel, the terms of any
material indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other material agreement,
obligation, condition, covenant or instrument to which HEA is a
party or bound or to which its property is subject, or (iii) any
statute, law, rule or regulation which, in the experience of such
counsel, typically is applicable to the types of transactions
contemplated herein or, to the knowledge of such counsel, any
judgment, order or decree applicable to HEA of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority asserting jurisdiction over HEA or
any of its properties. (i) such Subsidiary has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is
chartered or organized, with corporate power and authority to own
or lease, as the case may be, and to operate its properties and
conduct its businesses as described in the Prospectuses, and, to
the knowledge of such counsel, is duly qualified to do business
as a foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification, except
where the failure to be so qualified or be in good standing could
not reasonably be expected to have a material adverse effect on
the condition (financial or otherwise), prospects, earnings,
business or properties of such subsidiary, whether or not arising
from transactions in the ordinary course of business;
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of California, the General Corporation Law of the State of
Delaware or the Federal laws of the United States, to the extent it
deems proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Managers, and (B) as to matters of fact,
to the extent it deems proper, on certificates of responsible officers
of HEA and public officials.
(e) The Lead Managers shall have received from Cleary, Gottlieb,
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Managers, such opinion or opinions,
dated the Closing Date and addressed to the Lead Managers, with respect
to the issuance and sale of the International Securities, the
Registration Statement, the Prospectuses (together with any supplement
thereto) and other related matters as the Lead Managers may reasonably
25
25
require, and the Company and HEA shall have furnished to such counsel
such documents as they reasonably request for the purpose of enabling
them to pass upon such matters.
(f) The Company shall have furnished to the Lead Managers a
certificate of the Company, signed by the Chief Executive Officer and
the Chief Financial Officer of the Company, dated the Closing Date, to
the effect that the signers of such certificate have carefully examined
the Registration Statement, the Prospectuses, any supplements to the
Prospectuses and this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing Date
with the same effect as if made on the Closing Date and the
Company has complied in all material respects with all the
agreements and satisfied in all material respects all the
conditions on its part to be performed or satisfied at or prior
to the Closing Date (such certificate to set forth all known
failures to comply with such agreements or satisfy such
conditions, whether such known failures are material or
immaterial);
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the Company's
knowledge, after due inquiry with the Commission, no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectuses (exclusive of any
supplement thereto), there has been no material adverse effect on
the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and the Subsidiaries, taken
as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectuses (exclusive of any supplement
thereto).
(g) HEA shall have furnished to the Lead Managers a certificate,
signed by the Chief Executive Officer, dated the Closing Date, to the
effect that the signer of such certificate has carefully examined the
Registration Statement, the Prospectuses, any supplement to the
Prospectuses and this Agreement and that the representations and
warranties of HEA in this Agreement are true and correct in all material
respects on and as of the Closing Date to the same effect as if made on
the Closing Date.
(h) The Company shall have caused PricewaterhouseCoopers LLP to
have furnished to the Lead Managers letters, at the Execution Time and
at the Closing Date, dated respectively as of the Execution Time and as
of the Closing Date, in form and substance reasonably satisfactory to
the Lead Managers, confirming that they are independent accountants
within the meaning of the Act and the applicable published rules and
regulations thereunder and that they have performed a review of the
unaudited interim financial information of the Company for the six-month
period ended June 30, 1998 and as at June 30, 1998, as well as for the
six quarterly periods for the period ended
26
26
June 30, 1998 in accordance with Statement on Auditing Standards No. 71,
and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration
Statement and the Prospectuses and reported on by them comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and the
Subsidiaries; their limited review, in accordance with standards
established under Statement on Auditing Standards No. 71, of the
unaudited interim financial information for the six-month period
ended June 30, 1998, and as at June 30, 1998; carrying out
certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and the
audit, executive and compensation committees of the Company and
the Subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and the Subsidiaries as to transactions
and events subsequent to December 27, 1997, nothing came to their
attention which caused them to believe that:
(1) the unaudited financial statements described in
(ii) above and included in the Registration Statement and
the Prospectuses do not comply as to form in all material
respects with the applicable accounting requirements of
the Act and with the published rules and regulations of
the Commission with respect to registration statements on
Form S-1; and said unaudited financial statements are not
in conformity with generally accepted accounting
principles applied on a basis substantially consistent
with that of the audited financial statements included in
the Registration Statement and the Prospectuses;
(2) with respect to the period subsequent to June
30, 1998, there were any changes, at a specified date not
more than five days prior to the date of the letter, in
the long-term debt and capital lease obligations due after
one year of the Company and the Subsidiaries or capital
stock of the Company or increases in the stockholders'
deficit of the Company or decreases in working capital of
the Company and the Subsidiaries as compared with the
amounts shown on the June 30, 1998, consolidated balance
sheet included in the Registration Statement and the
Prospectuses, or for the period from July 1, 1998 to such
specified date there were any decreases, as compared with
the corresponding period in the preceding quarter in total
revenue or income from operations or income before
27
27
income taxes or in per share amounts of net income of the
Company and the Subsidiaries, except in all instances for
changes or decreases set forth in such letter, in which
case the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless said
explanation is not deemed necessary by the U.S.
Representatives; and
(3) the information included in the Registration
Statement and Prospectuses in response to Regulation S-K,
Item 301 (Selected Financial Data), Item 302
(Supplementary Financial Information) and Item 402
(Executive Compensation) is not in conformity with the
applicable disclosure requirements of Regulation S-K.
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and the Subsidiaries) set forth in the Registration
Statement and the Prospectuses, including the information set
forth under the captions "Summary Consolidated Financial Data"
and "Selected Consolidated Financial Data" in the Prospectuses,
agrees with the accounting records of the Company and the
Subsidiaries, excluding any questions of legal interpretation.
References to the Prospectuses in this paragraph (h) include any
supplement thereto at the date of the letter.
(i) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive
of any amendment thereof) and the Prospectuses (exclusive of any
supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (g)
of this Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and the Subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectuses (exclusive of any supplement
thereto) the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the sole judgment of the Lead Managers, so material
and adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the International Securities as contemplated by
the Registration Statement (exclusive of any amendment thereof) and the
Prospectuses (exclusive of any supplement thereto).
(j) Subsequent to the Execution Time, there shall not have been
any decrease in the rating of any of the Company's debt securities by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
28
28
(k) The International Securities shall have been listed and
admitted and authorized for trading on the Nasdaq National Market, and
satisfactory evidence of such actions shall have been provided to the
Lead Managers.
(l) Prior to the Closing Date, all of the conditions set forth in
the U.S. Underwriting Agreement with respect to the obligations of the
U.S. Underwriters to purchase the U.S. Securities shall have been
satisfied and not waived, and the purchase and sale of the U.S.
Underwritten Securities shall have been completed in accordance with the
terms of the U.S. Underwriting Agreement.
(m) Prior to the Closing Date, the Company shall have furnished
to the Lead Managers evidence satisfactory to the Lead Managers that (i)
the Company has obtained an asset securitization facility (or a
commitment to provide an asset securitization facility) in an aggregate
amount reasonably acceptable to the Lead Managers and not guaranteed in
any manner by, or dependent upon or linked in any way to the
creditworthiness of, HEA or any affiliates of HEA and (ii) the Company
has obtained a direct license with SAP Korea Ltd. that provides the
Company with substantially the same terms, rights and services as those
currently available to or received by the Company pursuant to the
license agreement between Hyundai Information Technology Co.
Ltd. and SAP Korea Ltd.
(n) At the Execution Time, the Company shall have furnished to
the U.S. Representatives and the Lead Managers a letter substantially in
the form of Exhibit A hereto from each officer, director, and
stockholder of the Company, which persons are listed on Schedule II
hereto, addressed to the U.S. Representatives and the Lead Managers.
(o) Prior to the Closing Date, the Company and HEA shall have
furnished to the Lead Managers such further information, certificates
and documents as the Lead Managers may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Lead Managers and counsel for the
Managers, this Agreement and all obligations of the Managers hereunder may be
canceled at, or at any time prior to, the Closing Date by the Lead Managers.
Notice of such cancellation shall be given to the Company and HEA in writing or
by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP, counsel for the
Company, at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on the Closing
Date.
7. Reimbursement of Managers' Expenses. If the sale of the
International Securities provided for herein is not consummated because any
condition to the obligations of the Managers set forth in Section 6 hereof is
not satisfied, because of any termination pursuant to
29
29
Section 10 hereof or because of any refusal, inability or failure on the part of
the Company or HEA to perform any agreement herein or comply with any provision
hereof other than by reason of a default by any of the Managers, the Company
will reimburse the Managers severally through ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. on demand for
all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company and HEA
jointly and severally agree to indemnify and hold harmless each Manager, the
directors, officers, employees and agents of each Manager and each person who
controls any Manager within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the International Securities as originally filed or in any
amendment thereof, 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, or arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectuses, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company and HEA
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Manager through the Lead Managers specifically
for inclusion therein; provided, further, that with respect to any untrue
statement or omission of material fact made in any Preliminary Prospectus, the
indemnity agreement contained in this Section 8(a) shall not inure to the
benefit of any Manager from whom the person asserting any such loss, claim,
damage or liability purchased the securities concerned, to the extent that any
such loss, claim, damage or liability of such Manager occurs under the
circumstance where it shall have been determined by final nonappealable judgment
that (w) the Company had previously furnished copies of the International
Prospectus to the Lead Managers, (x) delivery of the International Prospectus
was required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Prospectus was
corrected in the International Prospectus and (z) there was not sent or given to
such person, at or prior to the written confirmation of the sale of such
securities to such person, a copy of the International Prospectus.
This indemnity agreement will be in addition to any liability
which the Company or HEA may otherwise have.
30
30
(b) Each Manager severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, each person who controls the Company within
the meaning of either the Act or the Exchange Act and HEA, to the same extent as
the foregoing indemnity to each Manager, but only with reference to written
information relating to such Manager furnished to the Company by or on behalf of
such Manager through the Lead Managers specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Manager may otherwise have. The
Company and HEA acknowledge that the statements set forth in the last paragraph
of the cover page regarding delivery of the International Securities, the legend
in block capital letters on the inside front cover related to stabilization,
syndicate covering transactions and penalty bids, and under the heading
"Underwriting" in any Preliminary Prospectus and the Prospectuses constitute the
only information furnished in writing by or on behalf of the several Managers
for inclusion in any Preliminary Prospectus or the Prospectuses.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action)
31
31
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and HEA, jointly and severally,
and the Managers severally agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "Losses") to
which the Company, HEA and one or more of the Managers may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company and HEA on the one hand and by the Managers on the other from the
offering of the International Securities; provided, however, that in no case
shall any Manager (except as may be provided in any agreement among underwriters
relating to the offering of the International Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
International Securities purchased by such Manager hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Company and HEA, jointly and severally, and the Managers severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and HEA on the one
hand and of the Managers on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and HEA shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by them, and benefits received by the Managers shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Prospectuses. Relative fault shall be determined
by reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company or HEA on the one
hand or the Managers on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company, HEA and the Managers agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), 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. For purposes of
this Section 8, each person who controls a Manager within the meaning of either
the Act or the Exchange Act and each director, officer, employee and agent of a
Manager shall have the same rights to contribution as such Manager, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
(e) The liability of HEA under the indemnity and contribution
provisions contained in this Section 8 and the corresponding section in the U.S.
Underwriting Agreement shall be limited to an amount equal to $25,000,000;
provided, however, that the Managers shall not make any claim for indemnity or
contribution against HEA pursuant to this Section 8 unless the Managers shall
have first made a claim on the Company pursuant to this Section 8 and such claim
is not paid within 15 days from the time it is made. The Company and HEA may
agree, as
32
32
among themselves and without limiting the rights of the Managers under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
9. Default by a Manager. If any one or more Managers shall fail
to purchase and pay for any of the International Securities agreed to be
purchased by such Manager or Managers hereunder and such failure to purchase
shall constitute a default in the performance of its or their obligations under
this Agreement, the remaining Managers shall be obligated severally to take up
and pay for (in the respective proportions which the amount of International
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate amount of International Securities set forth opposite the names of all
the remaining Managers) the International Securities which the defaulting
Manager or Managers agreed but failed to purchase; provided, however, that in
the event that the aggregate amount of International Securities which the
defaulting Manager or Managers agreed but failed to purchase shall exceed 10% of
the aggregate amount of International Securities set forth in Schedule I hereto,
the remaining Managers shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the International Securities, and if
such nondefaulting Managers do not purchase all the International Securities,
then the Company shall have 36 hours within which it may, but is not obligated,
to find one or more substitute underwriters satisfactory to the Lead Managers to
purchase such International Securities upon the terms set forth in this
Agreement and, if the Company is unable to find one or more such underwriters
that are satisfactory to the Lead Managers, this Agreement will terminate
without liability to any nondefaulting Manager, HEA or the Company. In the event
of a default by any Manager as set forth in this Section 9, the Closing Date
shall be postponed for such period, not exceeding five Business Days, as the
Lead Managers shall determine in order that the required changes in the
Registration Statement and the Prospectuses or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Manager of its liability, if any, to the Company, HEA and any
nondefaulting Manager for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Lead Managers, by notice given to the Company
prior to delivery of and payment for the International Securities, if at any
time prior to such time (i) trading in any of the Company's securities shall
have been suspended by the Commission or the Nasdaq National Market or trading
in securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on either of such Exchanges, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Lead Managers, impractical or inadvisable to proceed with the
offering or delivery of the International Securities as contemplated by the
Prospectuses (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of HEA and of the Managers set forth in or made
pursuant to this Agreement will remain in full
33
33
force and effect, regardless of any investigation made by or on behalf of any
Manager, HEA or the Company or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the International Securities. The provisions of Sections 7 and 8
hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Lead Managers, will be mailed,
delivered or telefaxed to the SBI General Counsel (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and
confirmed to the General Counsel, c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel; or, if sent to
the Company, will be mailed, delivered or telefaxed to Chief Financial Officer
c/o of Maxtor Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (fax
no. (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel c/o Maxtor Corporation,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (fax no. (▇▇▇) ▇▇▇-▇▇▇▇), attention
of the Legal Department, with a copy to ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ (fax no. (650)
▇▇▇-▇▇▇▇) at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; or if sent to HEA, will be mailed, delivered or telefaxed to
Chief Executive Officer, c/o Hyundai Electronics America, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (fax no. (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the
General Counsel c/o Hyundai Electronics America, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (fax no. (▇▇▇) ▇▇▇-▇▇▇▇), attention of the Legal
Department.
13. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City
or London.
34
34
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement
is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
with respect to the offering of the U.S. Securities and the
International Securities, as the case may be, referred to in paragraph
1(i)(a) above and any preliminary prospectus with respect to the
offering of the U.S. Securities and the International Securities, as the
case may be, included in the Registration Statement at the Effective
Date that omits Rule 430A Information.
"Prospectuses" shall mean, collectively, the U.S. Prospectus and
the International Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective) and,
in the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date,
shall also mean such registration statement as so amended or such Rule
462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under
the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
"United States or Canadian Persons" means any person who is a
national or resident of the United States or Canada, any corporation,
partnership or other entity created or organized in or under the laws of
the United States or Canada or of any political subdivision thereof, and
any estate or trust the income of which is subject to United States or
Canadian federal income taxation, regardless of its source (other than a
35
35
foreign branch of such entity) and includes any United States or
Canadian branch of a person other than a United States or Canadian
Person.
36
36
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, HEA and the several Managers.
Very truly yours,
Maxtor Corporation
By:
------------------------------
Name:
Title:
Hyundai Electronics America
By:
------------------------------
Name:
Title:
37
37
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇ Brothers International (Europe)
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
By: ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By:
Name:
Title:
For themselves and the other
several Managers named in
Schedule I to the foregoing
Agreement.
38
SCHEDULE I
NUMBER OF INTERNATIONAL
UNDERWRITERS UNDERWRITTEN SECURITIES
------------ TO BE PURCHASED
---------------
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ............................................
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC.........................................
▇▇▇▇▇▇ Brothers International (Europe)........................
▇▇▇▇▇▇▇ ▇▇▇▇▇ International...................................
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC.........................
---------
Total................................................. 9,500,000
=========
39
SCHEDULE II
List of Officers, Directors and Shareholders
Executive Officers and Directors
Name Position
---- --------
▇▇. ▇.▇. ▇▇▇▇ Chairman of the Board of Directors
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ President, Chief Executive Officer, Director
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Director
▇▇▇▇▇ See ▇▇▇▇▇ Director
▇▇▇▇▇▇▇ ▇▇▇▇ Director
Y.H. ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Senior Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Senior Vice President
▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President
▇▇▇▇ ▇▇▇▇▇▇▇▇ Vice President
▇.▇. ▇▇▇ Vice President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Vice President
K.H. Teh Vice President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President
Principal Stockholders
Hyundai Electronics America
40
[FORM OF LOCK-UP AGREEMENT] EXHIBIT A
Maxtor Corporation
Public Offering of Common Stock
, 1998
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
As U.S. Representatives of the several Underwriters,
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇ Brothers International (Europe)
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
As Lead Managers of the several Managers,
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with (i) the
proposed Underwriting Agreement (the "U.S. Underwriting Agreement"), among
Maxtor Corporation, a Delaware corporation (the "Company"), Hyundai Electronics
America ("HEA"), a stockholder of the Company, and a group of U.S. Underwriters
named therein and (ii) the proposed Underwriting Agreement (the "International
Underwriting Agreement"), among the Company, HEA and a group of Managers named
therein, relating to an underwritten public offering of Common Stock, $0.01 par
value (the "Common Stock"), of the Company.
In order to induce you and the other U.S. Underwriters and
Managers to enter into the U.S. Underwriting Agreement and the International
Underwriting Agreement, the undersigned will not, without the prior written
consent of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., offer, sell, contract to sell, pledge or otherwise
dispose of, or file (or participate in the filing of) a registration statement
with the Securities and Exchange Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations of
41
the Securities and Exchange Commission promulgated thereunder with respect to,
any shares of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 180 days after the
date of this Agreement, other than shares of Common Stock disposed of as bona
fide gifts approved by ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
2
42
If for any reason the U.S. Underwriting Agreement and the
International Underwriting Agreement shall be terminated prior to the Closing
Date (as defined in the U.S. Underwriting Agreement and the International
Underwriting Agreement), the agreement set forth above shall likewise be
terminated.
Yours very truly,
By:
------------------------------
Name:
Title:
