EXHIBIT 1.1
2,600,000 Shares
KULICKE AND ▇▇▇▇▇ INDUSTRIES, INC.
Common Stock
UNDERWRITING AGREEMENT
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_____ __, 1995
▇▇▇▇▇▇▇▇▇▇ SECURITIES
PAINEWEBBER INCORPORATED
As Representatives of the several Underwriters
C/▇ ▇▇▇▇▇▇▇▇▇▇ SECURITIES
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
SECTION 1
INTRODUCTORY
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Kulicke and ▇▇▇▇▇ Industries, Inc., a Pennsylvania corporation (the
"Company"), proposes to issue and sell 2,500,000 shares of its authorized but
unissued Common Stock (the "Common Stock"), and C. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and his spouse
(collectively, the "Selling Shareholder") propose to sell 100,000 shares of the
Company's issued and outstanding Common Stock, to the several underwriters named
in Schedule A annexed hereto (the "Underwriters"), for whom you are acting as
Representatives. Said aggregate of 2,600,000 shares are herein called the "Firm
Common Shares." In addition, the Company and the Selling Shareholder propose to
grant to the Underwriters an option to purchase up to an aggregate of 390,000
additional shares of Common Stock (the "Optional Common Shares"), as provided in
Section 5 hereof. The Firm Common Shares and, to the extent such option is
exercised, the Optional Common Shares are hereinafter collectively referred to
as the "Common Shares." The Common Shares to be sold by the Company are herein
called the "Company Shares" and the Common Shares to be sold by the Selling
Shareholder are herein called the "Selling Shareholder Shares."
You have advised the Company and the Selling Shareholder that the
Underwriters propose to make a public offering of their respective portions of
the Common Shares on the effective date of the registration statement
hereinafter referred to, or as soon thereafter as in your judgment is advisable.
The Company and the Selling Shareholder hereby confirm their respective
agreements with respect to the purchase of the Common Shares by the Underwriters
as follows:
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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AND THE SELLING SHAREHOLDER
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Each of the Company and the Selling Shareholder jointly and severally
represent and warrant to the several Underwriters that:
(a) Amendment No. 1 to a registration statement on Form S-3 (File No.
33-69734) with respect to the Common Shares has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and has been
filed with the Commission. The Company has prepared and has filed or proposes
to file prior to the effective date of such registration statement an amendment
or amendments to such registration statement, which amendment or amendments have
been or will be similarly prepared. There have been delivered to you three
signed copies of Amendment No. 1 to such registration statement and all
subsequent amendments, together with three copies of each exhibit filed
therewith. Conformed copies of Amendment No. 1 to such registration statement
and all subsequent amendments (but without exhibits) and of the related
preliminary prospectus have been delivered to you in such reasonable quantities
as you have requested for each of the Underwriters. The Company will next file
with the Commission one of the following: (i) prior to effectiveness of such
registration statement, a further amendment thereto, including the form of final
prospectus, (ii) a final prospectus in accordance with Rules 430A and 424(b) of
the Rules and Regulations, or (iii) if and only if so requested by you, a term
sheet (the "Term Sheet") as described in and in accordance with Rules 434 and
424(b) of the Rules and Regulations. As filed, such amendment and form of final
prospectus, such final prospectus or such Term Sheet shall include all Rule 430A
Information (as hereinafter defined) and, except to the extent that you shall
agree in writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the date and time that this Agreement was
executed and delivered by the parties hereto, or, to the extent not completed at
such date and time, shall contain only such specific additional information and
other changes (beyond that contained in the latest preliminary prospectus) as
the Company shall have previously advised you in writing would be included or
made therein.
The term "Registration Statement" as used in this Agreement shall mean such
registration statement at the time such registration statement becomes effective
and, in the event any post-effective amendment thereto becomes effective prior
to the First Closing Date (as hereinafter defined), shall also mean such
registration statement as so amended; provided, however, that such term shall
also include all Rule 430A Information deemed to be included in such
registration statement at the time such registration statement becomes effective
as provided by Rule 430A of the Rules and Regulations. The term "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in the preceding
paragraph and any preliminary prospectus included in the Registration Statement
at the time it becomes effective that omits Rule 430A Information. The term
"Prospectus" as used in this Agreement shall mean (i) the prospectus relating to
the Common Shares in the form in which it is first filed with the Commission
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pursuant to Rule 424(b) of the Rules and Regulations or (ii) if a Term Sheet is
not used and no filing pursuant to Rule 424(b) of the Rules and Regulations is
required, the form of final prospectus included in the Registration Statement at
the time such registration statement becomes effective or (iii) if a Term Sheet
is used, the Term Sheet in the form in which it is first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations, together with
the Preliminary Prospectus included in the Registration Statement at the time it
becomes effective. The term "Rule 430A Information" means information with
respect to the Common Shares and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective pursuant to Rule 430A
of the Rules and Regulations. Any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein (the "Incorporated Documents")
pursuant to Form S-3 under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be.
(b) The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus, and each Preliminary Prospectus has conformed
in all material respects to the requirements of the Act and the Rules and
Regulations and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and at the time the Registration Statement becomes
effective, and at all times subsequent thereto up to and including each Closing
Date hereinafter mentioned, the Registration Statement and the Prospectus, and
any amendments or supplements thereto, will contain all material statements and
information required to be included therein by the Act and the Rules and
Regulations and will in all material respects conform to the requirements of the
Act and the Rules and Regulations, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, will include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, no representation or warranty contained in this subsection
2(b) shall be applicable to information contained in or omitted from any
Preliminary Prospectus, the Registration Statement, the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter,
directly or through the Representatives, specifically for use in the preparation
thereof. The documents incorporated by reference in the Prospectus, when they
were filed with the Commission, conformed in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(c) The Company does not own or control, directly or indirectly, any
significant subsidiary (within the meaning of Rule 1-02 of Regulation S-X)
corporation, association or other entity which holds assets or properties
(including intangible rights) or through which sales are made that could
reasonably be expected to be material to its business other than the
subsidiaries listed on Schedule B to this Agreement (the "Material
Subsidiaries"). Notwithstanding any other provision of this Agreement, all
representations and warranties with respect to Circle "S" Industries, Inc. and
American Fine Wire Corporation and their subsidiaries made in this Agreement
shall be deemed to be limited to the respective
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best knowledge of the Company and the Selling Shareholder. The Company and each
of its Material Subsidiaries have been duly incorporated and are validly
existing as corporations in good standing under the laws of their respective
jurisdictions of incorporation, with full power and authority (corporate and
other) to own and lease their properties and conduct their respective businesses
as described in the Prospectus; the Company owns all of the outstanding capital
stock of its Material Subsidiaries free and clear of all claims, liens, charges
and encumbrances; the Company and each of its Material Subsidiaries are in
possession of and operating in compliance with all authorizations, licenses,
permits, consents, certificates and orders material to the conduct of their
respective businesses, all of which are valid and in full force and effect; the
Company and each of its Material Subsidiaries are duly qualified to do business
and in good standing as foreign corporations in each jurisdiction in which the
ownership or leasing of properties or the conduct of their respective businesses
requires such qualification, except for jurisdictions in which the failure to so
qualify would not have a material adverse effect upon the Company and its
subsidiaries taken as a whole; and no proceeding has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification.
(d) The Company has an authorized and outstanding capital stock as set
forth under the heading "Capitalization" in the Prospectus; the issued and
outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable, are duly listed on the Nasdaq Stock Market,
have been issued in compliance with all federal and state securities laws, were
not issued in violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities, and conform to the description thereof
contained in the Prospectus, including in the Incorporated Documents. All
issued and outstanding shares of capital stock of each Material Subsidiary of
the Company have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned beneficially by the Company free and clear of all
liens, encumbrances, equities, claims, security interests, voting trusts or
other defects of title whatsoever. Except as disclosed in or contemplated by
the Prospectus and the financial statements of the Company, and the related
notes thereto, included in or incorporated by reference in the Prospectus,
neither the Company nor any Material Subsidiary has outstanding any options to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations. The description of the Company's
stock option, stock bonus and other stock plans or arrangements, and the options
or other rights granted and exercised thereunder, set forth in or incorporated
by reference in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.
(e) The Common Shares to be sold by the Company have been duly authorized
and, when issued, delivered and paid for in the manner set forth in this
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in the
Prospectus, including in the Incorporated Documents. No preemptive rights or
other rights to subscribe for or purchase exist with respect to the issuance and
sale of the Common Shares by the Company pursuant to this Agreement. No
shareholder of the Company has any right to require the Company to register the
sale of any shares owned by such shareholder under the Act in the public
offering contemplated by this Agreement. No further approval or authority of
the shareholders or the Board of
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Directors of the Company will be required for the transfer and sale of the
Common Shares to be sold by the Selling Shareholder or the issuance and sale of
the Common Shares to be sold by the Company as contemplated herein.
(f) The Company has full legal right, power and authority to enter into
this Agreement and perform the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by the Company and constitutes
a valid and binding obligation of the Company in accordance with its terms. The
making and performance of this Agreement by the Company and the consummation of
the transactions herein contemplated will not violate any provision of the
articles of incorporation or bylaws, or other organizational documents, of the
Company or any of its subsidiaries, and will not conflict with, result in the
breach or violation of, or constitute, either by itself or upon notice or the
passage of time or both, a default under any agreement, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of its respective properties may be bound or affected,
any statute or any authorization, judgment, decree, order, rule or regulation of
any court or any regulatory body, administrative agency or other governmental
body applicable to the Company or any of its subsidiaries or any of their
respective properties. No consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other governmental body is
required for the execution and delivery of this Agreement or the consummation of
the transactions contemplated by this Agreement, except for compliance with the
Act, the Blue Sky laws applicable to the public offering of the Common Shares by
the several Underwriters and the clearance of such offering with the National
Association of Securities Dealers, Inc. (the "NASD").
(g) Price Waterhouse LLP and Luboshitz, Kaiserer & Co., who have expressed
their opinions with respect to the financial statements and schedules of the
Company on a consolidated basis and Kulicke and ▇▇▇▇▇ (Israel) Ltd.,
respectively, included in or incorporated by reference in the Prospectus and in
the Registration Statement, are independent accountants as required by the Act
and the Rules and Regulations. To the best of the Company's knowledge, Deloitte
and Touche, LLP , who have expressed their opinion with respect to the financial
statements of Circle "S" Industries, Inc. incorporated by reference in the
Prospectus and in the Registration Statement, are independent accountants as
required by the Act and the Rules and Regulations.
(h) The financial statements and schedules of the Company and its
subsidiaries and of Circle "S" Industries, Inc., and the related notes thereto,
included in or incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company and its
subsidiaries and, to the best of the Company's knowledge, of Circle "S"
Industries, Inc. as of the respective dates of such financial statements and
schedules, and the results of operations and cash flows of the Company and its
subsidiaries and, to the best of the Company's knowledge, of Circle "S"
Industries, Inc. for the respective periods covered thereby. Such statements,
schedules and related notes have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis as certified by the
independent accountants named in subsection 2(g). No other financial statements
or schedules are required to be included in or incorporated by reference in the
Registration Statement. The selected financial data set forth in the Prospectus
under the captions "Prospectus Summary --
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Summary Consolidated Financial Data," "Capitalization," "Selected Consolidated
Financial Data" and "Unaudited Pro Forma Financial Information" fairly present
the information set forth therein on the basis stated in the Registration
Statement.
(i) Except as disclosed in the Prospectus, and except as to defaults which
individually or in the aggregate would not be material to the Company and its
subsidiaries taken as a whole, neither the Company nor any of its subsidiaries
is in violation or default of any provision of its articles of incorporation or
bylaws, or other organizational documents, or is in breach of or default with
respect to any provision of any agreement, judgment, decree, order, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other instrument
to which it is a party or by which it or any of its properties are bound; and
there does not exist any state of facts which constitutes an event of default on
the part of the Company or any such subsidiary as defined in such documents or
which, with notice or lapse of time or both, would constitute such an event of
default.
(j) There are no contracts or other documents required to be described in
the Registration Statement or to be filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations or to the Incorporated
Documents by the Exchange Act or the rules and regulations thereunder which have
not been described or filed as required. The contracts so described in the
Prospectus are in full force and effect on the date hereof; and neither the
Company nor any of its subsidiaries, nor to the best of the Company's knowledge,
any other party is in breach of or default under any of such contracts. Without
limiting the generality of the foregoing, the merger of Kulicke and ▇▇▇▇▇
Acquisition Corporation into Circle "S" Industries, Inc. contemplated by the
Agreement and Plan of Acquisition, dated September 14, 1995 (the "AFW
Agreement") by and among the Company, Kulicke & ▇▇▇▇▇ Acquisition Corporation,
Circle "S" Industries, Inc. and various shareholders of Circle "S" Industries,
Inc., has been consummated and the AFW Agreement (i) has been duly authorized,
executed and delivered by the Company and, to the best of the Company's
knowledge, by each other party thereto, (ii) to the best of the Company's
knowledge is a valid and binding agreement, enforceable in accordance with its
terms, and (iii) is in full force and effect, and the transactions contemplated
by the AFW Agreement have been consummated.
(k) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or threatened to which the
Company or any of its subsidiaries is or may be a party or of which property
owned or leased by the Company or any of its subsidiaries is or may be the
subject, or related to environmental or discrimination matters, which actions,
suits or proceedings might, individually or in the aggregate, prevent or
adversely affect the transactions contemplated by this Agreement or result in a
material adverse change in the condition (financial or otherwise), properties,
business, results of operations or prospects of the Company and its subsidiaries
taken as a whole; and no labor disturbance by the employees of the Company or
any of its subsidiaries exists or is imminent or has been threatened which might
be expected to affect adversely such condition, properties, business, results of
operations or prospects. Neither the Company nor any of its subsidiaries is a
party or subject to the provisions of any material injunction, judgment, decree
or order of any court, regulatory body, administrative agency or other
governmental body.
(l) The Company or the applicable subsidiary has good and marketable title
to all the properties and assets reflected as owned in the financial statements
hereinabove described (or elsewhere
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in the Prospectus), and is subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (i) those, if any, reflected in such financial
statements (or elsewhere in the Prospectus), or (ii) those which are not
material in amount and do not adversely affect the use made or proposed to be
made of such property by the Company and its subsidiaries. The Company or the
applicable subsidiary holds its leased properties under valid and binding
leases, with such exceptions as are not materially significant in relation to
the business of the Company. Except as disclosed in the Prospectus, the Company
owns or leases all such properties as are necessary to its operations as now
conducted or as proposed to be conducted.
(m) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, and except as described in or
specifically contemplated by the Prospectus: (i) the Company and its
subsidiaries have not incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or written
agreement or other transaction which is not in the ordinary course of business
or which could result in a material reduction in the future earnings of the
Company and its subsidiaries taken as a whole; (ii) the Company and its
subsidiaries have not sustained any material loss or interference with their
respective businesses or properties from fire, flood, windstorm, accident or
other calamity, whether or not covered by insurance; (iii) the Company has not
paid or declared any dividends or other distributions with respect to its
capital stock and the Company and its subsidiaries are not in default in the
payment of principal or interest on any outstanding debt obligations; (iv) there
has not been any change in the capital stock (other than upon the sale of the
Common Shares hereunder or the exercise of outstanding stock options) or
indebtedness material to the Company and its subsidiaries taken as a whole
(other than in the ordinary course of business); and (v) there has not been any
material adverse change in the condition (financial or otherwise), business,
properties, results of operations or prospects of the Company and its
subsidiaries taken as a whole.
(n) Except as disclosed in the Prospectus: (i) the Company and its
subsidiaries have sufficient trademarks, trade names, patent rights, mask works,
copyrights, licenses, approvals and governmental authorizations to conduct their
businesses as now conducted; (ii) the expiration of any trademarks, trade names,
patent rights, mask works, copyrights, licenses, approvals or governmental
authorizations would not have a material adverse effect on the condition
(financial or otherwise), business, results of operations or prospects of the
Company and its subsidiaries taken as a whole; and (iii) the Company has no
knowledge of any material infringement by it or its subsidiaries of any
trademark, trade name right, patent right, mask work, copyright, license, trade
secret or other similar rights of others, and there is no claim being made
against the Company or its subsidiaries regarding trademark, trade name, patent,
mask work, copyright, license, trade secret or other infringement that could
have a material adverse effect on the condition (financial or otherwise),
business, results of operations or prospects of the Company and its subsidiaries
taken as a whole.
(o) The Company has not been advised, and has no reason to believe, that
either it or any of its subsidiaries is not conducting business in compliance
with all applicable laws, rules and regulations of the jurisdictions in which it
is conducting business, including, without limitation, all applicable local,
state and federal environmental laws and regulations, except where failure to be
so in compliance would not materially adversely affect the condition (financial
or otherwise), business, results of operations or prospects of the Company and
its subsidiaries taken as a whole. No property which is owned, leased or
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occupied by the Company has been designated as a Superfund site pursuant to the
Comprehensive Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. (S) 9601, et seq.), or otherwise designated as a contaminated site under
applicable state or local law.
(p) The Company and its subsidiaries have filed all required federal, state
and foreign income and franchise tax returns and have paid all taxes shown as
due thereon; and the Company has no knowledge of any tax deficiency which has
been or might be asserted or threatened against the Company or its subsidiaries
which could materially and adversely affect the business, operations or
properties of the Company and its subsidiaries taken as a whole.
(q) The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(r) The Company has not distributed and will not distribute prior to the
First Closing Date or any Subsequent Closing Date any offering material in
connection with the offering and sale of the Common Shares other than the
Prospectus, the Registration Statement and the other materials permitted by the
Act.
(s) The Company and its subsidiaries maintain insurance of the types and in
the amounts generally deemed adequate for its business, all of which insurance
is in full force and effect.
(t) Neither the Company nor any of its subsidiaries has, directly or
indirectly, at any time during the last five years (i) made any unlawful
contribution to any candidate for foreign office, or failed to disclose fully
any contribution in violation of law, or (ii) made any payment to any federal or
state governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States of any jurisdiction thereof.
(u) The Company has not taken and will not take, directly or indirectly,
any action designed to or which has constituted or which might be reasonably
expected to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Common Shares.
(v) Each officer and director of the Company listed in the Registration
Statement under the caption "Management," has agreed in writing that such person
will not, for a period of seventy-five (75) days after the date of the
Prospectus, offer to sell, contract to sell, or otherwise dispose of any shares
of Common Stock or securities convertible into or exchangeable for shares of
Common Stock now owned or hereafter acquired directly by such person or with
respect to which such person has or hereafter acquires the power of disposition,
otherwise than by will, pursuant to the laws of descent and distribution, the
surrender of shares in payment of the exercise price of options under the
Company's option plans, or with the prior written consent of ▇▇▇▇▇▇▇▇▇▇
Securities, which consent may be withheld at the sole discretion of ▇▇▇▇▇▇▇▇▇▇
Securities.
(w) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with
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management's general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets, (iii) access to assets is permitted only in accordance with management's
general or specific authorization, and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(x) There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of them
required to be disclosed in the Registration Statement or Prospectus, that are
not so disclosed.
(y) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba.
(z) The Common Shares have been reserved for inclusion, subject to official
notice of issuance, in the Nasdaq National Market.
SECTION 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
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OF THE SELLING SHAREHOLDER
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(a) The Selling Shareholder, represents and warrants to, and agrees with,
the several Underwriters that:
(i) Such Selling Shareholder has, and on the First Closing Date and
any Subsequent Closing Date hereinafter mentioned will have, good and marketable
title to the Common Shares proposed to be sold by such Selling Shareholder
hereunder on such Closing Date and full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver such Common Shares
hereunder, free and clear of all voting trust arrangements, liens, encumbrances,
equities, security interests, restrictions and claims whatsoever; and upon
delivery of and payment for such Common Shares hereunder, the Underwriters will
acquire good and marketable title thereto, free and clear of all liens,
encumbrances, equities, claims, restrictions, security interests, voting trusts
or other defects of title whatsoever.
(ii) Such Selling Shareholder has executed and delivered a Custody
Agreement (hereinafter referred to as the "Shareholder's Agreement") and in
connection herewith such Selling Shareholder further represents, warrants and
agrees that such Selling Shareholder has deposited in custody, under the
Shareholder's Agreement, with the agent named therein (the "Agent") as
custodian, certificates in negotiable form for the Common Shares to be sold
hereunder by such Selling Shareholder, for the purpose of further delivery
pursuant to this Agreement. Such Selling Shareholder agrees that the Common
Shares to be sold by such Selling Shareholder on deposit with the Agent are
subject to the interests of the Company and the Underwriters, that the
arrangements made for such custody are to that
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extent irrevocable, and that the obligations of such Selling Shareholder
hereunder shall not be terminated, except as provided in this Agreement or in
the Shareholder's Agreement, by any act of such Selling Shareholder, by
operation of law, by the death or incapacity of such Selling Shareholder or by
the occurrence of any other event. If the Selling Shareholder should die or
become incapacitated, or if any other event should occur, before the delivery of
the Common Shares hereunder, the documents evidencing Common Shares then on
deposit with the Agent shall be delivered by the Agent in accordance with the
terms and conditions of this Agreement as if such death, incapacity or other
event had not occurred, regardless of whether or not the Agent shall have
received notice thereof. This Agreement and the Shareholder's Agreement have
been duly executed and delivered by or on behalf of such Selling Shareholder and
the form of such Shareholder's Agreement has been delivered to you.
(iii) The performance of this Agreement and the Shareholder's Agreement
and the consummation of the transactions contemplated hereby and by the
Shareholder's Agreement will not result in a breach or violation by such Selling
Shareholder of any of the terms or provisions of, or constitute a default by
such Selling Shareholder under, any indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease, franchise, license or other
agreement or instrument to which such Selling Shareholder is a party or by which
such Selling Shareholder or any of his or her properties is bound, any statute,
or any judgment, decree, order, rule or regulation of any court or governmental
agency or body applicable to such Selling Shareholder or any of his or her
properties.
(iv) Such Selling Shareholder has not taken and will not take, directly
or indirectly, any action designed to 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 to facilitate the sale or resale of the
Common Shares.
(v) Each Preliminary Prospectus and the Prospectus, insofar as it has
related to such Selling Shareholder, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made; and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, as it relates to such Selling Shareholder, will
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(b) The Selling Shareholder agrees with the Company and the Underwriters
not to offer to sell, sell or contract to sell or otherwise dispose of any
shares of Common Stock or securities convertible into or exchangeable for any
shares of Common Stock, for a period of seventy-five (75) days after the date of
the Prospectus otherwise than by will, pursuant to the laws of descent and
distribution, the surrender of shares in payment of the exercise price of
options under the Company's option plans, or with the prior written consent of
▇▇▇▇▇▇▇▇▇▇ Securities, which consent may be withheld at the sole discretion of
▇▇▇▇▇▇▇▇▇▇ Securities.
-10-
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS
--------------------------------------------------
The Representatives, on behalf of the several Underwriters, represent and
warrant to the Company and to the Selling Shareholder that the information set
forth (i) on the cover page of the Prospectus with respect to price,
underwriting discounts and commissions and terms of offering and (ii) under
"Underwriting" in the Prospectus was furnished to the Company by and on behalf
of the Underwriters for use in connection with the preparation of the
Registration Statement and the Prospectus and is correct in all material
respects. The Representatives represent and warrant that they have been
authorized by each of the other Underwriters as the Representatives to enter
into this Agreement on its behalf and to act for it in the manner herein
provided.
SECTION 5
PURCHASE, SALE AND DELIVERY OF COMMON SHARES
--------------------------------------------
On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, (i) the
Company agrees to issue and sell to the Underwriters 2,500,000 of the Firm
Common Shares, and (ii) the Selling Shareholder agrees to sell to the
Underwriters an aggregate of 100,000 of the Firm Common Shares. The
Underwriters agree, severally and not jointly, to purchase from the Company and
the Selling Shareholder, respectively, the number of Firm Common Shares
described below. The purchase price per share to be paid by the several
Underwriters to the Company and to the Selling Shareholder, respectively, shall
be $_____ per share.
The obligation of each Underwriter to the Company shall be to purchase from
the Company that number of full shares which (as nearly as practicable, as
determined by you) bears to 2,500,000 in the same proportion as the number of
shares which is set forth opposite the name of such Underwriter in Schedule A
hereto bears to the total number of Firm Common Shares. The obligation of each
Underwriter to the Selling Shareholder shall be to purchase from the Selling
Shareholder that number of full shares which (as nearly as practicable, as
determined by you) bears to 100,000 in the same proportion as the number of
shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Common Shares.
Delivery of certificates for the Firm Common Shares to be purchased by the
Underwriters and payment therefor shall be made at the offices of ▇▇▇▇▇▇▇▇▇▇
Securities, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (or such other
place as may be agreed upon by the Company and the Representatives) at such time
and date, not later than the third full business day following the first date
that any of the Common Shares are released by you for sale to the public, as you
shall designate by at least 48 hours prior notice to the Company (or at such
other time and date, not later than one week after such third full business day,
as may be agreed upon by the Company and the Underwriters) (the "First Closing
Date"); provided, however, that if the Prospectus is at any time prior to the
First Closing Date
-11-
recirculated to the public, the First Closing Date shall occur upon the later of
the third full business day following the first date that any of the Common
Shares are released by you for sale to the public or the date that is 48 hours
after the date that the Prospectus has been so recirculated.
Delivery of certificates for the Firm Common Shares shall be made by or on
behalf of the Company and the Selling Shareholder to you, for the respective
accounts of the Underwriters with respect to the Firm Common Shares to be sold
by the Company and by the Selling Shareholder against payment by you, for the
accounts of the several Underwriters, of the purchase price therefor by
certified or official bank checks payable in next day funds or by wire transfer
to the order of the Company and of the Agent in proportion to the number of Firm
Common Shares to be sold by the Company and the Selling Shareholder,
respectively. The certificates for the Firm Common Shares shall be registered
in such names and denominations as you shall have requested at least two full
business days prior to the First Closing Date, and shall be made available for
checking and packaging on the business day preceding the First Closing Date at a
location in New York, New York, as may be designated by you. Time shall be of
the essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company and the Selling Shareholder hereby grant an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
390,000 Optional Common Shares at the purchase price per share to be paid for
the Firm Common Shares, for use solely in covering any over-allotments made by
you for the account of the Underwriters in the sale and distribution of the Firm
Common Shares. The option granted hereunder may be exercised at any time (or
from time to time) on or before the thirtieth (30th) day after the first date
that any of the Common Shares are released by you for sale to the public, upon
notice by you to the Company and the Selling Shareholder setting forth the
aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, the names and denominations in which the certificates for
such shares are to be registered and the time and place at which such
certificates will be delivered. The time of any delivery of Optional Common
Shares (which may not be earlier than the First Closing Date), being herein
referred to as a "Subsequent Closing Date," shall be determined by you, but if
at any time other than the First Closing Date shall be three business days after
delivery of such notice of exercise. The number of Optional Common Shares to be
purchased by each Underwriter shall be determined by multiplying the number of
Optional Common Shares to be sold by the Company and the Selling Shareholder
pursuant to such notice of exercise by a fraction, the numerator of which is the
number of Firm Common Shares to be purchased by such Underwriter as set forth
opposite its name in Schedule A and the denominator of which is the total number
of Firm Common Shares (subject to such adjustments to eliminate any fractional
share purchases as you in your discretion may make). The number of Optional
Common Shares to be sold by the Selling Shareholder shall be determined by
multiplying the number of Optional Common Shares to be purchased by the
Underwriters pursuant to such notice of exercise by a fraction, the numerator of
which is 15,000, which corresponds to the total number of Optional Common Shares
available from such Selling Shareholder, and the denominator of which is the
total number of Optional Common Shares (subject to such adjustments to eliminate
any fractional share purchases as you in your discretion may make). The number
of Optional Common Shares to be sold by the Company shall
-12-
be determined by multiplying the number of Optional Common Shares to be
purchased by the Underwriters pursuant to such notice of exercise by a fraction,
the numerator of which is 375,000, which corresponds to the total number of
Optional Common Shares available from the Company, and the denominator of which
is the total number of Optional Common Shares (subject to such adjustments to
eliminate any fractional share purchases as you in your discretion may make).
Certificates for the Optional Common Shares will be made available for checking
and packaging on the business day preceding a Subsequent Closing Date at a
location in New York, New York, as may be designated by you. The manner of
payment for and delivery of the Optional Common Shares shall be the same as for
the Firm Common Shares purchased from the Selling Shareholder as specified in
the two preceding paragraphs. At any time before lapse of the option, you may
cancel such option by giving written notice of such cancellation to the Company
and the Selling Shareholder. If the option is canceled or expires unexercised
in whole or in part, the Company will deregister under the Act the number of
Optional Common Shares as to which the option has not been exercised.
You have advised the Company and the Selling Shareholder that each
Underwriter has authorized you to accept delivery of its Common Shares, to make
payment and to evidence receipt therefor. You, individually and not as the
Representatives of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by you by the First Closing Date or a Subsequent
Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
Subject to the terms and conditions hereof, the Underwriters propose to
make a public offering of their respective portions of the Common Shares as soon
after the effective date of the Registration Statement as in the judgment of the
Representatives is advisable and at the public offering price set forth on the
cover page of and on the terms set forth in the Prospectus.
SECTION 6
COVENANTS OF THE COMPANY
------------------------
The Company covenants and agrees that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective. If the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Rules and Regulations, or the filing of the
Prospectus is otherwise required under Rule 424(b) of the Rules and Regulations,
the Company will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to you of such timely
filing. The Company will promptly advise you in writing (i) of the receipt of
any comments of the Commission, (ii) of any request of the Commission for
amendment of or supplement to the Registration Statement (either before
-13-
or after it becomes effective), any Preliminary Prospectus or the Prospectus or
for additional information, (iii) when the Registration Statement shall have
become effective and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the institution
of any proceedings for that purpose. If the Commission shall enter any such
stop order at any time, the Company will use its best efforts to obtain the
lifting of such order at the earliest possible moment. The Company will not
file any amendment or supplement to the Registration Statement (either before or
after it becomes effective), any Preliminary Prospectus or the Prospectus of
which you have not been furnished with a copy a reasonable time prior to such
filing or to which you reasonably object or which is not in compliance with the
Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly upon
your request, any amendments or supplements to the Registration Statement or the
Prospectus which in your judgment may be necessary or advisable to enable the
several Underwriters to continue the distribution of the Common Shares and will
use its best efforts to cause the same to become effective as promptly as
possible. The Company will fully and completely comply with the provisions of
Rule 430A of the Rules and Regulations with respect to information omitted from
the Registration Statement in reliance upon such Rule.
(c) If at any time within the nine-month period referred to in Section
10(a)(3) of the Act during which a prospectus relating to the Common Shares is
required to be delivered under the Act any event occurs, as a result of which
the Prospectus, including any amendments or supplements, would include an untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or if
it is necessary at any time to amend the Prospectus, including any amendments or
supplements, to comply with the Act or the Rules and Regulations, the Company
will promptly advise you thereof and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will correct
such statement or omission or an amendment or supplement which will effect such
compliance and will use its best efforts to cause the same to become effective
as soon as possible; and, in case any Underwriter is required to deliver a
prospectus after such nine-month period, the Company upon request, but at the
expense of such Underwriter, will promptly prepare such amendment or amendments
to the Registration Statement and such Prospectus or Prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of the
Act.
(d) As soon as practicable, but not later than 45 days after the end of the
first quarter ending after one year following the "effective date of the
Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of 12
consecutive months beginning after the effective date of the Registration
Statement which will satisfy the provisions of the last paragraph of Section
11(a) of the Act.
(e) During such period as a prospectus is required by law to be delivered
in connection with sales by an Underwriter or dealer, the Company, at its
expense, but only for the nine-month period referred to in Section 10(a)(3) of
the Act, will furnish to you or mail to your order copies of the Registration
Statement, the Prospectus, the Preliminary Prospectus and all amendments and
supplements
-14-
to any such documents in each case as soon as available and in such quantities
as you may request, for the purposes contemplated by the Act.
(f) The Company shall cooperate with you and your counsel in order to
qualify or register the Common Shares for sale under (or obtain exemptions from
the application of) the Blue Sky laws of such jurisdictions as you designate,
will comply with such laws and will continue such qualifications, registrations
and exemptions in effect so long as reasonably required for the distribution of
the Common Shares. The Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise you promptly of the
suspension of the qualification or registration of (or any such exemption
relating to) the Common Shares for offering, sale or trading in any jurisdiction
or any initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification, registration
or exemption, the Company, with your cooperation, will use its best efforts to
obtain the withdrawal thereof.
(g) During the period of five years hereafter, the Company will furnish to
the Representatives and, upon request of the Representatives, to each of the
other Underwriters: (i) as soon as practicable after the end of each fiscal
year, copies of the Annual Report of the Company containing the balance sheet of
the Company as of the close of such fiscal year and statements of income,
shareholders' equity and cash flows for the year then ended and the opinion
thereon of the Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Report on Form 8-K or other
report filed by the Company with the Commission, the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or communication
of the Company mailed generally to holders of its Common Stock.
(h) During the period of 90 days after the date of the Prospectus, without
the prior written consent of ▇▇▇▇▇▇▇▇▇▇ Securities (which consent may be
withheld at the sole discretion of ▇▇▇▇▇▇▇▇▇▇ Securities), the Company will not
issue, offer, sell, grant options to purchase or otherwise dispose of any of the
Company's equity securities or any other securities convertible into or
exchangeable with its Common Stock or other equity security other than pursuant
to outstanding stock options and warrants or pursuant to employee benefit plans
in effect as of the date hereof.
(i) The Company will apply the net proceeds of the sale of the Common
Shares sold by it substantially in accordance with its statements under the
caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to qualify or register its Common
Stock for sale in non-issuer transactions under (or obtain exemptions from the
application of) the Blue Sky laws of the State of California (and thereby permit
market making transactions and secondary trading in the Company's Common Stock
in California), will comply with such Blue Sky laws and will continue such
qualifications, registrations and exemptions in effect for a period of five
years after the date hereof.
-15-
(k) The Company will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar (which may be the same
entity as the transfer agent) for its Common Stock.
(l) If at any time during the period after the Registration Statement
becomes effective that a Prospectus is required to be delivered, any rumor,
publication or event relating to or affecting the Company shall occur as a
result of which in your opinion the market price of the Common Stock has been or
is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after written notice from you advising the
Company to the effect set forth above, forthwith prepare, consult with you
concerning the substance of, and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(m) The Company further agrees that, if it commences engaging in business
with the government of Cuba or with any person or affiliate located in Cuba
after the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported in the
Prospectus, if any, concerning the Company's business with Cuba or with any
person or affiliate located in Cuba changes in any material way, the Company
will provide the Department notice of such business or change, as appropriate,
in a form acceptable to the Department.
You, on behalf of the Underwriters, may, in your sole discretion, waive in
writing the performance by the Company of any one or more of the foregoing
covenants or extend the time for their performance.
SECTION 7
PAYMENT OF EXPENSES
-------------------
Whether or not the transactions contemplated hereunder are consummated or
this Agreement becomes effective or is terminated, the Company and, unless
otherwise paid by the Company, the Selling Shareholder agree to pay in such
proportions as they may agree upon among themselves all costs, fees and expenses
incurred in connection with the performance of their obligations hereunder and
in connection with the transactions contemplated hereby, including without
limiting the generality of the foregoing, (i) all expenses incident to the
issuance and delivery of the Common Shares (including all printing and engraving
costs), (ii) all fees and expenses of the registrar and transfer agent of the
Common Stock, (iii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Common Shares to the Underwriters,
(iv) all fees and expenses of the Company's counsel and the Company's
independent accountants, (v) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution of the Registration
Statement, each Preliminary Prospectus and the Prospectus (including all
exhibits and financial statements) and all amendments and supplements provided
for herein, this Agreement, the Agreement Among Underwriters, the Selected
Dealers Agreement, the Underwriters' Questionnaire, the Underwriters' Power of
Attorney and the Blue
-16-
Sky memorandum, (vi) all filing fees, attorneys' fees and expenses incurred by
the Company or the Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Common Shares for offer and sale under the state or Canadian Blue Sky
laws, (vii) the filing fee of the National Association of Securities Dealers,
Inc., and (viii) all other fees, costs and expenses referred to in Item 14 of
the Registration Statement. The Underwriters may deem the Company to be the
primary obligor with respect to all costs, fees and expenses to be paid by the
Company and by the Selling Shareholder. Except as provided in this Section 7,
Section 9 and Section 11 hereof, the Underwriters shall pay all of their own
expenses, including the fees and disbursements of their counsel (excluding those
relating to qualification, registration or exemption under the Blue Sky laws and
the Blue Sky memorandum referred to above). This Section 7 shall not affect any
agreements relating to the payment of expenses between the Company and the
Selling Shareholder.
Unless otherwise agreed and paid by the Company, the Selling Shareholder
will pay (directly or by reimbursement) all fees and expenses incident to the
performance of his or her obligations under this Agreement which are not
otherwise specifically provided for herein, including but not limited to (i) any
fees and expenses of separate counsel, if any, for such Selling Shareholder;
(ii) any fees and expenses of the Agent; and (iii) all expenses and taxes
incident to the sale and delivery of the Common Shares to be sold by such
Selling Shareholder to the Underwriters hereunder.
SECTION 8
CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS
-------------------------------------------------
The obligations of the several Underwriters to purchase and pay for the
Firm Common Shares on the First Closing Date and the Optional Common Shares on
any Subsequent Closing Date shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Shareholder herein set forth as of the date hereof and as of the First Closing
Date or the Subsequent Closing Date, as the case may be, to the accuracy of the
statements of Company officers and the Selling Shareholder made pursuant to the
provisions hereof, to the performance by the Company and the Selling Shareholder
of their respective obligations hereunder, and to the following additional
conditions:
(a) The Registration Statement shall have become effective not later than
5:00 p.m. (or, in the case of a registration statement filed pursuant to Rule
462(b) of the Rules and Regulations relating to the Common Shares, not later
than 10:00 p.m.), Washington, D.C. time, on the date of this Agreement, or at
such later time as shall have been consented to by you; if the filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b) of
the Rules and Regulations, the Prospectus shall have been filed in the manner
and within the time period required by Rule 424(b) of the Rules and Regulations;
and prior to such Closing Date, 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 shall be pending or, to the knowledge of
the Company, the Selling Shareholder or you, shall be contemplated by the
Commission; and any request of the Commission for inclusion of additional
-17-
information in the Registration Statement, or otherwise, shall have been
complied with to your satisfaction.
(b) You shall be satisfied that since the respective dates as of which
information is given in the Registration Statement and Prospectus, (i) there
shall not have been any change in the capital stock of the Company (other than
upon the exercise of outstanding stock options) or any of its subsidiaries or
any material change in the indebtedness (other than in the ordinary course of
business) of the Company and its subsidiaries taken as a whole, (ii) except as
set forth or contemplated by the Registration Statement or the Prospectus, no
material verbal or written agreement or other transaction shall have been
entered into by the Company or any of its subsidiaries, which is not in the
ordinary course of business, (iii) no loss or damage (whether or not insured) to
the property of the Company or any of its subsidiaries shall have been sustained
which materially and adversely affects the condition (financial or otherwise),
business, results of operations or prospects of the Company and its subsidiaries
taken as a whole, (iv) no legal or governmental action, suit or proceeding
affecting the Company or any of its subsidiaries which is material to the
Company and its subsidiaries taken as a whole or which affects or may affect the
transactions contemplated by this Agreement shall have been instituted or
threatened and (v) there shall not have been any material change in the
condition (financial or otherwise), business, management, results of operations
or prospects of the Company and its subsidiaries taken as a whole which makes it
impractical or inadvisable in the judgment of the Representatives to proceed
with the public offering or purchase the Common Shares as contemplated hereby.
(c) There shall have been furnished to you, as Representatives of the
Underwriters, on each Closing Date, in form and substance satisfactory to you,
except as otherwise expressly provided below:
(i) An opinion of Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company and
the Selling Shareholder, addressed to the Underwriters and dated the First
Closing Date or a Subsequent Closing Date, as the case may be, to the effect
that:
(1) Each of the Company, Kulicke & ▇▇▇▇▇ Investments, Inc.,
American Fine Wire Corporation and Circle "S" Industries, Inc.
(collectively, the "U.S. Material Subsidiaries"), and the foreign
material subsidiaries listed on Schedule C annexed hereto (the
"Foreign Material Subsidiaries") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation. Each of the Company and the U.S.
Material Subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing in all other jurisdictions where
the ownership or leasing of properties or the conduct of its business
requires such qualification, except for jurisdictions in which the
failure to so qualify could not reasonably be expected to have a
material adverse effect on the Company and its subsidiaries taken as a
whole, and has full corporate power and authority to own its
properties and conduct its business as described in the Registration
Statement;
-18-
(2) The authorized issued and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the
Prospectus (as of the date thereof); all of the Selling Shareholder
Shares have been, and all of the Company Shares, when issued and paid
for in accordance with this Agreement will be, duly authorized and
validly issued, fully paid and nonassessable and have not been and
will not have been issued in violation of or subject to any preemptive
rights or other rights set forth in the Company's articles of
incorporation, bylaws or other organizational documents to subscribe
for or purchase any securities; without limiting the foregoing, to the
best of such counsel's knowledge there are no preemptive or other
rights to subscribe for or purchase any of the Common Shares to be
sold by the Company hereunder;
(3) All of the issued and outstanding shares of the U.S.
Material Subsidiaries have been duly and validly authorized and
issued, are fully paid and nonassessable and are owned beneficially by
the Company free and clear of all liens, encumbrances or security
interests and such counsel has no knowledge of any adverse claims with
respect to such shares;
(4) The certificates evidencing the Common Shares to be
delivered hereunder are in due and proper form under Pennsylvania law;
(5) Except as disclosed in the Prospectus, to the best of such
counsel's knowledge there are no outstanding options, warrants or
other rights calling for the issuance of, and no commitments to issue,
any shares of capital stock of the Company or any security convertible
into or exchangeable for capital stock of the Company;
(6) (a) The Registration Statement has become effective under
the Act, and no stop order suspending the effectiveness of the
Registration Statement or preventing the use of the Prospectus has
been issued and no proceedings for that purpose have been instituted
or are pending or, to the best of such counsel's knowledge,
contemplated by the Commission; any required filing of the Prospectus
and any supplement thereto pursuant to Rule 424(b) of the Rules and
Regulations has been made in the manner and within the time period
required by such Rule 424(b);
(b) The Registration Statement, each Preliminary
Prospectus, the Prospectus and each amendment or supplement thereto
(except for the financial statements and schedules included therein as
to which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Act and the Rules
and Regulations;
(c) The information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such counsel
and is a fair summary of such matters and conclusions;
-19-
(d) The description in the Registration Statement and the
Prospectus of the articles of incorporation and bylaws of the Company
and of statutes are accurate and fairly present the information
required to be presented by the Act and the applicable Rules and
Regulations;
(e) To the best of such counsel's knowledge, there are no
franchises, leases, contracts, agreements or documents of a character
required to be disclosed in the Registration Statement or Prospectus
or to be filed as exhibits to the Registration Statement which are not
disclosed or filed, as required;
(f) To the best of such counsel's knowledge, there are no
legal or governmental actions, suits or proceedings pending or
threatened against the Company which are required to be described in
the Prospectus which are not described as required; and
(g) The documents incorporated by reference in the
Prospectus (except for any financial statements and schedules included
in such documents as to which such counsel need express no opinion),
when they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder; and nothing has
come to the attention of such counsel which leads them to believe that
any of such documents (except for any financial statements and
schedules included in such documents as to which such counsel need
express no opinion), when they were so filed, contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading.
(7) The Company has full right, power and authority to enter
into this Agreement and to sell and deliver the Company Common Shares
to the several Underwriters; this Agreement has been duly and validly
authorized by all necessary corporate action by the Company, has been
duly and validly executed and delivered by and on behalf of the
Company, and, assuming due and valid execution and delivery of the
Underwriting Agreement by the Underwriters, is a valid and binding
agreement of the Company enforceable in accordance with its terms,
except as enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and except as to
those provisions relating to indemnity or contribution for liabilities
arising under the Act as to which no opinion need be expressed; and no
approval, authorization, order, consent, registration, filing,
qualification, license or permit of or with any court, regulatory,
administrative or other governmental body is required for the
execution and delivery of this Agreement by the Company or the
consummation of the transactions contemplated by this Agreement,
except such as have been obtained and are in full force and effect
under the Act and such as may be required under applicable Blue Sky
laws in connection with the purchase and
-20-
distribution of the Common Shares and the clearance of such offering
with the NASD as to which such counsel need express no opinion;
(8) The execution and performance of this Agreement and the
consummation of the transactions herein contemplated will not conflict
with, result in the breach of, or constitute, either by itself or upon
notice or the passage of time or both, a default under any agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit
or other instrument filed as an exhibit to the Registration Statement
or violate any of the provisions of the articles of incorporation or
bylaws, or other organizational documents, of the Company or any of
its U.S. or Foreign Material Subsidiaries or, so far as is known to
such counsel, violate any statute, judgment, decree, order, rule or
regulation of any court or governmental body having jurisdiction over
the Company or any of its U.S. or Foreign Material Subsidiaries or any
of its or their property;
(9) To the best knowledge of such counsel, neither the Company
nor any U.S. Material Subsidiary is in violation of its articles of
incorporation or bylaws, or other organizational documents, or to the
best of such counsel's knowledge, in breach of or default with respect
to any provision of any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument filed or
required to be filed as an exhibit to the Registration Statement,
except where such default would not materially adversely affect the
Company and its subsidiaries taken as a whole;
(10) To the best knowledge of such counsel, no holders of
securities of the Company have rights which have not been waived to
the registration of shares of Common Stock or other securities,
because of the filing of the Registration Statement by the Company or
the offering contemplated hereby;
(11) The merger contemplated by AFW Agreement has been
consummated and the AFW Agreement has been duly authorized, executed
and delivered by the Company and, to the best of such counsel's
knowledge, each other party thereto, and to the best of such counsel's
knowledge is in full force and effect.
(12) This Agreement and the Shareholder's Agreement have been
duly authorized, executed and delivered by or on behalf of the Selling
Shareholder; the Agent has been duly and validly authorized to act as
the custodian of the Selling Shareholder Shares; and the performance
of this Agreement and the Shareholder's Agreement and the consummation
of the transactions herein contemplated by the Selling Shareholder
will not result in a breach of, or constitute a default under, any
material indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, or other material agreement
or instrument known to such counsel to which the Selling Shareholder
is a party or by which the Selling Shareholder may be bound, or
violate any statute, judgment, decree, order, rule or regulation known
to such counsel of any court or governmental body having jurisdiction
over the Selling Shareholder; no
-21-
approval, authorization, order or consent of any court, regulatory
body, administrative agency or other governmental body is required for
the execution and delivery of this Agreement or the Shareholder's
Agreement or the consummation by the Selling Shareholder of the
transactions contemplated by this Agreement, except such as have been
obtained and are in full force and effect under the Act and such as
may be required under the rules of the NASD and applicable Blue Sky
laws as to which such counsel need express no opinion;
(13) The Selling Shareholder has full right, power and authority
to enter into this Agreement and the Shareholder's Agreement and to
sell, transfer and deliver the Common Shares to be sold on such
Closing Date by such Selling Shareholder hereunder; and upon delivery
to the Underwriters of the Common Shares to be sold to them by the
Selling Shareholder against payment therefor in accordance with this
Agreement, the Underwriters, assuming that they have purchased such
Common Shares in good faith and without notice of any adverse claim,
will acquire good and marketable title to such Common Shares free and
clear of all liens; and
(14) This Agreement and the Shareholder's Agreement are valid and
binding agreements of the Selling Shareholder, each enforceable in
accordance with its terms, except as enforceability may be limited by
the application of equitable principles (whether considered in a
proceeding at law or in equity) or of, bankruptcy, insolvency,
reorganization, moratorium and other laws now or hereafter in effect
affecting the enforcement of creditors' rights and remedies (including
those relating to fraudulent conveyances and transfers) and except as
to provisions relating to indemnity or contribution for liabilities
arising under the Act, as to which no opinion need be expressed.
(15) No transfer taxes are required to be paid in connection with
the sale and delivery of the Common Shares to the Underwriters
hereunder.
In addition, such counsel shall state that although they have not
verified the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, nothing has come to the attention of
such counsel which leads to them to believe that, at the time the Registration
Statement became effective, the Registration Statement (other than the
consolidated financial statements including supporting schedules and financial
data derived therefrom, as to which such counsel need express no comment)
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or
at the First Closing Date or any Subsequent Closing Date, as the case may be,
the Registration Statement or the Prospectus (except as aforesaid) contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely, as to matters other
than Pennsylvania law, Delaware corporate law, federal law, on opinions of local
or foreign counsel, and as to matters of
-22-
fact, on certificates of the Selling Shareholder and of officers of the Company
and of governmental officials, in which case their opinion is to state that they
are so doing and that the Underwriters are justified in relying on such opinions
or certificates and copies of said opinions or certificates are to be attached
to the opinion;
(ii) An opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, patent counsel
for the Company, addressed to the Underwriters and dated the First Closing Date
or any Subsequent Closing Date, as the case may be, to the effect that the
statements in the Prospectus under the captions "Risk Factors -- Intellectual
Property Protection; Notices of Alleged Patent Infringement" and "Business--
Intellectual Property" to the extent such statements constitute matters of law
or legal conclusions, are correct in all material respects and further stating
that nothing has come to their attention that causes them to believe that such
statements contain any untrue statements of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(iii) Such opinion or opinions of Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
P.C., counsel for the Underwriters dated the First Closing Date or any
Subsequent Closing Date, as the case may be, with respect to the incorporation
of the Company, the sufficiency of all corporate proceedings and other legal
matters relating to this Agreement, the validity of the Common Shares, the
Registration Statement and the Prospectus and other related matters as you may
reasonably require, and the Company and the Selling Shareholder shall have
furnished to such counsel such documents and shall have exhibited to them such
papers and records as they may reasonably request for the purpose of enabling
them to pass upon such matters. In connection with such opinions, such counsel
may rely on representations or certificates of officers of the Company and
governmental officials.
(iv) A certificate of the Company executed by the Chief Executive
Officer and the Chief Financial Officer of the Company, dated the First Closing
Date or any Subsequent Closing Date, as the case may be, to the effect that:
(1) The representations and warranties of the Company set forth
in Section 2 of this Agreement are true and correct, in all material
respects, as of the date of this Agreement and as of the First Closing
Date or such Subsequent Closing Date, as the case may be, and the
Company has, in all material respects, complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied on or prior to such Closing Date;
(2) The Commission has not issued any order preventing or
suspending the use of the Prospectus or any Preliminary Prospectus
filed as a part of the Registration Statement or any amendment
thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued; and to the best of the
knowledge of the respective signers, no proceedings for that purpose
have been instituted or are pending or contemplated under the Act;
-23-
(3) Each of the respective signers of the certificate has
carefully examined the Registration Statement and the Prospectus, and,
in his opinion and to the best of his knowledge, (a) the Registration
Statement and the Prospectus and any amendments or supplements thereto
contain all statements required to be stated therein regarding the
Company and its subsidiaries; and (b) neither the Registration
Statement nor the Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(4) Since the initial date on which the Registration Statement
was filed, no agreement, written or oral, transaction or event has
occurred which should have been set forth in an amendment to the
Registration Statement or in a supplement to or amendment of any
prospectus which has not been disclosed in such a supplement or
amendment;
(5) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, and except as
disclosed in or contemplated by the Prospectus: there has not been any
material adverse change or a development involving a material adverse
change in the condition (financial or otherwise), business,
properties, results of operations, management or prospects of the
Company and its subsidiaries taken as a whole; and, to the best of his
knowledge, no legal or governmental action, suit or proceeding is
pending or threatened against the Company or any of its subsidiaries
which is material to the Company and its subsidiaries taken as a
whole, whether or not arising from transactions in the ordinary course
of business, or which may adversely affect the transactions
contemplated by this Agreement; since such dates and except as so
disclosed, neither the Company nor any of its subsidiaries has (i)
entered into any material verbal or written agreement or other
transaction which is not in the ordinary course of business or which
could result in a material reduction in the future earnings of the
Company, (ii) incurred any material liability or obligation, direct,
contingent or indirect other than in the ordinary course of business,
(iii) made any change in its capital stock (other than upon exercise
of outstanding stock options), (iv) made any material change in its
short-term debt, or (v) funded debt or repurchased or otherwise
acquired any of the Company's capital stock; and the Company has not
declared or paid any dividend, or made any other distribution, upon
its outstanding capital stock payable to shareholders of record on a
date prior to the First Closing Date or Subsequent Closing Date; and
(6) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus and except as
disclosed in or contemplated by the Prospectus, the Company and its
Material Subsidiaries have not sustained a material loss or damage by
strike, fire, flood, windstorm, accident or other calamity (whether or
not insured).
(v) On the First Closing Date or any Subsequent Closing Date, a
certificate, dated such Closing Date and addressed to you, signed by or on
behalf of the Selling Shareholder to the effect
-24-
that the representations and warranties of such Selling Shareholder in this
Agreement are true and correct, in all material respects, as if made at and as
of the First Closing Date or such Subsequent Closing Date, and such Selling
Shareholder, in all material respects, has complied with all the agreements and
satisfied all the conditions on his part to be performed or satisfied prior to
the First Closing Date or such Subsequent Closing Date.
(vi) On the date before this Agreement is executed and also on the
First Closing Date and any Subsequent Closing Date a letter addressed to you, as
Representatives of the Underwriters, from Price Waterhouse LLP, independent
accountants, the first one to be dated the day before or the date of this
Agreement, the second one to be dated the First Closing Date and thereafter (in
the event of a Subsequent Closing) to be dated such Subsequent Closing Date, in
form and substance satisfactory to you.
(vii) On the date before this Agreement is executed and also on the
First Closing Date and any Subsequent Closing Date a letter addressed to you, as
Representatives of the Underwriters, from Luboshitz, Kaiserer & Co., independent
accountants for Kulicke and ▇▇▇▇▇ (Israel) Ltd., the first one to be dated the
day before or the date of this Agreement, the second one to be dated the First
Closing Date and thereafter (in the event of a Subsequent Closing) to be dated
such Subsequent Closing Date, in form and substance satisfactory to you.
(viii) On the date before this Agreement is executed and also on the
First Closing Date and any Subsequent Closing Date a letter addressed to you, as
Representatives of the Underwriters, from Deloitte & Touche, LLP, independent
accountants for Circle "S" Industries, Inc., the first one to be dated the day
before or the date of this Agreement, the second one to be dated the First
Closing Date and thereafter (in the event of a Subsequent Closing) to be dated
such Subsequent Closing Date, in form and substance satisfactory to you.
(ix) On or before the First Closing Date, signed agreements from each
director and officer of the Company, in form and substance satisfactory to you,
confirming that for a period of seventy-five (75) days after the date of the
Prospectus, such person will not directly or indirectly sell or offer to sell or
otherwise dispose of any shares of Common Stock or any right to acquire such
shares (other than by will, pursuant to the laws of descent and distribution or
the surrender of shares in payment of the exercise price of options under the
Company's option plans) without the prior written consent of ▇▇▇▇▇▇▇▇▇▇
Securities, which consent may be withheld at the sole discretion of ▇▇▇▇▇▇▇▇▇▇
Securities.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., counsel for the Underwriters. The
Company shall furnish you with such manually signed or conformed copies of such
opinions, certificates, letters and documents as you request. Any certificate
signed by any officer of the Company and delivered to the Representatives or to
counsel for the Underwriters shall be deemed to be a representation and warranty
by the Company to the Underwriters as to the statements made therein.
-25-
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification by you as Representatives to the
Company and the Selling Shareholder without liability on the part of any
Underwriter, the Company or the Selling Shareholder except for the expenses to
be paid or reimbursed by the Company and by the Selling Shareholder pursuant to
Sections 7 and 9 hereof and except to the extent provided in Section 11 hereof.
SECTION 9
REIMBURSEMENT OF UNDERWRITERS' EXPENSES
---------------------------------------
Notwithstanding any other provisions hereof, if this Agreement shall be
terminated by you pursuant to Section 8, or if the sale to the Underwriters of
the Common Shares at the First Closing is not consummated because of any
refusal, inability or failure on the part of the Company or the Selling
Shareholder to perform any agreement herein or to comply with any provision
hereof, the Company agrees to reimburse you and the other Underwriters upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by you and them in connection with the proposed purchase and the sale of the
Common Shares, including but not limited to fees and disbursements of counsel,
printing expenses, travel expenses, postage, telegraph charges and telephone
charges relating directly to the offering contemplated by the Prospectus. Any
such termination shall be without liability of any party to any other party
except that the provisions of this Section, Section 7 and Section 11 shall at
all times be effective and shall apply.
SECTION 10
EFFECTIVENESS OF REGISTRATION STATEMENT
---------------------------------------
You, the Company and the Selling Shareholder will use your and their best
efforts to cause the Registration Statement to become effective, to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
SECTION 11
INDEMNIFICATION
---------------
(a) The Company and the Selling Shareholder, jointly and severally, agree
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Act against any losses,
claims, damages, liabilities or expenses, joint or several, to which such
Underwriter or such controlling person may become subject, under the Act, the
Exchange Act or
-26-
other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company and the Selling Shareholder),
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state in any of them a material fact required to be
stated therein or necessary to make the statements in any of them not
misleading, or arise out of or are based in whole or in part on any inaccuracy
in the representations and warranties of the Company or the Selling Shareholder
contained herein or any failure of the Company or the Selling Shareholder to
perform their respective obligations hereunder or under law; and will reimburse
each Underwriter and each such controlling person for any documented legal and
other expenses as such expenses are reasonably incurred by such Underwriter or
such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that (i) neither the Company nor the Selling
Shareholder will be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with the
information furnished to the Company pursuant to Section 4 hereof; (ii) under
this Section 11(a), the liability of the Selling Shareholder shall not exceed
the aggregate proceeds received by the Selling Shareholder upon the sale of the
Common Shares (including any Optional Common Shares) by the Selling Shareholder
to the Underwriters and (iii) the indemnity provided in this Section 11(a) with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter with respect to any person asserting any loss, claim, charge,
liability or litigation based upon any untrue statement or alleged untrue
statement of any material fact or omission or alleged omission to state therein
a material fact, if a copy of the Prospectus in which such untrue statement or
alleged untrue statement or omission was corrected was required to be delivered
to such person by the Underwriter and was not sent or given to such person
within the time required by the Act and the Rules and Regulations thereunder,
unless such failure is the result of noncompliance by the Company with Section
6(e) hereof. The Company and the Selling Shareholder may agree, as among
themselves and without limiting the rights of the Underwriters under this
Agreement, as to their respective amounts of such liability for which they each
shall be responsible. In addition to its other obligations under this Section
11(a), the Company and the Selling Shareholder agree that, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, or any inaccuracy in the representations and
warranties of the Company or the Selling Shareholder herein or failure to
perform its obligations hereunder, all as described in this Section 11(a), it
will reimburse each Underwriter on a quarterly basis for all reasonable legal or
other documented expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's or the Selling Shareholder's obligation to
reimburse each Underwriter for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, each Underwriter shall promptly return it to the
Company together with interest,
-27-
compounded daily, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) announced from time
to time by Bank of America NT&SA, San Francisco, California (the "Prime Rate").
Any such interim reimbursement payments which are not made to an Underwriter
within 30 days of a request for reimbursement shall bear interest at the Prime
Rate from the date of such request. This indemnity agreement will be in
addition to any liability which the Company or the Selling Shareholder may
otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, the Selling Shareholder and each person, if any, who controls the
Company or the Selling Shareholder within the meaning of the Act, against any
losses, claims, damages, liabilities or expenses to which the Company, or any
such director, officer, Selling Shareholder or controlling person may become
subject, under the Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out of or are based
upon any untrue or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with the information
furnished to the Company pursuant to Section 4 hereof; and will reimburse the
Company, or any such director, officer, Selling Shareholder or controlling
person for any legal and other documented expense reasonably incurred by the
Company, or any such director, officer, Selling Shareholder or controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action. In addition
to its other obligations under this Section 11(b), each Underwriter severally
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this
Section 11(b) which relates to information furnished to the Company pursuant to
Section 4 hereof, it will reimburse the Company (and, to the extent applicable,
each officer, director, controlling person or Selling Shareholder) on a
quarterly basis for all reasonable legal or other documented expenses incurred
in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director, controlling person or Selling Shareholder)
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the Company
(and, to the extent applicable, each officer, director, controlling person or
Selling Shareholder) shall promptly return it to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company within 30 days
of a request for
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reimbursement shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section or to the
extent it is not prejudiced as a proximate result of such failure. In case any
such action is brought against any indemnified party and such indemnified party
seeks or intends to seek indemnity from an indemnifying party, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish,
jointly with all other indemnifying parties similarly notified, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be a conflict between the positions of
the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a),
representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, in each of which cases the
reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) If the indemnification provided for in this Section 11 is required by
its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under paragraphs (a), (b) or
(c) in respect of any losses, claims, damages, liabilities or expenses referred
to herein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of any losses,
claims, damages, liabilities or expenses referred to herein (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Selling Shareholder and the Underwriters from the offering of the
Common Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, the Selling Shareholder and the Underwriters in connection
with the statements or omissions
-29-
or inaccuracies in the representations and warranties herein which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The respective relative benefits received by
the Company, the Selling Shareholder and the Underwriters shall be deemed to be
in the same proportion, in the case of the Company and the Selling Shareholder
as the total price paid to the Company and to the Selling Shareholder,
respectively, for the Common Shares sold by them to the Underwriters (net of
underwriting commissions but before deducting expenses), and in the case of the
Underwriters as the underwriting commissions received by them bears to the total
of such amounts paid to the Company and to the Selling Shareholder and received
by the Underwriters as underwriting commissions. The relative fault of the
Company, the Selling Shareholder and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
or the inaccurate or the alleged inaccurate representation and/or warranty
relates to information supplied by the Company, the Selling Shareholder or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in subparagraph (c) of this Section 11, any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
subparagraph (c) of this Section 11 with respect to notice of commencement of
any action shall apply if a claim for contribution is to be made under this
subparagraph (d); provided, however, that no additional notice shall be required
with respect to any action for which notice has been given under subparagraph
(c) for purposes of indemnification. The Company, the Selling Shareholder and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 11 were determined solely by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding the
provisions of this Section 11, no Underwriter shall be required to contribute
any amount in excess of the amount of the total underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 11 are several in proportion to their respective underwriting
commitments and not joint.
(e) It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in Sections 11(a) and 11(b) hereof,
including the amounts of any requested reimbursement payments and the method of
determining such amounts, shall be settled by arbitration conducted under the
provisions of the Constitution and Rules of the Board of Governors of the New
York Stock Exchange, Inc. or pursuant to the Code of Arbitration Procedure of
the NASD. Any such arbitration must be commenced by service of a written demand
for arbitration or written notice of intention to arbitrate, therein electing
the arbitration tribunal. In the event the party demanding arbitration does not
make such designation of an arbitration tribunal in such demand or notice, then
the party responding to said demand or notice is authorized to do so. Such an
arbitration would be limited to the operation of the interim reimbursement
provisions contained in Sections 11(a) and 11(b) hereof and
-30-
would not resolve the ultimate propriety or enforceability of the obligation to
reimburse expenses which is created by the provisions of such Sections 11(a) and
11(b) hereof).
SECTION 12
DEFAULT OF UNDERWRITERS
-----------------------
It shall be a condition to this Agreement and the obligation of the Company
and the Selling Shareholder to sell and deliver the Common Shares hereunder, and
of each Underwriter to purchase the Common Shares in the manner as described
herein, that, except as hereinafter in this paragraph provided, each of the
Underwriters shall purchase and pay for all the Common Shares agreed to be
purchased by such Underwriter hereunder upon tender to the Representatives of
all such shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in their obligations to purchase Common Shares hereunder on
either the First or Second Closing Date and the aggregate number of Common
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase on such Closing Date does not exceed 10% of the total number of Common
Shares which the Underwriters are obligated to purchase on such Closing Date,
the non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Common Shares which such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of Common
Shares with respect to which such default occurs is more than the above
percentage and arrangements satisfactory to the Representatives and the Company
for the purchase of such Common Shares by other persons are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Company or the Selling Stockholder
except for the expenses to be paid by the Company and the Selling Shareholder
pursuant to Section 7 hereof and except to the extent provided in Section 11
hereof.
In the event that Common Shares to which a default relates are to be
purchased by the non-defaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than three business days
in order that the necessary changes in the Registration Statement, Prospectus
and any other documents, as well as any other arrangements, may be effected. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
SECTION 13
EFFECTIVE DATE
--------------
This Agreement shall become effective immediately as to Sections 7, 9, 11,
14 and 16 and, as to all other provisions, (i) if at the time of execution of
this Agreement the Registration Statement has not become effective, at 2:00
p.m., California time, on the first full business day following the
effectiveness
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of the Registration Statement, or (ii) if at the time of execution of this
Agreement the Registration Statement has been declared effective, at 2:00 p.m.,
California time, on the first full business day following the date of execution
of this Agreement; but this Agreement shall nevertheless become effective at
such earlier time after the Registration Statement becomes effective as you may
determine on and by notice to the Company or by release of any of the Common
Shares for sale to the public. For the purposes of this Section 13, the Common
Shares shall be deemed to have been so released upon the release for publication
of any newspaper advertisement relating to the Common Shares or upon the release
by you of telegrams (i) advising Underwriters that the Common Shares are
released for public offering, or (ii) offering the Common Shares for sale to
securities dealers, whichever may occur first.
SECTION 14
TERMINATION
-----------
Without limiting the right to terminate this Agreement pursuant to any
other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you and
the Selling Shareholder or by you by notice to the Company and the Selling
Shareholder at any time prior to the time this Agreement shall become effective
as to all its provisions, and any such termination shall be without liability on
the part of the Company or the Selling Shareholder to any Underwriter (except
for the expenses to be paid or reimbursed by the Company and the Selling
Shareholder pursuant to Sections 7 and 9 hereof and except to the extent
provided in Section 11 hereof) or of any Underwriter to the Company or the
Selling Shareholder (except to the extent provided in Section 11 hereof).
(b) This Agreement may also be terminated by you prior to the First Closing
Date by notice to the Company (i) if additional material governmental
restrictions, not in force and effect on the date hereof, shall have been
imposed upon trading in securities generally or minimum or maximum prices shall
have been generally established on the New York Stock Exchange or on the
American Stock Exchange or in the over-the-counter market by the NASD, or
trading in securities generally shall have been suspended on either such
Exchange or in the over-the-counter market by the NASD, or a general banking
moratorium shall have been established by federal, New York or California
authorities, (ii) if an outbreak of major hostilities or other national or
international calamity or any substantial change in political, financial or
economic conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Representatives, to affect
adversely the marketability of the Common Shares, (iii) if any adverse event
shall have occurred or shall exist which makes untrue or incorrect in any
material respect any statement or information contained in the Registration
Statement or Prospectus or which is not reflected in the Registration Statement
or Prospectus but should be reflected therein in order to make the statements or
information contained therein not misleading in any material respect, or (iv) if
there shall be any action, suit or proceeding pending or threatened, or there
shall have been any development or prospective development involving
particularly the business or properties or securities of the Company or any of
its subsidiaries or the transactions contemplated by this Agreement, which, in
the reasonable judgment of the Representatives, may materially and adversely
affect the Company's
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business or earnings and makes it impracticable or inadvisable to offer or sell
the Common Shares. Any termination pursuant to this subsection (b) shall
without liability on the part of any Underwriter to the Company or the Selling
Shareholder or on the part of the Company or the Selling Shareholder to any
Underwriter (except for expenses to be paid or reimbursed by the Company and the
Selling Shareholder pursuant to Sections 7 and 9 hereof and except to the extent
provided in Section 11 hereof).
SECTION 15
FAILURE OF THE SELLING SHAREHOLDER TO SELL AND DELIVER
------------------------------------------------------
If the Selling Shareholder shall fail to sell and deliver to the
Underwriters the Common Shares to be sold and delivered by such Selling
Shareholder at the First Closing Date or any Subsequent Closing Date under the
terms of this Agreement, then the Underwriters may at their option, by written
notice from you to the Company and the Selling Shareholder, either (i) terminate
this Agreement without any liability on the part of any Underwriter or, except
as provided in Sections 7, 9 and 11 hereof, the Company or the Selling
Shareholder, or (ii) purchase the shares which the Company has agreed to sell
and deliver in accordance with the terms hereof. In the event of a failure by
the Selling Shareholder to sell and deliver as referred to in this Section,
either you or the Company shall have the right to postpone the Closing Date for
a period not exceeding three business days in order that the necessary changes
in the Registration Statement, Prospectus and any other documents, as well as
any other arrangements, may be effected.
SECTION 16
REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY
---------------------------------------------------
The respective indemnities, agreements, representations, warranties and
other statements of the Company, of its officers, of the Selling Shareholder and
of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Shareholder, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 17
NOTICES
-------
All communications hereunder shall be in writing and, if sent to the
Representatives shall be mailed, delivered or telegraphed and confirmed to you
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇; and if sent to the Company or the Selling
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Shareholder shall be mailed, delivered or telegraphed and confirmed to the
Company at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention:
C. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive Officer, with a copy to Drinker, ▇▇▇▇▇▇ &
▇▇▇▇▇, Philadelphia National Bank Building, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esquire.. The
Company, the Selling Shareholder or you may change the address for receipt of
communications hereunder by giving notice to the others.
SECTION 18
SUCCESSORS
----------
This Agreement will inure to the benefit of and be binding upon the parties
hereto, including any substitute Underwriters pursuant to Section 12 hereof, and
to the benefit of the officers and directors and controlling persons referred to
in Section 11, and in each case their respective successors, personal
representatives and assigns, and no other person will have any right or
obligation hereunder. No such assignment shall relieve any party of its
obligations hereunder. The term "successors" shall not include any purchaser of
the Common Shares as such from any of the Underwriters merely by reason of such
purchase.
SECTION 19
REPRESENTATION OF UNDERWRITERS
------------------------------
You will act as Representatives for the several Underwriters in connection
with all dealings hereunder, and any action under or in respect of this
Agreement taken by you jointly or by ▇▇▇▇▇▇▇▇▇▇ Securities, on behalf of you,
will be binding upon all the Underwriters.
SECTION 20
PARTIAL UNENFORCEABILITY
------------------------
The invalidity or unenforceability of any Section, paragraph or provision
of this Agreement shall not affect the validity or enforceability of any other
Section, paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
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SECTION 21
APPLICABLE LAW
--------------
This Agreement shall be governed by and construed in accordance with the
internal laws (and not the laws pertaining to conflicts of laws) of the State of
California.
SECTION 22
GENERAL
-------
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in several counterparts, each one of
which shall be an original, and all of which shall constitute one and the same
document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Shareholder and you.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed copies hereof, whereupon it will
become a binding agreement among the Company, the Selling Shareholder and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
KULICKE AND ▇▇▇▇▇ INDUSTRIES, INC.
By:_______________________________
Title:____________________________
SELLING SHAREHOLDER
By:_______________________________
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By:_______________________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted by
us in San Francisco, California as of
the date first above written.
▇▇▇▇▇▇▇▇▇▇ SECURITIES
PAINEWEBBER INCORPORATED
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: ▇▇▇▇▇▇▇▇▇▇ SECURITIES
By:_______________________________
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SCHEDULE A
Number of Firm
Common Shares
Name of Underwriter to be Purchased
------------------- ---------------
▇▇▇▇▇▇▇▇▇▇ Securities........................
PaineWebber Incorporated.....................
--------
TOTAL
========
A-1
SCHEDULE B
Kulicke & ▇▇▇▇▇ (Asia) Ltd.
Kulicke & ▇▇▇▇▇ (Israel) Ltd.
Kulicke & ▇▇▇▇▇ (Japan) Ltd.
Kulicke & ▇▇▇▇▇ Export, Inc.
Micro Swiss Ltd.
Kulicke & ▇▇▇▇▇ (AG)
Kulicke & ▇▇▇▇▇ Investments, Inc.
Circle "S" Industries, Inc.
American Fine Wire Corporation
B-1
SCHEDULE C
Kulicke and ▇▇▇▇▇ (Asia) Ltd.
Kulicke and ▇▇▇▇▇ (Israel) Ltd.
Micro Swiss Ltd.
C-1
